Subrecipient Monitoring Webcast Presenters Pat O'Rourke, Irene St. Croix, Bridget Ware Department of Health and Human Services Health Resources and Services Administration Program Integrity Team

Agenda Program Integrity Why Monitor Subrecipients Funding Subrecipients Definitions Characteristics of a Subrecipient Sub-Award Agreement Federal Regulations Pre-Award Monitoring Post-Award Monitoring Wrap Up

Program Integrity This session is part of HRSA’s Program Integrity series Program Integrity aims to help: o ensure programmatic compliance, efficiency, and accountability o identify vulnerabilities that can adversely affect the integrity of the program o detect and prevent fraud, waste, and abuse

Why Monitor Subrecipients? For program integrity assurance To meet Federal regulations reporting requirements It’s the law!

Funding Subrecipients Funding vehicle can either be a grant or contract Prime Recipient Subrecipient

Definitions Prime Recipient – Entity who receives a direct award from the agency to carry out a Federal program Subrecipient - Non-Federal entity that expends Federal awards on behalf of the prime recipient to carry out a Federal program

Definitions Subaward - A legal instrument to provide support for the performance of any portion of the substantive project or program for which the recipient received the funds and then awards to an eligible subrecipient.

Who Is Not a Subrecipient? A vendor is not a subrecipient A dealer, distributor, merchant, or other seller providing goods or services that is required for the conduct of the sponsored program

Characteristics of a Subrecipient Has responsibility for making programmatic decision Has responsibility for adherence to applicable programs compliance requirements Has its performance measured against program objectives Uses funds to carry out a program as compared to providing goods or services for a program

Sub-Award Agreement Inform subrecipients of: –Catalog of Federal Domestic Assistance (CFDA) number –Award information –Notice of Award (NoA) terms and conditions –Reporting requirements –Circular A-133 requirement if expending $500K or more in Federal awards

Sub-Award Agreement At a minimum, the sub-award agreement must include the following: –Programmatic roles and responsibilities of individuals at the subrecipient’s organization –Procedures for directing and monitoring the programmatic effort –Procedures to be followed in providing funding to the subrecipient –Applicable policy that meets HRSA’s requirement

Federal Regulations Cost Principles: –2 CFR part 220 –2 CFR part 225 –2 CFR part 230 Federal Funding Accountability and Transparency Act (FFATA) OMB Circular A-133

Federal Cost Principles Sub-award to State, Local, and Indian Tribal Governments, 2 CFR part 225 shall apply Sub-award to a college or university, 2 CFR part 220 (Circular A–21) shall apply Sub-award to a commercial organization, FAR Subpart 31.2 the cost principles applicable to commercial organizations shall apply Sub-award to some other non-profit organization, 2 CFR part 230, Cost Principles for Non-Profit Organizations (Circular A–122), shall apply Sub-award to a hospital, 45 CFR 74 (Appendix E) Principles for Determining Cost Applicable to Research and Development under Grants and Contracts with Hospitals, shall apply

The Federal Funding Accountability and Transparency Act (FFATA) The Act was signed on September 26, 2006 Requires information on Federal awards (Federal financial assistance and expenditures) to be made available to the public via a single, searchable website, which is

FFATA Sub-Award Reporting System (FSRS) Reporting tool Federal prime awardees use to meet FFATA reporting requirements –i.e., prime contractors and prime grants recipients FSRS captures and reports sub-award and executive compensation data regarding first-tier sub-awards

FFATA Requirements

FFATA Requirements when Funds Reduce If an initial award equals or exceeds $25,000 …but is subsequently de-obligated and falls below $25,000 The award continues to be subject to the reporting requirements of the Transparency Act

Reporting Timeline for Prime Recipients The prime recipient is required to file a FFATA sub-award report by the end of the month following the month in which the prime recipient awards any sub-grant or subcontract greater than or equal to $25,000

Executive Compensation An executive is an officer, managing partner, or any other employees in management positions Total compensation includes cash and noncash dollar value earned by the executive during the subrecipient’s preceding fiscal year (17 CFR (c)(2))

Executive Compensation 80% or more of prior year annual gross revenues are from Federal awards; and $25 million or more in annual gross revenues are from Federal awards; and the public does not have access to compensation information filed under SEC and IRS requirements 80% $25M No access periodic reports Names and total compensation of the five most highly compensated officers are required

Costs Associated with Sub-Awards Audit costs and related services –The costs of audits required by Circular A-133 –Other audit costs included in a cost allocation plan or indirect cost proposal Settlement expenses –Accounting, legal, clerical, and similar costs reasonably necessary for: The termination and settlement of sub-awards

Pre-Award Monitoring Verify the subrecipients have not been debarred or suspended from receiving Federal funds at M// M// Determine whether the applicant is a subrecipient or a vendor

Pre-Award Monitoring Request agreement documents to be returned at a reasonable deadline Verify subrecipient written agreement has been completed with all required information Review the budget to ensure the correct rates are being used

Post-Award Monitoring Review all documentation Ensure the correct indirect cost rate and fringe benefit rate have been used Ensure the budget is reasonable and only allowable costs have been included

Post-Award Monitoring Review ongoing programmatic effort and expenditures Log communications with the subrecipient Maintain a Risk Assessment Log - include entities with A-133 findings or have been written off for non- payment

Wrap Up Program Integrity is key to meet program objectives Federal regulations require subrecipient monitoring The Prime recipient must report sub-award data in the FFATA Sub-Award Reporting System (FSRS)

Resources Public Law FFATA Legislation Public Law FFATA Legislation Federal Acquisition Regulation OMB Guidance on Subaward and Executive Compensation ReportingOMB Guidance on Subaward and Executive Compensation Reporting

You may contact the Program Integrity Team if you have questions your questions to Questions specific to grant policy should be sent to Contact Information