Research Administration Training Series Subawards and Subcontracting March 24, 2011 presented by Brian Prindle Division of Sponsored Research

 Division of Sponsored Research Subrecipient vs Vendor Determination Overview of the Pre Award Subaward Process Frequently Asked Questions  Contracts and Grants Accounting Post Award Subaward Process Invoicing Payment Research Administration Training Series Goals of Session

Research Administration Training Series Subrecipient or Vendor; Why is this Important? 1.Impacts; Documentation needed at the time of a grant submission. How you build your grant budget and apply indirects. Who you will work with at the time of award. DSR or Purchasing. What type of award is issued to the Subrecipient or Vendor.

Research Administration Training Series Characteristics of a Subrecipient? 1.Subrecipient assists in the work being conducted by the University of Florida under the prime award. 2.Subrecipient maintains prime responsibility for their own programmatic decisions. 3.Subrecipient is part of the team.

1.Vendors provide the goods and services to many different buyers. 2.Vendors operates in a competitive environment. 3.Vendors are typically are for-profits. But not always. Research Administration Training Series Characteristics of a Vendor

Still confused? Federal Circular OMB-A133 Says Use discretion and good judgment when making a determination Research Administration Training Series

For a Subrecipient work with DSR and we use: Subcontracts and Subawards ►DSR has Templates for both ►DSR completes with help from PI and PI staff. ►Authorized Officials for both Parties sign. For UF that is DSR. ►Terms and conditions of the prime agreement do flow down to the subrecipient. Subrecipient Award Mechanism

For Vendors you work with Purchasing and we use: Contract for Services, Purchase Orders ►Coordinate with Purchasing ►You may need to go out for Bid ►Sole Source Justification ►DSR can grant an exemption to the UF purchasing rules due to an emergency timing issue. Vendor Award Mechanism

Let’s Play? Subrecipient or Vendor Research Administration Training Series

Subrecipient or Vendor? University of Georgia Principal Investigator will be responsible for supervising a Post Doc and other personnel connected with the NIH funded project in the Atlanta area. UG staff will assist the UF research team with enrolling subjects into the NIH funded study from the Atlanta area. UG PI will participate with the UF’s PI in the preparation of progress reports and manuscripts resulting from this study. UG PI will devote 25% effort to this project each year. What is it?

Subrecipient or Vendor? Scholastic Inc. will assist in the development of book collections for each book fair to be conducted at 17 elementary schools. The book collections will include appropriate titles for the cultural groups represented in the particular schools where the book fairs are held. Scholastic will send a representative to each of the participating schools to complete the ordering and fulfillment processes. What is it?

Subrecipient or Vendor? The Investigator will be responsible for video taping mice to collect data in order to analyze taste reactivity. Monthly reports will be provided to UF. Investigator will play an integral role in the design and interpretation of the experiments and contribute to the preparation of manuscripts for publishing.

Subcontracting Frequently Asked Questions Research Administration Training Series

What is needed at the time of Proposal? 1) Endorsement from the Subrecipient’s Authorized Official. 2) A clear Description of Work to be performed by the Subrecipient. 3) A corresponding Budget and Budget Justification. A subrecipient’s proposal should include the following:

Subrecipients May Need to Provide Additional Information, such as:  Biographical Sketches of Key Personnel  Current and Pending Support of Key Personnel  Representations and Certifications  Detailed Budget Information  Negotiated Facilities and Administrative Rate Agreement  Financial Conflict of Interest Disclosure Forms

 Sole Source Justification The UF Principal Investigator, if required by the sponsoring agency, may need to provide a source selection justification.  Unusual Circumstances Its not always straight forward. In those cases unusual circumstances contact DSR’s Proposal Processing Office in advance and we can talk it through.

Where do I budget for the Subrecipient Costs?  When preparing the overall project budget, include the total costs of each subrecipient, which includes the subrecipient’s fringe benefits and indirect costs, as one line item in the UF direct cost budget.  When using the federal modified total direct (MTDC) base, F & A is calculated on the first $25,000 of each new subcontract, only.  When using a total direct cost (TDC) base, F & A is calculated on ALL Subrecipient $.

Example (MTDC Base) UF Salaries$ 200,000 Fringe$ 25,000 Travel$ 5,000 Supplies$ 10,000 Subrecipient (USF)*$150,000 Total Direct:$ 390,000 (MTDC Base = 390,000 – 125,000)$ 265,000 Indirect 46.5% MTDC$ 123,225 Total:$ 513,225 * exclusions: $125,000 USF subaward

Example (TDC Base) UF Salaries$ 200,000 Fringe$ 25,000 Travel$ 5,000 Supplies$ 10,000 Subcontract (USF)$150,000 Total Direct:$ 390,000 (TDC Base $390,000) Indirect 25% TDC$ 97,500 Total:$ 487,500

Proposal Has been Funded WHAT HAPPENS NEXT? 1.Award is accepted and the Notice of Award (eNOA) is issued 2.DSR or OER Research Administrators (RA) will begin subaward process 3.RA will pull from the UF proposal the subrecipient’s “scope of work” and “budget” 4.RA will contact the PI or Department’s Grant Specialist to confirm the details 5.Draft the subaward document – using templates.

6.Request C&G Accounting to encumber subaward funding 7.Subaward draft is sent to PI or Department Grant Specialist for review, comments, and approval 8.Final subaward is sent to the subrecipient institution’s Sponsored Programs Office for acceptance 9.Upon return of signed subcontract, DSR fully executes 10.Fully executed agreement is distributed to C & G Accounting, to the PI, and to the Department Administrator

Subcontract is Fully Executed Now What?  Responsibilities of PI: 1.Stay in touch with subcontractor’s PI. 2.Receive & review technical report/deliverables from Subcontractor. Especially Finals 3.Coordinate with C&G Accounting the review and approval for payment of Subrecipient’s invoices. 4.Review any requested changes in the budget, scope, project dates, and forward to DSR or OER for processing.

CAS Regulations, Do they apply to a Subcontractor?  YES, if federal funds are the source.  CAS is found in OMB Circular A-21, which is part of Flow through T & C’s.  Subcontractor is responsible for compliance with CAS (Cost Accounting Standards)

Can a Subcontractor Carryover Unexpended Funds?  YES, if the UF award allows automatic carryover and our PI agrees to flow this term down.  At the direction of our PI, a specific clause can be added that subcontractor may NOT carryover of unexpended balances, without UF prior approval.

Can a Subcontractor Grant itself a “No-Cost” Extension?  NO - the subcontractor may not grant itself a no-cost extension.  If subcontractor requires an extension PI must give DSR approval to extend the end date of subcontract Subcontract date may not go beyond the UF end date. UF Award may need to be extended.

Can a Subcontractor Grant itself Preaward Costs? Yes, if the federal prime award allows pre award and the terms of the subcontract do not remove the ability.

How do IRB & IACUC Rules Apply to Subcontractor’s?  Subcontractors are responsible for compliance with IRB & IACUC regulations  Subcontractors upon request, will need to provide proof of IRB or IACUC approval at their institution before we will release subcontract funds.

Can a Subcontractor Rebudget Funds without UF Prior Approval?  Depends FDP or Standard Research Terms - yes Expanded Authority- yes Fixed Price Subcontracts- yes  Follow the rules of the prime award  DSR can add special terms to not allow some costs without UF prior approval. For example: Purchase of Equipment where Equipment was not budgeted for.

What Happens when the Subcontractor is Not Performing?  PI works with Subcontractor - informally - formally  Work with DSR - resolutions - terminations  Terminations - for Breach of Contract - for convenience

 What if the Subcontractor's PI leaves and we would like to have a new subcontract issued to the PI’s new institution? Terminate early Final Report and Invoice Get Sponsor Approval if Necessary  We did not include a subcontract in the original proposal but would like to issue a subcontract. What do we do? Contact DSR with questions. Most likely, UF’s sponsor will need to approve, but not always. Will need a authorized subcontract proposal. Ship it off to the agency for approval or approve in house.

What are some Key Elements of UF Subcontract? Subcontract number CFDA number Prime Award Number Type: Cost or Fixed Project Directors Period of Performance Statement of Work Funding Amount $$$ Payment Terms Reporting Requirements Audit requirements Allowable Costs Compliance Certifications Termination Modifications/Amendments Signatures of officials

That’s it for PreAward Questions? Subawards and Subcontracting

The University of Florida Contracts and Grants Accounting Services POST AWARD INFORMATION POST AWARD INFORMATION Processing Subawards & Subcontracts March 24, 2011

Subaward Contact Info – 123 Grinter Deb Strickland Ed Parker Peg Canaday - Main Jerome Able – IFAS & EIES

Subaward Overview 1.For and Awards Administration in the Division of Sponsored Research (DSR) prepares the subaward agreement and sends a request to encumber the funds to C&G Accounting (CGA). 2.For the Office of Engineering Research (OER) performs this function. From this point on, C&G Accounting handles all the subaward processing. 3.Note: For this presentation, only DSR will be used in the steps that follow. 4. A purchase requisition is then prepared to encumber the funds in PeopleSoft.

Subaward Overview 5.Purchasing generates the actual Purchase Order. Unlike most PO’s, a copy is not sent to the subrecipient/vendor. The subaward agreement itself is their authorization to invoice UF. 6.The subaward is entered into the Subaward Management Database – a Microsoft Access application. 7.Upon execution of the subaward agreement DSR sends a copy of the document to the UF Principal Investigator and CGA. Invoices cannot be paid until a subaward has been fully executed. (There is an example on the next slide.) 8.We are now ready for receipt of the first invoice.

Subaward Agreement

Subaward Database History The University of Florida has developed an Access database that simplifies the monitoring of subawards. It is capable of importing files from PeopleSoft and the Federal Audit Clearinghouse (FAC) website. This facilitates keeping it’s data current. A Special “Thank you” to: Nick Dunham Director of Information Services UF Office of Research

The Subaward Database Why do we need the database? The database has a separate record for each subaward. Its contents are displayed using the Subaward Detail window, which has three functional tabs: – Prime Award Info Tab – Subrecipient Info Tab – Transactions Tab Examples of all three are next.

Prime Award Info

Subrecipient Info

Transactions Double Click Here for details

Transaction Detail

Subaward Database Documents Each subaward has a unique number. and use the format “UFXXXXX”. subawards use “UF-EIES”. The database self-generates the following: – Subaward Summary Report – Payment Certification Letters “Regular” “Final” Examples of both are shown next.

Payment Certification - Regular

Payment Certification - Messages Please pay attention to anything written in the text box shown below.

Payment Certification - Messages Please pay attention to anything written in the text box shown below.

Payment Certification – PI input Complete this section if the PI Approves the invoice Complete this section if the PI Declines payment

Payment Certification - Final Is this REALLY the “Final” ? If not, “X” out the word “Final” before sending the certification to C&G

Subaward Reports buttons

Subaward Summary Report

Payment Process for Invoices CGA reviews invoices received from the subrecipient for appropriateness of charges, dates of service, etc. If applicable, A-133 Federal Audit Compliance must be determined before the first invoice is paid. The invoice is entered into the database. The Subaward Payment Certification and related documents are generated. The Payment Certification, invoice, and Subaward Summary Report are ed to the department for PI’s signature/approval.

Payment Process for Invoices The PI indicates approval/denial on the Payment Certification letter. A justification, signature, and date are required. The letter is the only document we need to have returned. Please do so within 3 business days…. or you’ll get a visit from THIS guy!

Reasons for Delayed Payment The Certification letter is missing any of the 3 requirements just listed on the previous slide – or has not been returned at all. The subrecipient is not A-133 compliant according to the Federal Audit Clearinghouse, and has not returned the A-133 Compliance letter we send to them. Budget problems with the related PeopleSoft project, and/or the subaward itself.

The invoice is now ready to be paid. A voucher is created by C&G and the original invoice, payment certification, and bar code are faxed to Disbursement Services for audit, payment approval and archival imaging.

Subaward PeopleSoft Accounts Subaward expenses are charged to account ( first $25,000 if applicable ) and

Helpful Information Agencies to which UF makes payments and their A- 133 Audit Status are found at: – – If a non-Federal entity will be expending Federal awards, they must be listed on this website before payments can be made. – A-133 requirements may not apply to the subrecipient, but they still need to be on the website. I’ll go into more detail as we review the next slide. Several forms related to subawards can be found on DSR’s website at: –

The OMB A-133 Subaward Website Spent < 500,000 Foreign Entity For Profit Company

Thank you for coming!  Any Questions?