1 University of Washington Outgoing Subcontract Administration for Sponsored Programs May 2010 Michael J. Blackwell, Sponsored Programs Debbie Emerson-Carter, Sponsored Programs Suzi Freelund, Financial Services Michelle Schrader, Procurement Customer Service

2 S U B C O N T R A C T S Through this presentation, you will learn…  What a Subcontract is and how it differs from a Purchase Order for goods and services;  The proposal requirements for including a Subcontractor and administering a Subcontract;  How to process invoices to pay the Subcontractor; and  The procedures for closing out a Subcontract.

3 SUBCONTRACTS PROCESS IMPROVEMENT Currently engaged in USER Task Group #2 Part of Seamless Procure to Pay Project Goal is to Streamline Operations between the Academic Dept., OSP, and Accounts Payable New GIM 7 Subcontracts for Sponsored Programs just released Plan is to be finished by mid 2010

4 S U B C O N T R A C T S  I. Background, Definition, and Budget Format  II. Responsibilities of the UW PI and Various Offices  III. Subcontracts to the UW from Another Institution  IV. Questions or Need More Help?

5 S U B C O N T R A C T S I. Background, Definition, and Budget Format

6 Background  From fiscal year 2005 to 2009, the growth in dollars of UW issued subcontracts has been 21.7%. During the same period, overall sponsored awards grew by 12% at UW.  This is part of a larger national trend by Federal and private sponsors to encourage cross-disciplinary collaborative research, e.g., in RFAs or RFPs.

7 S U B C O N T R A C T S Background, Definition, and Budget Format Definition Characteristics indicative of a Federal award received by a subcontractor are when the organization (UW PI):  Determines who is eligible to receive what Federal financial assistance;  Has its performance measured against whether the objectives of the Federal program are met;  Has a responsibility for programmatic decision making;  Has responsibility for adherence to applicable Federal program compliance requirements; and  Uses the Federal funds to carry out a program of the organization as compared to providing goods or services for a program of the pass-through entity.

8 S U B C O N T R A C T S Background, Definition, and Budget Format Definition Characteristics indicative of a payment for goods and services received by a Subcontractor are when the organization (UW):  Provides the goods and services within normal business operations;  Provides similar goods or services to many different purchasers;  Operates in a competitive environment;  Provides goods or services that are ancillary to the operation of the Federal program; and  Is not subject to compliance requirements of the Federal program.

9 S U B C O N T R A C T S II. Responsibilities of the UW PI and Various Offices

10 S U B C O N T R A C T S Responsibilities of the UW PI and Various Offices Proposal Stage:  When a UW PI selects one or more Subcontractors, be sure to get a signed proposal (at a minimum, work scope and detailed budget) from authorizing official.  Encourage use of prime sponsor forms by the Subcontractor, e.g., R&R 424.

11 S U B C O N T R A C T S Responsibilities of the UW PI and Various Offices This Subcontract proposal is then folded into the UW proposal for transmittal through UW channels and on to the sponsor. This is then loaded into Grants.gov or whatever portal/method UW uses by UW dept. staff. Attach in SAGE to GC-1 also. The first $25K is subject to UW IDC, unless the standard rate is not allowed by the sponsor, e.g., a 10% of TDC base.

12 S U B C O N T R A C T S Responsibilities of the UW PI and Various Offices: UW Budget Format Budget Format 01Salaries$100 K 07Benefits$ 22 K 05Supplies$ 5 K 03-62Subcontract (MIT)$ 35 K 03Other$ 5 K --Subtotal DC=$167 K 25-99Subtotal MTDC= $87.92 K --GRAND TOTAL=$ K

13 S U B C O N T R A C T S Responsibilities of the UW PI and Various Offices Award Stage: When the award, including the proposed Subcontract, is made to the UW, a Budget No. is assigned by Grant and Contract Accounting (GCA) and the PI and dept. staff notified. Next step is to start the Purchasing Requisition in PAS using the budget number. Note: only one budget number can be used.

14 SUBCONTRACTS OUTGOING SUBCONTRACTS ARE FINANCIALLY SOLVENT! WHY? WE DON’T ISSUE SUBCONTRACT AWARDS WITHOUT THE MONEY!

15 S U B C O N T R A C T S Responsibilities of the UW PI and Various Offices To avoid unnecessary delays, the PI or designated staff person in the local UW department must:  immediately enter an on-line Purchase Requisition (PR) in the amount of the Subcontract,  which is then directed via Purchasing’s Buyer Assignment to OSP,  where the Subcontract, including all applicable conditions, is prepared.

16 SUBCONTRACTS PROPER WAY TO FILL OUT A PURCHASE ORDER FOR A SUBCONTRACT REQUEST Use Object Code Always Check “NO” for Attachments in PAS Send Attachments to Subcontract Manager in OSP with PR Number on Them Refer to OSP website for detailed guidance

17 S U B C O N T R A C T S Responsibilities of the UW PI and Various Offices Subcontract Preparation: OSP’s Subcontracts Group will use a standard template of general conditions (see OSP web site) and add the special “flowdown conditions” from the prime sponsor. The Subcontractor will be contacted for review and confirmation of all terms, especially the budget (cost and price analysis) and the need for an audit report.

18 S U B C O N T R A C T S Responsibilities of the UW PI and Various Offices Once signed by the OSP Subcontract Manager and ed to the Subcontractor, then signed and returned to OSP, it is at this point that the funds are encumbered in ordered status in PAS so that invoices from the Subcontractor may be received and processed for payment.

19 S U B C O N T R A C T S Responsibilities of the UW PI and Various Offices Invoice or Voucher Review and Approval: Subcontractor submits invoices at least quarterly, not more frequently than monthly, to Accounts Payables (AP). AP coordinates with PI and department staff on approval of invoices, then authorization is granted back to PA for check issuance. Both RIP and Non-Rip ($10K +) procedures are used.

20 S U B C O N T R A C T S Responsibilities of the UW PI and Various Offices Renewals or Modifications:  If the PI, under the prime award, receives a new Budget No., do a new PR.  If the existing Budget No. is used to continue the research program, just send a request in writing/ to the OSP Subcontract Manager.  PIs are not authorized to amend Subcontract terms (see Article VI).

21 SUBCONTRACTS PROPER WAY TO REQUEST A MODIFICATION TO A SUBCONTRACT New Form created about a year ago (UW PI or authorized designee must sign) Using the Form is Optional, but Completing it Properly may result in Faster Service The Form is available at the OSP website under Subcontracts section

22 S U B C O N T R A C T S III. Subcontracts to the UW from Another Institution

23 S U B C O N T R A C T S Subcontracts to the UW from Another Institution Members of the faculty are sometimes invited by colleagues at other institutions to participate in research and other sponsored programs.

24 S U B C O N T R A C T S Subcontracts to the UW from Another Institution Faculty member should prepare and submit, through regular UW channels, a proposal with Form eGC-1 outlining the extent of participation and funding and facilities commitment necessary to carry out the participation.

25 S U B C O N T R A C T S Subcontracts to the UW from Another Institution This will provide an opportunity for the same type of review given proposals going to primary funding sources, and will assure the awardee institution of official UW approval of the proposed collaboration.

26 SON - S U B C O N T R A C T S IV. Questions or Need More Help?

27 S U B C O N T R A C T S Questions or Need More Help? Questions concerning preparation, execution and close out of subcontracts should be directed to: Tru Ambrose, Verenice Barbosa, Jessica Brase and Lorri Vlcek (for new subcontracts, renewals, and modification requests) Adelina Caberto (execution and ordered status in PAS) Debbie Emerson-Carter (close out matters and ATA or invoice discrepancies)

28 S U B C O N T R A C T S Questions or Need More Help? Questions concerning how to process invoices and payments to Contractors should be directed to: Accounts Payable/Financial Services – Main Customer Service Line (Must have the Subcontract No. to contact this office.)

29 S U B C O N T R A C T S Questions or Need More Help? Questions concerning subcontracting using gift and state budgets should be directed to: Purchasing Services

Subcontracts in Accounts Payable How Invoices Get Paid How Invoices Get Paid Suzi Freelund – Accounts Payable Michelle Schrader – Procurement Customer Service

Sorting & Batching Online Invoices Invoices get sorted by the following criteria: Manual vs. Online Direct/Priority vs. Regular Handling RIP vs. NonRIP Invoices are then given to the appropriate team to log into batches

Sorting & Batching Online Invoices RIP and NonRIP invoices have notices sent to the department RIP notices let the department know the invoice is pending NonRIP invoices require written approval to be paid Direct invoices already have written approval to pay Currently piloting with several departments to have all subcontract invoices verified in department before being sent to AP for payment. Allows departments to stop problems before they happen. Allows AP to expedite payment of invoices

AP Glossary “Online” Invoices are invoices processed through PAS and payment is automatically generated by the system. “Manual” Invoices are processed completely by hand and manually keyed into PAS for payment. “Wire Transfers” are manual invoices paid via electronic bank communications to Subcontractors in foreign countries.

Paying Online Invoices Direct invoices are cleared for payment within hours of being logged NonRIP invoices are processed for payment then held pending written approval to pay. Priority & RIP invoices are processed 5 business days after the RIP notice is sent but within 30 days of the invoice received date.

Manual Invoice Payments Invoices given to Subcontract team for batching & processing. Hard copies of the Subcontract are pulled from the Subcontract filing cabinet in AP. Currently piloting with several departments to have all subcontract invoices verified in department before being sent to AP for payment. Allows departments to stop problems before they happen. Allows AP to expedite payment of invoices.

Processing Manual Invoices Department may submit these with an invoice voucher (see handout). The AP technician matches the invoice against the subcontract, including performance period, encumbrance, and dollar amount. This information is logged in a spreadsheet and in Doc Logging. FAS enters data in PAS and FIN to issue the check. Payment sent to Subcontractor

Wire Transfers Wire Transfers are logged into their own batch in Doc Logging. Allows Procurement Customer Service to know if the wire has been sent. Allows for data collection. Wires are sent using Bank of America Direct. Initiated by Suzi or Mesfin. Approved by Julie, Suzi or Pramilla. Wires can be sent in US Dollars or most Foreign Currencies. Wires sent inside US cost $10 and can take 5 business days to reach the beneficiary Wires sent Internationally cost $25 and can take 14 business days to reach the beneficiary

Continued… Wires logged into Wire Log Spreadsheet Funds unencumbered in PAS PO is closed if one-time payment JVs entered into FASTRANS Spreadsheet and sent to JVREQ Once JVs are uploaded, spreadsheet is returned with JV numbers and batch number Updated JVs are saved into an Excel workbook s are sent to department contacts with JV and Wire information attached in Excel files for BAR reconciliation

Invoice Discrepancies Manual – When invoice entered in Doc-Logging Order in Pre-Buy Status Subcontractor Mismatch Online – Generated while clearing invoice for payment Exceeds Order or Line NTE amount Beyond Contract Terms Order Closed Item doesn’t match order Freight not authorized Sent to Subcontract Manager for resolution Cleared for payment when approved by Subcontract Manager

Presented by: Debbie Emerson-Carter CLOSEOUT PROCESS FOR SUBCONTRACTS

Background  OSP receives monthly reports for Subcontract budgets that expired the month prior.  Depending upon the performance period, OSP Subcontract Coordinator (Currently Debbie Emerson- Carter) will send closeout or amendment memos electronically to the UW PI and department contact, informing them that the subcontract has expired and requires a response.  Memos were previously sent via campus mail with original signature. Effective 12/09 all amendment and closeout memos are being sent via with an electronic signature.

Modifications and New Subcontracts  Note: All other requests for amendments or new subcontracts should be made directly the Subcontract Manager (currently Mike Blackwell) only.

What’s Required of the Subcontractor?  The Subcontractor must provide the department with a Final Technical Report within 30 days after the end of the subcontract performance period.  The Subcontractor must provide the Final Invoice to UW Payables, Marked Final with the A-133 statement if it is a requirement stated in the subcontract within the time specified in the subcontract terms.

A-133 “The Contractor assures to the University that all expenditures were incurred in full compliance with OMB Circular A-133 or its own applicable audit regulations. Disallowed costs if found during the retention period of this Subcontract will be promptly refunded to University.”

Continued…  The Subcontractor must submit Exhibit D Close Out Certification to the University’s Subcontract Manager no later than 60 days following the termination of the Subcontract under Federal Contracts, DoD and NASA Grants only.

What’s Required of the Departments?  Departments must review and retain a copy of the final invoice prior to payment to make certain all requirements of the subcontract have been met, which is due no later than 60 days following termination of the subcontract.

Final Closeout Steps  Final invoice is received and paid, Departments must contact me via at requesting the subcontract be closed out and any remaining encumbrance be liquidated.  The request is received, OSP Subcontract Coordinator (Debbie Emerson-Carter) will send an to SAF at giving the ok to close the subcontract (copying the department) requesting the subcontract to be closed to verify that the final invoice was received and paid in accordance with all of Article IV. requirements (Allowable Cost and Payment Section of the Subcontract)

QUESTIONS Contact Information: Debbie Emerson-Carter (206)