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Subrecipient Determination and Monitoring on Sponsored Awards

Home / Subrecipient Determination and Monitoring on Sponsored Awards
Home / About Arcadia / Offices, Facilities, and Services / The Office of General Counsel and Secretary to the University / University Policies / University Policy Library / Subrecipient Determination and Monitoring on Sponsored Awards
Policy TitleSubrecipient Determination and Monitoring on Sponsored Awards Policy
Policy CategoryAcademic/Research Policies
Original Policy Approval DateFebruary 22, 2023
Policies SupersededNone
Responsible OfficeOffice of Sponsored Research & Programs/Financial Services
Related PoliciesAllowable Costs for Sponsored Research and Programs
Frequency of Review3 Years
Date of Next ReviewFebruary 22, 2025
Dates of Revision 

I. Scope

This Subrecipient Determination and Monitoring on Sponsored Awards Policy (“Policy”) pertains to all Principal Investigators/Project Directors and administrative support staff at the University who are involved in the administration and conduct of Sponsored Awards that issue and manage Subawards. All capitalized terms contained in the Policy are defined in Section IV below

II. Policy Statement

This Policy is intended to ensure responsible stewardship of Sponsored Awards to the University. As required by the United States Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 C.F.R. § 200.331, Subrecipient and contractor determinations, prior to passing through funds to other entities, the University shall use its judgment in making case-by-case determinations of whether a party receiving funds will be in the role of a Subrecipient or a Contractor. As presented in the associated Subrecipient Monitoring Procedures, prior to issuing a Subaward, the University shall evaluate each Subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions from the Pass Through Entity based upon a data-informed risk assessment questionnaire and apply a monitoring level appropriate to the degree of risk for the Subrecipient. Monitoring activities, if any, shall be presented in the Subaward, which shall include elements required by 2 C.F.R. § 200.332, Requirements for Pass Through Entities. The University shall monitor the Subrecipient’s activities to ensure that the Subaward is in compliance with applicable Federal statutes and regulations and the terms of the Subaward.

This Policy intends to comply with 2 C.F.R. § 170, Reporting Subaward and Executive Compensation, and the requirements of the Federal Funding Accountability and Transparency Act of 2006, 31 U.S.C. § 6101 et seq.

The University shall provide comparable oversight for Contractors or Subrecipients funded by non-Federal sponsored funds to demonstrate similar, responsible stewardship of such funds.

Failure to comply with this Policy and adequately monitor the compliance of Subrecipients could result in harm to the University’s reputation or jeopardize current and future funding.

III. Policy

The University’s Office of Sponsored Research and Programs, in collaboration with the Principal Investigator/Project Director and the University’s Department of Finance and Administrative Services, shall use its best judgment, based on the facts and circumstances available to it at the time, to determine whether an entity to receive funds originating from a Federal agency or non-Federal sponsor shall be considered a Subrecipient or Contractor and to assess the entity’s risk of noncompliance with the sponsor’s applicable provisions and requirements. Outcomes from this determination and assessment will be incorporated into a resulting Subaward whose terms and conditions shall fulfill the applicable requirements of 2 C.F.R. § 200.332 and 2 C.F.R. § 170 and be used to monitor Subrecipient performance and otherwise mitigate risk during the period of award. 

IV. Definitions

Some of the below definitions are taken from the Code of Federal Regulations. The University will also use these definitions in reference to funding from non-Federal Sponsors. 

Application/Proposal: A request for financial support of a Sponsored Award authorized by the University and submitted to a Sponsor in accordance with the Sponsor’s instructions. The Sponsored Award is typically well-aligned with both the University’s mission and the Sponsor’s interests and priority areas and upon completion is expected to result in outcomes or findings of broad benefit to society. If selected for funding, an Application/Proposal ordinarily results in a grant, sub-award, or other similar legal instrument to the University.

Contract: a legal instrument by which a recipient of a Sponsored Award or Subrecipient purchases property or services needed to carry out the project or program under a Sponsored Award; a contract creates a procurement relationship with the Contractor.  2 C.F.R. § 200.101.

Contractors: the entity supported by the Contract. Characteristics indicative of a procurement relationship between the non-Federal entity and a Contractor are when the Contractor:

  1. Provides the goods and services within normal business operations;
  2. Provides similar goods or services to many different purchasers;
  3. Normally operates in a competitive environment;
  4. Provides goods or services that are ancillary to the operation of the Federal program; and
  5. Is not subject to compliance requirements of the Federal program as a result of the Sponsored Award, though similar requirements may apply for other reasons.

2 C.F.R. § 200.331. 

Federal Award can have one of two meanings, means, depending on the context:

(1)(i) The Federal financial assistance that a recipient receives directly from a Federal awarding agency or indirectly from a pass-through entity, as described in 2 C.F.R. § 200.101; or (ii) The cost-reimbursement contract under the Federal Acquisition Regulations that a non-Federal entity receives directly from a Federal awarding agency or indirectly from a pass-through entity, as described in 2 C.F.R. § 200.101.

(2) The instrument setting forth the terms and conditions. The instrument is the grant agreement, cooperative agreement, other agreement for assistance covered in paragraph (2) of the definition of Federal financial assistance in 2 C.F.R. § 200.101, or the cost-reimbursement contract awarded under the Federal Acquisition Regulations, 48 CFR § 1 et seq.

Pass-through entity (PTE): a non-Federal entity that provides a Subaward to a Subrecipient to carry out part of a Federal program. In the context of this Policy, the PTE shall ordinarily mean the University. 2 C.F.R. § 200.101.

Principal Investigator/Project Director: the individual designated by the University as responsible for the overall scientific and technical or programmatic direction of the Sponsored Project. 2 C.F.R. § 200.101.

Sponsor: the organization or funding agency that funds a Sponsored Project.  The Sponsor may be a Federal, state, or local agency; a non-profit organization; a charitable or non-charitable foundation; a professional society; or a for-profit entity such as a corporation or a small business.

Sponsored Award: a formal, written legal agreement executed by the University and the Sponsor for specific work outlined in the Application/Proposal with the reciprocal transfer of something of value. The term includes but is not limited to grants; cooperative agreements; traineeships, scholarships, and fellowships; sponsored service, testing, and training agreements; sub-awards; and contracts, including fixed-price contracts. 

Sponsored Project: the specific activity (e.g., research, instruction, training), deliverable (e.g., service), and associated requirements (e.g., technical and financial progress reports) to be provided or completed as a condition of and supported by the Sponsor’s funding. The Sponsored Project and proposed personnel to be involved are ordinarily described in an Application/Proposal, approved by the University and submitted to the Sponsor, for their consideration of funding. Sponsored Projects ordinarily do not include major construction or renovation activities.

Subaward: an award provided by a PTE to a Subrecipient to carry out part of a Sponsored Award received by the PTE. It does not include payments to a Contractor or payments to an individual that is a beneficiary of a Federal program. A Subaward may be provided through any form of legal agreement, including an agreement that the PTE considers a contract. 2 C.F.R. § 200.101.

Subrecipient: an entity, usually but not limited to non-Federal entities, that receives a Subaward from a PTE to carry out part of a Sponsored Award, but does not include an individual that is a beneficiary of such award. A Subrecipient may also be a recipient of other Federal Awards directly from a Federal funding agency.  2 C.F.R. § 200.1.

Characteristics which support the classification of a non-Federal entity as a Subrecipient include when the non-Federal entity:

  1. Determines who is eligible to receive what Federal assistance;
  2. Has its performance measured in relation to whether objectives of a Federal program were met;
  3. Has responsibility for programmatic decision-making;
  4. Is responsible for adherence to applicable Federal program requirements specified in the Federal award; and
  5. In accordance with its agreement, uses the Federal funds to carry out a program for a public purpose specified in the authorizing statute, as opposed to providing goods or services for the benefit of the PTE.

2 C.F.R. § 200.331. 

Use of judgment in making determination: In determining whether an agreement between a PTE and another non-Federal entity casts the latter as a Subrecipient or a Contractor, the substance of the relationship is more important than the form of the agreement. All of the characteristics listed above may not be present in all cases, and the PTE must use judgment in classifying each agreement as a Subaward or a procurement contract. 2 C.F.R. § 200.101.

University is Arcadia University, its colleges, schools, affiliates, divisions, and subsidiaries.

V. Effective Date

This Policy is effective on the date that it is signed by the President

VI. Date of Approval

 Signed:  /s/ Ajay Nair, President

 February 22, 2023

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