Subaward and Contract Management  

The following procedures are intended to provide guidance regarding Carleton’s monitoring and obligations as the prime recipient (pass-through entity) of sponsored funding when assigning a portion of the research or substantive effort to another entity through a subaward agreement. These guidelines are based on the Office of Budget and Management (OMB) Uniform Guidance.

Definitions and Responsibilities

A Pass-through entity is a non-federal entity that provides a subaward to a subrecipient to carry out programmatic effort under a sponsored project. The pass-through entity assumes responsibility for negotiation, issuance, oversight, and management of a subaward. 

As the pass-through entity, Carleton must make a case-by-case determination whether each agreement for the disbursement of Federal funds constitutes a subaward or a contract. The Subrecipient verses Contractor checklist must be completed by the PI to determine which type of agreement is appropriate.

OMB’s Uniform Guidance describes a Subrecipient (§200.93) as a non-Federal entity that receives a subaward (§200.92), which is a binding agreement, from a pass-through entity to carry out part of a Federal program, but does not include an individual that is a beneficiary of such program. A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency. A Subrecipient (non-Federal entity) is classified by these characteristics:

  • Has its performance measured in relation to whether objectives of a Federal program are met
  • Has responsibility for programmatic decision-making
  • Provides scholarly/scientific contribution to the program
  • Subject to compliance requirements of the program
  • Requires use of discretion and unique expertise
  • Is responsible for adhering to applicable Federal programmatic compliance requirements

A Principal Investigator (PI) is the person responsible for the overall design, conduct, reporting and management of an externally sponsored project. The PI is responsible for the following:

  • Certifying that work performed by the subrecipient is being completed and is acceptable
  • Maintaining regular contact with the subrecipient PI regarding all technical aspects of the project
  • Ensuring that all deliverables required per the subaward terms and conditions are being provided
  • Reviewing and approving subrecipient invoices in a timely manner
  • Communicating to the Grant Manager any deliverable or performance related issues

A Contractor is defined as an entity that receives a contract, a legal instrument by which a non-Federal agency purchases property or services needed to carry out the project or program under a Federal award. A contract creates a procurement relationship with the contractor. Contracts fall under two broad categories – fixed price (paid negotiated amount regardless of expenses) or cost reimbursement (paid for all allowed expenses to a set limit). Characteristics of a contractor: 

  • Provides goods and services within routine business operations
  • Provides similar goods and services to many different purchasers
  • Operates in a competitive environment
  • Provides goods and services that are ancillary to the operation of the project
  • Is not subject to compliance requirements of the project

A Consultant (Independent Contractor) is an expert adviser who is paid for time at a fixed rate of compensation specified in the service agreement. A consultant can be an individual or a company. Consultants must use their own equipment and materials.

It is critical that the PI consult with Human Resources prior to engaging an individual for services using the Independent Contractor Evaluation Form located on the Human Resources Forms webpage under Recruitment.

The Independent Contractor evaluation is an important step in correctly classifying workers. This review is a means to ensure that the College has proper documentation supporting the classification decision. If an independent contractor does not meet specific qualifications, they may need to be hired as an employee.

Keep in mind, not all of the characteristics need to be present to determine whether another non-Federal agency should be classified as a subrecipient or a contractor. Uniform Guidance states that judgment should be used in each case. 

Pre-Award Stage

Subrecipient Selection and Review

The PI should select a subrecipient based on an assessment of the subrecipient’s ability to perform the work successfully. This should include an analysis of the subrecipient’s past performance and technical capability, as well as an assessment of the proposed costs for the work to be done. 

A PI who plans to engage an entity to assume a portion of programmatic effort as described in a proposal must begin by submitting the following documents to the Grant Manger in the Business Office:

  1. Completed Subrecipient verses Contractor form to determine appropriate relationship
  2. Letter of intent signed by Subrecipient’s authorized representative providing subrecipient institution’s PI, statement of work, detailed budget, budget justification, and period of performance

If the work is to be done via a Contract:
If the procurement cost is over $10,000 and under $150,000, there are two primary methods of selecting a Contractor; single/sole source selections or competitive.               

1. Single or Sole Source selection is the most common when the Principal Investigator (PI) wishes to collaborate with an identified colleague or contact offering unique expertise or capabilities toward the project proposed to a sponsor. As specified in the Uniform Guidance, §200.320   Methods of procurement to be followed, this procuring of services from only one source may be used only when one or more of the following circumstances apply:

  • The item or service is available only from a single source;
  • The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation;
  • The Federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the non-Federal entity; or
  • After solicitation of a number of sources, competition is determined inadequate.

In both Single/Sole Source selection, the PI is required to provide justification identifying the need for particular services and why the selected Subrecipient is the source selected.

2. Competitive bidding is often used when purchasing goods or services, or when the PI has not identified a preferred Contractor at the time of the proposal or post award. The PI will solicit proposals and base the selection on technical merit and cost objectives.

Award Stage 

Subrecipient Information Form

Upon receipt of the above-mentioned documents (Sub v Contract, Letter of intent), the Grant Manager in the Business Office will send a Subrecipient Information Form to the selected Subrecipient’s institution. This questionnaire collects information that pertains to the entity’s financial situation.  

Risk Assessment

Once the selected entity returns the completed Subrecipient Information Form, the Grant Manger will complete a Risk Assessment Form. If the risk analysis results in a high level of financial risk, the Grant Manger will consult with the Comptroller and Risk Manager and determine if additional terms and conditions or more robust monitoring measures will apply. In rare instances, the Business Office may determine the risk is too great to move forward with an agreement. 

Preparing the Subaward Agreement

Carleton uses the standard FDP subaward template that may include terms and conditions dictated by the prime award and/or risk level of the subrecipient. Also included with the award documentation:

  1. Cover letter
  2. Subaward face page
  3. Attachment 1 (Certifications and Assurances)
  4. Attachment 2 (Prime Award Terms and Conditions)
  5. Attachment 3 (Contacts/Highest Compensated Officers)
  6. Attachment 4 (Invoicing and Reporting Requirements, completed by PI)
  7. Attachment 5 – Statement of work and Budget

The Grant Manager will email the subaward agreement with cover letter and attachments, plus SOW, budget, and copy of award letter for Prime grant to the subrecipient’s administrative contact for signature, copying the PI and the Grants Office. Upon receipt of the partially executed subaward, the Grant Manger will forward the document to the Comptroller for final approval. The fully executed award will be emailed to the subrecipient, again copying the PI and the Grants Office. 

FFATA – Federal Funding Accountability and Transparency Act

The Federal Funding Accountability and Transparency Act (FFATA) is intended to empower every American with the ability to hold the government accountable for each spending decision. The FFATA legislation requires information on federal awards (federal financial assistance and expenditures) be made available to the public via a single, searchable website.

The FFATA Subaward Reporting System (FSRS) is the reporting tool Federal prime awardees use to capture and report subaward and executive compensation data regarding their first-tier subawards to meet the FFATA reporting requirements. The subaward information entered in FSRS will then be displayed on the USA Spending website associated with the prime award furthering Federal spending transparency.

Prime awardees with a federal grant are required to file a FFATA subaward report by the end of the month following the month in which the prime awardee awards any subaward equal to or greater than $30,000 and any modifications of $30,000 (cumulative) thereafter.

Post-award Subrecipient Monitoring

As a pass-through entity, Carleton must monitor the subrecipient to ensure that the subaward is used for authorized purposes, is in compliance with Federal statutes and regulations, and achieves performance goals. The Subrecipient Monitoring Policy has been created to ensure compliance. 

Technical Monitoring

As prime award recipient, Carleton assumes responsibility for the conduct and completion of the project. Subrecipient progress reports should be reviewed thoroughly by the Principle Investigator and discussed with the Subrecipient as needed. 

Financial Monitoring

The Subrecipient is instructed to submit invoices (not more than monthly) to the PI responsible for the oversight of the effort performed. The PI must review the invoice to determine that the amount being requested is consistent with the amount of effort performed during the billing period. Upon approval of the invoice, the PI will authorize payment with a signature, provide the account number to charge, and forward the invoice to Accounts Payable for processing. Before submitting, the PI will confirm the following:

  • Account number provided
  • Information is accurate
  • Period of performance is consistent with previous invoices
  • Confirm indirect cost rate is calculated correctly
  • Current and cumulative total is in accordance with approved budget
  • Authorize payment with signature

Risk Monitoring

As the prime award recipient of federal funds, Carleton must verify that Subrecipients are meeting their annual audit requirements as they apply to the particular type of entity receiving funds, and review annual Single audit reports for any findings which might impact the Subrecipients ability to complete their portion of the project, or which disqualify them from receiving federal funding. The level of risk assigned during the risk assessment will determine the intensity of monitoring recommended for the subaward, in addition to the prime sponsor terms and conditions.

Subaward Amendments

Should changes need to be made to the original subaward agreement, the Grant Manager in the Business Office will obtain the PI’s approval of requested changes and issue a subaward amendment. The amendment will only address those portions of the original subaward that will be changed. All other terms and conditions of the subaward will remain in effect and unchanged. Common reasons for amending an award include extending the period of performance, providing additional funding, or modifying the reporting schedule. If the amendment includes an increase in funding, a budget, budget justification and statement of work must be provided with the amendment request. 

Subawards NOT included in the Original Proposal

Occasionally, the need for a new subaward agreement, not included as part of the original proposal, arises during the life of the prime award. In these situations, the first step is to determine whether a subaward or contract is needed. Once it’s confirmed a subaward is required, the PI should then work with the Grants Office to determine if prior approval will be necessary.  

Subaward Closeout

Upon completion of the subaward, the subrecipient must follow the closeout procedures defined in the subaward.  Before a final invoice can be paid, the PI must certify that all technical reports and/or deliverables have been received and the subrecipient has fulfilled its obligations.  Final payment may be withheld until receipt of required documentation.  Final verification is indicated by the PI’s signature and date on the final invoice.  Approval by the PI will serve as Business Office’s consent to close out the subaward.

Annual Subrecipient Audit

In accordance with OMB Uniform Guidance, the Grant Manager conducts an annual audit of Subrecipients. An in-house audit letter is sent to the selected subrecipients with a list of requested documents to support the selected invoices. 

Carleton College as the recipient of subaward or contract

When a Federally funded entity acting as a pass-through entity issues Carleton a subaward or contract, they will typically begin by sending a subrecipient information form to the Grant Manager. Once that is returned to the pass-through entity, they will submit to Carleton a subaward agreement, attachments, budget and statement of work.

  1. The PI, Grants Office and Grant Manager will review the documents to ensure the requirements and conditions are reasonable.
  2. If an original proposal was submitted, confirm no changes were made
  3. Upon approval, submit the subaward to the Comptroller for authorized signature
  4. Return the partially executed document to the pass-through entity for their final signature (request fully executed copy)
  5. Upon receipt of the fully executed subaward, confirm PI and the Grants Office have received copies
  6. Notify Gift Accounting when fully executed copy of subaward is received. Provide the Business Office account number and request a new source code. Record the accounts receivable.
  7. Complete New Account set-up worksheet and notify PI of account number
  8. Schedule new PI orientation