Subawards - Overview

When conducting sponsored programs, investigators may desire to enter into an agreement with third parties to complete a portion of the scope of work. The third party, known as the subrecipient, will be required to provide the resources necessary to complete the portion of the scope of work as a semi-independent project; this includes providing a responsible investigator at the work site of the cooperating institution or company to oversee program activities.

UCR's proposal to the prime sponsor should include the intent to establish a subaward, however, some sponsors may allow investigators to add subawards after the prime award has been made. Please refer to the terms and conditions of your award to verify whether sponsor prior approval is required to transfer a portion of the scope of work to another entity.

SPA is responsible for drafting, negotiating and executing the subaward. A special type of subaward is used when the subrecipient is another campus in the UC system, and SPA is responsible for establishing outgoing subawards to another UC campus.

Initiation and Negotiation of Subawards

When RED receives an award which contained a proposed subaward, the Principal Sponsored Programs Officer will send the Principal Investigator a Subaward Verification Form. This form provides information to the officer that will be necessary to draft and negotiate the subaward agreement and the Principal Investigator's signature on the Subaward Verification Form provides audit documentation and the approval for RED to initiate a subaward.

Once the information and approval is received in RED, the Principal Sponsored Programs Officer will draft the subaward to include terms and conditions as required by the prime sponsor. The subrecipient may request clarification or negotiation of any terms, which are negotiated by RED. In turn, RED consults with the Principal Investigator regarding the negotiation of the scope of work and budget. Once a subaward has been executed by both parties, RED notifies the Principal Investigator, department administrator and Accounting Office via e-mail. The complete subaward document is made available through PAMIS.

Post-Award Administration of Subawards

Technical Monitoring - As the prime award recipient, UCR assumes the ultimate responsibility for the conduct and completion of the project. Subaward progress reports should be reviewed thoroughly by UCR's Principal Investigator and discussed with the subrecipient as needed. The subrecipient will be required to furnish reports as identified in the subaward. It is important to notify RED if technical progress reports fall behind schedule or are not provided.

Financial Monitoring - In accordance with the subaward, invoices should be provided to UCR on a regular basis. The Principal Investigator, in conjunction with his/her department administrator, should review the request for payments to ensure the payment is consistent with the effort performed. The Principal Investigator should provide approval prior to payment of the subaward invoice. Amounts above the dollar amount included in the subaward will not be paid, even with the approval of the Principal Investigator, until an amendment to the subaward is negotiated and executed by the RED.

Typical questions that should be asked as part of an effective subrecipient monitoring effort include the following:

1. Is the subrecipient's progress commensurate with the costs claimed (invoiced)?
2. Have there been project delays? If so, why?
3. Are the subrecipient's results leading the program in an unexpected direction? If so, how do these results impact the originally proposed work? Does it change the scope of work? Should the prime sponsor be notified?
4. Has the subrecipient been timely in the submission of progress reports and/or invoices? If not, why?
5. Has UCR's results led to changes in the scope of work or has the prime sponsor changed the scope of work? If so, does the subrecipient's scope need to change?
6. Do the costs claimed (invoiced) exceed the amount of the subaward?
7. Are invoice dates within the subaward period of performance?
8. Has the subrecipient fulfilled its cost sharing commitments?
9. Do invoices contain any unallowable costs?
10. Are the claimed costs allocable to the program and reasonable (i.e., pass the prudent person test)?

Principal Investigators and/or department administrators should report any of the following to the RED as soon as possible:

1. Subrecipients who fail to perform the scope of work.
2. Requests from subrecipients to change any terms of the subaward, including (but not limited to) scope of work, budget, period of performance, progress report due dates, invoicing requirements and changes in the subrecipients principal investigator.
3. Subrecipients who fail fulfill reporting obligations or provide deliverables.
4. Subrecipients who breach the terms of a subaward.

Subaward Amendments

Should it be necessary to change any portion of a subaward, the Principal Investigator should contact the Principal Sponsored Programs Officer. Common reasons for amending a subaward include providing additional funding, extending the period of performance, or modifying the reporting schedule. It is important to note that some changes, such as scope of work changes, change in the subrecipient's principal investigator or transferring the subaward from one recipient to another, may require the prior approval of the prime sponsor.

Closing Requirements

The subrecipient is required to submit a final technical report and final invoice at completion of the agreement. Additional reports may be necessary, as required by the prime sponsor agreement. These may include a final inventory of property or an invention report. Principal Investigators should not approve final payment until all reports have been received.

Principal Investigators, assisted by department administrators, are responsible for conducting timely and appropriate financial and programmatic reviews of the technical information and invoices submitted by subrecipients. The RED can assist with securing information and invoices from subrecipients who have failed to meet their obligations under their respective subawards. However, timely notification to the RED is essential to help ensure a successful and collegial resolution to such issues.

Guidelines for Subrecipient Monitoring by Principal Investigators

Background

Whenever UCR subawards to another entity, the University must monitor the subrecipient to ensure its compliance with federal laws and regulations. As part of a monitoring program, UC Riverside relies on Principal Investigators and departmental staff to review and determine the allowability, allocability and reasonableness of subrecipient project expenses. Although Principal Investigators have primary responsibility for monitoring the technical progress and claimed costs of subrecipients, it is understood that some of this responsibility is frequently delegated to departmental staff or administrators. The following guidance is provided to assist Principal Investigators and those to whom they have delegated this responsibility.

Definitions

Subrecipient is a legal entity that receives Federal assistance via a subaward from UCR to carry out or administer a program, including responsibility for programmatic decision making.

Subaward is defined, for the purpose of this guidance, as the legal agreement between UCR and a subrecipient that transfers a substantive portion of the scope of work and federal financial assistance funding under an award received by UCR. A subaward does not involve the procurement of goods or non-research services.

Monitoring Guidelines

Below are general guidelines for monitoring subrecipients. If there are specific concerns or questions please contact the Contract and Grant Officer assigned to your unit for more detailed advice.

1. Periodic progress reports should be reviewed, comparing results delivered against the subrecipient's statement of work. In addition, the reports should be compared to invoices to determine that the expenses match the progress of the project. Examples of instances that could raise concerns include, but are not limited to:
   • A subrecipient consistently invoices UCR for one twelfth of the subaward budget each month; however, the progress reports do not match the level of expense being reported.
   • A subrecipient is performing work as evidenced by its progress reports, but has not submitted any invoices or has not submitted invoice in accordance with the terms of the subaward.
2. Subrecipient invoices should be reviewed for allowability, allocability and reasonableness of costs and should be in enough detail to determine how the funds were utilized.
3. Costs which differ materially from the subrecipient's approved budget, or appear unusual or unallowable should be questioned. In addition, payment should be withheld until a satisfactory explanation is received or an appropriate audit/review is performed and the findings of such audit/review resolved or corrected. Examples of when an invoice should be questioned include, but are not limited to:
   • A subrecipient's invoice indicates the purchase of equipment, but equipment expenses are not in the approved budget.
   • A subrecipient's invoice lists only the total costs claimed without providing any categorical breakdown/detail.
4. Approval of subrecipient invoices should be in writing on the invoice by the Principal Investigator and any supporting documentation should be retained.
5. Final invoices should be identified as such and should not be approved for payment until all deliverables have been received.
6. The Principal Investigator or department staff should promptly contact SPA with any concerns about a subrecipient. Examples of situations that may require further inquiry by SPA include, but are not limited to:
   • Suspicion of subrecipient non performance, (e.g. late progress reports).
   • Fraud or non-compliance with Federal regulations and laws.
   • Any indication that the subrecipient is not fulfilling its obligations under the subaward.