When BMC is the Prime Awardee, Compliance Requirements Abound
As the prime recipient of federal funds, whenever BMC contracts with other institutions to conduct some of the award's work, BMC is responsible for completing a risk assessment and conducting annual performance review of its subrecipients. The review includes completion of a standard questionnaire and a review of subrecipients' most recent audit and may include a review of individual invoices .
Uniform Guidance (2 CFR 200) states that prime recipients are required to monitor all subrecipients that expend $750,000 or more in federal awards during the subrecipients' fiscal year, whenever pass-through federal funds provided by BMC were expended. BMC has created guidelines, systems and procedures to assist with this oversight obligation.
The BMC policy on Subrecipient Risk Assessment and Monitoring sets out the the requirements involved in subrecipient monitoring.
Monitoring Roles and Responsibilities
Principal Investigator/Program Director
The PI/PD has primary responsibility for monitoring subrecipients to ensure compliance with federal regulations and subaward terms and conditions. The PI/PD also monitors subrecipients' technical and programmatic activities relative to the subaward:
- Verifying that subrecipient work is completed in a timely manner and that the results are delivered according to the statement of work
- Reviewing subrecipient invoices to ensure that charges are allowable, allocable, reasonable, and incurred within the period of performance before approving, and
- Maintaining regular contact with the subrecipient investigator(s).
Department Administrator
A department administrator (DA) may support the PI/PD in meeting their obligations, including:
- Reviewing invoices from subrecipients to ensure expenses are incurred within the period of performance, are allowable, and support the work funded by the subaward
- Requesting clarification from the subrecipient regarding any unusual or excessive invoices to BMC
- Maintaining evidence of the critical and timely review of invoices, in the form of PI/PD signature, designee initials, e-mail communications, and notes of meeting with the PI/PD, and
- Documenting monitoring efforts (e.g., copies of e-mails, phone log).
Sponsored Programs Administration
Sponsored Programs Administration staff are responsible for ensuring that BMC’s subrecipient monitoring policy is compliant with federal regulations. They also assist in meeting monitoring obligations, including:
- Verifying federal award information (e.g., Catalog of Federal Domestic Assistance (CFDA) title and number, award name, name of federal agency) and compliance requirements, including flow-down provisions from the prime agreement
- Determining whether the subrecipient, its officers, or key personnel are debarred or suspended from receiving federal funds
- Conducting annual review of active subawards for which monitoring is required
- Requesting audit certification letters from subrecipients expending $750,000 or more in federal funds during the subrecipient’s fiscal year and reviewing to verify no audit findings are reported, and
- Following-up with subrecipients when audit findings indicate further oversight and actions may be necessary.
SPA staff work with PI/PDs and DAs to establish the framework for when further oversight is necessary. Additional sponsor or program-specific conditions may require other assurances during project performance, such as those related to lab animals, human subjects, and biohazards.
Performance Management
Just as BMC has an obligation to sponsors, subrecipients and vendors/contractors have similar obligations to BMC. It is important for the BMC PI/PD to outline clear expectations for the overall project with their counterpart subrecipient PI/PDs. If one is performing below standard, the BMC PI/PD needs to address it immediately, including:
- Understanding the issue and the root cause of the deficiency
- Reaching a mutually acceptable corrective action plan
- Scheduling recurring meetings to ensure the issue is being addressed as agreed upon, and
- Continuing the collaboration if the issues are resolved, or considering termination and replacement if the issues are unresolved.
Termination requires formal notification and must be completed in accordance with the subaward agreement. Subrecipients typically have 30 days after notification to wind down technical aspects of the project and submit final reports and invoices to BMC. If the subrecipient is to be replaced with another entity, the BMC PI/PD will need to inform the sponsor's program officer and begin preparing a formal request for replacement.