Subrecipient MonitoringWebcast

PresentersPat O'Rourke, Irene St. Croix, Bridget

Ware Department of Health and Human Services

Health Resources and Services Administration

Program Integrity Team

Agenda

• Program Integrity• Why Monitor

Subrecipients• Funding

Subrecipients• Definitions• Characteristics of a

Subrecipient

• Sub-Award Agreement

• Federal Regulations• Pre-Award

Monitoring• Post-Award

Monitoring• Wrap Up

Program Integrity

• This session is part of HRSA’s Program Integrity series

• Program Integrity aims to help:oensure programmatic compliance, efficiency,

and accountability o identify vulnerabilities that can adversely

affect the integrity of the program odetect and prevent fraud, waste, and abuse

Why Monitor Subrecipients?

• For program integrity assurance

• To meet Federal regulations reporting requirements

It’s the law!

Funding Subrecipients

Funding vehicle can either be a grant or contract

Prime Recipient

Subrecipient

Government Agency(HRSA)

Definitions

• Prime Recipient – Entity who receives a direct award from the agency to carry out a Federal program

• Subrecipient - Non-Federal entity that expends Federal awards on behalf of the prime recipient to carry out a Federal program

Definitions

• Subaward - A legal instrument to provide support for the performance of any portion of the substantive project or program for which the recipient received the funds and then awards to an eligible subrecipient.

http://www.hrsa.gov/grants/ffata.html

Who Is Not a Subrecipient?

• A vendor is not a subrecipient

• A dealer, distributor, merchant, or other seller providing goods or services that is required for the conduct of the sponsored program

Characteristics of a Subrecipient

Has responsibility for making programmatic decision

Has responsibility for adherence to applicable programs compliance requirements

Has its performance measured against program objectives

Uses funds to carry out a program as compared to providing goods or services for a program

Sub-Award Agreement

• Inform subrecipients of:– Catalog of Federal Domestic Assistance (CFDA)

number– Award information– Notice of Award (NoA) terms and conditions– Reporting requirements– Circular A-133 requirement if expending $500K

or more in Federal awards

Sub-Award Agreement

• At a minimum, the sub-award agreement must include the following:– Programmatic roles and responsibilities of

individuals at the subrecipient’s organization– Procedures for directing and monitoring the

programmatic effort– Procedures to be followed in providing funding

to the subrecipient– Applicable policy that meets HRSA’s

requirement

http://www.hrsa.gov/grants/hhsgrantspolicy.pdf

Federal Regulations

• Cost Principles:– 2 CFR part 220– 2 CFR part 225– 2 CFR part 230

• Federal Funding Accountability and Transparency Act (FFATA)

• OMB Circular A-133

Federal Cost Principles

Sub-award to State, Local, and Indian Tribal Governments, 2 CFR part 225 shall apply

Sub-award to a college or university, 2 CFR part 220 (Circular A–21) shall apply

Sub-award to a commercial organization, FAR Subpart 31.2 the cost principles applicable to commercial organizations shall apply

Sub-award to some other non-profit organization, 2 CFR part 230, Cost Principles for Non-Profit Organizations (Circular A–122), shall apply

Sub-award to a hospital, 45 CFR 74 (Appendix E) Principles for Determining Cost Applicable to Research and Development under Grants and Contracts with Hospitals, shall apply

The Federal Funding Accountability and Transparency

Act (FFATA) • The Act was signed on September 26, 2006

• Requires information on Federal awards (Federal financial assistance and expenditures) to be made available to the public via a single, searchable website, which is http://www.USASpending.gov/

https://www.fsrs.gov/

FFATA Sub-Award Reporting System (FSRS)

• Reporting tool Federal prime awardees use to meet FFATA reporting requirements

– i.e., prime contractors and prime grants recipients

• FSRS captures and reports sub-award and executive compensation data regarding first-tier sub-awards

https://www.fsrs.gov/

FFATA Requirements

• As of October 1, 2010, new Federal grants and contracts with an initial award that is equal to or over $25,000, must report sub-award and executive compensation data

• If the initial award is below $25,000, but subsequent grant and contract modifications result in a total award equal to or over $25,000, the award will be subject to the reporting requirements, as of the date the award exceeds $25,000

$25,000

FFATA Requirements when Funds Reduce

If an initial award equals or exceeds $25,000

…but is subsequently de-obligated and falls below $25,000

The award continues to be subject to the reporting requirements of the Transparency Act

Reporting Timeline for Prime Recipients

The prime recipient is required to file a FFATA sub-award report by the end of the month following the month in which the prime recipient awards any sub-grant or subcontract greater than or equal to $25,000

https://www.fsrs.gov/

June 2014

SUN MON

TUE WED THURS FRI SAT

1 2 3 4 5 6 7

Subaward

Agreement

Signed

8 9 10 11 12 13 14

15 16 17 18 19 20 21

22 23 24 25 26 27 28

29 30

July 2014

SUN MON TUES WED THURS

FRI SAT

1 2 3 4 5

6 7 8 9 10 11 12

13 14 15 16 17 18 19

20 21 22 23 24 25 26

27 28 29 30 31

FFATA

Subaward

Report Due

Executive Compensation

• An executive is an officer, managing partner, or any other employees in management positions

• Total compensation includes cash and noncash dollar value earned by the executive during the subrecipient’s preceding fiscal year

(17 CFR 229.402(c)(2))

http://www.hrsa.gov/grants/ffata.html

Executive Compensation

80% or more of prior year annual gross revenues are from Federal awards; and

$25 million or more in annual gross revenues are from Federal awards; and

the public does not have access to compensation information filed under SEC and IRS requirements

80%

$25M

No access periodic reports

Names and total compensation of

the five most highly

compensated officers are required

Costs Associated with Sub-Awards

• Audit costs and related services– The costs of audits required by Circular A-133– Other audit costs included in a cost allocation

plan or indirect cost proposal

• Settlement expenses– Accounting, legal, clerical, and similar costs

reasonably necessary for:• The termination and settlement of sub-

awards

Pre-Award Monitoring

Verify the subrecipients have not been debarred or suspended from receiving Federal funds at https://www.sam.gov/portal/public/SAM//

Determine whether the applicant is a subrecipient or a vendor

Pre-Award Monitoring

Request agreement documents to

be returned at a reasonable

deadline

Verify subrecipient written

agreement has been completed

with all required information

Review the budget to ensure the

correct rates are being used

Review

Document

Repeat

Post-Award Monitoring

• Review all documentation • Ensure the correct indirect

cost rate and fringe benefit rate have been used

• Ensure the budget is reasonable and only allowable costs have been included

Review

Document

Repeat

Post-Award Monitoring

• Review ongoing programmatic effort and expenditures

• Log communications with the subrecipient

• Maintain a Risk Assessment Log - include entities with A-133 findings or have been written off for non-payment

Wrap Up

• Program Integrity is key to meet program objectives

• Federal regulations require subrecipient monitoring

• The Prime recipient must report sub-award data in the FFATA Sub-Award Reporting System (FSRS)

Resources

• Public Law 109-282 FFATA Legislation• Public Law 110-252 FFATA Legislation• Federal Acquisition Regulation• OMB Guidance on Subaward

and Executive Compensation Reporting

• You may contact the Program Integrity Team if you have questions

• Email your questions to integrity@hrsa.gov

• Questions specific to grant policy should be sent to DGP@hrsa.gov

Contact Information