Research Policies

University Policy Number 4009

Subject: Subrecipient Monitoring Policy

Responsible Parties: Office of Sponsored Programs (OSP) and Fiscal Services

Procedures: Subrecipient Monitoring Procedures

Related University Policies: 4001 Financial Conflicts of Interest in University Contracts with Businesses under Virginia Law; 410 Financial Conflicts of Interest in Federally Funded Research

I. SCOPE

As a recipient of federal sponsored awards, George Mason University (“Mason”) must comply with the guidelines outlined in OMB Circulars A-21, A-110 and A-133. This policy applies to all subawards issued under sponsored projects awarded to Mason without regard to the primary source of funding. 

This policy does not apply to consultant agreements or procurement of services from vendors. Policies and procedures regarding those agreements are covered under Mason University Policy 2106. 

II. POLICY STATEMENT

Mason is responsible for financial and programmatic monitoring of sponsored project funds awarded to Mason that are subcontracted to another institution or organization (subrecipient). To provide the monitoring required by federal regulations and to ensure good stewardship of sponsored projects, Mason will use reporting, site visits, regular contact, or other means to provide reasonable assurance that the subrecipient administers awards in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.

This policy applies to all subawards issued under all sponsored projects awarded to Mason. The following are the objectives of the policy:

III. DEFINITIONS

Award
An award is financial assistance in the form of a grant or contract with a defined scope of work that provides support or stimulation to accomplish a public purpose.

Pass-Through Entity
A pass-through entity is a non-federal entity that provides an award of federal funds to a subrecipient to carry out the programmatic activities of a sponsored project.

Subaward
A subaward is an award of financial assistance from a prime awardee to a qualified organization, for the performance of a substantive portion of the programmatic effort under a sponsored project.

Subrecipient
A subrecipient is legal entity to which a subaward is made and which is accountable to the recipient for the use of the funds provided to carry out a portion of the programmatic effort under a sponsored project. It may include institutions of higher education, for-profit corporations and foreign or international organizations.  Subrecipients should not be individuals.  

Subrecipient Monitoring (PreAward, PostAward)
Subrecipient monitoring includes the oversight activities performed by a prime recipient that provide reasonable assurance that subawards made are being administered in compliance with applicable laws, regulations, and the provisions of the grant or contract agreement.

Vendor Agreement
Vendor Agreements cover services purchased that do not provide a substantive portion of the programmatic effort of the sponsored project.  Generally, the vendor provides the services commercially, operates in a competitive environment and retains no rights to intellectual property.

IV. RESPONSIBILITIES

Principal Investigator (PI)
The PI has responsibility for monitoring subrecipients, particularly the subrecipient’s technical and programmatic activities.  These activities should be performed in a timely manner throughout the duration of the subaward and be consistent with the proposed statement of work.  The PI should review technical reports and maintain regular contact with the subrecipient.  If necessary, the PI should perform site visits to review financial and programmatic records to ensure appropriate progress and compliance with subagreement terms and conditions.  

The PI also is responsible for reviewing and approving all invoices submitted by the subrecipient. The subrecipient shall be required to certify its invoices for accuracy and the PI should verify that invoice amounts are consistent with technical progress and that costs are allowable according to federal, state, university and sponsor requirements. 

Departmental Administrators
Departmental Administrators assist PIs in their subrecipient monitoring responsibilities.  The level of involvement may vary across Colleges/Schools/Institutes/Centers, but should be clearly defined at the local level.

Fiscal Services
Fiscal Services (Controller) is consulted in discussions regarding development of risk mitigation plans for high risk subrecipients.

Office of Sponsored Programs (OSP)
OSP is responsible for establishing a process for subrecipient monitoring that ensures compliance with federal, sponsor and university guidelines and regulations. OSP staff reviews proposal submissions to assure subaward arrangements are appropriately budgeted in the prime award budget and the appropriate representations, certifications and assurances are in place. 

During the award stage, OSP staff performs a pre-review of all subcontract invoices to ensure sufficient funding is available and routes the invoice to the PI to review and approve if programmatic progress is consistent with the level of expenditure (See Subrecipient Monitoring Procedures). 

OSP maintains a record of all active subrecipients and performs and annual risk assessment.  OSP also issues and collects an annual A-133 audit certification letter and financial questionnaire for non-A-133 subrecipients. 

OSP is available to assist PIs and Departmental personnel in the interpretation of subrecipient monitoring policies and procedures. OSP also will take the lead in developing strategies for resolving issues related to questionable costs or audit issues from subrecipients.

Purchasing and Accounts Payable (AP)
The purchasing department is responsible for consultant and vendor agreements for purchase of services that do not fall under the subrecipient monitoring policy. Subrecipients are directed to submit invoices to the Mason AP department, which is responsible for initiating the subrecipient invoice routing process to OSP. After OSP and PI approval, AP will post the payment against the proper encumbrance and issue payment to the subrecipient. 

Office of Risk Management
When necessary, the Office of Risk Management shall assist in determining whether a subrecipient maintains adequate commercial and general liability insurance to conduct the programmatic activities required under the statement of work

V. COMPLIANCE

As a recipient of federal funding, Mason assumes the responsibility of providing proper oversight of subrecipients to meet monitoring requirements.  These requirements include ensuring subrecipients are not debarred or suspended and are eligible to receive federal funds; the subrecipient has appropriate financial systems to manage sponsored funding; and the subrecipient does not have outstanding audit issues that will negatively impact the overall project. 

Associated Federal Regulations:

OMB Circular A-21, “Cost Principles for Educational Institutions”
OMB Circular A-110, “Uniform Administrative Requirements for Grants and Agreements with Higher Education, Hospitals and Other Non-Profit Organizations”
OMB Circular A-133, “Audits of States, Local Governments, and Non-Profit Organizations”
OMB Circular A-133, “Compliance Supplement”
31 USC 7502(f)(2)(B)(Single Audit Act Amendments of 1996 (Pub. L. 104-156)
U.S. Export Regulation:  ITAR – 2 CFR 120, EAR – 15 CFR 730, and OFAC – 31 CFR 501


VI. EFFECTIVE DATE AND APPROVAL

The policies herein are effective April 15, 2008. This policy shall be reviewed and revised, if necessary, annually to become effective at the beginning of the University's fiscal year, unless otherwise noted.

Approved:

_______________________
Maurice W. Scherrens
Senior Vice President

________________________
Peter N. Stearns
Provost

Date approved: May 14, 2008