Subgrants and Subrecipient Agreements

Grantees are responsible for the acts of their subrecipients. Grantees must first vet and assess the risk of subgranting government funds to another entity. Based on the results of these efforts, grantees must put in place mechanisms and processes to appropriately monitor both performance and cost to ensure that the program is carried out in compliance with the regulations and the specific terms of the subrecipient agreement.

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One of the more important and scrutinized aspects of being a federal grant recipient is monitoring project performance efforts, and the project performance efforts of subrecipients. While the drafters of the Super Circular do not believe it vastly differs from prior guidance [78 Fed. Reg. 78590, 78598 (Dec. 26, 2013)], it certainly opens up room for interpretation, misunderstanding, and disagreement. Accordingly, we attempt to shed some light on these requirements and provide practical considerations for addressing them.

Section 200.303 of the Super Circular requires that grant recipients establish and maintain effective internal controls over their federal awards that provide reasonable assurances the grant recipient is managing the grant in compliance with law and the terms of the grant. Moreover, grant recipients must “evaluate and monitor” such compliance and take “prompt action when instances of noncompliance are identified including noncompliance identified in audit findings.”

Section 200.328, Monitoring and Reporting Program Performance, provides that at least annually, but no more than quarterly, grant recipients will submit performance reports that:

Continue Reading Uniform Guidance, Ins and Outs of the Monitoring Rules