Responsible Officer: Director

Responsible Unit: Award Management

Effective date: July 1, 2008

Last revised on: May 9, 2011

Policy Statement

As a recipient of federal sponsored awards, the University of North Carolina at Chapel Hill must comply with guidelines outlined in OMB Circulars A-21, A-110 and A-133. OMB Circular A-110 requires the University to establish a system of internal controls to ensure that sub-recipients use federal funds in accordance with laws, regulations and contract/grant agreements.

Sub-recipient monitoring starts with the preparation and issuance of the subaward agreement continues through the execution, and ends after all conditions have been met and the subaward is closed. Adequate administration of subawards must be maintained during the period of performance to ensure conformance with (1) technical terms, conditions, and specifications, (2) cost performance and payment provisions, and (3) audit requirements.

Reason for Policy

This Policy seeks to:

  • ensure that risks associated with a sub-recipient are identified and managed prior to the grant of a subaward;
  • promote compliance with federal, state and local laws relating to sub-recipient monitoring;
  • assign appropriate unit-level and individual responsibility and accountability for the establishment and management of subawards; and
  • ensure that a sponsor’s funds are appropriately spent and that the University and its sponsors receive value for funds expended.

Roles & Responsibilities

Roles & Responsibilities Matrix

Determine the need for subcontract PI
Suggest sources of potential sub-recipients PI
Determine any conflict of interest PI
Obtain sponsor approval to sub-recipients PI/OSR
Review list of excluded parties to verify sub-recipient is not debarred, suspended or otherwise restricted from receiving federal funds OSR
Prepare and negotiate subcontract agreement and obtain completed subrecipient commitment form OSR
Monitor sub-recipient’s spending & approve invoices PI
Monitor sub-recipient’s performance and completion of statement of work PI
Check sub-recipient’s A-133 audit annually OSR

The following will be required prior to subaward execution:

  • a scope of work to be completed by the sub-recipient;
  • a budget that meets the requirements of the sponsor and UNC-CH
  • a letter of intent with an authorized signature indicating the potential sub-recipient institution’s commitment to perform the proposed scope of work, the commitment of the institution for cost sharing (if necessary), assuring the accuracy and reasonableness of the budget, and agreeing to enter into a subaward if the proposal is funded;
  • representations, certifications and assurances (e.g. human subjects assurance);
  • sole source justification (a proposal which identifies a specific sub-recipient and subsequently receives a prime award is usually enough justification for a sole source, however a sole source letter may be required by Purchasing).

Post Award Monitoring:

UNC-CH assumes the responsibility of providing proper oversight of sub-recipients to meet monitoring requirements. These requirements include ensuring sub-recipients are not debarred or suspended and are eligible to receive federal funds; the sub-recipient has appropriate financial systems to manage sponsored funding; and the sub-recipient does not have outstanding audit issues that will negatively impact the overall project. UNC-CH has adopted a Sub-recipient Commitment Form that should be completed by the potential sub-recipient prior to issuance of a subaward agreement. In addition, a purchase order is used to track payments to sub-recipients.

To ensure good stewardship of sponsored projects, UNC-CH will use reporting, site visits, regular contact, or other means to provide reasonable assurance that the sub-recipient administers awards in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.

Invoicing:

All subcontract invoices are directed to the principal investigator for approval. The signature of the principal investigator constitutes satisfactory performance and adherence to the subcontract agreement and budget. Approved invoices are submitted to Disbursement Services for payment against the check request or purchase order.

Audit Compliance:

In order to comply with OMB Circular A-133, certification letters are prepared annually by OSR and distributed to every sub-recipient working on an externally sponsored award. The letter requires the sub-recipient to certify one of the following:

  • They are not subject to the requirements of A-133 because the organization did not receive $500,000 or more in federal awards during the fiscal year, is a for profit corporation, or is a non-U.S. based entity.
  • They are subject to the requirements of A-133, the audit has been completed and there were no material conditions of non-compliance with federal regulations.
  • They are subject to the requirements of A-133, the audit has been completed, exceptions were noted and a copy of the audit report is provided.
  • They are subject to the requirements of A-133 but the audit has not been completed.

The audit reports are subsequently reviewed by OSR and any exceptions are noted. If findings of noncompliance are identified as a result of an audit, subcontractors are required to provide copies of responses to auditors’ reports and a plan for corrective action. Payment of the final invoice may be withheld until all audit requirements have been met.

Contacts

Questions and concerns can be submitted online at Ask OSR or by using the OSR staff directory. Within RAMSeS, the “Speak to Someone” option assists in locating the staff member best suited to address project-specific issues.

References

Research Administration Glossary at Carolina

1. Office of Management and Budget, Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations.

2. Office of Management and Budget, Circular A-110, Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations.

Revision History

The policies in the Office of Sponsored Research Policies & Procedures Manual supersede any OSR policies, procedures and appendices previously included in the University Business Manual, a publication of UNC Chapel Hill’s Division of Finance.