Subrecipients and the New Uniform Guidance. Amanda Humphrey, Partners Healthcare Dan Gilbert, Northeastern University Anita Mills, Evisions

Transcription

1 Subrecipients and the New Uniform Guidance Amanda Humphrey, Partners Healthcare Dan Gilbert, Northeastern University Anita Mills, Evisions

2 Overview Stewardship Why Subrecipient Monitoring? Definitions Key Uniform Guidance changes Subrecipient Monitoring Streamlining Subrecipient Monitoring

3 Stewardship

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5 Definitions Uniform Guidance Pass-through entity Non-federal entity that subs to a subrecipient Subrecipient A non-federal entity that receives a subaward from a pass-through entity to carry out part of a Federal program Subaward Award provided by the pass through entity to a subrecipient.

6 Subrecipient and Contractor Contractor Vendor Subrecipient Goods & Services Many Purchasers Competitive Environment Not Subject to Compliance Requirements Goods & services ancillary to the Federal Program Programmatic decision making and carrying out a portion of the Federal Award Carrying out a portion of the Federal Award Are they trying to avoid the compliance requirements?

7 1. Subaward document 2. Risk Assessment 3. Special Terms and Conditions When Appropriate 4. Monitor Subrecipient Activities 5. Monitor Performance Goals 6. Verify every Subrecipient has A-133 audit 7. Audits; Onsite Reviews may necessitate the subrecipients records be updated 8. Enforcement of Non-Compliance

8 Foreign Subrecipients Questions about Export Controls Shipping equipment, biological materials, encrypted software or other materials internationally Collaborate with researchers or organizations outside the US Foreign Nationals participate in the project Research performed at Non-US site Faculty taking equipment or encrypted software, select agents abroad Does this research involve military use or dual use

9 (a) 1 Subaward Document Requirements Subrecipient DUNS Number Federal Award Identification Number: FAIN Total amount awarded to date to Subrecipient Total amount awarded to Subrecipient for budget period Total Amount of the Federal Award Federal Award project description FFATA R&D (Yes/No) Indirect cost of the Federal award Approved Federal F&A Rate of Subrecipient Access to subrecipients records Terms and Conditions of Close-Out

10 Fixed Amount Subawards Fixed Price Subawards cannot exceed the Simplified Acquisition Threshold (currently $150K) Prior Approval is required before issuing subaward

11 (b) - Fixed Amount Subawards Periodic reports must be established Prior Approval from Federal Awarding Agency or Pass-Through Entity Principal Investigator Project Leader Scope Effort Multiple Fixed Amount Subawards may be issued to the same subrecipient Each Award must be $150k or less Each Award must have its own deliverable and scope

12 Institutional Changes Fixed Price Internal Controls Awards not issued when cost sharing is involved Certifications Activities Completed Subaward certifications must be received before a close-out Delivery schedule is reasonable and followed Contract/Agreement Language Changes Final invoices and/or closeout documents will need to be certified Periodic Reporting/Deliverable Required

13 Additional Guidance Citation Subject Area Conflict of Interest & Profit and Fixed Price Awards Prompt Payment of Subrecipients Subrecipients Financial and Progress Reports & Subrecipient and F&A Rates Timeframe for Program and Financial Reports Verifying / Reviewing Audits

14 Checks and Balances Requirement Sub PI Debarred or Suspended How to Check it Conflict of Interest FDP COI Clearinghouse: dp/pga_ htm & Verify Sub F&A Rate Get copy of the F&A rate agreement Verifying / Reviewing Audits Current A-133 Audit: E-Verify (federal contracts only) FFATA Reporting Work with HR to complete FFATA info uploaded:

15 Subrecipient Monitoring Has Uniform Guidance changed Subrecipient Monitoring? Subrecipient Monitoring Vague requirements Leaves lots of room for interpretation Need to manage efficiently and creatively Minimize risk

16 Subrecipient Monitoring in Context UG implementation and changes A-133 Being selective about vetting Risk assessment Monitoring through invoices

17 Driver for Audit Review OMB Circular A-133 Section 3-M requires PTE to ensure: Subrecipients have met audit requirements of A-133 Audit is completed within 9 months of the end of the audit period Subrecipient takes timely and appropriate corrective action on audit findings

18 Process Examples: Partners & Northeastern Controller or Subrecipient Manager reviews all Subrecipient audits Federal Audit Clearinghouse (FAC) & EIN Foreign and For-Profits are most time consuming because they are not listed on FAC A form does not obfuscate the need to check FAC because PTE has to validate information is correct Mailbox: phsa133@partners.org

19 Moving Away from Collecting / Completing A-133 Forms Leverage Federal Audit Clearinghouse EIN and/or Entity s Name Collect via Statement of Intent (SOI) FDP Subaward Form 3B Contract Templates FDP template, Attachment 1: Subrecipient assures PTE that it complies with A-133 and that it will notify PTE of completion of required audits and of any adverse findings which impact this subaward.

20 Thinking About Forms A-133 should be sufficient validation Contains details on veracity of systems Completed by outside party Information doesn t change depending on who is completing the form and how closely they are reading it If you must require forms Ask to complete annually at institutional level Offer re-certification of prior year s form

21 Risk Assessment Finding Classification Deficiency in Internal Control Significant Deficiencies Material Weakness Key Points Design or operation of the control does not allow institution to readily identify and correct or prevent mistakes on a timely basis. A deficiency in operations and supporting policies that is less severe than a material weakness, yet requires serious institutional attention. A more pervasive failure that could materially misstate a portion or all of the institution s financial reporting. Could indicate a lack of policies to support internal controls. Always check the auditor s summary to confirm how the independent auditor classified the institution (ie high / low risk).

22 UG Focus on Early Internal Control 1. Internal control, as defined in accounting and auditing, is a process for assuring achievement of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies. 2. It is a means by which an organization's resources are directed, monitored, and measured. It plays an important role in detecting and preventing fraud and protecting the organization's resources (wikipedia)

23 Higher Risk Subrecipients Usually: Foreign Entity Smaller Organization with lack of prior federal funding experience and/or internal controls or prior experience with Pass-through Entity Entities with biennial audits, unclean audits, and material weaknesses cannot be low risk, even with approval Huron Consulting Group

24 Risk Assessment; NU Example

25 More Frequent Monitoring: 1. Programmatic 2. Invoices High Risk Subs More Frequent Communication: 1. PI and ORAF keep detailed records of communications regarding unsatisfactory performance by the subrecipient. 2. PI Report any unsatisfactory performance to ORAF promptly Site Visits Stringent Review of Audits: 1. Auditees must review and respond to and address all audit findings as quickly as possible, and not wait until audit reports are submitted. (Huron Education) 2. Take prompt action when instances of noncompliance are identified.

26 Annual Monitoring 1. Review and File Annual Single Audit Report if available and document the review. If there is a finding related to federal awards, you must file the management response to the finding. 2. Get Annual Assurances from Higher Risk Subs (Handouts) 3. PI s Approve Invoices (electronically or by paper) and programmatic progress reports. Example: By signing below, I approve payment of this invoice and attest that the charge appear reasonable and the progress to date on this project is satisfactory

27 Single Audit Report Example

28 fcoi Forms FDP Clearinghouse You don t have to be a member to register Use DUNS to validate Subrecipient add to SOI FDP Template, Attachment 2 Certification language Confirm via check box

29 Thinking about Forms Hooray for Forms! Ensures information is current It includes project specific information including IRB/IACUC information I am passing the burden to Subrecipient I am passing the burden to Subrecipient I am passing the burden to Subrecipient No More Forms! But not consistent This is in the Proposal and/or can be added to the Subaward Forms require additional resources on both sides to complete and review If form is documented as a required part of process and it is missing or information conflicts between proposals, could be a finding failure to comply with own internal controls Forms can slow down the process, which can be a burden to the Prime delays in invoicing could mean additional carry forward requests/ scrutiny at Progress Report 29

30 Moving Away from Forms Use Contract Templates Example: fcoi certification Flow down expanded authorities Boston Children s Hospital FDP template IRB / IACUC Approval Build a website Expand FDP Clearinghouse to include A-133 and other institutional facts

31 Moving Away from Forms Update your SOI Include EIN and DUNS Include link to website Leverage PI to assist in Subrecipient Monitoring Attestation that sub has completed anticipated work at time of progress report submission

32 THANK YOU! Questions? Please contact us: Anita Mills, Evisions, Solutions Consultant Amanda Humphrey, Partners Healthcare, Manager Dan Gilbert, Subcontract Manager, Northeastern University