10.5.16 Subaward and Monitoring Policy

SUBJECT: Subaward and Monitoring Policy	Effective Date: 7/17/2025	Policy Number: 10.5.16
	Supersedes: 6/1/23, 2/21/2017, 11/21/13, 01/25/13, 02/18/11, 9/16/09	Page 1 of 7
	Responsible Authorities: Vice President for Research Executive Director, Research Accounting Associate Vice President, Sponsored Programs

Background

Florida Atlantic University (FAU) is required to comply with 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) to issue, evaluate and monitor subawards and the activities of subrecipients to ensure compliance with applicable Federal regulations.
Purpose

The purpose of the policy is to establish subaward and monitoring procedures for both Federal and Non-Federal awards in order to provide guidance and to ensure compliance with Florida Atlantic University policies, state regulations and Uniform Guidance that include:
- 2 CFR Part 200.206 Federal agency review of risk posed by applicants.
- 2 CFR Part 200.208 Specific Conditions.
- 2 CFR Part 200.331 Subrecipient and contractor determinations.
- 2 CFR Part 200.332 Requirements for pass-through entities.
- 2 CFR Part 200.333 Fixed amount subawards.
- 2 CFR Part 200.501 Audit requirements.
- 2 CFR Part 200.521 Management decisions.
General Statement

Research Accounting and Sponsored Programs is available to answer questions and provide assistance regarding the requirements of the Subaward and Monitoring Policy.

Policy

Determining a Subrecipient:

At the time of proposal, The Principal Investigator (PI) makes the initial determination on whether a subrecipient is necessary for the performance of a project. The Proposal Administrator in the Office of Sponsored Programs (OSP) will review the subrecipient’s Statement of Work (SOW) and Budget and confirm the subrecipient’s role on the project.

In general, work performed by a subrecipient is conducted at another institution or company and not at FAU. The subrecipient provides a SOW and detailed budget outlining the costs associated with the project including salary/fringe, supplies, travel, equipment, F&A, etc.

As a pass-thru entity on subawards, FAU is ultimately responsible to the Prime Sponsor for the work performed by the subrecipient on a project. The subrecipient is expected to carry out a portion of the work on the sponsored project under the direction of the subrecipient’s Principal Investigator (PI).

The subrecipient is responsible for complying with all rules and regulations, including reporting requirements and any terms and conditions that flow down from the prime sponsored award.

	Agreement Type
Determining Factors	Subrecipient (Subaward)	Consultant (Consulting Services Agreement)	Vendor (Service Provider)
Definition	An entity that receives a subaward from the primary recipient and performs a substantive role in the conduct of the planned research to carry out part of the ‘project’s objective	An individual or company that provides their expertise or technical advice	Generally, a company, may be an individual that provides goods and/or services for a fee
Personnel	Subrecipient assigns a lead investigator who is considered key personnel and serves as the Principal Investigator (PD/PI) at subrecipient entity	Typically, an individual or a consulting firm. Cannot be a current or former FAU employee within the last 12 months	Individuals who perform the services are generally not known
Compliance	Is subject to and must comply with prime award terms and the pass-through entity’s reporting requirements	Not subject to prime award terms, but subject to Terms outlined in Consulting Services Agreement	Not subject to prime award terms, tied specially to vendor terms
Project / Scope of Work Design	Collaborates with FAU PI on developing the project Scope of Work and proposal. Subrecipient work is defined by Scope of Work (SOW)	Does not collaborate with FAU PI on the design or development of the Scope of Work or proposal. Consulting Services Agreement includes broad SOW and outlines services	Does not collaborate with FAU PI on the design or development of the Scope of Work or proposal. Services to be performed or delivered are selected by PI but defined by vendor
Documents Required for Proposal to FAU Sponsor	Subrecipient Commitment Form; SOW, Budget, Budget Justification, and F&A rate agreement, if applicable.	Letter of Commitment signed by consultant outlining the consulting services, hourly rate, estimated # of hours, and travel expenses (if applicable)	Price quote for services provided by company
Work Performance	Substantive programmatic work, significant portion of overall project	Expert advice or review. Subject matter expert	Incidental to overall project
Goods / Services	Does not provide procured goods/services	Provides similar consulting services to others. Individual Consultants may not use their primary employer’s facilities to provide consulting services. Operates in a competitive environment	Provides similar goods/services to others as part of their business and operates in a competitive environment
Programmatic Decision Making	Controls method and results of their portion of the project	Has no responsibility for programmatic / project decisions
Performance Measurement	Measured against meeting the project objectives via deliverables or technical reports, as listed in the SOW	Not responsible for progress or overall outcome of project; Measured by services rendered	Not responsible for progress or overall outcome of project; Measured by goods provided and/or services rendered
Publications	May create or co-author publications	No rights to publications. Does not create or co-author project publications
Intellectual Property (IP)	IP rights detailed in subaward agreement	No Intellectual Property rights. All rights assigned to FAU
Paid Services based on	Invoicing terms outlined in subaward agreement which are Cost-Reimbursable, Fixed, or Hybrid	Typically, paid an hourly rate with a maximum number of hours	Quoted price set by vendor for services or goods provided
Budget	Subject to authorized budget and indirect cost	Not subject to a budget nor indirect cost

Subrecipient Eligibility and Approval:

Proposal stage:

Subrecipients are required to complete FAU’s Subrecipient Commitment Form which is signed by the subrecipient’s authorized official. The Subrecipient Commitment Form provides the institutional commitment to the project and includes information regarding the entity’s financial, internal controls, policies and procedures and project specific information including compliance.

Subrecipients who are participating in the FDP Expanded Clearinghouse have the option of completing FAU’s Subrecipient Commitment Form or FDP’s Subrecipient Letter of Intent or Commitment Form.

The signed Subrecipient Commitment form, subrecipient’s Scope of Work (SOW), detailed budget, and budget justification should be uploaded to the proposal file and routed through Novelution. Subrecipients who are not participating in the FDP Expanded Clearinghouse should also include the URL links to their annual audit report and F&A rate agreement (if federally funded).

To reduce the administrative burden on subrecipient entities, if a subrecipient has already submitted their financial profile information and audit report within the last 12 months, this information is not required. Additionally, institutions who have completed the on-line entity profiles through the FDP Expanded Clearinghouse are only required to complete Part I (page 1) of FAU’s Subrecipient Commitment Form.

Award stage:
1. OSP Review and Subaward Initiation
  
  Once a proposal is funded, the OSP Award Administrator submits a Subaward Initiation Form (SIF) through Novelution to the Contract Services unit to begin the subaward process.
  
  The Subaward Administrator within the Contract Services team reviews the Subaward Initiation Form and submitted documents and begins the subaward process.
2. PI Verification and Risk Assessment:
  
  The Subaward Administrator requests that the PI verify the subaward information by reviewing the Scope of Work, budget and budget justification and confirms that the SOW meets the project requirements.
  
  The PI completes and signs the PI Verification form and returns to the Office of Sponsored Programs.
  
  Upon reviewing the subrecipient documents, the Subaward Administrator will determine:
  - If the organization is excluded from receiving federal funds by reviewing the System for Award Management (SAM). If the subrecipient has active exclusions or is delinquent on federal debt, they are not permitted to receive federal funds.
  - If the organization is sanctioned by reviewing the Office of Foreign Assets Control (OFAC) Sanctions List. If the organization is listed, they are not permitted to receive federal funds.
  The Subaward Administrator will conduct a risk assessment using the Federal Demonstration Partnerships (FDP) risk assessment tool and will assign a risk level of low, medium or high based on a scoring system.
  
  Low – an educational institution that consistently has audit reports with no potential audit findings
  
  Medium – has previous audit findings or failed to submit timely programmatic reports
  
  High – lack of documented internal controls, no previous experience with subrecipient, foreign institution, no audited financial reports, financial reports submitted are not in English (foreign language), subaward is more than 75% of the prime award
  
  OSP will inform the PI if approval is denied or if the risk level assessed is high.
  
  OSP will review the Subaward Commitment Form questions regarding research subjects, EH&S safeguards, export controls and conflict of interest and obtain appropriate approvals, if needed.
  
  If the subrecipient does not have a compliant financial conflict of interest policy, and the sponsor requires such policy, the subrecipient will be required to implement a compliant and enforced policy prior to execution of the subaward agreement.
  
  OSP will draft the subaward agreement between FAU and the subrecipient using an approved FDP or FAU subaward template.
  
  Once the subaward agreement is fully executed, OSP will forward copies of the subaward documents including the fully executed subaward agreement to the PI, department administrator and Research Accounting. Research Accounting will initiate a Supplier Contract.
Monitoring Subawards:
1. The Principal Investigator (PI) and Grant Manager are responsible for the following monitoring areas:
  1. Establish and maintain channels of communication with the subrecipient.
  2. Perform on-site visits, if applicable. These visits could be conducted to evaluate compliance with the scientific objective of the project.
  3. Review and approve invoices to ensure that expenses are:
    - Submitted in a timely manner
    - Allocable and reasonable to the project
    - Incurred within the period of performance
    - Aligned with technical progress and/or deliverables, if applicable
    - Cost-sharing is appropriately reflected, if applicable
  4. Review financial and programmatic reports to ensure that performance goals are achieved; and identify any problems in carrying out the project. In some cases, subaward terms may require specified deliverables in addition to or in lieu of technical reports.
  5. Follow up and ensure that the subrecipient takes timely and appropriate action on all deficiencies detected, if applicable.
  6. If changes are requested by the subrecipient regarding project end dates, budget amount, or Scope of Work, contact the Office of Sponsored Programs for guidance on whether an amendment should be issued.
  7. Upon the end date of the subaward agreement for federal and federal flow-through projects, the PI must complete a Close-out Subrecipient Verification Form, to document the PIs confirmation that all requirements were met by the subrecipient; typically 90 days after the end date.
2. Research Accounting will be responsible for the following monitoring areas:
  1. Review and maintain audit documentation for monitoring efforts on the following types of entities (Federal and Federal Flow-Through Only):
    1. Non-Profit:
      - Obtain annual audit reports, if applicable.
      - Review annual audit reports and document findings, if any.
        If any material findings related to the project are identified, Research Accounting will issue a management decision determining whether the subrecipient carrying out the project may need to be monitored more rigorously and will be referred to the PI, Sponsored Programs Contracting, and Legal (if needed).
    2. For-Profit:
      - Obtain annually audited financial statements, if applicable. Note: For-Profit entities are not required to disclose financial statements.
      - Review financial statements and document findings, if any.
      - If any material findings related to the project are identified, Research Accounting will issue a management decision determining whether the subrecipient carrying out the project may need to be monitored more rigorously and will be referred to the PI, Sponsored Programs Contracting, and Legal (if needed). If the subaward amount is in excess of $500,000, a discretionary audit may be performed sometime during the life of the subaward agreement. Although these audits are generally infrequent, they are considered an acceptable monitoring practice under federal regulations; FAU’s subawards contain a “right-to-audit” clause.
      - Audit documents requested could include but are not limited to: payroll certifications or timecards, copies of expenditure receipts and/or invoices as well as travel charges and cost share documentation, if applicable.
    3. Foreign:
      - Foreign subcontracts are associated with increased risk, which may require a greater degree of review, evaluation and attention therefore pre-award or discretionary audits may be required.
  2. Research Accounting will assist the PI in monitoring the activities of the subrecipient which include:
    1. Issue and maintain the Close-out Subrecipient Verification Forms for federal and federal flow-through projects.
    2. Review financial reports required in subaward agreement, if applicable.
    3. Follow-up and ensure subrecipients take timely and appropriate action on all deficiencies detected, if applicable.
    4. Discretionary audits of subawards are considered acceptable monitoring practices; FAU’s subaward agreements contain a “right-to-audit” clause. Audits could be performed but are generally infrequent.
3. Non-compliance of subrecipients:
  
  Failure of a subrecipient to provide requested documentation or to address any concerns ‘may’ require FAU to take the following action:
  1. Temporarily suspend or withhold cash payments pending correction of the deficiency by the subrecipient.
  2. Disallow all or part of the cost of the activity or action not in compliance.
  3. Wholly or partly suspend or terminate the subaward.
  4. Initiate suspension or debarment proceedings (Federal and Federal Flow-Through only).
  5. Withhold further awards for the project or program.
  6. Take other remedies that may be legally available.

Definitions

Award Administrator means the administrator in the Office of Sponsored Programs responsible for the non-financial post-award activities of a sponsored award.

Authorized Official means an official of the entity authorized to legally bind the entity by executing the subaward agreement.

Grant Manager means a role identified within FAU’s financial system that is responsible for the overall financial management and compliance of research projects under the direction of the principal investigator to monitor the budget, review and approve expenditures, and ensure expenditures charged are allowable, allocable, reasonable, and adhere to Federal, State and Florida Atlantic University policies as well as serve as a liaison between the principal investigator and central administration to finalize costs and process closeouts.

Pass-Through Entity means a non-federal entity that provides a subaward to a subrecipient to carry out part of a federal or non-federal sponsored award. The pass-through entity assumes responsibility for negotiation, issuance, oversight, and management of a subaward.

Principal Investigator means the individual responsible for the technical compliance, compliance, completion or programmatic work, fiscal stewardship, and administrative compliance requirements of the research project.

Proposal Administrator means the administrator in the Office of Sponsored Programs responsible for the review and approval of proposals submitted to external sponsors on behalf of Florida Atlantic University.

Research Accountant means a role identified within FAU’s financial system that is responsible for invoicing, financial reporting, accounts receivable and collections, and review and approval of cost transfers and official closeout as well as central administrative oversight on direct cost charging, financial management and compliance of research projects for adherence to Federal, State and Florida Atlantic University Policies.

Subaward means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a sponsored award received by the pass-through entity.

Subaward Administrator means the administrator in the Office of Sponsored Programs responsible for the development and execution of subawards and amendments issued under a sponsored research project.

Subrecipient means a non-Federal entity that receives a subaward from a pass-through entity to carry out part of a Federal or non-federal sponsored award.
Accountability

The Principal Investigator, Grant Manager, Research Accounting and the Office of Sponsored Programs are responsible for issuing subawards and subrecipient monitoring.

POLICY APPROVAL

Initiating Authority

Gregg Fields, Ph.D, Vice President for Research
7/17/2025

Executed signature pages are available in the Initiating Authority Office