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Subrecipient Monitoring: What the Auditor Will Ask For

research administration, era software, Streamlyne Research, award management

As universities undergo federal auditing, research offices might find that subrecipient monitoring is among the most scrutinized areas during such a procedure. When an institution passes federal grant money to another organization through a subaward, it assumes the federal sponsor’s responsibility, ensuring that the funds are spent both lawfully and ethically. Accordingly, research administrators have to understand how current rules, particularly Uniform Guidance (2 CFR 200.332), govern such arrangements and responsibilities, including specific oversight tasks.

The primary grantee, also known as the pass-through entity (PTE), needs to evaluate the subrecipient’s risk level, even as they insert mandatory federal data elements into subaward agreements and track financial invoices. Conversely, auditors will evaluate whether the institution maintains a complete and auditable record for every subaward, and this could be problematic, especially if documentation for the subrecipient is scattered across departmental email folders, paper files, and separate financial spreadsheets. By leveraging subrecipient tracking in a centralized electronic research administration (eRA) platform like Streamlyne Research, research offices can ensure that auditors and other users can access all the relevant information via an auditable record easily.

What Does 2 CFR 200.332 Require in Practice?

Federal regulations are specific regarding the obligations that pass-through entities must meet across the subaward lifecycle, and which auditors typically test to verify compliance.

  • Risk Assessment and Audit Review: Before issuing a subaward, the PTE should evaluate critical considerations regarding a subrecipient, including its financial stability, internal controls, and prior federal audit history. In doing so, the institution must verify whether the receiving organization underwent a Single Audit under Uniform Guidance, establishing whether any audit findings might impact the subaward. By reviewing subrecipient filings in the Federal Audit Clearinghouse, you could easily determine if the entity is designated as a “low-risk auditee” or has unresolved compliance findings.
  • Mandatory Data Elements in Subaward Agreements: Uniform Guidance also requires the PTE to include specific data points in every subaward agreement, including the entity’s name and its Federal Award Identification Number. Other key details that should be included are the total amount of federal funds obligated to the subrecipient, as well as indirect cost rates and an indication of whether the subaward is research and development. Standardized templates provided by the Federal Demonstration Partnership can guide administrators to meet this requirement, ensuring all the necessary federal data elements are present.
  • Monitoring Financial and Technical Progress: As the project progresses, the PTE should also review financial invoices to confirm costs are allowable and allocable. This requirement also enables administrators to ensure that the expenses are reasonable, even as they verify that the subrecipient has included formal written certifications in the invoices. Equally important, the institution should verify that the principal investigator has received and approved technical progress reports before releasing the payment.
  • Closeout Procedures: Once the subaward period ends, federal regulations require the PTE to collect final technical reports and final financial invoices, along with property disposition statements and invention disclosures. This step should be completed within the mandated closeout window, which is typically 90 to 120 days.

How Does Streamlyne Manage Outgoing Subawards?

The process of managing subaward compliance can be intricate, especially because it requires institutions to link subrecipient records to the primary award directly while maintaining organization-level risk histories. As you use Streamlyne Post-Award, you can be guaranteed that each outgoing subaward functions as an active record tied to the prime award that provides the funding. The solution has multiple capabilities that could help PTEs achieve proper compliance even as they manage their subawards intended for subrecipients. These features include:

  • Dedicated Subaward Records: Each subaward within the module tracks the subrecipient organization, along with relevant details such as the current status, subrecipient site investigator, and purchase order number.
  • Funding History: The platform also tracks the obligated and anticipated funding amounts, breaking them down into direct and indirect costs. In doing so, the system records carryforward approvals and no-cost extensions, while allowing the user to attach files to each funding action.
  • Invoices: Streamlyne’s features enable it to monitor all the pertinent financial information related to the subrecipient, including the billing period, review status, and the released amount. This data, together with the required certification statements, can then be transmitted to the institution’s central finance system directly.
  • Deliverables and Reports: As a system, Streamlyne Post-Award allows you to track the necessary technical, financial, and property reports that the subrecipient owes, logging this information along with the frequency and due dates.
  • FDP Agreement: The platform stores the relevant data fields required by FDP templates while generating standardized subaward agreements and amendments. These changes include cost-reimbursement, fixed-price, and foreign versions of the subaward.
  • Closeout: Streamlyne also monitors the requirements for individual closeouts, recording all the pertinent documents that you requested, as well as if you had any follow-ups and when the research office received the final deliverables.
  • Organization-Level Risk and Audit Profiles: The platform stores data about the subrecipient’s risk and audits, ensuring the information is available on the central organization record rather than duplicating it on every subaward.
  • Agreement Negotiations: The user can attach a negotiation record to a subaward directly while keeping contract redlines and any crucial communication, including email exchanges.

Auditors are, therefore, likely to ask questions related to these issues for each subaward meant for a subrecipient. Accordingly, administrators can easily use Streamlyne Post-Award to obtain complete compliance packages instantly, demonstrating that they have complied with federal regulations appropriately.

What Does Streamlyne Subaward Management Not Do?

As you leverage the platform to manage outgoing subawards, it is critical to appreciate its limitations, even as you optimize its capabilities. Therefore, it is worth noting that Streamlyne does not:

  • Perform risk assessments automatically: The software does not determine whether a subrecipient is risky. Instead, compliance officers make this evaluation, allowing the system to record the risk designation and supporting notes.
  • Pull audit reports from the FAC: Based on the solution’s design, an administrator needs to look up a subrecipient’s filings from the Federal Audit Clearinghouse manually before logging the audit status and uploading the relevant supporting audit documentation into Streamlyne.

Guidelines and Regulatory Resources

Frequently Asked Questions

Why shouldn’t institutions store a subrecipient’s risk information on each individual subaward record?

Using a central organization record is highly beneficial for research offices, mainly since it lowers the risk of duplicating work and having inconsistent data. Hence, the user can simply update the organization’s profile once while being guaranteed that Streamlyne will apply the compliance status across all active subawards with the specific entity.

Does Streamlyne calculate indirect costs on subawards automatically?

No. The solution records the direct and indirect subaward amounts the office enters and tracks them against the prime award. The modified total direct cost calculation stays with the institution’s budget and finance systems.

How does linking a negotiation record to a subaward help during an audit?

By connecting the negotiation record to the subaward directly, administrators can assist auditors in viewing the complete chain of custody. This approach allows auditors and other users to access useful information like the original contract drafts without searching through separate files or email archives.

Author bio: Bramwel Saisi is an author and researcher specializing in federal grant compliance, institutional policy, and sponsored project operations.

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