Grant Subrecipient Monitoring Procedures – Federal Programs
In the event the district disperses federal funds received through a federal award to other entities and assigns responsibilities to the outside entity to conduct a portion of the work, the district shall be responsible for determining, on a case-by-case basis, whether the agreement with such entity places the outside entity in the role of a sub-recipient receiving a sub-award of federal funding, or the role of a contractor.
If the district grants sub-awards of federal funding to other entities as subrecipients, the district shall be responsible for:
For purposes of policies and procedures related to federal programs, the following definitions shall apply:
Contract – a legal instrument by which a non-federal entity purchases property or services needed to carry out the project or program under a federal award. The term as used here does not include a legal instrument, even if the entity considers it a contract, when the substance of the transaction meets the definition of a federal program award or sub-award. (2 CFR 200.22)
Contractor – an entity that receives a contract, as defined in law and regulations, by which a non-federal entity purchases property or services needed to carry out the project or program under a federal award. (2 CFR 200.23)
Pass-through entity – a non-federal entity that provides a sub-award to a sub-recipient to carry out part of a federal program. The district serves as the pass-through entity in cases where it awards federal funding to a subrecipient as defined in this procedure. (2 CFR 200.74)
Sub-award – an award provided by a pass-through entity to a subrecipient in order to carry out part of a federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a federal program. A sub-award may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract. (2 CFR 200.92)
Subrecipient – a non-federal entity that receives a sub-award to carry out part of a federal program; but does not include an individual that is a beneficiary of such program. (A subrecipient may also be a recipient of other federal awards directly from a federal awarding agency.) (2 CFR 200.93)
Subrecipient Versus Contractor
The district must determine, on a case-by-case basis, whether an entity receiving funds from the district as part of a federal funding program serves in a role of subrecipient or contractor. (2 CFR 200.330)
The Federal Programs Coordinator shall be responsible for analyzing the criteria listed in the chart below and evaluating the relationship with the entity based on the substance of the legal agreement, rather than the form of the agreement. The Federal Programs Coordinator may consult with the school solicitor or other qualified counsel in making such determination.
Creates a Federal assistance relationship
Purpose is to obtain goods and services for the non-Federal entity’s own use and creates a procurement relationship
Determines who is eligible to receive what Federal assistance
Provides the goods and services within normal business operations
Has its performance measured in relation to whether objectives of a Federal program were met
Provides similar goods or services to many different purchasers
Has responsibility for programmatic decision making
Normally operates in a competitive environment
Is responsible for adherence to applicable Federal program requirements specified in the Federal award; and
Provides goods or services that are ancillary to the operation of the Federal program; and
In accordance with its agreement, uses the Federal funds to carry out a program for a public purpose specified in authorizing statute, as opposed to providing goods or services for the benefit of the pass-through entity (PTE)
Is not subject to compliance requirements of the Federal program as a result of the agreement, though similar requirements may apply for other reasons
*chart provided by © American Institute of CPAs (AICPA)
The district shall notify subrecipients that they have been identified as a subrecipient and that the funding qualifies as a sub-award. The district shall provide the subrecipient with the following information as specified at 2 CFR Sec. 200.331(a) regarding the federal funding award, and any subsequent changes:
Evaluation of Risk
The district shall evaluate each sub-recipient’s risk of noncompliance with law, regulations and the terms and conditions of the sub-award to determine appropriate monitoring practices. (2 CFR 200.331)
The Federal Programs Coordinator or designee shall be responsible for evaluating risk based on the following factors:
The Federal Programs Coordinator or designee shall request adequate documentation from the subrecipient to conduct the evaluation of risk; such documentation may include, but shall not be limited to, audit reports, financial reports, policies and procedures, detailed descriptions or users’ guides of current systems and processes.
The district shall evaluate subrecipients for risk of noncompliance annually.
Based on the results of the risk evaluation, the district may consider imposing specific conditions on implementation of the sub-award, in accordance with applicable law and regulations. (2 CFR 200.207, 200.331)
The district shall monitor the implementation and activities of each subrecipient as necessary to ensure that the sub-award is used for authorized purposes, in accordance with law, regulations and the terms and conditions of the sub-award.
The district shall notify subrecipients of monitoring requirements, and may provide technical assistance to subrecipients in complying with monitoring requirements.
As part of the monitoring process, the district shall complete the following steps: (2 CFR 200.331)
The Federal Programs Coordinator or designee shall be responsible for monitoring of subrecipients. Monitoring activities may include, but shall not be limited to:
The district shall verify that subrecipients are audited as required by applicable law and regulations. (2 CFR 200.331, 2 CFR 200.500-200.521, Pol. 619)
Follow-Up Actions –
The Federal Programs Coordinator or designee shall provide subrecipients with written documentation detailing their monitoring results and listing any identified deficiencies. The district shall consider whether the results of monitoring indicate the need to revise existing district policy and procedures. (2 CFR 200.331)
The district shall require subrecipients to take immediate action on issues involving ineligible or illegal use of federal funding, and notify the district of corrective action taken.
The district shall require subrecipients to develop a corrective action plan to address other identified deficiencies or noncompliance issues; such plan shall be submitted to the district
as specified in the agreed-upon procedures, and the district shall evaluate and monitor the activities taken by the subrecipient under the corrective action plan. The district may provide technical assistance and/or training to subrecipients in complying with corrective action requirements.
The Federal Programs Coordinator or designee shall maintain all documentation on monitoring of subrecipients and corrective action taken during the monitoring process.
The district shall report issues of noncompliance to the appropriate federal agency where required by law, regulations, or requirements of the federal funding program.
Remedies for Noncompliance –
When monitoring activities identify issues of noncompliance that are not addressed through corrective action, the district may take the following actions: (2 CFR 200.331, 200.338)
The Federal Programs Coordinator shall ensure that all documentation regarding subrecipient identification, notification, evaluation, monitoring activities and corrective action is maintained in accordance with Board policy and procedures. (Pol. 800)
Records shall be retained in accordance with applicable law, regulations, specific requirements of the federal program and the district’s records retention schedule. (2 CFR 200.333-200.337, Pol. 800)