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Compliance-Ready Partnerships: Subrecipient and Contractor Management

State Budget Department�Grants Management Office

Mark Gordon, Governor | Kevin Hibbard, Director

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Dru Palmer, Grants Integration Manager

Christine Emminger, Administrator for the Grants Management Office

Diana Cabriales, Deputy Administrator for the Grants Management Office

June 23, 2026

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Session �Objectives

Definitions

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Characteristics

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Pass through Entity Requirements:

  • Suspension and Debarment
  • Subawards
  • Risk Assessment
  • Monitoring Activities

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Definitions: �2 CFR 200.1

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Pass-through Entity (PTE)

  • A recipient or subrecipient that provides a subaward to a subrecipient to carry out part of a Federal program.

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  • The authority of the pass-through entity flows through the subaward agreement between the pass-through entity and subrecipient.

Awarding Agency

Direct Recipient (PTE)

Sub-recipient & PTE

Sub-recipient

Beneficiaries

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Subrecipient

  • Entity that receives a subaward from a PTE to carry out part of a Federal award.

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  • Does not include a beneficiary or participant.

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  • A subrecipient may also be a recipient of other Federal awards directly from a Federal agency.

Awarding Agency

Direct Recipient (PTE)

Sub-recipient & PTE

Sub-recipient

Beneficiaries

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Subaward

An award provided by a PTE to a subrecipient for the subrecipient to contribute to the goals and objectives of the project by carrying out part of a Federal award received by the pass-through entity.

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A subaward may be provided through any form of legal agreement, including an agreement the pass-through entity considers a contract.

PTE

Sub-recipient

Subaward

For the purpose of carrying out a portion of the Federal award; creates a Federal financial assistance relationship with a subrecipient.

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Contractor

An entity that receives a procurement contract.

Vendor

Service provider

Purchase

Procurement:

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Contract

A legal instrument by which a recipient or subrecipient conducts procurement transactions under a Federal award.

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Implications

Subrecipient/Subaward:

    • Proper subaward executed
    • 2 CFR 200 requirements flow down to subrecipient
    • Pass-through must be monitored under 2 CFR 200.331-333, Subrecipient Monitoring and Management

Contractor/Contract:

    • Proper contract executed
    • Pass-through must procure under 2 CFR 200.317-327, Procurement Standards
    • Contractor monitoring as needed

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Characteristics:�2 CFR 200.331

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Determination Factors

PTE responsible for making case-by-case determinations on whether the entity receiving Federal funds is a subrecipient or a contractor.

An entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor. Each agreement should be evaluated!

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Subrecipient

Determines eligibility of beneficiaries.

Has performance measured in relation to objectives of program.

Has responsibility for programmatic decision making.

Responsible for adherence to Federal program requirements.

Implements a program for public purpose specified in authorizing statute, as opposed to providing goods or service of the benefit of the pass-through entity.

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Contractors

Provides the goods and services within normal business operations.

Provides similar goods and services to many different purchasers.

Normally operates in a competitive environment.

Provides goods and services that are ancillary to implementation of Federal program.

Is not subject to compliance requirements of a Federal program as a result of the agreement. However, similar requirements may apply for other reasons.

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Determination Factors

All of the characteristics may not be present in all cases, and some characteristics from both categories may be present at the same time.

No single factor or any combination of factors is necessarily determinative.

The pass-through entity must use judgment in classifying each agreement as a subaward or a procurement contract.

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In making this determination, the substance of the relationship is more important than the form of the agreement!

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Checklist

Utilize a checklist (such as the provided Subrecipient vs. Contractor Determination Checklist) when appropriate.

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Keep completed checklist to document justification for treating the agreement as either Subrecipient or Contractor relationship.

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Activity – �Subrecipient vs. Contractor Determination Checklist

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Activity

In small groups:

Review scenario compliance obligations and match scenarios with the correct roles

  • Subaward
  • Contract
  • Beneficiary Agreement

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Contract

Beneficiary

Subaward

Scenario 1:

The overarching goals for these HIV prevention services are due to:

  1. Reduce new HIV infections in Alameda County
  2. Ensure that all people living with HIV are aware of their infection and successfully linked medical care and treatment to achieve viral suppression
  3. Expand access to pre-exposure prophylaxis (PrEP), condoms, and other proven HIV prevention strategies for people at high risk of becoming infected.

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Scenario 2:

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Subaward

Contract

Beneficiary

c. If contained, the source of these federal funds is:

Family & Youth Services Bureau.

d. The CFDA number is 93.092. The conditions that apply to all federal funds awarded by the Prevention and Health Promotion Administration are contained in Appendix B. Any conditions that apply to this federally funded grant are contained in Appendix D.

Quarterly MDH reports will include the following:

  • Describe data collection activities performed
  • Describe evaluation tools developed and monitoring activities performed
  • Provide an explanation of fiscal expenditures

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Scenario 3:

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Subaward

Contract

Beneficiary

Target Population to be served is comprised of populations detailed in I, Project Demographics. The Subrecipient shall develop, run, and operate programs for two distinct groups:

  • Small Businesses whose business address filed with Washington State resides within QCTs identified in Section I (hereinafter “within a QCT”).
  • Small Businesses within the Impacted Industries of Manufacturing, Leisure and Hospitality, and Child Care.

The Subrecipient shall:

  • Provide navigator and operational support to existing impacted small businesses, particularly to underserved populations and areas of the county, to support their recovery.
  • Establish and implement a startup group training program to spur innovation and opportunity in Snohomish County to support disproportionately impacted small businesses or start-ups.
  • Provide operational micro-grants to impacted small businesses and microbusinesses.
  • Establish a small business technical assistance program in Snohomish County that supports and serves small businesses and entrepreneurs for the long-term.

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Requirements:�2 CFR 200.332

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Subaward: Order of Operations

Identify potential subrecipient

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Perform suspension/debarment check

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Perform risk assessment

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Execute subaward

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Ongoing monitoring

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Suspension or Debarment Check

Past-through Entity Must:

~ Verify that the subrecipient is not excluded or disqualified in accordance with 2 CFR §180.300 prior to entering into subaward.

~ Keep print out of the verification check record in subrecipient files for documentation!

Methods: §180.300:

a) Check SAM.gov exclusions; or

b) Collect a certification from that entity/person; or

c) Add a clause or condition to the covered transaction with that entity/person.

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Risk Assessment

Evaluate each subrecipient’s fraud risk and risk of non-compliance with a subaward…

…to determine the appropriate subrecipient monitoring

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Risk Assessment

When evaluating a subrecipient's risk,

PTEs should consider:

Prior experience

Results of previous audit

New personnel or new or

substantially changes systems

Extent and results of Federal agency monitoring

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Risk Assessment

Q: Under UG, is the subrecipient risk assessment required for an existing subrecipient who is entering into a new UG-funded award?

A: Yes, PTEs must evaluate each subrecipient's risk of noncompliance, but they can also consider the subrecipient’s prior experience with the same or similar awards.

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Subaward Agreement Requirements

Past-through Entity Must:

~ Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the required information (see next slide).

Information Availability:

a) Provide the best available information when some of the information is unavailable

b) Provide the unavailable information when it is obtained.

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Subaward Required Information

  • Required information for subaward:
    • Federal Award Identification (see next slide)
    • All requirements of the subaward, including requirements imposed by Federal statutes, regulations, and the terms and conditions of the Federal award;
    • Any additional requirements that the pass-through entity imposes on the subrecipient for the pass-through entity, including performance and financial reports due
    • Indirect cost rate to be used – either an approved rate, negotiated rate, or de minimis rate
    • Requirement that sub permits the PTE and auditors to access records and financial information
    • Appropriate terms and conditions concerning closeout of the subaward

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Federal Award Identification:

  • Subrecipient’s name
  • Subrecipient’s unique entity identifier (UEI)
  • Federal Award Identification Number (FAIN)
  • Federal award date
  • Name of Federal agency, PTE, and contact info for PTE’s awarding official
  • Assistance listing title and number (ALN; formerly CFDA)
    • Must identify amounts by ALN when multiple
  • Subaward period of performance (start and end date)
  • Subaward budget period (start and end date)
  • Amount of federal funds obligated in the subaward and amounts committed to the subrecipient
  • Federal award project description (required by FFATA)
  • Identification if award is R&D
  • Indirect cost rate for the Federal award

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Required Monitoring

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Pass-through entities must monitor activities of the subrecipient:

Review financial and programmatic reports

Verify audit is being performed (if necessary) and following up on audit findings/ deficiencies

Issue management decision on audit findings on the program the PTE funded

Resolve audit findings related to subaward

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Additional Possible Monitoring

Additional monitoring tools / procedures that may be used depending on risk assessment of sub-recipient:

Providing training and technical assistance

Regular check-ins

On-site reviews of program operations

Arranging for agreed upon procedures

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Risk Assessment Tool

Utilize a tool (such as the provided Subrecipient risk Scoring Worksheet)

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Keep completed tool to document why the monitoring procedures were deemed appropriate

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Activity – �Subrecipient Risk Assessment

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Activity

Step 1: In small groups, review subrecipient profile scenarios

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Step 2: Identify risk indicators

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Step 3: Assign a risk level

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Step 4: Recommend appropriate monitoring activities using a risk scoring worksheet

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Determine:

  • Risk level (low, medium, high)
  • Would you issue a subaward to the entity/person?
    • If yes, what type of monitoring would you recommend?

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Subrecipient is receiving Federal funds from this PTE for the first time but does have history with Federal awards.

Subrecipient’s prior audit (FY24) report:

  • $1,530,027 of total Federal expenditures on SEFA
  • $220,099 expenditures under ALN 14.218
  • One major program: 21.027; $490,433 expenditures
  • Significant deficiency in internal controls over compliance related to reporting for ALN 21.027, a funding source that ended in early FY25.

Subrecipient’s policies have extensive policies, which have not been updated since implemented in 2014.

There have been no changes in subrecipient’s financial management team, however the subrecipient would need to hire a new grant manager to oversee this award.

Scenario 1:

Proposed award: $350,000

ALN 14.218, Community Development Block Grant

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Previous award from PTE to sub for $400,000 (7/1/23-6/30/25).

Subrecipient has never been subject to a single audit, as total Federal expenditures below SA threshold.

2025 monitoring performed by PTE resulted in no findings, but recommendations related to:

  • Updating equipment policies to better align with Uniform Guidance..
  • Consolidating approach to timesheet review across locations.
  • Timeliness of invoices submitted to PTE requesting reimbursements.

Subrecipient’s operations and personnel have been stable.

Scenario 2:

Proposed award: $200,000 and 1-year extension for existing award (through 6/30/26).

ALN 14.218, Community Development Block Grant

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Aisha Little, Director, CliftonLarsonAllen, LLP (CLA)

Email: Aisha.Little@CLAconnect.com

State Budget Department�Grants Management Office

Email: sbd-grants@wyo.gov 

Website: https://sbd.wyo.gov/grants

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Kevin Hibbard, State Budget Dept, Grants Management Office Director

Christine Emminger, Administrator for the Grants Management Office

Diana Cabriales, Deputy Administrator for the Grants Management Office

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Email: dru.palmer@wyo.gov

Dru Palmer, Grants Integration Manager

Governor’s Office�Grants Management Initiative