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What Are My Subrecipient Monitoring Responsibilities?

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A pass-through entity that receives federal awards and/or New Jersey state awards as a subrecipient must determine on a case-by-case basis whether the disbursements made under each agreement represents a subrecipient or contractor relationship. Once a determination is made that a subrecipient relationship exists, as a pass-through entity, you must:

  1. Award identification to include the subrecipient name, D&B’s D-U-N-S® -(Data Universal Numbering System) identification, federal award identification number, award date, start and end dates of award, amount of federal funds obligated, amount obligated to subrecipient, total amount of federal/state award, federal award project description, name of federal awarding agency, pass-through entity and contact information for awarding official, Catalog of Federal Domestic Assistance (CFDA) name and number, any intended research and development use of the award, and any indirect cost rate applicable to the award.
    1. Notice to recipients of requirements imposed by federal and state laws, regulations and provisions of contracts or grant agreements, as well as any supplemental requirements imposed by the pass-through entity.
    2. Identification of any approved federally-recognized indirect cost rate negotiated between the subrecipient and the federal government.
    3. Inclusion of a requirement that the subrecipient permit the pass-through entity and auditor access to the subrecipient’s records and financial statements.
    4. Identification of appropriate terms and conditions concerning closeout of the subaward.Ensure that every subaward is clearly identified as such to the subrecipient entity and that the following required information is provided:

  2. Prior experience of the subrecipient with the same or similar awards.
    1. The results of previous audits, including whether the subrecipient is subject to Single Audit
      requirements. New requirements have raised the threshold to $750,000 for fiscal years
      ending December 31, 2015 and after.
    2. Changes in personnel or new or substantially-changed systems.
    3. Results of any monitoring activities, such as by federal and state agencies.Evaluate each subrecipient’s risk of non-compliance and determine the appropriate monitoring
      steps, which may include:

  3. Review financial and programmatic reports.
    1. Follow-up on the status of all deficiencies identified as a result of audits and on-site and desk reviews.
    2. Issue a management decision on audit findings within six months after receipt of the subrecipient’s audit report and ensure that appropriate corrective action takes place.Monitor the activities of the subrecipient to ensure that the subaward is used for the authorized purpose by performing the following required actions:

Additional monitoring tools may include:

  • Providing training and technical assistance to subrecipients when necessary.
  • Conducting on-site reviews or arranging for agreed-upon procedure engagements to be
    conducted.

Learn more about your subrecipient monitoring responsibilities and how The Mercadien Group can help you meet them by contacting W. Richard Hoyt, MST, CPM, Senior Consultant/Manager, Mercadien P.C., CPAs at (609) 689-9700 or rhoyt@mercadien.com.

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