Subrecipient vs. Contractor Determinations - PowerPoint Presentation

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Subrecipient vs. Contractor Determinations

Transitioning to 2 CFR 200 the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards

4/23/2015

Office of Sponsored Research

Deborah

Rutkowski-Howard,

Subawards

Manager, Research Management Services

William Brett, Subcontract Team Associate,

Research Management Services

Supply Chain Management

David Pendergast, Procurement Contracts ManagerSlide2

History from 1990 until today…

1990 - The United States Office of Management and Budget (OMB) administratively extends the Single Audit process to non-profit organizations by issuing OMB Circular A-133, “Audits of Institutions of Higher Education and Other Non-Profit Organizations”.

December 2013 - OMB issues 2 CFR 200, which superseded and combined the requirements from OMB Circulars A–21, A–87, A–110, A– 122, A–89, A–102, and A–133.December 26, 2014 - All federal agencies were required to implement the regulations included in the new Uniform Guidance (UG) by December 26, 2014.

The Office of Management and Budget (OMB)

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Uniform Guidance Section § 200.330

“The

non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor

.”

Subrecipient and contractor determinations

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Uniform Guidance Section § 200.330

“In

determining whether an agreement between a pass-through entity and another non-Federal entity casts the latter as a subrecipient or a contractor, the substance of the relationship is more important than the form of the

agreement

”.

NOTE

: With the implementation of the UG the

official terminology has been changed

from “vendor” to “contractor

”.

This section further states under § 200.330 (c):

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What is the effect of the new language?

Every year UCSF is audited on its

subaward activity. It is possible that auditors will be directed to verify that direct recipients of federal funding are complying with the requirement to make these case-by-case determinations.

In addition to our office, auditors may be coming to you and your investigators looking for the rationale behind classifying a transaction as either a

subaward

or a procurement, as well as any associated documentation of the

assessment.

UCSF’s Single Audit

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Who makes the determination?

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Who does what?

The Principal Investigator is primarily responsible for making the determination.

However, the administrators helping to develop the proposal should also be reviewing all third party involvement to determine if it is categorized appropriately as either a procurement, or a collaborative

subaward

.

Still not sure? Contact the

Subawards Manager at least 30 days prior to submitting the proposal.

At proposal development:

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Who does what?

The RMS Subcontract Team also reviews this issue as part of its compliance review process that is required to be completed prior to issuing the

subaward to the subrecipient institution. This is done in consultation with the

PI, the RSC

and the Department

At

Subaward

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How do we make the determination?

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Subawards

and ProcurementsBoth have a defined Scope of Work

Both have a detailed budgetBoth are a formal legal agreement between The Regents of the University of California and the third-party entity

What is the same?

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Subawards

versus ProcurementsProcurements are used to acquire goods or services for the project, and

Constitutes “work for hire”. Does not transfer programmatic effort to the third-party entityThe third-party entity does not have a Principal Investigator

There is no collaborative element to the scope of work

UCSF is not required by the sponsor to flow down the requirements of the prime agreement

What is different?

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Subawards

versus ProcurementsSubawards

bring a third party entity into the project, andTransfers programmatic effort to the third-party entityHas a Principal Investigator

The scope of work includes collaboration on the work for the UCSF award

UCSF is required by the sponsor to flow down the requirements of the prime agreement

UCSF is required

to monitor and

ensure the recipient’s ongoing compliance with the flow down requirements (eg

. issue management plans for audit findings)What is different?

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Working with Supply Chain Management

The

procurement process is not managed by RMS. The PI’s department is required to submit a requisition via the

BearBuy

system

. Additional information can be found at:

http

://supplychain.ucsf.edu/

Go to the “How to Buy” tab

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Guidance for submitting your request

"How To" Guides are provided so end users have guidance on how to process certain types of orders

.

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Case Studies

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Questions?

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