# Presentation: 678281

## Region 5 Coordinators’ Meeting

**Subrecipient **
**Regulations and **
**Monitoring**

## Background

**Background**

**Rules and Regulations**
**New Grant Programs and Partners**

**Notes:**
The rules and regulations concerning subrecipients are not new.  States have sub-granted or passed through federal funds from SFR & WR programs.  With the addition of the newer grant programs it has brought in new partners and questions about the regulations to be followed.

Some of the questions, why does it matter if it is a subrecipient or a vendor, how do you determine what is a subrecipient, what is a vendor, what are the regulations and why do we care?  

I’m going to try to answer some of those questions today and give you the places to look for the rules and regulations.

Whenever a State has an outside entity perform grant related activities they’re either passing through federal funds to a subrecipient or simply contracting with a vendor to purchase goods or services.

## Why is it important?

**Regulations differ **
**(subrecipients vs. vendors)**
**Compliance issues**
**Monitoring**

**Notes:**
So why is it important to determine if the funds are being passed through as a subrecipient or contracted with a vendor?

It is important to determine because federal regulations differ for subrecipients versus vendors and more than likely state regulations will differ as well.

Compliance requirements may be passed down to subrecipients that are not passed down to vendors. There’s different OMB Circulars that must be complied with relating to managing grants and cost principles for various types of subrecipients.  There are also monitoring requirements involving subrecipients.

## Subrecipient vs. Vendors

**OMB Circular A-133**
**Section 210 - Subrecipient and vendor determinations**

**Notes:**
How do you decide what is a subrecipient or a vendor?  On page 2 of the handout I’ve listed information from Section 210 of OMB Circular A-133 giving characteristics of a federal award versus a vendor.  

## Subrecipient

**Determines eligibility**
**Performance measured against objectives of Federal program**
**Programmatic decision making**
**Compliance requirements**
**Carry out program vs. providing goods or services**

**Notes:**
Determines who is eligible to receive what Federal financial assistance – subrecipient might determine individuals eligible to receive benefits and provide benefits such as job training, education or employment services.

Has performance measured against whether the objectives of the Federal program are met - 

Has responsibility for programmatic decision making - 

Has responsibility for adherence to applicable Federal compliance requirements – 

Uses the Federal funds to carry out a program of the organization as compared to providing goods or service for a program of the pass through entity. – When the goods or services are for the benefit of the primary recipient would be a vendor even though it can be charged as a cost to the grant.

## Vendor

**Provides goods & services within normal operations**
**Similar goods or services to different purchasers**
**Competitive environment**
**Ancillary to Federal program**
**Not subject to compliance requirements**

**Notes:**
Provides the goods or service within normal business operations

Provides similar goods or services to many different purchasers

Operates in a competitive environment

Provides goods or services that are ancillary to the operation of the Federal program

Is not subject to compliance requirements of the Federal Program – A State’s compliance responsibility with vendors is to ensure that the procurement, receipt and payment for goods and services comply with laws, regulations and provisions of contracts or grant agreements.  Program compliance requirements normally do not flow down to vendors.  Such as boat ramps, BIG, CVA.

Don’t have to have all characteristics.

## Subrecipients vs. Vendors

**Boating Infrastructure – Public & Private Marinas**
**Landowner Incentive – Private landowners**
**Clean Vessel Act - Marinas**
**State Wildlife Grant - Universities**
**Sport Fish Restoration – Local Government**

**Notes:**
Let’s talk about some examples of subrecipients and vendors relating to the Grant Programs in FA.

BIG – Marinas – Providing a direct public benefit.  Program compliance requirements are passed down – reasonable access, equitable fees, construction designed to last 20 years, ADA - Subrecipient

LIP – Providing financial assistance to a landowner would be subrecipient, paying a contractor to perform work on private land – vendor

CVA – Providing funds to marinas to construct pump outs – reasonable access to the public, limits charges for use of facilities - subrecipient.  Paying a contractor to develop and print informational material - vendor

SWG – Universities providing statistical analysis (did not gather data) as part of a bigger objective would be a vendor, if University performs research/study as objective of the grant subrecipient.  Sample to be analyzed.

SFR – Boat Ramps by local governments – providing match – subrecipient or hire a firm to build on State land would be a vendor.

## State Responsibilities

**43 CFR Part 12 **
**OMB Circular A-133**
**Program Authorization & Funding Legislation**

**Notes:**
Once you make the determination that you have a subrecipient relationship, what are the State Responsibilities?

The Federal rules and regulations concerning subrecipients are found in 43 CFR Part 12, OMB Circular A-133 – Single Audit Act and Grant Program authorizing legislation or CFRs for specific grant program.

## State Responsibilities

**States follow State law & procedures when awarding and administering subgrants (43 CFR 12.77).**

**Notes:**
States follow their own procedures when awarding and administering subgrants the same as a State has to follow their State procurement regulations for vendors.  

Your State should have written policies to follow.  Auditors look for polices and verify States are following their State policies.  This may be Federal Auditors or your State Auditors.

## State Responsibilities

**Identify and provide information about the Federal award to the subrecipient.**

**Notes:**
In addition to basic information in the subrecipient agreement OMB Circular A-133 and 43 CFR 12 requires the primary grantee to identify certain pieces of information to the subrecipient.  This must be included in the subrecipient agreement.

Listed on page 4 of the handout....
CFDA name and number
Award name, number and year
If it’s research and development
Name of federal awarding agency

## State Responsibilities

**Inform subrecipients on compliance requirements.**

**Notes:**
Inform subrecipients about compliance requirements (Federal laws, regulations and provisions of contracts or grant agreements as well as additional State requirements);

The subrecipient agreement should incorporate the laws and regulations the subrecipient must comply with as a condition of the agreement.

We’ll talk more about compliance requirements a little later.

## State Responsibilities

**Monitor subrecipient activities.**

**Notes:**
Monitor subrecipient activities through Audits, Site Visits, Document Reviews and Communication. Handout page 7.

In talking with the Regions there is monitoring going.  I asked for examples of types of monitoring being performed.  States regularly meet with 3rd parties, on site follow up field reviews, States may have staff to act as liaison with university (researcher), cost summaries or documents are submitted to central office for review and payment.  So while the FAC may not be directly involved with monitoring it seems States are monitoring subrecipients. The monitoring process should be included in the State polices and documented as it is performed.

It may be good idea to incorporate monitoring activities in the agreement.

## State Responsibilities

**Ensure subrecipients have single audits, if required.**

**Notes:**
Ensure subrecipients have single audits, if required.

All State and local governments, colleges and universities and non profit organizations that expend $500,000 or more in Federal funds in a fiscal year must have a single audit under OMB Circular A-133.

Under $500,000 and For Profits are not required to have an audit according to A-133.

States are responsible for verifying if the subrecipient must have an audit by getting them to identify the amount of federal funds received in a fiscal year and monitoring the Single Audit reports. See page 8 or OMB A-133. 

## State Responsibilities

**Issue management decisions on single audit findings and ensure corrective action is taken.**

**Notes:**
Issue management decisions on single audit findings and ensure corrective action is taken including adjusting grantee records

Part of monitoring audit reports of subrecipients.

## State Responsibilities

**Require subrecipients to permit State and State Auditors access to records.**

**Notes:**
Require subrecipients to permit State and its auditors access to their records.

For Profits are not always as open to this requirement as governments, non-profits – records relating to grant work.

## Compliance Requirements

**Program Regulations **
**Public Policy Requirements**
**Administrative Requirements**
**State Requirements**

**Notes:**
States agree to comply with all applicable federal laws, regulations and policies.  States are responsible for ensuring subrecipients also comply.

See page 5 for examples.  Compliance should be included in subrecipient agreement, either listed or by reference.  Talk about assurances.

Certain Circulars for types of subrecipients.

State requirements should also be included.

## Remember!

**State policies & procedures**
**Identify required information **
**Identify compliance requirements **
**43 CFR 12 and OMB Circular A-133**
**Contact Regional Office**

**Notes:**
States should have written polices and procedures on dealing with subrecipients.

Some information is required in subrecipient agreement, some should probably be included as first communication with subrecipient and to provide for monitoring.  States may want to create standard agreements for various grant programs.  See examples from LA and Alaska.

## Questions / Parking Lot