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RESTRICTED FUNDS ACCOUNTING
The purpose of this policy is to communicate the University of
Arkansas for Medical Sciences’ guidelines for the programmatic and
financial monitoring of its sponsored research award subrecipients.
OMB Circular A-133, “Audits of States, Local Governments, and
Non-Profit Organizations” defines pass-through entities, recipients,
subrecipients and vendors in Sub-part B. In general terms, a
pass-through entity is one that is either a direct recipient or
sub-recipient of Federal funds that passes through to another entity
(herein after referred to as the subrecipient) a portion of the work
and a portion of the funding of a federally sponsored agreement. In
a case where the university acts as the pass-through entity to a
subrecipient, Sub-part D of A-133 sets forth the University’s
responsibilities for subrecipient monitoring.
The determination of the potential need for a subaward to a
business/organization is normally made at the proposal stage. The
Principal Investigator identifies the scope of work to be performed
by the potential subawardee and must be prepared to justify the
selection of the potential subawardee. When selecting a potential
subawardee, the principal Investigator should be aware of the “Codes
of Conduct” section (subpart C.42) of OMB Circular A-110 (“Uniform
Administrative Requirements for Grants and Agreements for
Institutions of Higher education, Hospitals, and Other Non-Profit
Monitoring and Compliance Responsibilities
The University is responsible for monitoring the activities of
subrecipients as necessary to ensure that Federal awards are used
for authorized purposes in compliance with laws, regulations, and
the provisions of contracts or grant agreements and that performance
goals are achieved.
- Ensure that subrecipients expending
$500,000 or more in Federal awards during the subrecipient’s
fiscal year comply with OMB Circular A-133.
- Ensuring that appropriate corrective
action is taken within six (6) months after receipt of the
subrecipient audit report in instances of noncompliance with
Federal laws and regulations.
- Considering whether subrecipient audits
necessitate adjustments of the University’s own records.
- Requiring that subrecipients permit
independent auditors to have access to the records and financial
statements necessary in order for the University to comply with
- Providing the Catalog of Federal Domestic
Assistance (CFDA) number to the subrecipient when issuing a
subaward or subsequent change.
The following units are responsible for the monitoring of
subrecipients and the receipt of subrecipient audit reports:
- The Office of Research and Sponsored
Programs (ORSP) is responsible for the development of the
subaward and for inclusion of all applicable OMB requirements,
disclosures, and for obtaining the proper signatures on the
subaward. ORSP is also responsible for the risk assessment of
subrecipients and verifying that they are not debarred or
suspended from receiving federal funds.
- Principal Investigators/Department
Administrators are responsible for monitoring periodic progress
reports and invoices from the subrecipients for compliance with
the terms of the contract. Invoices should be checked to ensure
that they are reflective of progress. Non-compliance with
technical reporting requirements or dissatisfaction with level
of subrecipient progress should be reported immediately to ORSP
and the Grants Accounting office.
Monitoring the subcontractor’s
compliance with audit, financial and equipment reporting
requirements is the responsibility of the Grants Accounting Office.
These responsibilities are outlines below.
- Ensure that a current certification or
A-133 audit report is submitted annually.
- Review reports and letters submitted by
subrecipients for instances of noncompliance or reported
findings to determine whether adjustments are need to the
In instances of noncompliance, Grants Accounting will seek to
obtain assurance from the subrecipient that corrective action
efforts have taken place and shall review management’s
corrective action plan.
- Retain certifications and report for a
period of three years or longer if required by the sponsor after
termination of the subcontract.
- Send letters and make follow-up phone
calls requesting certifications or A-133 reports not received
for the prior fiscal year within two weeks of the initial
request for certifications. The audit report is due nine months
after the end of the audit periods (typically the end of an
organization’s fiscal year).
- If the subrecipient fails to establish
that corrective action has been taken, the Grants Accounting
Office will refer the subrecipient to the Grants Administration
Advisory Committee for a management decision, where the proper
course of action will be determined. In noted instances of
non-compliance, the Grants Accounting Office will maintain
documentation of action taken and results of such action.