Copyright © 2008 NCURA Subrecipient Risk Assessments – or Judging our Friends Pamela Webb...
-
Upload
rebecca-campbell -
Category
Documents
-
view
214 -
download
1
Transcript of Copyright © 2008 NCURA Subrecipient Risk Assessments – or Judging our Friends Pamela Webb...
Copyright © 2008 NCURA
Subrecipient Risk Assessments – or Judging
our Friends
Pamela WebbAssociate Vice President for Research AdministrationUniversity of Minnesota
Andy HornerDirector, Health and Education GroupHuron Consulting Group
Csilla CsaplárContract and Grant Officer, Office of Sponsored ResearchStanford University
Copyright © 2008 NCURA
Objectives
What do we need to understand about federal regulations to assess subaward risk?
What tools are institutions using to meet A-133 risk assessment obligations?
How do different risk profiles impact the subaward instrument, language, or monitoring?
When, if ever, is a subaward too risky?
Copyright © 2008 NCURA
Federal Regulations
The following regulations guide Subawards and Subrecipient Monitoring:
OMB Circular A-133 OMB Circular A-110 Federal Acquisition Regulations (FAR)
Primarily for contract as funding mechanism
Copyright © 2008 NCURA
Definitions
Subrecipient Monitoring is the process of providing oversight on subawards throughout their lifecycle including:
Obtaining the appropriate information prior to submitting the proposal (statement of intent, accurate budget, statement of work)
Reviewing appropriateness of subawardee
Executing an agreement consistent with A-133 requirements
Acquiring signed A-133 certification statements (from other A-133 institutions)
Copyright © 2008 NCURA
OMB Circular A-133
Pass-through Entity Responsibilities: Ensure that federal funds are used for authorized purposes in
accordance with laws, regulations and provisions of the prime award.
Ensure that performance goals are met. Monitor the activities of the subrecipient to ensure compliance. Ensure that subrecipients expending $500K or more annually have
met the audit requirements for that fiscal year. Issue a management decision on audit findings, if necessary, and
ensure that the subrecipient takes appropriate and timely corrective action.
Provide prime award information to subrecipients. Conduct on-going review and oversight of subrecipient progress and
compliance
Copyright © 2008 NCURA
Compliance Environment In the last several years the Office of Inspector General (OIG) has
pursued a number of issues related to accounting for and substantiating the appropriate and compliant use of Federal funds for research.
DHHS OIG 2006 Workplan: Subrecipient Costs and Monitoring:
“We will determine whether college and universities are complying with applicable Federal regulations to monitor subrecipient costs. OMB Circulars A-110 and A-133 require that grantees monitor subawards and ensure subrecipients have met audit requirements. Grantee monitoring should take place during and after the award, and should include site visits, review of performance and financial reports, and development of risk assessments based on relevant factors to ensure a proper level of monitoring. Our reviews at three institutions show that grantees are not adequately complying with Federal requirements.”
Copyright © 2008 NCURA
Recent Settlements and AuditsSubrecipient Monitoring
• University of Massachusetts Medical School (UMMS) and Yale University Key elements of complaint
NIH Award to UMMS UMMS issued subaward to Yale University Audit report alleges that Yale claimed $193,779 in costs that did not
comply with OMB Circular A-21 and the terms of the subgrant. Because Yale received its funds through a subgrant from UMMS
rather than directly from NIH, audit recommended under separate cover that UMMS reimburse NIH for unallowable subgrant costs totaling $193,779.
Yale currently under federal investigation• George Washington University
Payments made to fake subcontractors GWU agreed to $1.8 million settlement with DOJ Former PI stole nearly $1 million was sentenced to prison
Copyright © 2008 NCURA
Recent Settlements and AuditsSubrecipient Monitoring
• University of Puerto Rico (UPR) Key elements of the complaint
The audit found $16,000 in questioned subawardee costs and that UPR’s internal controls for subawardee costs are lacking.
Two subawardees were unable to provide adequate supporting documentation and one subawardee duplicated billing for indirect costs.
Subawards were not adequately monitored because UPR’s policies and procedures did not include a risk-based system for monitoring and reporting subaward costs.
UPR agreed with the findings and is launching a new subrecipient monitoring system.
Copyright © 2008 NCURA
Risk ManagementMethods to Evaluate Institutional Exposure
Review policies and procedures for subrecipient monitoring. Ensure 100% completion of A-133 audit certifications. Confirm subcontract template meets A-133 requirements. Review process to pre-qualify subrecipients. Determine if roles and responsibilities for pre-award, post-award
and department levels are clearly defined.
Copyright © 2008 NCURA
Risk ManagementMethods to Evaluate Institutional Exposure
Determine if subrecipient monitoring approach is risk-based (which is a preferred industry practice): A-133 institutions may need less overall monitoring. Desk audits for some sites. Smaller, less savvy institutions might merit increased
oversight. Review the process used to monitor subrecipient performance:
Review of audit reports. Approval of invoices by the PI. Review of invoices and reports by research accounting.
Copyright © 2008 NCURA
Managing Risk: Review Audit Reports
A-133 entities Federal Audit Clearinghouse for A-133 (aka Harvester at
http://harvester.census.gov/sac/) or review of institution’s A-133 audit report or certification
Non-A-133 entities Consider requesting completion of an Audit questionnaire
For-profit entities DCAA-cognizant or ONR Resident Representative can
review for you
Copyright © 2008 NCURA
Potential Indications of High-Risk
Significant audit findings relative to research and development, or failure to have a current audit report
History of non-compliance History of non-performance or failure to use funds for their authorized
purposes New subrecipient (or new to this type of project) New personnel or systems Large subaward/large percentage pass-through Award size relative to subrecipient’s sponsored research portfolio Criticality to overall success of pass-through entity’s project Program complexity Type of subrecipient (is the subrecipient already subject to A-
133?)
Factors that may affect the extent of monitoring Factors that may affect the extent of monitoring required:required:
Copyright © 2008 NCURA
Implement Corrective Action Plan for audit findings or yet-to-be developed internal controls
Write a more detailed Statement of Work with explicit understandings about methodology, procedures, and deliverables - and consequences for not meeting them
Authorize more limited allotments of time and money Require more frequent technical reporting, additional correspondence with PI Engage in “agreed-upon procedures engagements” or other external audit Add more detailed or frequent invoicing requirements
Add requirement for expenditure backup materials* Tie payments to receipt of satisfactory technical progress reports Require on-site monitoring (technical and financial) Add more stringent termination or stop-work language for failure to comply with
requirements Include obligation to promptly notify you of changes in audit status, compliance
approvals, conflict of interest, or management plan
Potential Responses to High Risk Subrecipients
*Be careful of what you ask for! You have to review it, and theymay ask you for the same in a reverse situation!
Copyright © 2008 NCURA
Understanding Risk
Low Medium High
Simple Program
e.g., R03
Basic Program e
e.g., R01
Complex Program
e.g., Center Grant
Low % of Awards Passed Through Subrecipient
Standard % of Awards Passed Through Subrecipient
High % of Awards Passed Through Subrecipient
Small Award Standard Award Large Award
Long History with Subrecipient Some History with Subrecipient No History with Subrecipient
No Compliance Problems Responsive to Minor Compliance Issues
Known History of Compliance Problems
Copyright © 2008 NCURA
Risk Assessment Exercise
Evaluate each case study and complete a risk analysis matrix for each one to determine if the subrecipient
might be considered low, medium or high risk.
Are there any special considerations needed?What controls might you put in place?
Copyright © 2008 NCURA
Choose the Right Instrument
Low Risk
http://www.thefdp.org/Subawards_Forms.html
High Risk
•Full agreement with explicit flow down clauses, in full text if subrecipient is inexperienced•Extra language inserted to address perceived risk areas or deficiencies
Copyright © 2008 NCURA
Fixed Price versus Cost-Reimbursement
Cost-Reimbursement (Pass-through assumes greatest risk) Work cannot be precisely defined or cost precisely
estimated (much of what we do!) Allows greatest flexibility (add $$ or time as mutually agreed
and perform work within scope until funds/time are exhausted)
Common for other educational institutions, hospitals, and non-profits
Fixed Price (Subrecipient assumes greatest risk) Appropriate if there can be a clear work scope, solid cost
estimate and well-articulated deliverables Lower administrative burden for prime Common for foreign entities and for-profits May be appropriate for small entities
Copyright © 2008 NCURA
How Can you Tell if You have Managed Your Risk Satisfactorily?
Technical progress is being made according to schedule Acceptable deliverables or progress reports are received on-
time Adequate communication is happening between PI and
Subrecipient PI Award modifications occur as needed Subrecipient has proper control of property Subrecipient is continuing to meet compliance requirements Subrecipient is submitting acceptable invoices on time Required prior approvals are obtained Annual review of audit status or fulfillment of corrective action plan
is satisfactory
Copyright © 2008 NCURA
Questions?
Pamela [email protected]
Andy [email protected]
Csilla Csaplá[email protected]
Contact Information:Contact Information: