Subaward
(think about vs. Contractor/Vendor)
Subaward
*Purpose of carrying out a portion of the award
oPerformance Measured in relation to project performance
oHas responsibility for programmatic decision making
oPublic purpose
oMust follow federal program requirements
Contractor/Vendor
*Paid by PO for goods or services
*Provides goods or services within normal business operations
*Provides similar good or services to many different purchasers
*Normally operates in a competitive environment
*Not subject to all the federal program requires
Subaward Risk Assessment
Determining Low/High Risk
oRequired under UG. Anyone who gets one has to do a risk assessment on subawardee.
Low or High Risk
*Have they been debarred or suspended? If so they cannot get the funds
oSize of entity
oDomestic or Foreign (at IU foreign is automatically high risk)
oSingle Audit? Any findings?
What should be monitored for sub?
- Compliance with fed regulations
- Compliance with prime terms and conditions
- Spending is appropriate, allowable and allocable
- Adequate technical process consistent with the statement of work and invoices
FFATA (Federal Funding Accountability and Transparency Act)
*requires that information on federal awardsbe published on a single, searchable public website, www.USASpending.gov.
All federal subs must be reported in SAM.gov by the last day of the month of insurance over $30K
*Sub Name, Location, Subaward, Summary of SOW
(F&A / Overhead)
Admin capped at:
Not directly allocable; support overall infrastructure.
Includes:
*Facilities (buildings, utilities, depreciation, IT)
*Administration (central offices, RA salaries, HR, finance)
oAdmin portion capped by Congress at 26%.
Items excluded from indirect calculations
*Space like classrooms, lobbies
*Costs already charged directly (no double count)
* Rare library
books (odd but explicit)
F&A rate equasion
Total allowable indirect costs ÷ Direct cost base = F&A rate.
Common Bases (MTDC, TDC, S&W)
MTDC (Modified Total Direct Costs) – excludes equipment, tuition, patient care. (most universities)
TDC – includes all direct costs.
Salary & Wages – only salary is used for the base. (usually hospitals)
NICRA (Negotiated Indirect Cost Rate Agreement)
2 methods of higher ed
3 methods for non-profits
Negotiated with Cognizant Agency (DHHS or ONR).
* Your Cognizant Agency has provided the most funds to you over the last three years
- Two Methods for Higher Ed:
o Standard (Long Form): IHE receive more than 10 million per FY
o Simplified: may be used if less than 10 million per FY - Three Methods for Non-Profits
o Direct Allocation
o Multiple Allocation
o Simplified
Types of NICRA
*Predetermined (Estimate)
o A permanent rate was established for a specified period of time; normally in effect for 2 to 4 years. IU has a pre-determined rate
*Fixed Rate (Based on Actuals)
o Like the predetermined rate, but estimated costs and the actual, allowable costs of the period covered by the rate are carried forward as an adjustment to the rate computation for the next period.
*Provisional Rate (Temporary)
o When we don’t yet have a predetermined or fixed rate
*Final Rate
o If the provisional rate is not replaced by a predetermined for fixed rate before the end of the institution’s fiscal year, then the final rate will be established by the cognizant agency
If no NICRA, use 15% de minimis (or 8% international).
Cost Share Types (3)
Mandatory – required by sponsor.
Voluntary Committed – institution offers; must track/report. (Salary, faculty will work 10%, for example)
Voluntary Uncommitted – not tracked.
Cost share rules (2)
-Must be allowable, auditable, and properly documented.
-Unrecovered F&A can sometimes count as cost share (if sponsor allows). Video describes. Rate is capped, but extra can go on cost-share if sponsor allows.
Cost-share impact
Cost share increases your F&A denominator → decreases rate.
*ALL COSTS on a cost-share, have to follow the same rules, reasonable, allocatable, etc. Cost share is not supposed to be seen as beneficial if not required.
Procurement Standards
Simplified Acquisition Threshold (SAT):
$250K
Informal Procurement Standards
Formal Procurement Standards
Micro-purchase < $25K: 1 quote.
Small purchase $25K–$249,999: ≥2 quotes.
Sealed bid: lowest cost wins.
Competitive proposal: best overall value.
Procurement Standards Noncompetetive Allowed For:
Sole source
Emergency
Sponsor-approved subawards
Inadequate competition
Equipment Rules
oMust be > $10,000 and lifespan > 1 year.
oFabricated equipment = all assembled components count as equipment. (ex: if put 3 pieces of equipment together that cost 4k each, equals over 10K, fabricated)
o If used by multiple projects, costs must be split proportionately
o Title usually vests with the institution (check award).
When Equipment is no longer needed
Reuse for same agency → other federal agency → non-federal.
If selling and fair market value is more than $10K → federal share must be paid back.
Service Centers
o Internal units charging for specialized services. (ex: Animal Services)
o Must break even (no profit, no loss).
o Rates based on actual costs; reviewed every 2 years.
o Federal users must receive the lowest rate.
Effort Reporting
Salary charged must match actual effort.
Part of institutional internal controls
* Supported by a system that provides reasonable assurance that the charges are accurate, allowable, and properly allocated
Changes require documentation; cannot shift effort just to spend down.
Cost Transfers
(Allowable vs. Unallowable)
oAllowable only if:
Error correction
Timely (typically ≤ 90 days)
Fully documented
o Not allowed:
To spend down funds
To fix budget overruns
- Prior approval needed for: (Know for NIH, NSF and DoD)
oScope changes
oPI changes or absences (usually 3 months of disengagement)
oMajor rebudgeting
oNo-cost extensions (given through Expanded Authorities (know what that means). Grantee approved has to be done before it has expired. Outside of Expanded Authorities, all NCEs require prior approval.
oEquipment purchase (sponsor-specific)
Cost Reimbursable Awards
(have to give back what is not spent)
Sponsor pays actual costs incurred.
Reporting Costs
* Invoicing
* Financial Reporting
If cost share isn’t met:
* Sponsor may reduce payment
* Delay payment
* Terminate award (severe cases)
