Issue and Manage Subagreements
Issuing Subawards and Subcontracts Overview
- The first step in the subcontracting process is completion of the Subcontract/Subaward Request Form in coordination with your college/unit Contracts and Grants office or Financial Officer. The form and any necessary backup materials are then forwarded to the Office of Sponsored Programs (OSP), which will prepare and issue the subcontract/subaward (subagreement).
- Prior to issuing the subagreement, OSP may perform a risk assessment in order to determine the subrecipient's capacity to properly manage the funds (i.e., review a copy of an independently audited financial statement or Single Audit Report). The subrecipient risk assessment process is illustrated in the Risk Assessment Flowchart.
- Refer to GURU policy RA80 for procedures related to the administration of subcontracts and subawards, respectively.
- Upon full execution, it is the college/unit and Principal Investigator’s responsibility to manage the subagreement. The Principal Investigator (PI) is responsible for monitoring the subrecipient’s progress and approval of invoices to ensure the costs are appropriate and commensurate with the work performed. The PI is responsible for signing the Technical Release form accepting final deliverable and technical performance.
- Following completion of the subagreement, OSP is responsible for the final review and analysis of costs incurred against the subagreement and for obtaining all required closeout documents.
- Subaward and Subcontract Policy (RA80)
- Subaward Procedures Manual
- Subcontract Procedures Manual
- Financial Conflict of Interest (FCOI) and Subrecipients
Roles and Responsibilities
Office of Sponsored Programs
- Performs risk assessment prior to issuing subaward/subcontract, including financial audit reviews
- Reviews contractual obligations
- Issues subaward/subcontract document and negotiates terms and conditions, if necessary
- Reviews documentation submitted by College to verify subrecipient monitoring
- Reviews and approves final invoices
College/Financial Officer (as applicable):
- Prepares Subaward/Subcontract Request Form and sends with any special reporting/invoicing instructions (if applicable), F&A rate agreement, subrecipient budget, and subrecipient scope of work to OSP
- Ensures compliance with all restrictions and obligations associated with subaward/subcontract
- Verifies that any cost sharing commitments are met and appropriately reflected on the invoices
Approves invoices for payment after ensuring all costs are
- allowable, allocable and reasonable
- incurred within the period of performance
- aligned with technical progress
- Prepares/approves Special Request For Check (SRFC) for payment
- Obtains the final invoice prior to closeout
- Ensures that Certification of Technical Completion has been completed by PI prior to closeout
- Forwards a copy of the final cumulative invoice and completed Certification of Technical Completion to OSP, along with request for approval to release final payment and close
Obtain approval from OSP to release final payment and close
- Provides oversight during the subaward/subcontract period of performance
- Ensures full and timely compliance with all restrictions and obligations of prime award
- Monitors scientific progress and subrecipients adherence to terms of subaward/subcontract
Follows up on late or missing reports/deliverables
- Submits appropriate invoices and reports in accordance with subaward/subcontract
- Submits required technical reports
- Audit compliance ‐ notifies Penn State of completion of required audits and any adverse findings which impact the subaward/subcontract
- At closeout, submits accurate final invoice (sample invoice available on website) and submits final reports, including technical, inventory, and inventions
College Responsibilities for Issuing and Managing Subagreements
1. Prepare Subaward/Subcontract Request Form.
2. Send with any special reporting/invoicing instructions (if applicable), F&A rate agreement, subrecipient budget, and subrecipient scope of work to Office of Sponsored Programs (OSP).
3. Receive and pay subrecipient invoices:
- ensure all costs are allowable, allocable, and reasonable
- ensure all costs were incurred within the period of performance of the subagreement
- confirm that expenses are aligned with the technical progress
- confirm that cost sharing commitments are met and are appropriately reflected, if required
College Responsibilities for Initiating Closeout
1. Obtain the final invoice and review for the information below (please note that the College/Unit is responsible for the same type of review and approval as is required for the routine monthly invoice evaluations). The College must make certain this information is clearly provided prior to submitting the documentation to OSP for the purpose of requesting release of final payment and closeout. If the required information is not found on the final invoice, the College must seek the missing items from the subrecipient.
- Is invoice clearly marked "FINAL"?
- Does the invoice include current and cumulative costs incurred (including cost sharing, if required by the subaward/subcontract)?
- If cost sharing was required, was the subrecipient's obligation met?
- If there were any special cost provisions made part of the subaward/subcontract, were they followed by the subrecipient?
- Does the invoice include the subaward/subcontract number?
- Does the invoice include the period during which the costs were incurred?
- Does the invoice include a certification as to the truth and accuracy of the invoice?
2. Ensure that Certification of Technical Completion has been completed by PI. (This is the PI's acknowledgment that the subrecipient has completed the proposed work and all technical reports have been received.)
3. Forward a copy of the final cumulative invoice and completed Certification of Technical Completion to OSP, along with request for processing and approval of release of final payment.
4. Obtain approval from OSP to release final payment and close.
The principal investigator (PI) is responsible for the oversight during the subagreement period of performance.
PI Responsibilities for Issuing and Managing Subagreements:
- Ensures full and timely compliance with all restrictions and obligations
- Monitors scientific progress and subrecipients adherence to terms
- To successfully close out the subagreement, the PI must also follow up on late or missing reports/deliverables
- Submit appropriate invoices and reports in accordance with subagreement.
- Submit required technical reports.
- Audit compliance - notify Penn State of completion of required audits and any adverse findings which impact the subagreement.
- At closeout, submit accurate final invoice (sample invoice) and submit final reports, including technical, inventory, and inventions.