Policy Statement

The University of Illinois System may issue a subaward to a subrecipient for the purpose of performing a portion of the scope of work under an award for a sponsored project. In issuing a subaward, the system assumes responsibility for the oversight of programmatic and financial activities of the subrecipient throughout the life of the subaward, including but not limited to the determination of subrecipient versus contractor, assessing subrecipient's capacity to perform, and subrecipient's compliance with award terms. The Principal Investigator shall be responsible for confirming the subrecipient performs the awarded scope of work and all costs are reasonable and in accordance with the terms of the award.

Reason for the Policy

As a recipient of an award, the system must comply with the requirements outlined in 2 CFR § 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards that require the system  to manage and monitor each subaward to reasonably ensure that costs are allowable, awards are used for authorized purposes, and performance goals are achieved. Subawards must also be administered in compliance with applicable laws, regulations, and the provisions of the grant or contract agreement.

Applicability of the Policy

This policy applies to all sponsored projects and programs.

Related Policies and Procedures

Review and Pay Subrecipient Invoices
Close a Subaward

Additional Resources

Guidelines on Subrecipient Performance
Responsibilities to Monitor a Subrecipient

Last Updated: July 7, 2015 | Approved: Senior Associate Vice President for Business and Finance | Effective: July 7, 2015

Review and Pay Subrecipient Invoices

Policy Statement

The University of Illinois may issue a subaward to a subrecipient for the purpose of performing a portion of the scope of work under an award for a sponsored project. In issuing a subaward, the University assumes responsibility for the oversight of programmatic and financial activities of the subrecipient throughout the life of the subaward, including but not limited to the determination of subrecipient versus contractor, assessing subrecipient’s capacity to perform, and subrecipient’s compliance with award terms. The Principal Investigator shall be responsible for confirming the subrecipient performs the awarded scope of work and all costs are reasonable and in accordance with the terms of the award.

Before you Begin

The Principal Investigator (PI) is responsible for reviewing, certifying and approving all invoices, in consultation with the business manager as required, with regard to the subrecipient’s performance. In some cases, the PI may delegate this authority to a designee who can attest to the performance of the subrecipient. When this occurs, written documentation must be kept on file. For Urbana and Springfield, notify and provide this documentation to the Grants and Contracts Office.

Encumbrance Number – An encumbrance must be established in Banner before an invoice can be paid. After a subaward has been fully executed, a copy of the subaward agreement is sent to the PI and the Grants and Contracts Office (GCO). Additional details for each campus are as follows:

Chicago – GCO creates the encumbrance number upon receipt of the executed subaward and sends the encumbrance number to the unit business manager upon issuance.

Urbana – GCO creates the encumbrance number upon receipt of the executed subaward. The encumbrance number can be found in Banner or on the sub-invoice cover letter provided with each sub-invoice.

Springfield – The department business manager forwards an Encumbrance Request form to GCO. GCO creates an encumbrance for the amount of the subaward. The encumbrance number will be sent to the unit business manager upon issuance.

Final Invoice – In order for the University to comply with its financial reporting requirements, subrecipients are required to submit a final invoice within the timeframe specified in the subaward. The final invoice should not be paid until the subrecipient has met all subaward requirements. In the event that a final invoice is received from the subrecipient after the specified time period has lapsed, payment may be denied. PIs and unit business managers are responsible for obtaining final closeout information, including invoices, from their subrecipients.

Begin

To review and pay subrecipient invoices, the PI or delegate should:

• Review each invoice with regard to applicable regulations and the terms and conditions of the award.
• Ensure the costs are reasonable (e.g. in line with the amount of work being reported or deliverables submitted), allowable in accordance with the cost principles, and incurred within the project period.
• Ensure any cost sharing commitment has been satisfied and that appropriate documentation is received from the subrecipient. The subrecipient’s cost sharing must meet the criteria specified in the University’s cost sharing policy. If a subaward includes a cost sharing commitment from a subrecipient, this should be reported on the subrecipient’s invoices, including the cumulative cost sharing total.
• Investigate any charges which appear to be unallowable, unusual or excessive, and resolve them prior to submitting the invoice for payment.
• Submit the approved invoice for payment using the Request a General Encumbrance/Wire Transfer Payment form following the instructions found on Non-Purchase Order Invoices webpage.
• Make sure the final invoice is submitted by the subrecipient within the timeframe specified in the subaward or payment may be denied.

For the Chicago campus, the Subrecipient Monitoring – Invoice Checklist may be used to help ensure the invoice meets the criteria for completeness and compliance prior to release of payment.

Forms Used in this Procedure

Request a General Encumbrance/Wire Transfer Payment

Subrecipient Monitoring - Invoice Checklist – Chicago

Additional Resources

Non-Purchase Order Invoices

Last Updated: July 12, 2015 | Approved: Senior Associate Vice President for Business and Finance - July 7, 2015

Close a Subaward

Policy Statement

The University of Illinois may issue a subaward to a subrecipient for the purpose of performing a portion of the scope of work under an award for a sponsored project. In issuing a subaward, the University assumes responsibility for the oversight of programmatic and financial activities of subrecipient throughout the life of the subaward, including but not limited to the determination of subrecipient versus contractor, assessing subrecipient’s capacity to perform, and subrecipient’s compliance with award terms. The Principal Investigator shall be responsible for confirming the subrecipient performs the awarded scope of work and all costs are reasonable and in accordance with the terms of the award.

Before you Begin

An integral component of subrecipient monitoring is closeout of the subaward at the end of the project period. At this point is when the Principal Investigator (PI) determines that the subrecipient has fulfilled all of its responsibilities under the subaward. The final invoice should not be paid until the subrecipient has met all subaward requirements.

Begin

To close a subaward, the PI, unit business manager, and Grants and Contracts office fulfill the responsibilities described below.

The Principal Investigator and Unit Business Manager:

• Ensure that all programmatic or technical reports have been submitted in accordance with the subaward terms and conditions, and performance goals have been achieved.
• Obtain, review, and process a final invoice from the subrecipient within the timeframe specified in the subaward.
• Verify that the subrecipient’s cost sharing commitments have been satisfied, as applicable.

The Grants and Contracts Office:

• Liquidate any remaining subaward encumbrance.

Forms Used in this Procedure

(Optional) Subrecipient Monitoring Checklist

Guidelines on Subrecipient Performance

The Principal Investigator (PI) is responsible for ensuring that the progress on the subrecipient’s scope of work is satisfactory. The PI should manage each subrecipient's work or progress as presented in the subaward proposal, and as awarded by reviewing the subrecipient’s technical reports or other deliverables related to the project.

Programmatic Reports

The subrecipient is responsible for completing programmatic reports as stipulated in the terms and conditions of the subaward. Programmatic reports should be submitted by the subrecipient to the PI, as applicable. Programmatic reports serve as official documentation that the stated work has been performed, and substantiate the invoices paid throughout the course of the funding period. These reports should be maintained by the PI/department.

Unsatisfactory Performance

The PI determines the validity of the subrecipient invoices based upon the progress of the subawardee. The PI reserves the right to reject or withhold an invoice due to insufficient or unsatisfactory performance. If there are concerns about either the subrecipient’s performance or invoices, contact your university Grants and Contracts Office (post-award) as quickly as possible for assistance in resolving the issue.

Early Termination

If the subrecipient is in violation, breach or default of any of its obligations under the subaward and fails to remedy such default, the PI has the option to terminate the subaward. The PI or business manager shall notify the pre-award office and GCO of the intent to terminate the award early so written notification can be provided to the subrecipient.

Upon early termination, the subrecipient will be required to submit a final invoice within 30 days of the termination date unless otherwise stated in the termination notice. The subrecipient will be reimbursed for allowable, non-cancelable costs and commitments incurred in the performance of the subaward up to termination date, not to exceed the maximum reimbursement amount set forth in the agreement. Additionally, the subaward’s PI must submit all necessary progress reports through the date of termination.

Last Updated: January 3, 2019 | Approved: Senior Associate Vice President for Business and Finance - July 7, 2015

Responsibilities to Monitor a Subrecipient

The Principal investigator (PI), the unit business manager, and the university Grants and Contracts office (GCO) share the responsibility of monitoring subrecipients.

The Principal Investigator and Unit Business Manager:

• Verify that work performed by the subrecipient is conducted in a timely manner and is acceptable.
• Review and compare subrecipient invoices to established budgets to ensure cost are allowable.
• Certify/approve all subrecipient invoices and submit for payment.
• Maintain regular contact with the subrecipient regarding the technical aspects of the project.
• Ensure that all deliverables (e.g. technical, equipment, and invention reports) required under the subaward are being provided and reviewed.
• Participate in audits, site visits or other monitoring activities if necessary to review fiscal and programmatic records and/or observe programmatic activities.
• Facilitate closeout, i.e., final technical/programmatic reports and final invoice. PIs should not approve final payments until all reports have been received.
• Maintain documentation to support monitoring activities.
  

The Grants and Contracts Office:

• Verify on an annual basis that the subrecipient has completed an OMB Single Audit (formerly known as A-133 audit), as applicable.
• Follow-up to ensure subrecipient takes timely and appropriate corrective action when deficiencies are detected through audits, on-site reviews and other means that are related to the federal subaward issued by the University.
  • If the subrecipient does not respond in a timely manner, GCO will contact the pre-award office, PI and business manager. Future and/or final payments on any current agreements may be withheld until the subrecipient satisfactorily responds.
• Issue a management decision for audit findings that are directly related to federally-funded subawards issued by the University.
• Perform audits, desk reviews and other monitoring activities as determined necessary.
• May establish its own requirements, as necessary, to ensure compliance by foreign or for-profit subrecipients, since the Single Audit provisions in OMB Circular A-133 or the Uniform Guidance do not apply to such subwards;
  • Methods to assess compliance with federal subawards made to foreign or for-profit subawards may include audits, desk reviews or other monitoring activities.
     
    

Last Updated: January 3, 2019 | Approved: Senior Associate Vice President for Business and Finance - July 7, 2015