University Research University Research Services and Services and

AdministrationAdministrationSubawardsSubawards

May 27, 2010May 27, 2010

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AgendaAgenda Training objectiveTraining objective

To provide an overview of the subcontracting To provide an overview of the subcontracting process through topics covering:process through topics covering:• Establishing a subcontract relationshipEstablishing a subcontract relationship• Issuing a SubcontractIssuing a Subcontract• Budgeting and Spending on a SubcontractBudgeting and Spending on a Subcontract• Subcontractor MonitoringSubcontractor Monitoring

Definition and CharacterDefinition and Character

Defined by OMB A 110:Defined by OMB A 110: ““Subaward means an award of Subaward means an award of financial assistance financial assistance

in the form of money or property in lieu of money, in the form of money or property in lieu of money, made under an [prime] award by a recipient to an made under an [prime] award by a recipient to an eligible subrecipient .... may be called a contract but eligible subrecipient .... may be called a contract but does not include does not include procurement of goods and servicesprocurement of goods and services””

Sometimes referred to as subcontracts, Sometimes referred to as subcontracts, subagreements, subgrants, and purchase subagreements, subgrants, and purchase ordersorders

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Establishing the RelationshipEstablishing the Relationship Risk Assessment MatrixRisk Assessment Matrix New Subcontractor – check the federal New Subcontractor – check the federal

and state debarment websitesand state debarment websites Determine if role is Determine if role is ““subcontractor vs. subcontractor vs.

consultant vs. vendorconsultant vs. vendor”” Important to classify the relationship Important to classify the relationship

properly because:properly because:a. Impacts the budgeta. Impacts the budget

b. Potential audit findingb. Potential audit finding

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WhatWhat’’s the Differences the Difference

Subcontractor - Subcontractor - Key person is acting as a collaborator or co-investigator and Key person is acting as a collaborator or co-investigator and

contributing to a significant portion of the scholarly/scientific contributing to a significant portion of the scholarly/scientific work of the projectwork of the project

The work to be accomplished is an identifiable segment of The work to be accomplished is an identifiable segment of the project with a separate scope of workthe project with a separate scope of work

Adheres to applicable program compliance requirementsAdheres to applicable program compliance requirements Responsible for assisting in the completion of project Responsible for assisting in the completion of project

deliverables and/or technical reportsdeliverables and/or technical reports Terms and conditions of prime award flows down to the Terms and conditions of prime award flows down to the

subcontractorsubcontractor

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Establishing A SubcontractEstablishing A SubcontractConsultant - Consultant -

Individual who provides professional or highly technical Individual who provides professional or highly technical advice, an expert who sets own work hours; considered advice, an expert who sets own work hours; considered ““work for hirework for hire””

University controls the results but not the manner in which University controls the results but not the manner in which the service is performedthe service is performed

Vendor -Vendor - Provides goods and services within normal business Provides goods and services within normal business

operations ; similar goods or services are provided to many operations ; similar goods or services are provided to many different purchasers; operates in a competitive environmentdifferent purchasers; operates in a competitive environment

Program compliance requirements do not pertain to the Program compliance requirements do not pertain to the goods or services providedgoods or services provided

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Scenario OneScenario OneDr. Howard with Building Great Minds (BGM) will Dr. Howard with Building Great Minds (BGM) will conduct six professional development training conduct six professional development training workshops for math and science teachers participating in workshops for math and science teachers participating in STEM, a program designed to train educators how to STEM, a program designed to train educators how to teach science, technology, engineering and math to teach science, technology, engineering and math to students in urban high schools. The total annual costs of students in urban high schools. The total annual costs of $125,000 includes travel, per diem, and costs per $125,000 includes travel, per diem, and costs per workshop.workshop.

COCONSULTANTNSULTANT

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Scenario TwoScenario Two

Dr. Hilliard, faculty member at the University of Dr. Hilliard, faculty member at the University of Texas, will serve as a collaborator on a five year Texas, will serve as a collaborator on a five year NSF grant with Dr. Williams in Risk Management NSF grant with Dr. Williams in Risk Management and Insurance. He will be responsible for and Insurance. He will be responsible for identifying the sample group, collecting and identifying the sample group, collecting and analyzing the data, and writing research analyzing the data, and writing research findings. His total budget is $225,000 over the findings. His total budget is $225,000 over the grant period at $45,000 annually. grant period at $45,000 annually.

SUBCONTRACTSUBCONTRACT

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Scenario ThreeScenario Three

Dr. Diaz in the Department of Real Estate has Dr. Diaz in the Department of Real Estate has a project with the Georgia Real Estate a project with the Georgia Real Estate Commission for the purpose of creating and Commission for the purpose of creating and maintaining an internet-based real estate maintaining an internet-based real estate information database. Computer services are information database. Computer services are being provided by Dataliant, Inc., who has being provided by Dataliant, Inc., who has extensive experience in creating and extensive experience in creating and maintaining sites for colleges and maintaining sites for colleges and universities. universities.

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VENDOR

Establishing Subcontractor in Establishing Subcontractor in SpectrumSpectrum

Separate budget lines are created for each subcontractor Separate budget lines are created for each subcontractor on an award during the on an award during the ““generate awardgenerate award”” process process

PS Grants have the capability to create 18 subcontractorsPS Grants have the capability to create 18 subcontractors 753111-753119 Subcontracts > $25,000753111-753119 Subcontracts > $25,000 753121-753129 Subcontracts ≤ $25,000753121-753129 Subcontracts ≤ $25,000

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Issuing a SubcontractIssuing a Subcontract

Complete Request for Subcontract form, attach Complete Request for Subcontract form, attach budget and statement of work, secure PIbudget and statement of work, secure PI’’s s signature on form, and send to the Office of signature on form, and send to the Office of Sponsored Proposals & Awards (OSPA)Sponsored Proposals & Awards (OSPA)

OSPA Staff creates a subcontract using the FDP OSPA Staff creates a subcontract using the FDP templatetemplate

OSPA Staff attaches to the subcontract the OSPA Staff attaches to the subcontract the statement of work, budget, and prime awardstatement of work, budget, and prime award

OSPA Officer reviews the subcontract for OSPA Officer reviews the subcontract for accuracy before sending electronically to accuracy before sending electronically to subcontractor for signaturesubcontractor for signature

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Executing A SubcontractExecuting A Subcontract

Subcontractor reviews agreement for Subcontractor reviews agreement for accuracyaccuracy if agreeable, signs the agreement and return if agreeable, signs the agreement and return

to OSPA to OSPA If not, negotiates terms and conditions, before If not, negotiates terms and conditions, before

signing and returning to OSPAsigning and returning to OSPA

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Executing A SubcontractExecuting A Subcontract GSUGSU’’s AOR signs the agreement and a s AOR signs the agreement and a

copy of the fully executed agreement is copy of the fully executed agreement is sent back to the subcontractor for official sent back to the subcontractor for official recordsrecords

OSPA sends an electronic copy to PI and OSPA sends an electronic copy to PI and Business Manager along with pink sheetBusiness Manager along with pink sheet

Business Manager must enter a PO in Business Manager must enter a PO in Spectrum to encumber funds Spectrum to encumber funds

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Budgeting and SpendingBudgeting and Spending

It is best practice to encumber the funds associated It is best practice to encumber the funds associated with the subaward to ensure that the funds are with the subaward to ensure that the funds are obligated on the overall project budgetobligated on the overall project budget

A purchase requisition should be initiated in A purchase requisition should be initiated in Spectrum+ prior to submission of invoices and PO Spectrum+ prior to submission of invoices and PO issued to establish the encumbrance of the fundsissued to establish the encumbrance of the funds

Subaward invoices should be processed against Subaward invoices should be processed against the PO and encumbrance reduced accordinglythe PO and encumbrance reduced accordingly

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Budgeting and SpendingBudgeting and Spending

On Subawards, Georgia State University is only On Subawards, Georgia State University is only allowed to calculate indirect cost on or up to the allowed to calculate indirect cost on or up to the first $25,000 expended on each subaward.first $25,000 expended on each subaward.

G/L Expense Codes are used to properly G/L Expense Codes are used to properly allocate Subaward Expendituresallocate Subaward Expenditures 753111-753119 Subcontracts > $25,000753111-753119 Subcontracts > $25,000 753121-753129 Subcontracts ≤ $25,000753121-753129 Subcontracts ≤ $25,000

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Budgeting and SpendingBudgeting and Spending Subawards should be budgeted and expended Subawards should be budgeted and expended

based on the Subaward No. assigned by the based on the Subaward No. assigned by the Office of Sponsored Proposals & Awards on the Office of Sponsored Proposals & Awards on the ““Research Subaward AgreementResearch Subaward Agreement””. .

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Budgeting and SpendingBudgeting and Spending

For example, if the Subaward No. is For example, if the Subaward No. is SP00010201-03 has an award amount of SP00010201-03 has an award amount of $75,000, the funds should be budgeted on as:$75,000, the funds should be budgeted on as: SUB003 - $50,000SUB003 - $50,000 SUBX03 - $25,000SUBX03 - $25,000

And should be expended as:And should be expended as: 753113 - $50,000753113 - $50,000 753123 -$25,000753123 -$25,000

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Case StudyCase Study

The Dr. Yu in the Chemistry Depart has a NIH The Dr. Yu in the Chemistry Depart has a NIH project that has issued three subawards. project that has issued three subawards. SP00010302-01-Emory University-$24,000; SP00010302-01-Emory University-$24,000; SP00010302-02-Baylor University-$105,000; SP00010302-02-Baylor University-$105,000; SP00010302-03-Chemtech, Inc-$27,500.SP00010302-03-Chemtech, Inc-$27,500.

How should the subawards be budgeted:How should the subawards be budgeted: Emory - SUBX01 -$24,000Emory - SUBX01 -$24,000 Baylor - SUBX02-$25,000 and SUB002-$80,000Baylor - SUBX02-$25,000 and SUB002-$80,000 Chemtech-SUBX03-$25,000 and SUB003-$2,500Chemtech-SUBX03-$25,000 and SUB003-$2,500

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Case StudyCase Study

Dr. Yu received invoices for subaward Dr. Yu received invoices for subaward reimbursements from Baylor University-$35,000 and reimbursements from Baylor University-$35,000 and Chemtech, Inc.-$20,000Chemtech, Inc.-$20,000

What expenses codes should be reflected on the What expenses codes should be reflected on the vouchers for payments?vouchers for payments? Baylor University - 753122 -$25,000 Baylor University - 753122 -$25,000

-753112 -$10,000-753112 -$10,000 Chemtech,Inc. - 753123 - $20,000Chemtech,Inc. - 753123 - $20,000

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Budgeting and SpendingBudgeting and Spending

Subcontractor Invoices:Subcontractor Invoices:• Review all invoices prior to processing payment Review all invoices prior to processing payment • Check to make sure that invoices are accurate, sent Check to make sure that invoices are accurate, sent

in timely and detail out work and expenses in timely and detail out work and expenses • Clarification of unusual, miscellaneous or Clarification of unusual, miscellaneous or

apparently excessive chargesapparently excessive charges•   Obtain all required approvals prior to submitting for Obtain all required approvals prior to submitting for

paymentpayment• Retain copies of all invoices, approvals and Retain copies of all invoices, approvals and

supporting documents supporting documents 2121

MonitoringMonitoring

The Subrecipient MatrixThe Subrecipient Matrix Developed by OSPA as a means to evaluate Developed by OSPA as a means to evaluate

the risk levels of GSU subrecipients.the risk levels of GSU subrecipients. The overall subrecipient is evaluated, as well The overall subrecipient is evaluated, as well

as the individual project.as the individual project. Risk levels are low, medium, high, and Risk levels are low, medium, high, and

nuclear. nuclear.

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MonitoringMonitoring

The Subrecipient Matrix The Subrecipient Matrix Examples of criteria for the overall sub:Examples of criteria for the overall sub:

• Foreign v. DomesticForeign v. Domestic• Audit Report (Number of findings)Audit Report (Number of findings)• Previous experience working with GSUPrevious experience working with GSU

Examples of criteria for the individual project:Examples of criteria for the individual project:• Amount of the subcontractAmount of the subcontract• Award lengthAward length• Sponsor typeSponsor type

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MonitoringMonitoring

SamplingSampling Monthly reviews (centrally) of invoices.Monthly reviews (centrally) of invoices. Looking for:Looking for:

• Requested payments falling within subaward datesRequested payments falling within subaward dates• Cumulative amounts invoiced compared to total Cumulative amounts invoiced compared to total

authorized.authorized.• Fringe rates and F&A accurate per terms of award.Fringe rates and F&A accurate per terms of award.• Unusual and/or unallowable charges.Unusual and/or unallowable charges.• Invoices that are behind/lateInvoices that are behind/late• Use of proper 8.9 account codes.Use of proper 8.9 account codes.

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MonitoringMonitoring

DatabasesDatabases Review Federal Audit Clearinghouse (FAC) Review Federal Audit Clearinghouse (FAC)

database for audit resultsdatabase for audit results Ensure that subrecipient is not on the federal Ensure that subrecipient is not on the federal

or state debarment list or state debarment list

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MonitoringMonitoring

A-133 MonitoringA-133 Monitoring A-133 certification letters sent out every A-133 certification letters sent out every

March to our subrecipients.March to our subrecipients. If findings exist, review the audit report and If findings exist, review the audit report and

subcontract to ensure findings do not relate to subcontract to ensure findings do not relate to GSU/GSURF.GSU/GSURF.

If findings are applicable, create monitoring If findings are applicable, create monitoring plan.plan.

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MonitoringMonitoring

Non A-133 MonitoringNon A-133 Monitoring• Request that supporting documents (technical Request that supporting documents (technical

performance reports, deliverables, update reports performance reports, deliverables, update reports etc.) be submitted with invoicesetc.) be submitted with invoices

• Review supporting documents and obtain Review supporting documents and obtain approval/sign off that the work is being completed approval/sign off that the work is being completed per the scope of work, on schedule and per the scope of work, on schedule and satisfactorily satisfactorily

• Monitor subcontractorsMonitor subcontractors’’ work/progress via phone work/progress via phone calls or site visitscalls or site visits

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