A Subcontract Information Sheet must be signed, completed and returned to our office to initiate the subcontracting process.
(See http://spo.usu.edu/files/uploads/Subcontract_InfoSheet.pdf) for the form)
Sponsors require prior authorization for subcontracts: If the sub award was not approved in the initial proposal or subsequent award, then a sole source justification is required. When this situation arises, the Sponsored Programs Administrator will work with the Principle Investigator and go back to the sponsor to obtain written approval for the sub awards. Adequate justification will be necessary to support the need to subcontract significant portions of the Scope of Work.
Once approved, the sub award will be assigned a sub award number that is associated with the prime award control number.
The sub award will then be identified as a sub grant or subcontract. The wording is important to distinguish the intent of the sub award. For example, a sub grant will be flowing through "financial assistance", where a subcontract generally reflects "procurement" actions. It is necessary to distinguish the award type to determine applicability of flow down requirements and sub award monitoring.
Once identified as a subcontract or sub grant and either cost-reimbursable or fixed price, the sub award is prepared by SPO using the appropriate standard boilerplate wording, incorporating any changes or additions as necessary.
After the sub award documents and the appropriate attachments are compiled, the subcontract is sent to the subcontractor with instructions to return three signed copies. If necessary, SPO administrators negotiate terms and conditions with sub recipient. When an agreement is reached, three fully executed sub awards as well as other required forms are returned to SPO. The SPO Administrator reviews signed sub awards and forms to assure no changes have been made to documents without approval, and the sub recipient is in compliance with the A-133 audit. If the sub recipient has had findings in the A-133 audit, the SPO administrator notifies Sponsored Programs Accounting, and action is implemented to ensure the sub recipient has initiated an adequate plan of action to change or correct the findings. Once everything is in order the SPO Administrator (or Director) signs and returns a fully executed copy to the subcontractor.
The SPO Administrator then encumbers funds in Banner (FGAENCB form), and forwards the subcontract file to the SPO Administrative Assistant and/or Students to update the Subcontract database, upload scanned documents into e-office, and send copies of sub award to PI and Sponsored Program Accounting.
Amendments:
Amendments should be issued to change scope of work, budgets, period of performance, change the PI, as well as other changes and are initiated by the USU PI completing the Sub Award Information Sheet.
Once the information sheet is received by SPO, the assigned SPO Administrator reviews the information sheet and prime award. This review process is to assure that the intended amendment is in compliance with USU policies and procedures, sponsor regulations, and the terms and conditions of the prime award.
Using the information sheet, the SPO administrator prepares the amendment using the standard boilerplate amendments, incorporating any changes or additions as necessary. General procedures for amendments are the same as for the initial subcontract.
Monitoring and Issuing Payments:
Subaward monitoring during the subcontract period and subcontract payments are handled by Sponsored Program Accounting. Specific questions related to this area should be addressed to the assigned accountant and/or the supervisory accountant. However, the following is a general representation of the payment and monitoring processes.
All invoices should be sent directly to the Controller's Office for review. The assigned accountant will go through a multi-step process to review the invoice and determine if it meets the terms and conditions of the subcontract. The verification process includes, at least in part, the following:
- Ensure that the subcontract has
been executed and the funds have been encumbered in Banner (FGAENCB).
- Verify that the invoice period
falls within the approved period of performance for the subcontract.
- Check to see if there is
sufficient funding to cover the invoiced amount.
- Make sure the costs incurred
are allowable according to the terms and conditions of the subcontract.
- Verify if cost sharing is
required. If it is, the accountant will verify that the both current and
cumulative cost share is documented and reported
If an invoice fails any of these steps, the accountant will contact the sub-recipient to let them know why their invoice cannot be paid. Depending on the problem, it may be necessary for the sub-recipient to submit a revised invoice.
If the above steps are satisfied, the accountant will update the subcontract database with the following information: invoice number, date of invoice, date received, amount of invoice and period covered by invoice. The invoice is then sent to the Principal Investigator for their approval and signature. If the Principle Investigator is awaiting deliverables before the invoice can be approved or has other concerns, he or she should contact the sub-recipient to advise them what is required and notify the accountant that approval is being withheld until the requirements are met.
If approved, The Principal Investigator should sign and return the invoice to the accountant for final review. If a change in the amount to be paid or associated Banner Index has been made, the accountant verifies that there is a valid encumbrance with sufficient funding. The accountant updates the database to show the date approved and then sends the invoice to Accounts Payable for payment. Accounts Payable sends the invoice back to the accountant who will then verify:
- A check was issued to the
proper vendor for the correct amount, noting the check number and date paid.
- There was a de-obligation
against the encumbrance for the amount paid and the correct account was
charged.
The accountant updates the database to show that the above requirements were met and satisfied. The accountant then submits the invoice for scanning.
Close Out Process:
The Close out process of sub awards can be initiated by one of two occurrences. The first is the receipt of a “final” invoice, and the second is following the conclusion of the project as determined by the period of performance.
In either case, the SPO administrator sends a concurrence letter to PI to approve closeout of sub award. If a response is not received from the PI within ten business days it is assumed that concurrence is given and the close out process can begin. If the PI intends to amend the subcontract, request a Subcontract Information Sheet and follow the amendment process. If the PI approves closeout, the SPO administrator prepares the following close out documents as required based on sponsor requirements:
- Sub Award Release - required
for all cost reimbursable sub awards
- Sub Recipient's Assignment for
Refunds, Rebates, Credits and Other Amounts - required for all cost
reimbursable sub awards.
- Report of Inventions - required
only if required in prime award
- Final Inventory of Property -
required only if required in prime award
The SPO Administrator will send the appropriate close-out documents to the sub award recipient, and a copy is kept in the file. The Administrator should follow up periodically until the closeout forms are signed and returned. However, in unusual circumstances, if the subcontractor is unresponsive and the lack of response will not impact our ability to report to the prime sponsor, the SPO Administrator can get approval from the SPO Director to close the project to expedite the closeout of the prime award.
Upon return of Close out documents, SPO administrator verifies proper signatures, verifies any inventions and property acquired with funds. In the database, the SPO administrator verifies final payment has been issued, de-obligates any unspent funds, updates database, scans and uploads documents, and shreds hard copies.
