Grants Management 101 (Part 2): Monitoring and Oversight

Let’s say you are a grantee and in order to execute your programs, you need to include partners in order to meet your outcomes and they help execute your deliverables. However, these are not just any partners, these are commonly referred to as subrecipients. Many organizations need subrecipients, as they themselves do not have the capacity to perform all program related tasks. This is a unique relationship, and must be treated carefully.

However, before we start talking about oversight of these subrecipients, let’s distinguish subrecipients from vendors.

The Office of Management and Budget (OMB) offers up the following definitions:
Subrecipients = An entity that expends awards received from a pass-through entity (i.e. grantee) to carry out a project.

Vendor/Contractor = Generally a dealer, distributor or other seller that provides, for example, supplies, expendable materials, or data processing services in support of the project activities.

This classification is important as the OMB’s Uniform Grant Guidance (2 CFR 200) is more focused on grant recipient oversight of their subrecipients, in order to ensure transparency and accountability of federal funds. What are some steps you can follow to ensure you are in compliance with the Uniform Grant Guidance, and also establish best practices for subrecipient oversight on other grants expended?

1. It’s all in a name – Your organization must clearly define the relationship of the organization – are they a subrecipient or a vendor? A good rule of thumb is, review your project plan or outcomes. Are any of your partner organizations integral in completing the activities you have described? Are they needed to meet outcomes? In general, vendors are ancillary to the process and provide expertise and guidance, rather than hands on activity support.

2. Setting the stage – Once you have determined whether the partners are subrecipients vs. vendors, you need to establish a plan for providing oversight over the subrecipients. This plan should include how you will oversee that: a) the costs are in line with the budget, and you have all financial documents on file, b) you conduct regular status checks (monthly, quarterly, etc.) to ensure activity targets are being met, c) communicate your monitoring plan with subrecipients and provide technical assistance to ensure they have all information needed.

3. Don’t forget about the audit – If you receive over $750,000 in federal funds within a fiscal year, you must receive an A-133 federal audit. The subrecipient monitoring is especially important. Review the A-133 compliance supplement and work with your auditor to ensure that you have all the information required, and prepare your subrecipients in the same way.