Purpose:

Wayne State University (WSU) is committed to ensuring responsible stewardship of sponsor funds by effectively overseeing the programmatic and financial activities of its subrecipients. This policy applies to all subawards issued under sponsored programs awarded to the Board of Governors of Wayne State University, irrespective of the primary funding source.

Scope:
This policy establishes institutional responsibilities and provides guidance for Principal Investigators (PIs) and administrators to ensure that:

1. Performance Goals – Subrecipients achieve the performance objectives outlined in their agreements.
2. Compliance – Subrecipients adhere to applicable federal laws, regulations, and specific provisions set forth in each subaward agreement.

Key Responsibilities:

• Monitoring Activities: WSU will conduct ongoing reviews of subrecipients’ programmatic and financial performance to ensure compliance and accountability.
• Adherence to Regulations: Subrecipients must comply with federal requirements and any specific terms in their subaward.
• Support for PIs and Administrators: The policy assists PIs and administrators in fulfilling their oversight duties to ensure effective collaboration with subrecipients.

This policy ensures that WSU maintains integrity in the management of sponsored programs and fulfills its obligations to funding agencies.

Need for Policy

The OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200), commonly referred to as the “Uniform Guidance”, specifically §200.332, mandates pass-through entities:

• Evaluate each subrecipient's risk of noncompliance to determine the appropriate level of monitoring.
• Monitor subrecipient activities to ensure adherence to applicable federal statutes, regulations, and the terms of the subaward.
• Verify that subrecipients undergo audits as required by Subpart F of the Uniform Guidance.

These requirements help ensure compliance and accountability in the management of federal funds.

For non-federal awards, sponsors may require WSU to demonstrate due diligence in evaluating a subrecipient’s capacity to achieve the subaward’s objectives and manage the sponsor's funds appropriately.

Inadequate monitoring of subrecipient compliance could harm the reputation of the University and its schools and put current and future funding at risk. As the pass-through entity, WSU is responsible for ensuring the proper stewardship of sponsored funds. Subrecipient funds should be managed with the same diligence as those retained by WSU.

Who Must Comply?

All Principal Investigators (PIs) and administrators at Wayne State University—across all schools, units, divisions, University-wide initiatives, and centers—who are involved in administering and managing sponsored awards with subawards must adhere to this policy.

Role and Responsibilities

The responsibility for subrecipient monitoring is shared among the following:

• PI & School/Department/Local Unit
  • Confirm the statement of work and review any non-standard terms and conditions of the subaward during the subaward agreement negotiation process
  • Monitor programmatic progress and ability of the subrecipient to meet objectives of the subaward
  • Review and approval of subrecipient invoices by PI or designee
  • Monitor each subaward throughout the period of performance and escalate concerns to SPA
  • Confirm that the PI is receiving access to NIH funded foreign subrecipient data in accordance with Final Updated Policy Guidance for Subaward/Consortium Written Agreements” (NOT-OD-23-182. September 15, 2023)
• Sponsored Program Administration (SPA)
  • Complete risk assessments on new subrecipient organizations and conduct annual assessments on active non-single audit subrecipient organizations
  • Document the review of each subaward
  • Include additional terms in subawards as necessary, based on input from the PI, department/unit, and the risk assessment of the subrecipient organization.
  • Perform monitoring activities as determined during the risk assessment
  • Review problematic subawards and work with the department/local level managing units to establish additional monitoring criteria
  • Update subrecipient organization risk rating when appropriate
  • Provide training to the University on subrecipient monitoring post-award risk activities to be determined by the team in our analysis of the current subrecipient monitoring plan

Subrecipient vs. Contractor Guidance

• Vendor vs. Subrecipient: Guidance on Appropriate Classification of Legal Relationships
  • o Under the OMB Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, which went into effect on 12/16/2014, the term "vendor" was replaced with "contractor." The terms vendor and contractor substantially have the same meaning and may be used interchangeably in other guidance. For consistency purposes, when Wayne State provides funds from a federal award to a non-federal entity, the non-federal entity receiving these funds is classified as a subrecipient or a contractor based on the nature of the agreement and the criteria in 2 CFR §200.331.
• Subrecipient
  • A subrecipient relationship is appropriate when:
    • Substantive, programmatic work or an important or significant portion of the research program or project is being undertaken by the other entity.
    • The research program or project is within the research objectives of the entity.
    • The entity participates in a creative way in designing and/or conducting the research.
    • The entity retains some element of programmatic control and discretion over how the work is carried out.
    • The entity commits to a good faith effort to complete the design or conduct of the research.
    • The entity makes independent decisions regarding how to implement the requested activities.
    • A principal investigator has been identified at the entity and functions as a "Co-Investigator".
    • There is the expectation that the entity will retain ownership rights in potentially patentable or copyrightable technology or products that it produces while fulfilling its scope of work.
    • Publications may be created or co-authored at the entity.
    • The entity provides cost sharing or matching funds for which it is not reimbursed by Wayne State.
    • The entity regards itself, and/or is regarded by Wayne State, as "engaged in research" involving human subjects under the Common Rule and therefore requires approval for its interactions with human subjects.
• Contractor (Vendor)
  • A contractor (vendor) relationship (including that of an individual acting as a vendor of consulting services) is appropriate when:
    • The entity is providing specified services in support of the research program.
    • The entity has not significantly participated in the design of the research itself but is implementing the research plan of the Wayne State investigator.
    • The entity is not directly responsible to the sponsor for the research or for determining research results.
    • The entity markets its services to a range of customers, including those in non-academic fields.
    • Little or no independent decision-making is involved in the design and conduct of the research work being completed.
    • The agreement only specifies the type of goods/services provided and the associated costs.
    • The entity commits to deliverable goods or services, which if not satisfactorily completed will result in nonpayment or requirement to redo deliverables.
    • The entity does not expect to have its employees or executives credited as co-authors on papers that emerge from the research.
    • The expectation is that the work will not result in patentable or copyrightable technology or products that would be owned by the entity.
    • In the case of an individual vendor of consulting services, the person has no employment relationship with Wayne State, either academic or administrative in nature.

Definitions

Contractor (Vendor)

An organization that supplies goods and services as part of its standard business operations. Contractors (vendors) offer similar goods and services to multiple clients, operate in a competitive marketplace, and provide goods or services that support but are not central to the sponsored program's operations.

Designee

An individual authorized by the PI to approve subrecipient invoices, possessing firsthand knowledge of the PI's sponsored award(s) and the subrecipient's programmatic progress.

Federal Audit Clearinghouse

Division of the Office of Management and Budget (OMB) that collects information on Single Audit (formerly A-133) results.

Single Audit

A non-Federal entity that expends $1,000,000 or more in Federal awards during the non-Federal entity's fiscal year.

Pass-through Entity

Non-federal entity that provides federal funding to a subrecipient to carry out a federal program, also referred to as the prime or lead organization.

Sponsored award

A funding arrangement in which the University provides a return benefit, a defined deliverable, or completes specified activities for the sponsor in exchange for funds, regardless of whether the funding instrument is labeled a contract, cooperative agreement, grant, consortium agreement, or another designation.

Subaward

A legally binding subrecipient agreement that defines the relationship between a pass-through entity and another organization responsible for executing a significant part of a federally sponsored project. This agreement differs from a standard vendor contract and does not cover the simple purchase of goods or services.

Subrecipient (subcontractor or subawardee)

An entity qualified to receive funding that actively contributes to and helps execute a sponsored program. Unlike a vendor, a subrecipient plays a critical role in achieving the program's core objectives, makes substantive programmatic decisions, and bears direct responsibility for meeting compliance requirements and program goals.