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Subrecipient and Vendor Determination Checklist. Grants & Contracts Support Group December 10, 2008. Objectives . Understand differences between Subrecipients and Vendors Purpose of the checklist Methodology for evaluation. Definition. Subcontract

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subrecipient and vendor determination checklist

Subrecipient and Vendor Determination Checklist

Grants & Contracts Support Group

December 10, 2008

objectives
Objectives
  • Understand differences between Subrecipients and Vendors
  • Purpose of the checklist
  • Methodology for evaluation
definition
Definition
  • Subcontract
    • Agreement between the University and another entity in which the University agrees to fund the entity to conduct a portion of the tasks required to complete the Prime Award.
    • Subject to compliance requirements
characteristics
Characteristics
  • Subcontractor/Subrecipient
    • Services directly related to furtherance of the scope of work on an award
    • Contributes to the scholarly and scientific conduct of the project
    • Services are unique to the award
    • Statement of work encompasses a variety of activities
    • Work is an identifiable segment of the project
    • Must provide periodic reports and/or other deliverables
characteristics5
Characteristics
  • Consulting Agreement
    • Provides professional and/or technical advice usually over a short period of time
    • Work is not unique to the research
    • Work independently using own resources
    • Not employees of the University
    • Not subject to the compliance requirements
characteristics6
Characteristics
  • Vendor
    • Provides goods and/or services for normal business operations
    • Operates in a competitive environment
    • Work is not unique to project – many customers
    • No research or judgment required
    • Not subject to compliance requirements
    • Examples include:
      • Standard lab testing
      • Report printing
      • Routine analysis
checklist purpose
Checklist - purpose
  • Why was the checklist developed?
  • Vendors and/or consultants inappropriately classified as subrecipients
  • 13% misclassified – MU campus
  • Impacts F&A rate
compliance supplement new
Compliance Supplement (New)
  • M.Subrecipient Monitoring:
    • “When determining whether the subrecipient monitoring compliance requirement applies in an R&D environment, the auditor should first assess whether the pass-through entity made the proper classification between subrecipients and vendors.. .
    • In deciding whether a subrecipient or vendor relationship exists, the substance of the relationship is more important than the form of the agreementand it is not expected that all of the characteristics of a subrecipient described in OMB Circular A-133 §__.210 will be present.” [Emphasis added]

Per new 2008 A-133 Compliance Supplement – Part 3

compliance supplement new10
Compliance Supplement (New)
  • M.Subrecipient Monitoring (continued):
    • “. . . A subrecipient relationship exists when funding from a pass-through entity is provided to perform a portion of the scope of work or objectives of the pass-through entity’s award agreement with the Federal awarding agency. A subrecipient performs part of the project activities.
    • A vendor, on the other hand, is generally a dealer, distributor or other seller that provides, for example, supplies, expendable materials, or data processing services in support of the project activities.” [Emphasis added]

Per new 2008 A-133 Compliance Supplement – Part 3

concluding points
Concluding Points
  • Use the checklist to:
    • Document consideration of activity
    • Assist in a decision if uncertainty exists
  • Attach to sub award as documentation
  • Maintain in award file as support
  • Nature and substance of the transaction must be the deciding factor
contact information
Contact Information
  • Jennifer Duncan, CPA
  • Interim Director – Office of Sponsored Programs Administration
  • duncanjenn@missouri.edu
  • 573.882.7560