Subawards Policies and Procedures Johns Hopkins University Research Administration 2017

Transcription

1 1 Subawards Plicies and Prcedures Jhns Hpkins University Research Administratin 2017 I. Intrductin Spnsred prject awards made t The Jhns Hpkins University ( JHU r University ) are generally cnducted within the physical bundaries f JHU by University faculty and staff. Frequently, hwever, a significant prtin f the required wrk may need t be prvided utside the University by a third party. The third party is made respnsible fr a discrete prtin f the prject award, prviding the leadership and directin f a respnsible investigatr and the resurces necessary t cnduct that prtin f the wrk. Csts assciated with this wrk may include persnnel csts, supplies, equipment, travel, and verhead. Such an arrangement is carried ut thrugh the issuance f a subaward. Unifrm Guidance (2 CFR 200) requires JHU as the Prime Recipient t analyze and mnitr funds ging t subrecipients. The guidelines and specific prcedures set ut in this manual have been develped by the Jhns Hpkins University Research Administratin (JHURA) fr establishing subawards (subgrants and subcntracts) fr research, develpment and services under federal prime grants and cntracts awarded t JHU t assure cmpliance with U.S. Gvernment regulatins. These instructins shuld als be used as guidance in establishing subawards and subawards under nn-federal prime awards as well. A. Definitins OMB Unifrm Administrative Requirements, Cst Principles, and Audit Requirements fr Federal Awards 2 CFR Part 200, et al., Referred t as the Unifrm Guidance (UG). The Office f Management and Budget (OMB) issued Unifrm Administrative Requirements, Cst Principles, and Audit Requirements fr Federal Awards in the Federal Register. The UG replaces the administrative, accunting, audit rules and principles currently prmulgated in the OMB Circulars, including A-21, A- 110, and A-133. The UG tk effect n December 26, Freign and fr prfit subrecipients have additinal applicable prvisins. Award: Financial assistance received directly frm a Federal r nn-federal spnsr that prvides supprt t accmplish a purpse. The term award includes grants, cperative agreements, cntracts and ther agreements whereby funds are given t JHU by the spnsr. Cmpetitive Bid: Requires the PI t slicit bids/qutes frm a number f surces (typically three r mre) and make a final selectin based n dcumented technical merit and cst bjectives. Cntract: A legal agreement used t prcure gds r services. Subawards under cntracts are typically referred t as subcntracts. DUNS number: Dun & Bradstreet (D&B) prvides a DUNS Number (Data Universal Numbering System), a unique nine digit identificatin number, fr each physical lcatin f a business. Any rganizatin wh wishes t d business with the gvernment is required t have ne. See

2 2 Facilities and Administrative Csts (F&A): Otherwise knwn as indirect csts, r IDC. These are csts incurred by the institutin which supprt the JHU research enterprise but are nt specifically identified with a particular spnsred prject. Institutins f higher educatin and many nn-prfits have their F&A rate negtiated by the Gvernment. Fringe Benefits Rate: Fringe benefits are emplyee assciated csts such as health plan expenses, pensin plan expenses and wrkman's cmpensatin expenses, amng thers. These csts are expressed as a rate by emplyee class. The rate is the pled csts f these benefits divided by the ttal salaries in each emplyee class. These rates are then applied t the applicable emplyee salary t represent the assciated benefits fr that type f emplyee. Pass-thrugh Entity (PTE): Als knwn as the Prime Recipient, the PTE is the rganizatin wh receives funding directly frm a spnsr, and then passes funds t a subrecipient. Prime Award: A gverning agreement between the PTE and the awarding spnsr. Purchase Order: Used in cases f purchased services frm an rganizatinal entity but d nt invlve substantive, prgrammatic, r scientific research. Fr example, repetitive tests r activities requiring n discretinary judgment n the part f the prvider. Utilized in purchaser-vendr relatinships invlving the prcurement f gds r services when detailed terms and cnditins are nt required. Fr subawards, the Purchase Order is the identifying number and must be included in subrecipient invices. Risk Rating: After assessing subrecipient capabilities and resurces, JHURA sets the risk rating fr the subrecipient. Fr JHU, there are nly tw risk ratings: lw and high. A high risk rating is initially applied t: all subrecipients wh have never dne business with JHU previusly; all freign subrecipients; and entities that d nt require a Single Audit in accrdance with Unifrm Guidance. SAM.gv Registratin: Registratin in sam.gv (System fr Award Management), a website maintained by the General Services Administratin (GSA), is required t engage in research funded by the federal gvernment. Registratins must be updated annually, are required fr all subrecipients n federal prime awards, and ensure cmpliance with required federal regulatins. Sle Surce: In identifying subrecipients r vendrs, where there is clearly and legitimately nly ne surce f supply that meets the necessary requirements, a subrecipient r vendr can be selected withut sliciting bids r cllecting qutes frm multiple rganizatins. A sle surce justificatin is required t explain why there is nly ne surce available fr the wrk t be subcntracted. Subaward: A legally binding executed agreement that transfers r delegates a prtin f research r substantive intellectual effrt f a prime award t anther institutin r rganizatin. Subawards are nt written t individuals. The term subgrant is used when the prime award is a grant and the term subcntract is used when the prime award is a cntract. Subrecipient: The recipient f a subaward awarded t a freign r dmestic rganizatin (either a nnprfit, educatinal institutin, state r lcal gvernment, r private industry) fr the perfrmance f a prtin f the wrk statement cvered by a prime agreement that is funded either directly r indirectly with spnsred funds. It des nt include agreements with individuals fr cnsulting services r purchase rders fr equipment, materials r ther services. A subrecipient receives an award f

3 3 assistance frm a pass-thrugh entity and cnducts its wn scpe f wrk. Als referred t as subawardee, subgrantee r lwer-tier institutin. Subrecipient Mnitring: Unifrm Guidance requires prime recipients have the respnsibility t mnitr the activities f subrecipients in accrdance with the gverning agreement and federal, state and lcal laws, t assure that awarded funds are used fr authrized purpses in cmpliance with the prvisins f the agreement, and t ensure that perfrmance gals are achieved. See 2 CFR B. Determining the Nature f the Relatinship: Cnsultant v. Cntractr (Vendr) v. Subrecipient Befre entering int a relatinship with anther entity under a spnsred award in which the ther entity will prvide gds r services, r substantive prgrammatic wrk t JHU as the prime recipient f funding, a determinatin must be made as t the nature f the legal relatinship f JHU and ther entity. This determinatin will identify the type f legal agreement required t dcument the relatinship. Prperly classifying the relatinship is essential because it determines the allcatin f respnsibilities and influences the apprpriate applicatin f indirect cst rates, and is critical t ensure prper accunting fr csts and cmpliance requirements. The University fllws the requirements in the UG t determine subrecipient r cntractr status. The Subrecipient Determinatin Frm is used fr this purpse. See 2 CFR sec In the case f a subaward, it is incumbent upn the prime recipient (JHU) t ensure that subrecipients cnduct their prtins f research prjects in cmpliance with all applicable terms and cnditins f JHU s Prime Awards and that prject csts incurred by subrecipients are reasnable and allwable. Agreements with cntractrs fr the purchase f services, hwever, typically d nt bind cntractrs t the full set f spnsr terms and cnditins, and are subject t cmpetitive bidding prcurement practices, t assure that funds paid t cntractrs d nt exceed fair market value. It is imprtant that the crrect agreement determinatin is made early in the prcess f preparing a grant applicatin, as F&A treatment and mnitring requirements fr these types f agreements vary and will impact the award budget and, in sme cases, the statement f wrk. In additin, if specified in the award terms and cnditins, spnsr apprval may be required prir t executing a subaward; spnsr pre-apprval is less frequently required fr JHU t enter int a cntractr agreement fr purchase f services. Bth frms f agreement shuld have a clear purpse and cst. Activities perfrmed by private individuals wh are nt emplyees f JHU are nrmally administered thrugh a Cntract fr Persnal Services Rendered by a Cnsultant/Independent Cntractr. Fr further infrmatin n cnsultants and independent cntractrs, please refer t the Independent Cntractrs Guide issued by the Office f the Cntrller, which can be fund at: In cases where purchased services frm an rganizatinal entity d nt invlve substantive prgrammatic r scientific research, a purchase request may be apprpriate. An example wuld be the perfrmance f repetitive tests r activities requiring n discretinary judgment n the part f the prvider, r which are related t the administrative supprt f the federal assistance prgram.

4 4 A subrecipient relatinship may be apprpriate when many f the fllwing factrs are present: Substantive, prgrammatic wrk r an imprtant r significant prtin f the research prgram r prject is being undertaken by the ther entity. The research prgram r prject is within the research bjectives f the ther entity. The entity participates in a creative way in designing and/r cnducting the research. The entity retains sme element f prgrammatic cntrl and discretin ver hw the wrk is carried ut. The entity cmmits t a gd faith effrt t cmplete the design r cnduct f the research. The entity makes independent decisins regarding hw t implement the requested activities. A principal investigatr has been identified at the ther entity and functins as a C- Investigatr. There is the expectatin that the ther entity will retain wnership rights in ptentially patentable r cpyrightable technlgy r prducts that it prduces in the curse f fulfilling its scpe f wrk. Publicatins may be created r c-authred at the entity. The entity prvides cst sharing r matching funds fr which it is nt reimbursed by JHU. The entity has respnsibility fr cmpliance with Federal prgram requirements. The entity regards itself, and/r is regarded by JHU, as engaged in research invlving human subjects under the Cmmn Rule and therefre requires apprval fr its interactins with human subjects. Subawards shuld have a detailed scpe f wrk and a budget that specifies salary, fringe, supplies, and ther direct csts, as well as apprpriate F&A csts cnsistent with the subrecipient s indirect cst rate. Terms and cnditins frm a Prime Award are typically impsed n the subrecipient t the same degree that they are impsed n JHU as the prime recipient. A cntractr relatinship may be apprpriate when many f the fllwing factrs are present: The entity is prviding specified services in supprt f, r ancillary t, the research prgram. The entity has nt significantly participated in the design f the research r prgram itself, but is implementing the research plan r prgram activities f the JHU investigatr. The entity is nt directly respnsible t the spnsr fr the research, r prgram, r fr determining research results. The services are perfrmed in the entity s nrmal curse f business and marketed t a range f custmers, bth fr-prfits and nn-prfits. Little r n independent decisin-making is invlved in the design and cnduct f the research r prgrammatic wrk being cmpleted. The agreement nly specifies the type f gds/services prvided and the assciated csts. The entity cmmits t deliverable gds r services which if nt satisfactrily cmpleted will result in nnpayment r requirement t red deliverables. The entity des nt expect t have its emplyees r executives credited as c-authrs n papers that emerge frm the research r prgrammatic wrk. The expectatin is that the wrk will nt result in patentable technlgy r cpyrightable prducts that wuld be wned by the entity. In the case f an individual vendr f cnsulting services, the persn has n emplyment relatinship with JHU, either academic r administrative in nature.

5 5 It is nt expected that all f the characteristics will be present. The PTE must exercise judgment shuld be used in determining whether an entity is a subrecipient r cntractr. See 2 CFR (c). Further infrmatin regarding vendr prcedures and relatinships can be fund at the Spnsred Shared Services Supply Chain website: Misclassificatin may result in delays f subaward prcessing, and failure t include r exclude Facilities and Administrative (F&A) csts will lead t significant errrs in budget calculatins. The Principal Investigatr (PI), thrugh the department s administrative fficial, is expected t prvide detailed infrmatin abut the prpsed vendr r subrecipient as well as a final Statement f Wrk t JHURA s that an accurate determinatin can be made. Any questins r cncerns abut this prcess shuld be directed t JHURA. C. Prcess 1. Determinatins are made by JHURA n a case by case basis, at the prpsal stage, upn review f the Subrecipient Determinatin Frm cmpleted by the department fr each entity. A determinatin fr TBD rganizatins will still be made at prpsal stage t be either a subrecipient r cntractr based n a statement f wrk, t the extent pssible. 2. Befre a prpsal is submitted t an agency, JHURA will make the final determinatin, in cnsultatin with the PI. 3. If rganizatin is a subrecipient: a. All parties will engage in discussins t ensure subrecipient can cmply with all requirements. b. If awarded, nrmal subaward prcess ccurs, beginning with cmpletin f the Subaward Request Frm by the department, as described in this guide. 4. If rganizatin is a cntractr: a. There will be n waiver f F&A n full amunt. b. Cntractr may be paid directly thrugh a PO r if the department needs t manage deliverables, JHURA may draft a Cntract Services Agreement, which will be managed similar t a subaward, but will be signed by the Chief Prcurement Officer, rather than JHURA, which is entered int the purchasing system thrugh an ECPO created by the department, instead f a SPPO. 5. Once awarded, uplad the Subrecipient Determinatin Frm in the Subaward Checklist Request.

6 6 II. Overview f the Subaward Prcess A. Administrative Prcess Administrative respnsibilities at varius stages in the prcess are shared by the PI/department administratin, JHURA and the Cntrller s Office/Shared Services. Preaward Stage The subrecipient s prpsal t perfrm a prtin f the prject s wrk generally is sent directly t JHU s PI, wh reviews the prpsal, determines whether the cst/price is acceptable (see Sectin IV.A.2, Cst and Price Analysis), and incrprates it int his r her prime prpsal. The prime prpsal is frwarded t JHURA, which examines it fr frm, plicy adherence and sufficient detail and submits. Subawards under prime gvernment awards require cmpetitive bidding r sle-surce justificatins fr their selectin (see Sectin IV.A.1). This dcumentatin must be prvided by the department/pi at the time f selectin f the subrecipient t the spnsr if required at the prpsal stage, r at the time the department prepares the subaward checklist. A cpy shuld be sent t JHURA. Subrecipients which are freign, fr prfit r have never dne business with JHU must cmplete a Financial Subrecipient Questinnaire alng with available audit dcuments. Fr JHU, there are nly tw risk ratings: lw and high. A high risk rating is fr all subrecipients wh have never dne business with JHU previusly, all freign sites and fr prfit sites, all entities that d nt cnduct a Single Audit. Subawards t any new subrecipients will nt be sent ut until the questinnaire is received by JHURA. In additin, shpping carts must be established befre sub sent ut. JHURA will establish a risk classificatin fr a new subrecipient, which will specify the additinal mnitring terms required fr the subaward. Existing subrecipient risk ratings are psted n the Cntrller s website. See fr risk rating spreadsheet. If required under FAR Clause (subawards exceeding $700,000 issued under federally funded prime cntracts) the department must btain a Small Business Subcntracting Plan frm the subrecipient. Subaward Creatin Stage JHSPH: Once the prime award is received, the JHSPH department requests a 96 I/O frm Finance via the Subaward Checklist Frm, fund n the JHURA website. Cmplete the tp prtin f the frm t request an I/O. Other divisins: departments initiate a request fr a 96 IO number thrugh webfrms (an interface that ORIS supprts). These frms are wrkflwed t SPSS fr the 96 number and the department is then ntified f same. As sn as 96 I/O is received, departments shuld create a shpping cart in SAP. A subaward request shuld then be submitted thrugh the Subaward Request Checklist system.

7 7 Fr mdificatins t existing subawards, an I/O request is nt necessary. Cmplete nly the bttm prtin f the Subaward Checklist Frm. JHU is required t advise subrecipients f requirements impsed n them by Federal laws, regulatins, and the applicable prvisins f the prime award as well as any supplemental requirements impsed. JHURA drafts and negtiates the subaward, and nce finalized, the subrecipient signs and returns the partially executed cpy t JHURA. JHURA has sle signature authrity t enter int the subaward. Wrk shuld nt begin until the subaward is fully executed and, if new, the PO# has been issued. See attached Sample Dmestic Cst Reimbursable USAID Subaward. JHURA has the final signatry authrity fr all administrative aspects f the subaward. Subaward Management Stage The PI is ultimately respnsible fr ensuring cmpliance by reviewing all invices and the technical prgress f wrk cmpleted by the subrecipient, befre payments are authrized. Invices must be reviewed fr cst reasnableness, including cnfirmatin f apprpriate IDC rate, as well as apprpriateness based n wrk perfrmed. Each invice requires cmpletin f the PI Certificatin fr Payment and Perfrmance Frm in rder t be prcessed. See Attached. JHU via the PI remains accuntable t the prime spnsr fr funds management and cmpliance by subrecipients. Upn cmpletin f the subaward, all apprpriate clsing dcuments are cmpleted by the PI and JHURA and frwarded t the prime spnsr. The cmplete file is retained by JHURA fr a predetermined perid f time t satisfy all audit requirements. A Subrecipient Annual Audit Request will be sent annually by the Cntrller s Office, t subrecipients with JHU pass-thrugh federal funding in excess f $750,000 per fiscal year. In accrdance with the terms and cnditins f each subaward, all subrecipients shall make financial recrds available fr review r audit by Federal agencies r JHU as requested. B. Rles and Respnsibilities Principal Investigatr/Dept. JHURA SPSS/FRC/Cntrller s Office Review subaward SOW fr Determine apprpriate Cnsult with JHURA regarding technical feasibility rganizatin status and assign risk assessment when required Perfrm cst and price analysis, including reasnableness f fringe benefits and IDC Prvide cmpetitive bid infrmatin r sle surce justificatin risk rating Screen subrecipients t assure nt debarred, suspended, OFAC restricted, r ITAR/Cmmerce restricted Draft, negtiate and execute subaward Ensure receipt f all necessary subrecipient audit infrmatin Prcess invices

8 8 Cmplete Subaward Checklist Frm with all required infrmatin and attachments included Mnitr subrecipient technical perfrmance; review and apprve reprts and deliverables Mnitr subrecipient spending; review and apprve invices prir t payment, and financial reprts including prgram incme and cst sharing Cnfirm receipt f final technical reprt and all deliverables at clseut Final signature authrity fr all administrative actins including rebudgeting apprval and subaward mdificatins Cllect additinal clseut dcuments including final prperty and inventin reprts and assignment and release frms, as necessary Apprve and execute assignment and release frms at clseut

9 9 III. Plicy A. JHU Respnsibilities As a recipient f spnsred research funding, the University is required t ensure that funding is used fr authrized purpses in cmpliance with applicable grant and cntract terms, Federal and State regulatins and University plicies and prcedures. As a pass thrugh entity, JHU remains ultimately respnsible and accuntable t the prime spnsr fr funds management and cmpliance by its subrecipients. T satisfy the requirements f Unifrm Guidance, it is the respnsibility f prime recipients f spnsred funding t advise subrecipients f requirements impsed n them by laws, regulatins, and the prvisins f cntracts r grant agreements, and any additinal requirements impsed. Under the Federal Funding Accuntability and Transparency Act (FFATA), prime recipients f federal funding are required t reprt subawardee infrmatin t the FFATA Subaward Reprting System (FSRS). The data must be entered int FSRS the mnth fllwing the date f the last signature. Subawards $25,000 and ver must be reprted. The threshld fr subcntracts is $30,000. The data required t be submitted includes the DUNS number and cnfirmatin f SAM registratin fr subawardees. The terms f the subrecipient relatinship is thrughly dcumented in an agreement executed by JHURA and by an authrized representative f the subrecipient rganizatin. When a subrecipient receives a high risk rating, JHU requires it t submit general ledger back up fr each invice. JHURA ensures the Subawardsubaward cntains brad terminatin and audit language, and any ther additinal terms that may be apprpriate fr the risk basis. High risk subrecipients wh receive a cst reimbursement subaward frm JHU under a Federal award will als receive a Subrecipient Welcme Packet, which prvides guidance n financial cmpliance with federal regulatins and JHU plicies. The Welcme Packet includes best practices, gd financial principles, and sample wrksheets fr accunting fr csts. B. Advance Payments The University's preferred methd f payment t a subrecipient is n a cst reimbursable basis. In situatins where the subrecipient lacks sufficient capital, and the request has been apprved by the respective Divisinal Business Office, advances may be pssible. Cntact JHURA fr mre infrmatin. When a prime award explicitly apprves an advance payment, federal regulatins limit the advance t nly funds fr immediate need, which they define as 30 days. Dcumentatin f determinatin f immediate need shuld be retained in department files, and upladed int the Subaward Request Checklist. General ledger detail is required fr each invice/recnciliatin reprt in rder t cnfirm the advance was prperly expensed. In additin, the subrecipient is required t depsit funds int an interest-bearing accunt, and remit interest earned ver $250 per entity t JHU. JHU s FRC ffice will then remit interest t the gvernment.

10 10 Advanced payments are generally allwable n nn-federal prime awards. Fr initial advance payments f mre than 20% f subaward value, written apprval frm the department chair is required. C. Audits The Cntrller s Office (Office f Financial Research Cmpliance) is respnsible fr btaining and reviewing annual audit reprts fr the subrecipients. If their audit review reveals a prblematic issue, they will cntact JHURA and we may mdify Subawardsubaward language as apprpriate. Subrecipients are required t make financial recrds available fr review r audit by Federal agencies r pass-thrugh entities as requested, under the terms and cnditins f their subaward. D. Subrecipient Mnitring The PI is ultimately respnsible fr ensuring cmpliance with spnsr regulatins and JHU plicy by reviewing all invices and the technical prgress f wrk cmpleted by the subrecipient, befre payments are authrized. The PI is als respnsible fr mnitring requests fr rebudgeting and reviewing the technical and financial reprts f the subrecipient. The PI shall wrk with JHURA t request additinal subawards r mdificatins if increases r decreases in time and/r supprt, r changes in the Scpe f Wrk, are necessary fr the cllabratin. JHU, as prime awardee, must maintain recrds f the receipt and dispsitin f all related prgram incme generated by spnsr-funded activities and verify hw cst sharing cmmitments are met. Accrdingly, the subrecipient shall include the receipt f prgram incme and cst sharing dcumentatin, if applicable, n invices and financial reprts submitted t JHU. When JHU departments have a field ffice that mnitrs subrecipients in a freign cuntry, the Chief f Party fr that field ffice must certify annually that they are in cmpliance with all U.S. and cuntry laws and regulatins, and are nt aware f any fraud.

11 11 IV. Prcedures A. Preaward/Prpsal Stage 1. Selectin f Subrecipient The PI is respnsible fr the due diligence invlved with selecting a ptential subrecipient at the prpsal stage. It is the respnsibility f the PI t ensure that the selectin f a subrecipient is cnducted in a manner t prvide, t the maximum extent practical, pen and free cmpetitin. The easiest way t d s is t cmpetitively bid the wrk t be perfrmed, which is apprpriate when multiple pssible surces exist t d the wrk. Slicitatins fr prpsals frm pssible subrecipients shall be based upn a clear and accurate descriptin f the technical requirements fr the service t be prvided and shuld clearly set frth all requirements that the fferr must fulfill in rder fr his r her bid t be evaluated by JHU. Subsequent awards t subrecipients shuld be made t the fferr whse bid is mst respnsive t the slicitatin and is mst advantageus t JHU, price and ther factrs cnsidered, including that the prpsed subrecipient is technically qualified. Psitive effrts als shuld be made t utilize small business and minrity wned business surces. Steps fr Cmpetitively Bidding a Prtin f yur Research Prject 1. Cllect ROEs (Rugh Orders f Estimate) frm all qualified entities. 2. Narrw the bidders based n thse ROEs and submit t each a RFQ (Request fr Qute) which includes specificatins fr the wrk. Include the financial questinnaire if necessary. 3. Cllect respnses and chse the apprpriate entity based n a number f criteria, nt just cst r price. 4. Dcument every step f yur prcess fr audit. In cases where the nature f the prgram is cllabrative with ne r mre utside entities, such cllabratin shuld be clearly identified in the prpsal. If the prject requires perfrmance frm a single surce because the required services r expertise are nt available frm ther surces, the PI is required t prvide sle surce justificatin, identifying the need fr the particular services and why the selected subrecipient is the nly surce available fr thse services. Sle Surce Justificatins Must Include: Specific descriptin f the supplies and services required t meet the needs A statement f facts that shw the unique qualificatins f subcntractr t meet thse needs A descriptin f effrts made t lcate ther surces f supply Dcumentatin that the anticipated cst is fair and reasnable Any ther infrmatin supprting the use f ther than full and pen cmpetitin If subrecipient is a freign entity, fr-prfit r small nn-prfit, a determinatin f the fllwing must be made befre deciding t engage them as ptential recipients f federal funding: Are they qualified t receive Federal funds? D they have internal cntrls in place t manage and track the funds? Have they ever received Federal funds?

12 12 A subrecipient questinnaire is used t gather this and ther financial and accunting infrmatin abut an rganizatin t determine if the ptential subrecipient is an rganizatin with whm JHU shuld d business (see Appendix). In the case f subawards n prime gvernment cntracts, JHURA requires that dcumentatin cncerning the selectin (frm a cmpetitive bidding prcess r a sle surce written justificatin) be included in the Subaward Checklist Frm. 2. Subaward Payment Type During discussins with ptential subrecipients, anticipated payment mechanism shuld be raised. Generally we issue subawards as either a cst-reimbursement subaward r a fixed-price subaward. Cst reimbursement subawards shuld be used when the wrk is general and few, if any, deliverables are anticipated ther than prgress reprts. Fixed price subawards may be used when specific, well-defined deliverables are listed in the statement f wrk. Under Unifrm Guidance, the use f a fixed price subaward requires prir apprval and cannt be written fr ver $150,000. (See 2 CFR and ) Cst reimbursement subawards invlve much mre mnitring f perfrmance and cst during the life f the prject, and each invice must be analyzed fr reasnableness and fr determining whether adequate wrk is being cmpleted. With fixed price subawards, due diligence is dne at the prpsal stage thrugh a price analysis, and invices are paid nly when deliverables are received and apprved. Cst Reimbursement (CR) Prvides fr payment f allwable incurred csts t the extent permitted in the prime award Establishes an estimate f ttal csts fr the purpse f bligating funds and establishes a ceiling that the subrecipient may nt exceed Wrk cannt be precisely defined r cst precisely estimated Allws greatest flexibility (add $ r time and perfrm wrk within scpe until funds/time are exhausted) Cmmn fr ther educatinal institutins, hspitals, and nn-prfits Fixed Price (FP) Prvides fr a price that is nt subject t any cst adjustment n the basis f the subcntractr s experience in perfrming the cntract Prvides fr the maximum incentive fr the subcntractr t cntrl csts and perfrm the wrk plan in the mst effective manner Apprpriate if there can be a clear wrk scpe, slid cst estimate and wellarticulated deliverables Lwer administrative burden fr JHU Cmmn fr freign entities and fr-prfits. May be apprpriate fr small entities Cst Reimbursement: Why might yu want t issue ne? SOW cannt be sufficiently detailed at start t create specific milestnes Cst analysis at prpsal stage is easier Mre cntrl ver spending can mnitr by budget line item

13 13 Why might yu nt want t issue ne? Mre nus n PI t ensure cntinued perfrmance Increased recnciliatin and financial reprting required If Subrecipient runs ut f mney, they aren t required t cntinue wrking Fixed Price: Why might yu want t issue ne? Subrecipient has freedm t rebudget within funding ceiling Limited financial reprting - less administrative burden, n recnciliatins Risk is n Subrecipient t prvide all wrk within established price Effective way t prvide initial funds t cash-strapped rganizatins Payments tied t deliverables prvide incentive t cmplete wrk Why might yu nt want t issue ne? Cmprehensive price analysis needs t be dne upfrnt, befre subaward is issued SOW and deliverables/milestne schedule needs t be specific and detailed; the mre milestnes, the better Mdificatins n price cannt ccur unless there is a crrespnding increase in SOW tasks/deliverables Subrecipient must perfrm wrk fr a fixed price if they run ut f mney, they may lse incentive t cmplete perfrmance On rare ccasin, a subaward can include elements f bth cst reimbursement and fixed price. If the prject is large and nging, JHURA can issue a master agreement and issue specific Task Orders fr wrk. Task Orders under the same master agreement can be either cst reimbursement r fixed price, depending n the type f wrk. Keep in mind that the subaward type des nt have t match prime award type JHURA can issue a fixed price subaward n a cst reimbursement prime award, and vice versa. Cst and/r price analysis, subrecipient risk assessment, and subrecipient statement f wrk shuld determine subaward type. 3. Cst and Price Analysis The PI is respnsible fr cnducting and prperly dcumenting a cst and price analysis when selecting a subrecipient, bth when cmpetitively bidding and when using a sle surce. Cst and price analysis is required t be perfrmed each time a subrecipient is prpsed r selected, in accrdance with Unifrm Guidance. The PI will ultimately determine the apprpriate cst r price fr the required services. Prir t selectin, the PI may cntact JHURA t determine whether r nt the ptential subrecipients are debarred r suspended frm receiving federal funds. Cst r Price Analysis shuld be dne at the prpsal stage, befre a subaward is prpsed.

14 14 Questins t Ask in Perfrming a Cst r Price Analysis Have multiple qutes been received and cmpared fr the services? Has cst/price been cmpared t similar services available in the marketplace/industry? Has the subrecipient prvided a cpy f their indirect cst rate agreement? If nt, has sme ther apprpriate dcumentatin been reviewed fr reasnableness? Have all csts been evaluated fr reasnableness, allcability and allwability? Have details been dcumented in respnse t the questins abve? Cst Analysis - the review f separate elements f cst and supprting data. Required fr cstreimbursement subawards. Review f each cst element and supprting infrmatin Determine whether labr rates/hurs/effrt are reasnable in bth cst and time required t perfrm the wrk Determine whether each cst is necessary and reasnable Evaluate cst trends and reasnableness f estimates Evaluate the applicatin f F&A rates. Rates may be cnsidered reasnable if: Subrecipient has a federally negtiated indirect cst rate agreement Subrecipient is requesting the 10% de minimus rate in accrdance with Unifrm Guidance A Cgnizant Federal Agency, such as DCAA, has reviewed and apprved the rate Evaluate the applicatin f fringe benefits rates. Rates may be cnsidered reasnable if: Subrecipient has a federally negtiated fringe benefits rate agreement Individual csts (health insurance, life insurance, tuitin assistance, etc.) are reasnably direct charged as actual csts A Cgnizant Federal Agency, such as DCAA, has reviewed and apprved the rate Subrecipient has received recent federal funding that included the same rate Subrecipient has an independent audit apprved financial statement with rates described Cmparisn f prpsed subrecipient csts with: Actual csts previusly incurred by subrecipient; Previus cst estimates frm the subrecipient r ther subrecipients fr similar items; Other cst estimates received in respnse t the slicitatin; r Independent estimates by technical persnnel Price Analysis - the review f the entire cntract price withut lking at individual items f cst. Apprpriate when there is adequate price cmparisn. Required fr fixed-price subawards. Used t evaluate the ttal price under fixed price awards ( The review f the full price f the subaward withut evaluating the individual cst elements Evaluate based n price cmparisns: Cmpetitive bids Published price lists Cmpare t cst estimates Market research Histrical data/experience

15 15 4. Incrprating the Subrecipient Prpsal int the Prime Prpsal Statement f Wrk: The PI and the subrecipient negtiate the Statement f Wrk ( SOW ) fr the subaward and it is included as part f the prpsal submitted t the prime agency. The Statement f Wrk shuld be a cncise narrative abstract f the wrk t be undertaken by the subrecipient. It is imperative that SOWs are clear. The majrity f disputes invlving a subrecipient are the direct result f an unclear SOW. In the case f a fixed price subaward, the Statement f Wrk shuld als cntain perfrmance standards and deliverable/milestne schedules. Again, it s very imprtant that the schedule is clear: they must list hw much will be paid when fr what. If yu list deliverables in the SOW, thse same deliverables shuld be included in yur schedule. Guidelines fr the develpment f Statements f Wrk and deliverable schedules are attached as an Appendix. Budget: The csts related t subawards are included in JHU s direct cst prtin f the prime prpsal. When the anticipated subaward will be cst reimbursement, a separate subaward budget shuld be attached within the JHU prpsal, prviding a detailed breakdwn f budget categries, such as salaries, wages, fringe benefits, materials, supplies, equipment, travel and ther direct csts that are required in rder t accmplish the specific aspects f the research that the subrecipient has been requested t perfrm. Percentages f effrt fr persnnel shuld als be included. Indirect csts and fringe benefits shuld be calculated using the subrecipient s negtiated rate agreement, r ther substantiating dcumentatin t supprt hw the rate was derived in accrdance with the cst analysis review, which must be submitted as part f the subrecipient s prpsal and at the award stage attached t the Subaward Checklist request. At the award stage, the JHURA Subaward Team will verify the rate cntained in the subrecipient budget is apprpriate t the subrecipient s negtiated F&A rate agreement and is reasnable and allwable. The JHURA subaward team may als review ther supprting dcumentatin t supprt (i.e. detailed budgetary explanatin f hw the rate(s) was derived, acceptance by the federal gvernment n anther recent federal award, acceptance by the federal gvernment f the rate(s), etc.). If the rate is cnsidered unreasnable, r the subrecipient des nt prvide the supprting dcumentatin, JHURA will request a review by Cst Analysis fr internal acceptance f the rate(s). If cst sharing is required, the percentage and amunt required shuld als be included in the subrecipient s budget. JHURA will review the subrecipient budget fr verall reasnableness in light f the prpsed activity. When the anticipated subaward will be fixed price, a price analysis must be cmpleted by the department prir t submitting the JHU prpsal t the spnsr (see previus sectin). The fixed price amunt can be listed as a single line n the JHU prpsal budget, and described in the budget justificatin.

16 16 Sme spnsrs limit freign subrecipients, r rganizatins withut a federally negtiated rate agreement, frm recvering indirect csts. Nn-Federal Entities (see definitin at 2 CFR ) withut a federally recgnized indirect cst rate may elect t charge a de minimis indirect cst rate f 10% f mdified ttal direct csts (MTDC), which may be used indefinitely. The department shuld review the spnsr rules t ensure all csts included in the subrecipient s budget are allwable under the applicable federal rules and regulatins. When including budgets fr freign subrecipients, all amunts must be listed in U.S. dllars (USD). Other Dcuments A Letter f Intent, signed by a designated business fficial f the subrecipient, may be included as part f the subrecipient s prpsal. This individual shuld be smene wh is authrized t cmmit the subrecipient s time and resurces tward the wrk described in the subrecipient s prpsal. Fr fixed price subawards, the subrecipient shall include a statement prviding indicating that the attached qute will remain valid fr a minimum f six (6) mnths frm date f their prpsal. If required under FAR Clause , JHU must als btain a Small Business Subcntracting Plan frm the subrecipient and incrprate the Plan int the prime prpsal when the ttal subrecipient budget will be $700,000 r abve ver the life f the prject. JHURA reviews the subrecipient s prpsal t determine cmpliance with slicitatin instructins and federal and/r spnsr guidelines. Under federal law, agreements shuld be made nly with respnsible cntractrs wh pssess the ptential ability t perfrm successfully under the terms and cnditins f the prpsed subaward. Cnsideratin is given t matters such as subrecipient integrity, recrd f past perfrmance, financial and technical resurces and accessibility t ther necessary resurces. An nline database is available t JHURA fr checking the status f ptential vendrs and cntractrs t assure the rganizatin is nt debarred r suspended frm receiving federal funds and t assure that the subrecipient is nt therwise cnsidered a restricted party. JHURA is respnsible fr ensuring that an analysis f the subrecipient's prpsed budget r price has been perfrmed by the PI. This is generally accmplished by review f the budget justificatin included in the prpsal. Evaluatin and verificatin may be necessary fr each element f the cst/price t determine reasnableness, allcability and allwability. At this stage f the prpsal prcess, JHURA may require the subrecipient t submit a Certificate f Current Cst r Pricing Data, if applicable (subcntracts f $750,000 and ver n federal prpsals). The prcedures utlined abve are designed t accmmdate the majrity f subawards prepared by JHURA. In sme cases, hwever, it may be necessary t issue a subaward which was nt planned fr r listed in the cntract prpsal. In such instances, these guidelines shall be fllwed as clsely as pssible and in cnsultatin with JHURA. DUNS Number and SAM registratin fr Subrecipients Fr subawards gverned by FFATA (Federal spnsrs, subgrants ver $25,000//$30,000 fr subcntracts), a DUNS number is required fr each subrecipient, including freign subrecipients, fr

17 17 regulatry cmpliance and reprting purpses. Dun & Bradstreet (D&B) prvides a DUNS Number, a unique nine digit identificatin number, fr each physical lcatin f a business. See fedgv.dnb.cm New DUNS numbers shuld be sent t the requesting party within a week. Once the subrecipient received the DUNS number, they must g int sam.gv and cmplete a recrd fr their rganizatin. This recrd must be maintained and updated annually. B. Subaward Negtiatin Stage 1. Submissin f a Subaward Checklist Request Once a fully executed prime award is received frm the spnsr and set up in SAP, the department cmpletes a Subaward Checklist Request, available at which is als used t request a 96 I/O frm the Office f Financial Operatins fr JHSPH awards. Other divisins will utilize the Webfrm system thrugh ORIS t request a 96 I/O frm Spnsred Prjects Shared Services. This frm needs t be fully cmpleted, with all apprpriate attachments included. Based n the infrmatin prvided n the frm, JHURA drafts a subaward and sends t the subrecipient. Each prime spnsr has its wn apprval requirements regarding subawards. In sme cases, apprval is required fr all subawards. This apprval is ften implied if the subaward was incrprated as part f the apprved prime prpsal budget. In certain instances, hwever, the spnsr's cgnizant administrative fficial may require either the apprval f the subaward dcument itself prir t executin r the prvisin f a cpy f the executed dcument. If the subrecipient is ne with whm JHU has nt previusly dne business, JHURA will require a cmpleted/upladed Financial Subrecipient questinnaire. JHURA may als request a cpy f the mst recent Single Audit r recent audited financial statements, as applicable, frm the subrecipient. 2. Risk Assessments JHURA shall establish a risk classificatin, High r Lw, fr each new subrecipient and cmmunicate the rating t Financial Research Cmpliance, PI and department. Such subrecipient classificatin shall specify the additinal mnitring that may be required in the subaward. FRC maintains a Subaward Risk Assessment Spreadsheet. The prcess fr cmpleting the risk assessment will include: Cnsulting the initial Subaward Risk Assessment Spreadsheet; Reviewing the Financial Subrecipient questinnaire; Reviewing last tw years f Single Audits r financial statement audits Cntingent upn the specific subrecipient rganizatin risk classificatin and the nature f the wrk prpsed, JHU resurces are fcused n mnitring the subrecipients wh demnstrate the greatest ptential fr nn-cmpliance.

18 18 The fllwing factrs will be cnsidered during the risk classificatin prcess: Risk Factrs t Cnsider Prir, favrable experience with the rganizatin and staff Subrecipient membership in the Federal Demnstratin Partnership Subaward amunt Prime award terms and cnditins, and applicable regulatins Subrecipient is a freign entity and/r perfrmance lcatin is freign Subrecipient cmpliance histry as a recipient r subrecipient Subrecipient will use a lwer-tier cntractr Subrecipient has well dcumented accunting guidelines, plicies and prcedures Subrecipient is a small start-up r a fr-prfit entity Subrecipient has required plicies and prcess t assure cmpliance with federal regulatins Amunt f Federal funding subrecipient has received Results f subrecipient Single Audit University plicy states that the fllwing situatins require the subrecipient be classified as high risk: Subrecipient is a freign entity Subrecipient is a fr-prfit entity Subrecipient is a dmestic entity withut a frmal cmpliance audit Subrecipient is an entity with n prir JHU wrk histry Subrecipient has received less than $1m in Federal funding in either f the last tw years. All ther subrecipients wuld be classified as lw risk, and typically remain lw risk unless audit findings r ther extenuating circumstances warrant a change t high risk. Mst dmestic universities and established, larger dmestic nn-prfit rganizatins are lw risk. All high risk subawards must include the fllwing high risk language: Each invice must be accmpanied by a prgress reprt, and: (i) be sequentially numbered; (ii) indicate the date(s) f perfrmance by the Subrecipient; (iii) state the JHU Purchase Order number, the title f the prject and the name f the JHU Principal Investigatr; (iv) itemize csts in detail, in accrdance with the Subaward budget; (v) include bth current csts and cumulative csts ; (vi) include the Subrecipient certificatin, with authrized fficial s signature, that csts are apprpriate and accurate and that payment has nt yet been received; and (vii) be supprted by a general ledger reprt riginating directly frm the Subrecipient s financial recrd keeping system. JHU may request supprting dcumentatin in certain categries prir t r subsequent t apprving the invice. Supprting dcumentatin includes, but is nt limited t, travel receipts, purchase rders, invices fr services r supplies, r time recrds. All supprting dcumentatin shall be retained and prvided by Subrecipient t JHU upn request. High risk language includes a review f general ledger (GL) detail with every invice submissin. In additin, the Department must cnduct a desk audit at least twice a year.

19 19 3. Drafting the Subaward The prime award is reviewed by JHURA t determine any budgetary cnstraints; whether the terms and cnditins that are included in the prime award (special prvisins) are applicable t the subrecipient; whether any general prvisins incrprated int the prime award are required t be flwed dwn t the subrecipient; and whether there are any certificatins required f the subrecipient. A subaward is drafted which is cnsistent with the terms and cnditins f the prime award (type and prvisins f award) and which is apprpriate fr the specific subrecipient (i.e. nn-prfit v. prfit; risk categry). Only JHURA is authrized t enter int negtiatins with the subrecipient and execute the final subaward agreed t between the parties. Applicable general prvisins f the prime award must be incrprated int the subaward. PRIME AWARD TYPE Federal Gvernment Grant Federal Gvernment Cntract Nn-Federal Spnsr PRINCIPLES & PROCEDURES THAT APPLY: Cde f Federal Regulatins, including Unifrm Guidance Terms and Cnditins f the Prime Award, Agency plicy guidelines Federal Acquisitin Regulatins (Title 48 f CFR) Terms and Cnditins f the Prime Cntract Spnsr Requirements Terms and Cnditins f the Prime Award Generally accepted accunting standards r Gvernment Accunting Standards All applicable terms and cnditins, special prvisins and certificatins detailed in the prime awards are required t be passed thrugh t the subrecipient. These terms are included in the subaward (e.g. Cst Sharing, Prgram Incme, Intellectual Prperty and Publicatins). Additinally, JHURA reviews and cnfirms cmpliance with Cnflicts f Interest r Cnflicts f Cmmitment regulatins. As required by Unifrm Guidance, the subrecipient shall be infrmed f the prime award Catalg f Federal Dmestic Assistance (CFDA) title and award name, award number (FAIN), award year, award type, prime spnsr, subrecipient name, subrecipient DUNS number, subaward perid f perfrmance start and end date, amunt bligated, ttal amunt f federal award, prject descriptin, name f federal awarding agency, whether the award is R&D, and indirect cst rate, in accrdance with 2 CFR The subaward will als include certificatins fr research invlving the use f human subjects r vertebrate animals, cnflicts f interest, debarment and suspensin, research cmpliance and cmpliance with ther flw dwn requirements by the subrecipient rganizatin, as necessary. Fr all subawards written n DHHS prime awards, additinal Cnflict f Interest language is included which requires subrecipients t have an enfrced Cnflict f Interest plicy, and requires all cnflicts t be reprted t JHU. N DHHS funds may be used by a subrecipient until all cnflicts are adequately managed.

20 20 4. Human Subjects Research Cnducted in Subaward If the subrecipient s research plan invlves human subjects research, JHU is engaged in human subjects research whether the PI is cnducting the research r merely flwing mney t an entity cnducting the research. As such, the PI shuld cntact the apprpriate Institutinal Review Bard well in advance f requesting a subaward t assure that IRB apprval is btained. C. Negtiating the Subaward JHURA exercises final apprval rights and issues and executes all subawards and mdificatins. T ensure that subrecipients cnduct their prtins f research prjects in cmpliance with laws, regulatins and that prject csts incurred are reasnable and allwable, the subaward will utline the expectatins and requirements f JHU as the prime recipient and the subrecipient. Any changes r mdificatins t the subaward shall be apprved and executed thrugh JHURA. This includes all JHU PI/departmental and subrecipient requests fr rebudgeting, freign travel, equipment purchases, subrecipient PI changes, lwer tier subawards and the hiring f cnsultants. JHURA will keep subaward dcumentatin, stred in Oculus, in accrdance with the University s Recrds Retentin guidelines. Infrmatin abut recrds retentin is available nline at: nes.pdf D. Subaward Administratin 1. JHURA Subaward Mnitring Respnsibilities JHURA is slely respnsible fr apprving any administrative changes r requests frm the subrecipient, including apprval fr rebudgeting, freign travel, the purchase f equipment, and the hiring f cnsultants. JHURA will cnsult with the PI befre apprving r rejecting such requests. Spnsr apprval may be necessary fr certain changes. During the curse f the subaward, it may be necessary t issue subaward mdificatins. JHURA is respnsible fr the issuance and executin f all subaward mdificatins. 2. PI Subaward Mnitring Respnsibilities The PI hlds final apprval rights fr all technical cmpnents f the subaward. The PI is respnsible fr reviewing subrecipient invices, and prviding payment apprval via a PI Certificatin fr Payment and Perfrmance frm, signed by the PI and included with each invice. This enables the PI t mnitr the rate f expenditure t determine if csts are reasnable, cnfirm that the wrk is prgressing as planned and in accrdance with spending, and if there will be sufficient funds fr the duratin f the prject. The PI is respnsible fr mnitring all wrk in prgress. Generally this will entail infrmal cntact between investigatrs, althugh it may be desirable t request mnthly r quarterly technical reprts in the subaward dcument if the PI deems necessary. The PI shuld ensure cmpliance with the reprting requirements and infrm JHURA if he r she needs assistance in attaining cmpliance frm the