Payments to Subrecipients on Sponsored Projects

Where a project subcontracts (also known as subawards) work and funding to a subrecipient (also known as subawardee), the PI may be the only one aware of the subrecipient’s technical progress and whether a particular payment should be made.

• The PI, therefore, should authorize payment and be given the opportunity to raise any concerns prior to payment.
• Under normal situations payments must be made within 30 days.
• Delays required to resolve invoice concerns should be fully documented in the payment eDoc. 

Final Invoice or Invoice from Elevated Risk Subrecipient

The Office of Sponsored Programs (OSP) and Sponsored Financial Services (SFS) determine if a subaward or subrecipient is assessed as posing “elevated” risk and notify the department research administrator and PI of the risk determination and all actions required to manage this risk.

Note: A designation of “elevated risk” is assigned following a review of subcontractor documentation related to financial status and financial management controls. A subcontractor will be deemed “elevated risk” if it is determined that they lack essential controls and thus pose an increased risk for non-compliance with technical or administrative requirements of the award. The designation is provided to allow the PI, the department research administrator, OSP and SFS to use additional caution in monitoring and during the review of invoices to ensure that procedures and subcontract terms are followed.

1. The department research administrator receives the subaward invoices. The department research administrator and PI have responsibilities. See definitions in the Roles and Responsibilities page.
2. The department research administrator provides the PI (or formal technical designee^*) a copy of the invoice, any supporting documentation, and review instructions. 
3. The PI (or designee) must review^** and approve or disapprove the payment, by signing the invoice, e-mail notification, or other written means.
4. The department research administrator must obtain and this documentation attach it to the Disbursement Voucher (DV) eDoc when processed.

All Other Invoices (Not Final or Elevated Risk)

1. The department research administrator provides the PI (or formal technical designee^*) a copy of the invoice, any supporting documentation, and review instructions.
2. The PI (or designee) must review the payment and notify the unit administrator within three business days if there is any reason that the payment should not be made.
3. If no response is received by the department research administrator within three business days it is presumed that PI has no concerns with the payment. The DV eDoc note field or invoice must include the notation “PI notified, no issues communicated” or have attached any PI response.

^*The PI may designate an individual on their project team to provide the technical review and approval. A designee must have sufficient responsibility within the project (for example, research associate, lab manager), technical understanding, and knowledge of subrecipient requirements and performance. Department research administrators are normally not technically qualified to assume this responsibility. Delegation must be documented in writing, noted in the Account Expense Guideline Text in Kuali Financial System (with the authorization attached to the ACCT document), and with a copy retained by the department research administrator.

^** The purpose of PI review is to ensure that the subrecipient’s technical progress is aligned with the amount of the specific and cumulative invoice.  When approving the invoice the PI should be comfortable that:

1. Performance on the subaward as of the invoice date is satisfactory. If not, the PI should discuss this with the subrecipient. 
2. The proportion of the overall subrecipient invoice is commensurate with the progress to date, or that the PI understands and agrees with a significant deviation. (For example, it is reasonable if 10% of the subaward has been billed, and the work is 10% complete or if front-loaded costs such as equipment result in a 25% expended / 10% completed ratio. However, a project 10% complete and 50% billed may be cause for concern).
3. All required technical progress reports or deliverables have been received and reviewed.

Note: the PI should contact OSP if a sufficient lack of progress or deliverables could negatively impact the project, or if there are other significant  irregularities with the invoice. 

Sample Invoice

The subrecipient shall submit invoices for payment as outlined in the terms and conditions of their subaward.

All subrecipients shall certify on each invoice the costs are the actual costs as recorded in the subrecipient's records and as expended for the actual work performed per the agreement.

Federally funded awards shall have a certification equivalent to that required under 2 CFR 200.415:

[By signing this report, I certify to the best of my knowledge and belief that the report is true, complete, and accurate, and the expenditures, disbursements and cash receipts are for the purposes and objectives set forth in the terms and conditions of the Federal award. I am aware that any false, fictitious, or fraudulent information, or the omission of any material fact, may subject me to criminal, civil or administrative penalties for fraud, false statements, false claims or otherwise. (U.S. Code Title 18, Section 1001 and Title 31, Sections 3729-3730 and 3801-3812)].

All invoices must be approved by an individual with payment authority on the award. Such approval asserts that the PI has performed their required review.

In order to be eligible for reimbursement, invoices shall be for allowable, approved costs incurred in accordance with the terms of the agreement and shall indicate expenses for reimbursement by budget category, identifying the total project costs, the reimbursable costs and the subrecipient’s cost share pursuant to the submitted budget.

An authorized representative of the subrecipient shall certify on each invoice that the costs, including those requested for reimbursement and those shown as the subrecipient cost share, are the actual costs as recorded in subrecipient’s records and as expended for the work actually performed in accordance with the terms of the subaward.