Subawards: Risk Assessment

In preparing to issue a subaward, OSP gathers information about the subrecipient and creates a profile that provides information about the subrecipient’s financial status and internal controls.

The Subaward Officer reviews the prime award terms and conditions before drafting a subaward that flows down the appropriate clauses. Additional modifications are made to the subaward based on a risk assessment of the subrecipient which includes but is not limited to a review of:

  • Subrecipient financial status and internal controls
  • Amount of subaward
  • Percentage of award passed through to subrecipient
  • Program complexity

In some instances, a subrecipient may be designated as elevated risk. This means that based on an evaluation of many factors including the award, supporting financial documents, the institutional profile completed by the subrecipient, and prior history of working with the entity that there is an above-average likelihood of programmatic or financial concerns during the subaward period. Examples include:

  • A small organization receives a very large subaward and may not have the business systems in place to account for the award in the manner prescribed by the prime sponsor.
  • A university has a history of multiple audit findings.
  • A company has a track record of failing to deliver on Cornell projects.
  • A non-governmental organization is operating in a remote area of the world where communication and monitoring is difficult.

Once the subaward draft is complete, the Subaward Officer sends it unsigned to the subrecipient for review.
The subrecipient may want to negotiate changes or request clarification of the terms and conditions. The Subaward Officer negotiates the changes, coordinating requested changes with unit administrators and the PI, where appropriate.
Once negotiations are complete and the signed subaward is received, the Subaward Officer executes it on behalf of Cornell, returns the fully executed document to the subrecipient, and distributes the fully executed award to the PI, unit administrator, and Sponsored Financial Services. If a subrecipient is deemed to pose "elevated risk," the PI will be responsible for specific monitoring and approvals.