Outgoing Subawards

Outgoing Subawards

Subrecipient: A subrecipient is an individual or other entity outside the University who will perform a portion of the actual scope of work. This relationship implies that the subrecipient is an integral part of the project and accepts responsibility for a portion of the project effort. Subrecipients are usually in the original proposal as collaborating institutions.

Consultant: A consultant is an individual or other entity outside the University, possessing specialized expertise, engaged to give professional advice, make recommendations or address a specific problem. They have little or no responsibility for overall project effort and are usually retained on a short-term basis. The contractual agreement used is a Personal Services Agreement (PSA).

Both of these relationships require a formal written agreement before work may begin. University Purchasing Regulations, located in the Business Procedures Manual, section B-4 provide university policies and procedures for personal services agreements. When the source of funds is a sponsored project, the agreement is prepared by the Office of Sponsored Projects Administration (OSPA) based on information provided by the Principal Investigator (PI). The agreement specifies the required work, performance period, allowable costs, billing and reporting requirements. It may also include provisions from the original sponsored agreement which also apply to a subrecipient of the funds.

Proposal

  • Subrecipient
    • Documents normally required:
      • Letter of intent (special format for NIH
      • Budget
      • Description of work
      • Signed sponsor face page and certification pages
      • Any other sponsor specific requirement
    • Include both direct and Facilities and Administrative (F&A) costs of the subcontractor as a direct cost line item in the UK budget. For grants using the full university rate, UK may assess F&A on the first $25,000 of each subcontractor.
    • The PI must review the budget to determine that it is reasonable in terms of the scope of work.
    • The PI must determine that the proposed subrecipient is technically able to perform the work.
    • Note: Subagreements usually require prior sponsor approval if not in the proposal.
  • Consultant
    • Documents Required:
      • Letter of commitment
    • Include in UK budget as a direct cost line item. The consultant’s rate should include all expenses. UK may assess F&A on the entire amount.
    • The Internal Revenue Service issues guidelines for classifying a worker as an employee or an independent contractor. Refer to UK Business Procedures Manual, section E-7-2 for guidance.
    • Note that if a consultant is not named in the proposal, the PI must complete a Proof of Necessity Form (PON) to be reviewed by Purchasing. Complete the PON and send it to OSPA and OSPA will forward to Purchasing.

Award

Consultants are budgeted in E530130. Subagreements are budgeted in E530200 (first $25,000 of each) and E530201 (amount over $25,000 of each). Department completes OSPA's On-Line Subagreement Request and submits to OSPA (please see OSPA On-Line Subagreement Request Guidance for additional detail). OSPA prepares contractual agreement, obtains signature of other party and signs for UK. Agreements with individuals require a W9. OSPA encumbers contract amount and issues a purchase order. Any changes will require a contract amendment prepared by OSPA. OSPA will also prepare a revised purchase order.

Payment

Contractor will send invoices for work completed to the Principal Investigator. The PI will review the invoice to be sure costs are reasonable and appropriate. The PI will also monitor performance and not approve payment if work has not been completed. Alert OSPA to any performance problems. After PI approves payment, PI’s Department prepares Vendor Invoice Transmittal and Payment Authorization form with attached invoice. Be sure to mark the final payment "final".

Information on Subaward Monitoring is available on the Accounts Receivable and Compliance page.

Personal Services Agreement up to $1000 from all UK sources in a fiscal year.

No Proof of Necessity needed. Use UK Independent Contractor Agreement form available at "forms" section of UK website OR request OSPA to prepare an agreement. Pay based on an invoice and W9 if an individual.

Keep in Mind

When the Principal Investigator signs the invoice and the business officer submits the invoice for payment, this indicates the following circumstances have been met:

  • The amount being paid is commensurate with the work being performed.
  • The reports have been received from the subawardee.
  • The invoice is dated during the period of performance of the subaward.
  • The amount to be paid doesn’t exceed the subaward total.
  • The invoice expense detail coincides with the original budget of the subaward (attachment A or B).
  • There are remaining funds to pay the invoice.
  • Cost sharing is part of the invoice, if required, and a copy forwarded to University Financial Services for reporting purposes.