The Office of Sponsored Projects Administration (OSPA) in collaboration with the college/department staff negotiates and executes subagreements. The Principal Investigator (PI), is ultimately responsible for monitoring the programmatic and financial activities of his/her grant and/or contract subrecipients to ensure proper stewardship of sponsor funds.
A subrecipient is an 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.
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 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 subaward 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.
At the proposal stage of the process, the PI works with the college/department staff to collect the following items for a subaward or a consultant.
- Documents normally required:
- Letter of intent (special format for NIH)
- Budget and budget justification
- Scope of work
- Signed subrecipient commitment form (unless a FDP member)
- Any other sponsor specific requirement
- Sub vs. Vendor Determination form for any entity besides IHE.
- Include both direct and Facilities and Administrative (F&A) costs of the subrecipient 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 subrecipient.
- 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.
- A copy of the IRB/IACUC Approval Letters for Subrecipient (Not UK’s Approvals)
- Documents Required:
- Letter of commitment specifying rate
- 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-7-3 for guidance.
- If the amount being paid is less than $10K and no single payment is more than $5K, complete the Independent Contractor: Worker Status Evaluation Form (must be approved by HR prior to work begins) and email to email@example.com along with a Independent Contractor: Scope of Work Form. If approved as an Independent Contractor, payment can be made by submitting an invoice to Accounts Payable Services through PRD. If the payment is over $10K or more, or less than $10K but has a $5K or more for a one-time payment, a Personal Service Contract is complete along with a Proof of Necessity Form (PON) to purchasing. The documents would be processed through SRM to purchasing for review.
The PI will need to submit a request for a subaward using the OSPA On-Line Subagreement request form in the Suabward Database.
- The Subaward Database is an online portal where any UK employee could create a draft online request form for the subaward.
- OSPA's On-Line Subagreement Request (Note: Only the Principal Investigator can submit the request form.) The submission by the PI confirms his/her approval to proceed with the subaward using the information provided on the request form including the attached scope of work and budget.
- See OSPA On-Line Subagreement Request Guidance for additional details.
- Subagreements are budgeted in E530200 (first $25,000 of each) and E530201 (amount over $25,000 of each). Once the subaward has been signed, the Subaward Administrator will alert the OSPA administrative staff and the Purchase Order (PO) will be created. Once the purchase order has been created, an email is sent to the Principal Investigator at UK with a copy of the subaward and PO. An additional email will be sent to the administrative contact at the subrecipient institution, including a copy of the fully executed subaward and the PO. The purchase order created will begin with 78XXXXXXXX.
- The college/department is responsible for assisting the PI with review of the subrecipient expenditures on the monthly ledger. This includes making sure the budget is in the correct category (E530200 or E530201) and the expenditures are correct. There should not be other debit/credit entries outside of the AP process in these sponsored classes.
- Subrecipient must have a Vendor Number in the UK Purchasing Vendor Database. The Subaward Administrator will initiate the Payment Works request to the Subrecipient. The address in the PaymentWorks profile, must match the remit to address listed on all invoices.
- Most subaward modifications are initiated when an increment of funding from the sponsor is issued. If an amendment is needed for an existing subaward, the PI will need to submit an official request to OSPA via the OSPA's On-Line Subagreement Request. Be sure to check the box ‘Going to request Amendment’. For additional information please see Amendment Guidance Document or email firstname.lastname@example.org.
- When the PI approves the Subrecipient’s final invoice for payment, this approval action provides verification to UK that the Subrecipient has reasonably fulfilled its technical responsibilities and that the PI is in receipt of the deliverables as well as reports required by the subaward agreement. In general, the subaward is consider closed upon payment of the subrecipient’s final invoice.
- If there are remaining funds in the subaward sponsored class once the FINAL invoice has been paid, send an email to email@example.com requesting the PO be liquidated.
- Additional invoices cannot be paid by a PO once it has been liquidated. If an invoice is received once a PO has been liquidated, it will need to be paid by departmental funds.
Subaward Online Invoice Review and Approval Process
Quick Reference Cards
Keep in Mind
When the SIR approves the invoice and the Principal Investigator 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 invoice expense detail coincides with the original budget of the subaward (attachment A or B).
- If cost sharing is part of the budget, it should be reflected on the invoice. If the cost sharing commitment is reportable, Research Financial Services will pull a copy for reporting purposes.
- Cumulative balance needs to be compared to expenses (invoices) posted to ensure invoice amounts have not changed and there are no missing invoices.
Most common questions
- What if the amount is wrong?
- Place the invoice on hold.
- Contact the vendor for a credit memo or invoice for the difference to be submitted to APPOinvoices@uky.edu or contact the vendor to include the difference on the next invoice. The original invoice stays on hold until the credit memo or subsequent invoice is received.
- Once the credit memo or invoice for the difference OR the next invoice that includes the difference is entered, approve credit memos first then invoices.
- What if the wrong PO was used (PO corrections)?
- Before an invoice is approved, ensure the PO number listed on the invoice is correct and the PO number matches what it entered.
- If the wrong PO was entered by APS, please email APPOinvoices@uky.edu and copy firstname.lastname@example.org requesting the original entry to be reversed and re-entered using the correct PO number.
- If the vendor sent the incorrect PO number, please contact the vendor requesting a credit memo matching the incorrect entry and an invoice with the corrected PO information to be sent to APPOinvoices@uky.edu with a copy to email@example.com.
- Place the incorrect entry on hold. Once the credit memo and corrected invoice are entered, approve the credit memo & invoice with the incorrect PO and the invoice with the correct PO.
- If the invoice was approved and processed for payment then determined the wrong PO was used, a correction is needed.
- Create a JV crediting the incorrect grant and debiting the correct grant. Submit a request for PO correction to firstname.lastname@example.org. Include a copy of the JV, standard JV explanation details, copy of the subaward invoice and explanation from the PI stating why the invoice was certified with the wrong PO and certifying the invoice with the correct PO information.
- What is an auto block?
- An auto block is an invoice entered beyond the validity dates of the PO.
- The invoice needs to be reviewed to determine if expenses were incurred within the budget period (period of performance) of the subaward.
- The department needs to contact the vendor for a credit memo, invoice for the difference or a correcting invoice if the period of performance dates is incorrect with a copy to email@example.com.