Re: Audit Requriement for Subrecipient Nancy Stewart 08 Jun 2000 06:11 EST

Hi Leah,

I didn't see your original post and think Steve's idea is a good one.  I recently
was in the same situation and tried for language quite similar to his.  The
company however wanted something "more specific."  After speaking with contract
officer at NIH (this was a prime NIH contract) and several other RA's  I came up
with the following:

The SUBCONTRACTOR certifies that it shall comply with FAR 31 Contract Cost
Principles and Procedures, Subpart 2:  Contracts with Commercial Organizations
with modifications as follows:  the term "Contract" shall mean "Subcontract";
"Contractor" shall mean "Subcontractor"; "Authorized Contracting Officer" shall
mean "UNIVERSITY's Contracting Officer"; "U.S. Government" shall mean "UNIVERSITY"
except that the terms "Authorized Contracting Officer" and "U.S. Government" shall
retain their meaning relative to audits of costs, negotiation of overhead rates,
and inspections.

The company was satisfied with this; however they do have experience in
contracting directly with feds so are comfortable with FAR's etc.

If anyone sees any gap or problem with the language, please let me know.  Thanks.

Nancy

Stephen Erickson wrote:

> Leah,
>
> I don't know of any provision that exempts private companies from  audit....if
> so I am petitioning to change Boston College to Boston College Corp.
> Seriously, the company, like all federal awardees, is subject to audit (at
> least under subgrants or cost-reimbursement subcontracts), but it is not
> subject to the audit requirements of A-133.  I would simply insert a clause in
> the subcontract saying that the subcontractor agrees to cooperate with an
> audit of subcontract related books and records required by your institution or
> the federal government, and that such audits may talke place at any time
> during period of performance or within three years after your institution's
> submission of it's final financial report.
>
> As a general matter (and I don;t know whether  you prime award is a grant or a
> contract) you should make sure that the clauses and provisions you flow down
> are those designated for commercial organizations and not those for
> educational or non-profit organizations.
>
> Please feel free to contact directly if you have any questions about specific
> clauses.
>
> Steve
>
> Leah Bevan wrote:
>
> > I am working on a subcontract for a private company which will be issued
> > under a prime agreement with DOE.  I understand that all the requirements
> > of the prime flow down to any subrecipient.  We as the recipient of the
> > prime require subcontractors to provide us with annual audit reports.
> >
> > Since the subcontractor is a private company and not subject to audit they
> > of course do not want to provide a copy.  Over the first budget period (two
> > years), their budget will be $1,118,890 which to me is substantial.
> >
> > Can anyone shine a little light for me?  Is there policy/regulations or
> > anything in writing I can reference here dealing with small private
> > companies and audits?
> >
> > Thanks for any help,
> > Leah Bevan
> > Coordinator of Grants and Contracts
> > The University of Tulsa
> > 600 South College Avenue
> > Tulsa, Oklahoma 74104
> > (918) 631-2883
> > Fax: (918) 631-2073
> >
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> --
> Stephen Erickson
> Director, Office of Research Administration
> Boston College
> McGuinn Hall 600
> Chestnut Hill, MA 02467
> Telephone:  617-552-3344
> On-Campus Fax:  617-552-0747
> Fax to My Computer: 413-895-8328
>
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--
Nancy E. Stewart
Fiscal Administrator
Office of Grant and Contract Administration
408 Goodell Building
University of Massachusetts
Amherst, MA 01003
(413) 577-1591
(413) 577-1595 FAX
http://www.umass.edu/research/ogca

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