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Re: Audit Requriement for Subrecipient Lisa Thompson 08 Jun 2000 19:36 EST

I agree and want to thank him for his input and help as well.

Lisa Thompson

-------------

At 08:33 AM 6/8/00 -0400, you wrote:
>Todd,
>
>Thank you for your advise and research in response to Leah's query (I've
printed
>it for my file for the next time I draw a blank when faced with a similar
>situation).  I am writing to remark about your P.S.:  "Researched and
posted at
>8:13 PM CST - Not on Government Time or Dime."  Maybe you are ONR and this
was a
>DOE question, but I find it EXTREMELY valuable to have the input of
>professionals from the agencies on this discussion group and I would never
>object to anyone using government time to interact and dessiminate
information
>with your "customers"!  I sure hope your supervisors feel the same!
>
>Ruth Tallman
>
>
>
>"Frye, Todd" wrote:
>
>> There are no easy answers to your questions, but here are some important
>> points to consider:
>>
>> 1.  Since you use the term, "agreement", I will assume you mean that the
>> prime award to Tulsa is an assistance instrument of some type, such as a
>> cooperative agreement or grant, vs. a procurement contract.  This
assumption
>> points us towards one likely solution path, vs. the one we would take under
>> a procurement contract.
>>
>> 2.  What do the DoE Prime award specific terms and conditions say about the
>> handling of subcontracts to commercial concerns?  Also, take a look at the
>> DoE General Assistance Terms and Conditions at
>> http://www.pr.doe.gov/gf3tc.html, specifically referencing contract and
>> subaward/subgrant flowdown provisions, with hypertext links to other
>> subparts and appendices that address the question of flowdowns more fully.
>> In short, they invoke Subpart C of 10 CFR 600, which states,
>>
>>         "10 CFR 600.104 Subawards.
>> Unless sections of this subpart specifically exclude subrecipients from
>> coverage, all DOE recipients, including State, local and Indian tribal
>> governments, shall apply the provisions of this subpart to subrecipients
>> performing work under awards if such subrecipients are institutions of
>> higher education, hospitals, other non-profit organizations or commercial
>> organizations. Thus, this subpart is applicable to those types of
>> organizations regardless of the type of recipient receiving the primary
>> award. State and local government subrecipients are subject to the
>> provisions of 10 CFR part 600, subpart C, ``Uniform Administrative
>> Requirements for Grants and Cooperative Agreements to State and Local
>> Governments.''
>>
>> 3.  Also, you should take a look at 10 CFR 600.126, entitled, "Non-Federal
>> audits", which gives DoE Prime assistance recipients the specific authority
>> to seek audits of subs in order to protect the interests of the project,
the
>> prime, and DoE
>>
>> 4.  You don't really say in the sub-award to the commercial concern is
for a
>> shared part of the technical work, (i.e, a true "subrecipient"
relationship)
>> or merely the procurment of related items required by the prime (i.e,
vendor
>> relationship).  This distinction is critical for governing the appropriate
>> Federal flowdowns and audit issues.  More on this subject is found in the
>> discussion of subrecipients vs. vendors at OMB Circular A-133, at
>> http://www.whitehouse.gov/OMB/circulars/a133/a133.html#b .  Scroll down to
>> "§___.210 Subrecipient and vendor determinations."
>>
>> 5.  If the commercial concern sub has any intention of getting into
>> Federally funded research, even as a subcontractor, it would do well to
>> contact the DoE Small Business people, and get ramped up and get "all its
>> vacinations" to become a Federal recipient, subrecipient, or
>> contractor/subcontractor.  Good information about getting started with DoE
>> as a small business is found at
>> http://www.er.doe.gov/production/grants/grants.html#SBIR
>>
>> 6.  If, on the other hand, they are already in reciept of Federal awards or
>> functioning as a subcontractor, they may already have a cognizant Defense
>> Contract Audit Agency (DCAA) nearby that oversees their work.  DCAA has
>> agreements with other agencies to do audits for them, as well as normal DoD
>> Agencies.  In this case, they should "know better" than to expect that a
$1M
>> subaward would carry no expectation of closeout audit of some type.
>>
>> 7.  Item the Last:  Partner early and often with your Prime DoE
>> Grants/Contracting Professionals, and seek guidance from them in writing
for
>> open issues pertaining to all project obstacles, not just the subcontract
>> costs. Also, was the subcontract approved as part of the pre-award proposal
>> submitted to DoE by Tulsa?  If so, then the subaward can rightly be
>> considered a "government directed" subcontract or subaward, and more
>> programmatic and cost type oversight would be appropriate by the DoE at
that
>> point.  That is in keeping with the nature of cooperative agreements, which
>> envision a more developed involvement of the issuing agency.
>>
>> 8.  Sorry to be so long winded. You ask for the time, I tell you how to
>> build a watch. . . .
>>
>> Good Luck!
>>
>> Todd
>>
>> Todd A. Frye, Deputy Regional Director
>> ONR CHICAGO
>>
>> 312 886-5423, ext. 237
>> xxxxxx@onr.navy.mil
>>
>> P.S. Researched and posted at 8:13 PM CST - Not on Government Time or Dime.
>>
>> -----Original Message-----
>> From: Leah Bevan [mailto:xxxxxx@UTULSA.EDU]
>> Sent: Wednesday, June 07, 2000 4:41 PM
>> To: xxxxxx@HRINET.ORG
>> Subject: Audit Requriement for Subrecipient
>>
>> 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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HAPPY TRAILS!!!

Lisa L. Thompson
Associate Director
Office of Research
 and Sponsored Programs
The University of Tulsa
Tulsa, OK  74104-3189

phone:  (918)631-2716
fax:    (918)631-2073
e-mail: xxxxxx@utulsa.edu

Never be afraid to try something new.  Remember, amateurs built the Ark.
Professionals built the Titanic!

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