I would appreciate folks' experience with and thoughts about a
 subcontractors' responsibility to read the  authorizing legislation that
 defines a
 relationship between the sponsor and the prime.

Our institution was recently notified by the U.S. Attorney General's
Office that we were at fault for entering into a subcontractual
relationship with a state agency because the state agency used the
wrong matching rate (an enhanced rate) when it drew down Federal funds.
We argued that it is not the subcontractor's role to review the conditions of
 the
authorizing legislation. We review the terms and conditions of the
prime agreement if the prime is referenced in its entirety, but we  do
not go back to the authorizing legislation to determine if the
relationship between the sponsor and the prime is "correct."
Some questions:
Do you  review authorizing legislation of a prime contractor before
you enter into a subcontractual agreement with a prime?

Do you ever review authorizing legislation, e.g., when you are the
prime? If so, under what circumstances?

Do you have any experience with a similar situation? If so, please
share your experience.

Have you had experience with "enhanced rate" matches between state
and Federal agencies?

Do you have any thoughts on how we might approach the "problem"? Our
statement that it was not our responsibility was not persuasive.

Thanks for any insights or helpful hints you may have.

kathy
Kathleen L. Sukanek
Associate Director of Research
Office of Research

University, MS 38677
 (601)232-7482
Fax: (601)232-7577
Internet: xxxxxx@sunset.backbone.olemiss.edu