I'm so glad the subject of subrecipient monitoring came up. I, too, would
appreciate knowing what policies and subcontract clauses have been
developed at other universities, particularly state universities.

My opinion on the question of monitoring for-profit recipients is that it
depends on the amount of funds awarded to the subrecipient as well as the
level of risk involved. For example, let's say you receive a standard NSF
grant and you award a for-profit entity $25,000 to do a minor portion of
the work. The NSF grant has no unusual compliance requirements. The
for-profit entity has received Federal funds in the past and has the
controls in place necessary to account for the funds. They have experience
in managing a Federal project. Their business is sound as evidenced by
their financial statements. You are able to make a judgement call on the
level of monitoring required. You decide to rely on their technical and
financial reports to monitor their activities. Your principal investigator
will share in this responsibility.

On the other hand, let's say under that same prime grant you want to award
another for-profit entity $25,000 to do work. But, they are a small
company, have been in business only a couple of years but you've never
worked with them before. They've never had to account for Federal funds or
managed a Federal project. You decide to monitor their activities more
closely by reviewing their technical and financial reports, making site
visits, and requiring a program-specific audit at the end of the project.

The hardest part (to me) will be how to pay for the cost of high-level
monitoring. The best way of course is to build the cost into your proposal
budget. You know how well that will go over with your PI. Has anyone else
on the listserv has experience with this?

Once again, how we monitor our subrecipients is going to be an educated,
prudent judgement call.

I'm very interested to hear other's opinions, too.

Diana L. Hyde
Grants Specialist Supervisor (Subcontracts)
Contracts and Grants
Florida State University
109 Herb Morgan Building
Innovation Park
Tallahassee, Florida 32306-2820
Phone: (850) 644-8664
Fax: (850) 644-1464
E-mail: xxxxxx@res.fsu.edu