Subaward Agreements - Research: Indiana University

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Subaward Agreements

Understanding subaward processes

A subaward transfers funds from a sponsored award to another entity for that other entity to provide goods or services or programmatic work to Indiana University.

What is an outgoing subaward?

An outgoing subaward is a formal written agreement made between IU and a subrecipient to perform a portion of your statement of work under an IU sponsored award. An outgoing subaward is written and negotiated by the Office of Research Administration (ORA) subaward team.

Before IU enters into a subaward relationship with another entity, the other entity must be classified as a subrecipient or vendor. This determination will be reviewed by ORA during your proposal submission, as requirements for these types of agreements vary and will impact your proposal budget.

What are subaward roles and responsibilities?

The ORA subaward team issues and administers subawards in compliance with IU policies and procedures, the applicable sponsor regulations, and the terms and conditions of the prime award.

Subaward roles & responsibilities after prime award is received

Timeframe	Department/Principal Investigator	IU Office of Research Administration (ORA)
Initiating subaward agreement	Submit subaward request form and documentation Provide additional information to ORA as requested Review and sign non-FDP subaward agreements	Review subaward request form and follow up with PI/dept with any questions If federal pass-through, complete risk assessment of subrecipient and notify department if high risk Prepare, issue & negotiate subaward agreement Fully execute subaward agreement and send to department
After subaward is executed	Initiate requisition in BUY.IU - Detailed Requisition Guidance (Accessible 10/03/23) and Requisition Quick Guide (Accessible 04/13/22) Progress, performance, and adherence to terms and requirements Review and approve invoices - BUY.IU Matching Invoices Quick Guide (Accessible 04/26/22) Alert ORA to problems with subrecipient Follow IU Subrecipient Monitoring policy Submit subaward request form for amendments to subaward	FFATA report Facilitate resolution of any performance issues Prepare, negotiate, issue, and distribute amendments

Subaward risk assessment

Federal regulations require Indiana University to verify that a subrecipient has adequate internal controls to comply with agency requirements and regulations, prior to entering into a subaward agreement and throughout the life of the subaward. Before issuing a federal pass-through subaward agreement, ORA is responsible for reviewing each subrecipient’s audit information or alternative verification of the subrecipient’s internal control structures.

Subrecipients are assigned a risk level by ORA based on the quality of the subrecipient’s internal controls as assessed by an external auditor (e.g. an A-133 audit and/or financial statement audit). If your subrecipient is deemed a high risk, you will need to ensure the invoices include additional documentation as required by the High Risk Billing Attachment, which will be included in the subaward agreement and explains to the subrecipient the items needed for each invoice.

Subaward payment mechanisms

The two payment mechanisms most often used when issuing subawards are cost reimbursable and fixed price.

Cost reimbursable is the most common mechanism, as most collaborators are performing experiments and the costs are mostly for salary and materials. For a cost reimbursable subaward agreement, the subrecipient invoices monthly for the actual costs of the work performed in the previous month.

A fixed price mechanism is used when the subrecipient will be paid a predetermined amount based on the costs during a project period for a specific deliverable. Invoices may be submitted on a predetermined schedule, at a milestone, or when the deliverable is received. The scope of work includes the required deliverables for payment and a payment schedule.

Fixed price subawards involving federal funds must comply with the following requirements outlined in federal regulations (2 CFR 200):

• §200.201 Use of grant agreements (including fixed amount awards), cooperative agreements, and contracts
• §200.332 Fixed amount subawards

Outgoing subaward request

To initiate an outgoing subaward agreement or amendment from an IU sponsored award, you, as the principal investigator, or your department administrator must send an email containing the appropriate completed and signed Subaward Request form, along with the required documents listed in the form, to subaward@iu.edu.

• Subaward Request Form with guidance – New Subaward
• Subaward Request Form with guidance – Amendment to existing Subaward (Accessible 06/24/22)

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