Outgoing subawards

1. Outgoing subawards Presented by: Victoria Tugade, Rachel Wallace and Gricelda La Turco

2. Subcontract Process Subcontracts Team: Victoria Tugade, 626-5782 Email: gibbinsv@email.arizona.edu Rachel Wallace, 626-0603 Email: relizond@email.arizona.edu Or Gricelda La Turco, 626-4610 Email: laturco@email.arizona.edu • ORCA • Drafting the Agreement: • ORCA receives the requisition after department and SPS approval. We then complete compliance checks and write the draft. • NOTE: Requisitions are completed on a first-come-first-serve basis. ORCA will attempt to accommodate rush requests whenever possible. • Department • Approval: • ORCA e-mails the draft to the department for approval. The business manager and/or PI review the information and make any necessary changes. • We also ask for any additional documentation at this time. • Department must return signed SC-227 and all requested documents to ORCA to allow subaward to be signed. • Department • Requisition: • Object code 3350 for the first $25K encumbered on any subaward and object code 3340 for the remaining funds • Attach Subaward Initiation Form and all supporting documents to the Requisition or Purchase Order Amendment. • NOTE: Entering a requisition or purchase order amendment does not make it okay to pay invoices on that action. • ORCA • Processing the Agreement: • ORCA receives the signed SC-227 and requested documents and initiates signatures. For new subawards, ORCA cannot sign subaward until PACS approves (finalizes) the PO number. • ORCA • Finalizing the Agreement: • ORCA receives the fully executed document from the subcontractor and sends a PDF via email to the business office for their files. Department can now pay invoices. IMPORTANT!!!!! Invoices may notbe paid until the subcontract is fully executed and the business office has received a fully-executed copy. Invoices not accompanied by the completed Subcontract Payment Authorization Form will not be approved for payment.

3. At the Proposal Stage When preparing your proposal for submission, here are some things to keep in mind to make issuing your subawards easier down the line.

4. Subaward vs. Vendor Some helpful information when determining if you have a subaward or vendor relationship At the Proposal Stage • A subcontract involves a collaborative working relationship between a UA Principal Investigator and a PI at another institution or company, or an individual: • The Subawardee PI makes program decisions and collaborates with the UA PI. • Performance measured against a pre-designed scope of work. • Accountable to UA for the use of any funding provided through the Subaward. • For a subaward, the University’s IDC is only charged on the first $25,000 of the total amount (this is the standard case, although it sometimes changes as a stipulation of the Prime Sponsor or with a waiver from the VPR’s office). • The other option is to appoint a vendor to complete a part of the work: • A vendor provides goods or services as a regular part of its business operations as part of a competitive environment. • For a standard purchase from a vendor, the University’s IDC is charged on the entire amount of the purchase. • This type of collaboration is processed through PACS • Sometimes a “subaward” can have vendor-like features. ORCA is happy to assist in this determination. Simply provide your designated Contract Analyst with your Scope of Work.

5. Subawardee Information What to collect at the proposal stage At the Proposal Stage • For Federally Funded Subawards, ORCA will need the following: • A clearly detailed budget for the individual subawardee. • A completed Budget Negotiation Form, along with negotiation documents. • A clearly outlined and detailed Scope of Work for the individual subawardee. • The Subawardee must have a valid DUNS number. • The Subawardee must be registered in the Central Contracting Registration Database (CCR). • The Subawardee’s completed A-133 Audit Report, or audited financial statements. • For Non-Federally Funded Subawards, ORCA will need the following: • A clearly detailed budget for the individual subawardee. • A clearly outlined and detailed Scope of Work for the individual subawardee. • The Subawardee’s completed A-133 Audit Report, or audited financial statements.

6. Subawardee Information Why we need a DUNS number and CCR registration for federally funded Subawards At the Proposal Stage • In order to receive federal funds, even those funds that are passed through the University of Arizona to a subcontractor, the recipient of funds must have a valid DUNS number and have that number registered in the Central Contractor Registration (CCR) database. • This is not a one time registration. Organizations must renew registration annually. • When selecting a subawardee to receive federal funds, please check to see that they are registered in CCR. If not, ask that they start the process. • Applying for a DUNS number and registering in CCR can take some time. ORCA must hold a subaward until that subawardee is fully registered, or until their expired registration is reactivated. This can significantly delay the issuance of a subaward. • Complete information on this requirement, including a link to the CCR website is provided in this packet. (see Attachment No. 1)

7. Preparing a Subaward Budget What ORCA needs for a subaward budget At the Proposal Stage • ORCA will require a complete budget for each subaward. These budgets should be individual to the subawardee • ORCA cannot accept a copy of the prime award budget with a line item for Subaward. • In the event that you have multiple subawardees for a single project, ORCA will require a separate budget for each individual subawardee. • The budget serves at your guide post for proper monitoring and invoice payment and must be clear and as detailed as possible. • The budget provided must match the amount that is being requested by the Purchase Order Requisition in UAccess. • Budgets should be detailed and, at minimum, should include the following categories: • Salary – name of individual(s) receiving salary, amount budgeted and separate amount for F&A calculation. • Travel – listing of travel expenditures (i.e., hotel, airfare, misc) and budgeted amounts. • Equipment – listing of authorized equipment for purchase and budgeted amounts. • Supplies – amount budgeted for supplies. • Sub-Total amount prior to IDC calculation. • IDC rate and total IDC calculation. • Budget total.

8. Budget Negotiation Documentation What ORCA will need for Budget Negotiation Documentation. At the Proposal Stage • In order to comply with OMB A-110, Subpart C, Section 45 (for federal grants and cooperative agreements) and FAR Rule 12.209 (for federal contracts) you are required to retain documentation of budget review and negotiations as part of the acceptance of federal funds. What does this mean for you when preparing a budget? • The individual responsible for reviewing and accepting the budget should be retaining documentation of how they came to the conclusion that the budget was accurate, reasonable and appropriate.  The following is a general list of documentation or information that should be retained: • For Salary: correspondence or documentation showing that the individual salaries list in the budget are in fact the salaries those individuals are paid through their institution or organization. • For IDC Rate: a copy of the institution’s or organization’s current rate agreement or justification for the rate that is being charged (NOTE: if the rate being applied to the subawardee is dictated by the terms of the prime award no documentation is necessary). • For Travel: documentation confirming that the estimated travel costs in the budget are acceptable within GSA per diem rates and appropriate for traveling with federal funds (i.e., the airline ticket price is not in the first class price range) and that the travel is for the benefit of the project and for individuals working on the project. • For Equipment: documents showing that the amount being charged for the equipment purchased is appropriate (i.e., the budget expense for a computer is appropriate for the computer that is being purchases, which can be done by an internet search of comparable computer equipment). • ORCA has created a form to assist in the compilation of this information. (See Attachment No. 2)

9. Preparing a Subaward Scope of Work What ORCA needs for a subaward scope of work At the Proposal Stage • ORCA will require a clear and detailed scope of work. The scope of work should outline the work you expect the subawardee to complete, the timeline you expect it to be completed in, and the deliverables you expect to receive in exchange for the funding you are providing. • The scope of work should be individual to the subawardee, not a copy of the complete scope of work for the entire project as provided in your prime award. • A vague scope of work can lead to issues with the subawardee’s performance during the course of the Subaward. • In the event of a conflict with your subawardee, the scope of work becomes the guide for determining legal requirements for completion of the project.

10. Ready for Action What to do when you are ready to enter your new subaward or subaward modification into UAccess.

11. Prior Approval for Subcontracts Ready for Action • Prime Sponsor Approval: • If a subaward is listed in the prime award budget, a subaward disclosure form is required. • If the prime award does not require prior approval to a new subaward, the Prime Sponsor is notified of the new subaward in the form of a letter, written by the department and signed in approval by Sponsored Projects. • Please contact your Sponsored Projects Fund Accountant for assistance with these requirements. • EAR/ITAR Requirements: • The terms and conditions of your prime award will flow down to your subawardee. If your project is export controlled, your subaward will be as well. These issues should be addressed when accepting the prime award. • For questions regarding EAR/ITAR issues, please consult the Export Compliance office by contacting Melissa Faulk via e-mail at mfaulk@email.arizona.edu or via phone at 520-626-5338.

12. New Subaward or Modification Ready for Action • Modification • Existing Subcontract • Same Account No. • Same Project • New Subcontract • New Project • Competitive Renewal of existing project • New agreement from Prime Sponsor

13. When is a Modification Necessary Ready for Action • ORCA needs to issue a written modification to the subaward for a number of reasons. Some actions require an official change to the PO in UAccess, while others simply require that you notify ORCA, via e-mail, of the needed change. • Modifications requiring a Purchase Order Amendment in UAccess: • The total Budget amount increase or decreases. • The Termination Date of the agreement is changed (extended or reduced). • The Legal name of the subawardee changes. • Modifications that do not require amendment in UAccess, but do require e-mail notification to ORCA: • A material change in the Scope of Work. • The Subawardee PI changes • Any terms and conditions of the original subaward are modified (i.e., when invoices are to be received, the total estimated cost of the project, changes in policy or law that require change to the subaward agreement language). • NOTE: ORCA does not automatically modify your subaward. You must request that action be taken to modify your subaward.

14. How to Enter New Subawards in UAccess Ready for Action • When completing a Purchase Order Requisition for a new subaward please be sure to do the following: • Always use the subaward object codes: 3350 for the first $25k and 3340 for everything thereafter. If these object codes are not used the action will not be processed as a subcontract and will never arrive in ORCA’s action list for approval. • Attach the New Subaward Initiation form (see Attachment No. 3), along with all of the backup documentation (i.e., budget, scope of work, sole source justification and budget negotiation documents) to the requisition. • Be sure to enter the start and end dates of the subaward in the notes section of the requisition. • All subawards are non-taxable, please do not add tax to the subaward amount. • ALWAYS check the box in the “Payment Request Positive Approval Required” field to indicate that invoices should never auto approve.

15. How to Enter a Subaward Modification in UAccess Ready for Action • When completing a Purchase Order Amendment to an existing Subaward, please be sure to do the following: • Keep in mind that the entire life of the Subaward is provided to us when entering a modification. Please be clear about what action you would like ORCA to take by providing detail in the “Explanation” box at the top of the action (see below). • Please attach the Subaward Modification Initiation form (see Attachment No. 4), along with the accompanying documents for that action, to the requisition. • If you are modifying a subaward that has a PO number from the old FRS system, please reference the original PO number in the “Orig. Doc. #” box at the top of the action (see below). • In the Notes section, please include a note that states what action is required on ORCA’s part.

16. In ORCA’s Hands What happens after ORCA receives the Purchase Order Requisition or Purchase Order Amendment?

17. Compliance Requirements ORCA must complete a number of compliance checks prior to drafting any subaward action In ORCA’s Hands • CCR – For federally funded Subawards, ORCA must check to ensure that each Subawardee is actively registered in CCR. If ORCA does not have a DUNS number on hand for the Subawardee, we must search it out. • If the Subawardee is not registered, or if their registration has expired, ORCA must hold the Subaward until the Subawardee’s registration is active. • Audit – ORCA is required to read each Subawardee’s OMB A-133 audit and review all findings to ensure that the Subawardee is in good standing to receive funding. • If the Subawardee does not meet the OMB A-133 audit requirements (i.e., receives less than $500,000 in federal funding in a given year), ORCA must request that the Subawardee complete a financial questionnaire and provide an audited financial statement for our review. • This is required regardless of the Prime Funding Source. • This requirement must be completed for each Fiscal Year over the life of the subaward. • Debarment/Suspension – ORCA is required to complete a debarment/suspension check on both the Subawardee organization, and all key personal working on the project, each time an action is made on the subaward. • Prime Sponsor Specific Requirements – ORCA is required comply with all Prime Sponsor’s stipulations in the oversight and issuance of each subaward. Example: compliance with the E-Verify FAR 52.222-54, as included in most government contracts.

18. What Kind of Subaward? Why don’t we have one standard agreement we can just pass out? In ORCA’s Hands • Because the UA does not receive funds from only one organization or federal agency, and issue subawards to only one organization or institution, we do not have a “standard” agreement. • Each project is distinct and has its own set of challenges. • Some factors that go into creating the type of Subaward ORCA drafts: • Prime Sponsor – Are the funds coming from: • A non-profit in the form of a grant? • A federal agency in the form of a contract? • A federal agency in the form of a grant or cooperative agreement? • A private industry sponsor? • What type of institution or organization are we issuing the Subaward to? Are the funds going to: • A non-profit public university or college? • A private university or college? • A local state institution? • A state institution (outside of Arizona)? • A foreign university or college? • A not-for profit organization? • A for profit organization? • What type of work is being completed and for what amount? Is the Subaward for: • A large dollar amount with a complicated scope of work? • A small dollar amount with a complicated scope of work? • A large dollar amount with a simple scope of work? • A small dollar amount with a simple scope of work?

19. Drafting the Subaward In ORCA’s Hands • Once ORCA has completed its compliance requirements, and determined the most appropriate type of Subaward to use, it’s time to get drafting! • ORCA will complete the Subaward, or Subaward Modification, to the best of its ability, with the information provided in the Purchase Order Requisition or Purchase Order Amendment, and the attachments included therein. The more detail we receive, the easier it is for us to complete the draft. • When the draft is complete, ORCA will e-mail a copy to the Departmental Contact, as provided on the Initiation Forms, for review and acceptance. • The draft will be accompanied by the SC-227 Subcontract Authorization form. This form will always be the very last page of the draft word document. The SC-227 must be returned to ORCA, via fax or e-mail, to allow issuance of the Subaward. ORCA cannot sign and mail the Subaward until the signed SC-227 and all requested documents are received. • The draft, and all of the documents provided are internal only and should not be forwarded to the Subawardee. ORCA is the only department authorized to issue these subawards on behalf of the University of Arizona. • A copy of the SC-227 Subaward Approval Form is provided in this packet for your review. (see Attachment No. 5)

20. What Happens Now? In ORCA’s Hands • When ORCA receives the signed SC-227, approving the new Subaward draft, or Subaward Modification draft, along with any documents that are requested on SC-227, we prepare the Subaward for signature. • Lee Anne T. Peters and Lewis Barbieri are the officials authorized to bind the University of Arizona in ORCA. • ORCA finalizes the Subaward, with all appropriate attachments, and presents it to one of the two authorized signatories to sign on behalf of the University of Arizona. • NOTE: ORCA will send the Subaward unsigned if one of the following conditions exists: • FFATA reporting is required (all federal funding issued to UA after October 1, 2010). • The Prime Sponsor is USDA (Subawardee must complete a form and sign Subaward prior to ORCA). • ORCA is unable to locate the Subawardee’s A-133 or other audit documents. • Once the Subawardee returns the signed Subaward, or Subaward Modification to ORCA, it is scanned and e-mailed to the department. • At this point, it is acceptable to make payments for invoices that show expenses during the now active period of performance.

21. The Life of Your Subaward Monitoring your Subaward, Paying Subawardee invoices, closing out your Subaward and more.

22. Subrecipient Monitoring The Life of Your Subaward • “Subrecipient Monitoring Responsibilities” form for all subcontracts • The level of monitoring required for each subcontract is determined by ORCA and provided to you at the draft stage. • Delineates the responsibilities of the department and Principal Investigator in ensuring that only ALLOWABLE expenditures are being paid and the Subaward is properly monitored. • The PI is required to approve all charges on each invoice by completing and signing the PI portion of the Subcontract Payment Authorization form. (see Attachment No. 6) • The Departmental authorized official is also required to approve invoices by completing and signing the Business Official portion of the Subcontract Payment Authorization Form before they are sent to accounts payable. • Accounts Payable will not pay any invoice that is not accompanied by a PROPERLY COMPLETED Subcontract Payment Authorization Form.

23. Subrecipient Monitoring The Life of Your Subaward • Risk level is assessed by ORCA, based on: • Amount of the subcontract, Type of institution, Subcontractor’s performance in prior agreements with the University, Relevant findings on the Subcontractor’s audit, and Departments compliance with University policy and process. • Change in Risk Level: • The following areas can create change in the assigned risk level of a subaward: • Changes in the contract circumstances • Issues with departmental compliance with subaward policies and procedures • Audit findings on Subcontractors A-133 or other audited/financial documents • ORCA will notify department of changes in risk level and request a revised Subrecipient Monitoring Form. • Please see Risk Level Matrix and Subrecipient Monitoring Responsibilities forms. (see Attachment No. 7)

24. Paying Invoices The Life of Your Subaward • NO payment can be made without a fully signed Subaward in place, covering the period of performance expensed in that invoice. • In order to send an invoice for payment the PI and Department administrative official must review invoices and complete the Subcontract Payment Authorization Form. • The completed form must accompany any subcontract invoice sent to Accounts Payable for payment. Accounts Payable will reject your invoice for payment if the form is not included, or if the form is included but not filled out properly. • ORCA has final approval over all Subaward invoices and will hold invoices for payment if the payment request is not accompanied by a completed Subcontract Payment Authorization Form, and if the payment is for a period of performance that is not covered by the fully signed Subaward.

25. When the Subaward has Ended Don’t forget the closeout process. The Life of Your Subaward • In order to consider a Subaward closed, we must have a fully signed closeout letter in place. • This letter, generally called a “Termination Letter,” protects you from future request for payment. The letter provides the exact end date, the amount of final invoice, and the total amount expended on the Subaward. Both parties sign in agreement that the project is closed and there are not additional funds to be paid. • The department must complete a no-cost Purchase Order Amendment to closeout a Subaward. In the “Explanation” box of the amendment, please provided the final invoice amount, the final subaward total amount, and the final end date of the project (see example below). • ORCA does not automatically closeout Subawards, unless no action has been completed on the Subaward more than a year after the period of performance has expired. • In this event, ORCA will send a notice requesting information to closeout the Subaward.

26. Audits and the University of Arizona Who audits Subawards and what you should do.

27. Who can Audit You Audits at the University • Every Subaward issued by the University of Arizona is subject to audit. Subawards can be audited by any of the following: • ORCA Internal Audit • University of Arizona Internal Audit • State of Arizona OMB A-133 Audit • Sponsor Audit • Office of Naval Research (ONR) Audit • During the course of any audit, your department may be asked to produce documentation as proof of appropriate subrecipient monitoring so as to comply with University of Arizona Policy and procedure, State of Arizona and Federal oversight requirements, and Prime Sponsor requirements. • If your Subaward is selected for audit, ORCA will notify you via e-mail, informing you who is auditing the file and when the audit will take place. • If you receive a call directly from an auditor, without prior notice from ORCA, please notify us immediately.

28. ORCA Internal Audit Audits at the University • ORCA is required to complete an annual audit of randomly selected Subawards. • This audit is done to ensure compliance with all requirements for the oversight of Subawards. • ORCA selects a random sample of active Subawards, and completes a full audit review of selected Subawards. • This audit will help you prepare for any future audit by ensuring that your Subawards are in order.

29. University of Arizona Internal Audit Audits at the University • The University of Arizona Internal Audit department has the right, and responsibility, to audit any Subaward at any time. • During the course of an audit conducted by the Internal Auditors, all aspects of compliance and all expenses for the period in question will be reviewed. • The Internal Auditors are charged with ensuring that the University of Arizona complies with all rules, regulations and requirements.

30. State of Arizona OMB A-133 Audit Audits at the University • Each year, the State of Arizona Auditor General’s office completes the OMB A-133 Single Audit, covering each institution under its jurisdiction. The University of Arizona is one of these institutions. • For Subawards, each file is reviewed for compliance with requirements and each expense under the subaward, for that given Fiscal Year, is reviewed to ensure that payment was made within the guidelines. • If your subaward is selected, you will be asked to show proof of compliance with the terms and conditions of the Subaward, with terms and conditions of the Prime Award, with the subrecipient monitoring responsibilities agreed to at the issuance of the Subaward, and with State of Arizona and Federal requirements.

31. Prime Sponsor and ONR Audits Audits at the University • Prime Sponsor Audit: • Your Prime Sponsor has the right to audit you for any action taken with its own funds, at any time during the life of the Project, and for several years after the Project has ended. • A Prime Sponsor can choose to audit a Project at any time, and has the right to audit any Subaward under that Project. • Office of Naval Research Audit: • ONR is the University of Arizona’s cognizant auditing authority, and reserves the right to audit the University of Arizona at its discretion. • ONR is responsible for certifying the University of Arizona Purchasing System, allowing the UA to do the volume of business it does with the Federal Government.

32. At a Glance Key things to remember to make your Subaward process easier.

33. Remember Me! At a Glance • Retain your budget negotiations documentation. • Be sure to collect the necessary information at the budget creation stage, regarding all budget negotiations, to provide to ORCA when issuing the Subaward later in the process. • Budget and Scope of Work: • Make sure your budget clearly outlines the anticipated expenses for the Subaward, and that the Scope of Work clearly outlines the work you are expecting the Subawardee to perform in exchange for the funding provided. • Know your responsibilities. • The Subrecipient Monitoring responsibilities form outlines the responsibilities for both the PI and the authorized Business Official. Be sure you are complying with these requirements when monitoring your Subaward and paying your Subaward Invoices. • DO NOT PAY INVOICES WITHOUT A FULLY SIGNED AGREEMENT IN PLACE. • If the last signed agreement or modification has expired, you cannot pay an invoice for expenses incurred beyond that date. • DO NOT send the draft, or any documents provided at the draft stage, to the Subawardee. • The department is not authorized to issue agreements on behalf of the University. The draft is considered an internal only document until ORCA finalizes the agreement for signature. • All other documents provided at the draft stage (Sole Source Justification, Risk Monitoring Responsibilities Form, etc.,) will always be an internal document. • Remember the Termination Process. • Please remember to enter a no-cost closeout Purchase Order Amendment in UAccess when your Project is complete. This will ensure that your Subaward is officially, and properly, closed out.

34. Mistakes to Avoid At a Glance • Paying invoices without a fully signed Subaward and/or without a completed Subaward Payment Authorization Form. • Payments Requests entered into UAccess without both of these items will be held until both are in place. • Entering the wrong object code. • Without the correct object codes (3350 and 3340) your Subaward will not be routed to ORCA and could float in the system for some time before someone figures out where it should go. • Unclear Budget or Scope of Work. • ORCA will request a revised budget and/or scope of work if we feel the documents we receive do not provide sufficient detail to become part of the legally binding document. • Unclear Requisition or Purchase Order Amendment. • Lack of necessary information on Requisitions or Purchase Order Amendments creates uncertainty, resulting delays in the process. • Assume No-cost extensions and Terminations are automatic. • ORCA will never automatically extend a Subaward, even when the prime award is extended. • ORCA will never automatically terminate a subaward, even when the Project period has expired.