Eliminate Prime Recipient Monitoring of Subs Subject to Audit

AAU, COGR and APLU recommend that OMB clarify that where a subrecipient has a current Single Audit report, prime recipients can rely on the subrecipient’s auditors and cognizant agency oversight for routine audit follow-up and management decisions.


Science is engendering an increased number of collaborative projects, resulting in significant growth in the number of subawards issued and received by institutions of higher education. The Uniform Guidance has added prescriptive administrative requirements (e.g., determination of subrecipient/contractor relationship (implied need to document for audit purposes) and detailed risk assessment and monitoring requirements) to an already burdensome process of issuing subawards to other universities and research organizations for collaborations on federally funded projects. With subrecipient monitoring, the “Prime” recipient is expected to monitor the business practices and internal controls of the subrecipient. This may be necessary for subrecipients that do not meet the threshold for Federal Single Audit ($750K in 2 CFR 200).It is unnecessary for subrecipients that have completed a Federal Single Audit.


The vast number of our subrecipients are our sister universities. There is no added benefit in University #1, the prime recipient of federal funds, monitoring University #2, the subrecipient, for compliance with audit requirements when Universities #3 – #50, also prime recipients, are also monitoring University #2, their subrecipient. And all this is in addition to the monitoring of University #2 that is being conducted by several Federal funding agencies. Subrecipient monitoring is a costly practice that has persisted, for unknown reasons, despite consistent calls to eliminate it.

In response to a recent AAU-COGR-APLU survey, 51 institutions reported:


• 3,578 subrecipients with federal awards not subject to an A-133 audit in FY14, but

• 8,409 subrecipients with federal awards were subject to A-133 audit in FY14.

• An average of 2.8 FTE dedicated to subrecipient monitoring; the fully burdened cost of such staff was $7,524,944 (for the 51 institutions) in FY14. (Central staff only; excludes investigators and departmental staff.) Institutions anticipate adding staff/FTEs to comply with the new requirements specified in § 200.331(d) of the Uniform Guidance.



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Idea No. 29