Risk Monitoring and Compliance
- At least annually, SPS will review subrecipient’s financial stability, financial processes, and controls as follows:
- A-133 entities: Subrecipients that expend $750,000 or more of federal funds annually are subject to Uniform Guidance (UG). SPS relies on the accuracy and veracity of subrecipient data submitted on the Federal Demonstration Project database for this purpose (Harverster). Upon review of Harvester data, if the subrecipient discloses findings related to the management of sponsored awards receipt of an unfavorable audit report, SPS will confirm that the subrecipient has taken appropriate and timely corrective action. SPS will issue a management decision letter stating if additional terms and conditions are part of the subrecipient agreement as a means to mitigate risk.
- Subrecipients not subject to A-133 or the Uniform Guidance audit requirements: Annual audited financial statements or responses to questions regarding financial status and systems to be completed as part of the Subrecipient Profile Questionnaire will be requested and reviewed by SPS.
- SPS will review subrecipient compliance certifications annually to ensure they are current in accordance with the applicable regulations.
Closeout of Subawards
SPS, in collaboration with department administrators and/or PI, will begin subaward closeout actions immediately following conclusion of the subaward period of performance. Subawards will be processed for closeout and formally closed within a 60-day time period, unless SPS grants the department an extension. A subaward may not be formally closed until all of the following closeout requirements have been met:
- Final review of costs charged to UConn Health and final close-out of all commitments, accrued costs, or payables
- Receipt of final invoice from subrecipient and Subrecipient Release and Certification Form
- Receipt of all required deliverables as specified in the subaward, patent/invention documentation, and equipment reports. Final verification of technical completion will be indicated by the PI’s signature and date on the final invoice
For UConn Health proposals to external sponsors in which a potential subawardee is identified, the Principal Investigator (PI) must include the following documents for each potential subawardee.
- Information and Compliance Form for Subrecipients
- Subrecipient budget and agreed upon scope of work
- F&A rate agreement
- Other information that may be required by sponsors, such as compliance certifications, biographical sketches, current and pending support, and available facilities pages
Risk Assessment
The subrecipient must complete and submit a Subrecipient Profile Questionnaire, which allows UConn Health to identify financial weaknesses related to management of sponsored funds. A risk assessment is completed based on the subrecipient Profile Questionnaire, the Information and Compliance form, and most current single audit for subrecipient. Where the risk assessment reveals a high potential for financial risk, a proposed risk mitigation strategy will be developed by SPS before proceeding with the subaward. The risk assessment takes into account several factors, including:
- Type of subrecipient organization (for-profit/not-for-profit/small business/corporation/foreign/domestic)
- Whether the subrecipient is subject to Uniform Guidance or other federal financial review. Subrecipients not subject to Uniform Guidance audit requirement will provide more information regarding their financial status and systems as part of the Subrecipient Profile Questionnaire
- Award size relative to the subrecipient’s sponsored research portfolio
- Award complexity, sensitivity of the work, and complexity of the governing regulations
- UConn Health’s prior experience with the subrecipient
- Subrecipient location (i.e., remoteness from the UConn Health might require more oversight);
- Organizational and individual conflict of interest
Issuing a Subaward
In order to initiate a subaward, the PI or designee submits a requisition in HuskyBuy, which must include the FDP Agreement Request form, subrecipient SOW, budget, budget justification and any applicable compliance approvals.
- SPS reviews the documents, drafts a Research Subaward Agreement, sends to PI for review and approval, and forwards it to the subrecipient for signature
- SPS negotiates terms with the subrecipient if necessary, countersigns the agreement
- SPS distributes copies of the subaward to the subrecipient and PI. A copy is retained in SPS’ award file
Standard Terms in Subawards
The UConn Health subawards generally will include the following terms and conditions:
- Mandatory flow-down provisions from the prime award, such as the requirements of applicable federal laws and regulations
- Payment terms, including but not limited to: fixed price or cost reimbursement, termination, billing and invoice certification requirements
- Ownership of intellectual property and data
- For federal awards, the CFDA number, prime award number, and the federal agency sponsoring the award
- Requirement permitting the sponsor and UConn Health and their auditors to have access to the records and financial statements as necessary for the University to conduct a review as necessary
- For subrecipients subject to Uniform Guidance, a requirement to report any problem related to the subaward identified in their annual audits
Post-Award Subrecipient Monitoring
UConn Health is responsible for monitoring the activities of subrecipients to ensure that awarded funds are used for authorized purposes and that performance goals are achieved.
Unlike cost-reimbursement arrangements, where expenditures are reimbursed after they are incurred, some granting agencies award fixed price contracts.
When such an award expires, leaving a residual balance in the account, a determination must be made as to whether the remaining funds may be utilized. The decision belongs to the awarding agency, and is often communicated within the terms and conditions of the agreement.
If the remaining balance results from a fixed-price agreement, it is often available for the principal investigator (PI) to spend. In such cases the balance will be transferred to an unrestricted discretionary account in the name of the PI.
Cost sharing on a sponsored program is a contribution to the cost of the project not funded by the sponsor. Cost sharing refers to funds expended by UConn Health on behalf of a sponsored project and includes personnel, equipment, and supplies.
Type of Cost Sharing
- Mandatory – a program requirement by the sponsor that UCH must contribute costs toward a project in order for the award to be made
- Voluntary Committed – a specific, quantified commitment made in the proposal that is above and beyond many mandatory cost share required by the sponsor
- Salary limitation and salary cap – salary and related fringe benefit expenses that exceed salary amounts chargeable as direct costs on projects as set forth by certain sponsors, such as the NIH
- Voluntary Uncommitted – contributions that are over and above that which is reflected in the proposal
Mandatory and voluntary committed cost sharing are required to be reported on the financial reports and to be supported by the accounting records.
Identification of the source of cost sharing is to be made at the time the proposal is submitted. Cost sharing/match funds (companion funds) are set up for each grant as required and used to charge the cost sharing expense. These funds should be established at the time the award is received and set up in UConn Health’s financial system (Banner).
A periodic review of the financial statements will ensure that cost sharing commitments are being met.
Costing sharing/matching Policy
Salary charges to accounts are initiated by electrical personnel action forms (EPAF). The EPAF provides the basis for the recording of payroll charges in Banner. Once an EPAF is submitted and entered into the system, payroll charges will continue in accordance with the stated distribution until a revised authorization is issued, changing the distribution. EPAFs should be prepared as soon as a change is anticipated in order to allow time for all required approvals and processing. EPAFs can be future dated for greater ease in managing payroll changes. Project personnel should be transferred to another source of funding by the project end date.
Federal regulations require certification of all employees whose salary is paid on sponsored projects or who committed effort to a sponsored program where that effort was paid by the institution (committed effort cost share). This certification is accomplished through Effort Reports. Effort reports are automatically generated and distributed quarterly. Effort Reports are project based and report the percentage pay for any faculty or staff paid from the sponsored project during the quarter. Effort reports are first reviewed by department administration staff for administrative errors before being released to Principal Investigators (PI) for certification. PIs are required to certify to the accuracy of the report as a representation of the individual’s effort on his/her project.
In cases where the PI is not available or unable to certify, a responsible official may certify the effort provided that he/she has first-hand knowledge of the individual’s effort. Salaries and effort are also verified for each grant at the end of the project.
See UConn Health’s effort reporting policies and procedures for more information related to salary distribution and effort reports.
LDCAs-Labor Distribution Change Authorization Form
A cost transfer of salary charges transferred through payroll reallocations is known as Labor Distribution Change Authorizations (LDCAs). An LDCA is a request to make a change in labor distribution for a prior period. The transaction does not affect future periods. LDCAs are processed in AMS (only available within UCH internal network). and are initiated by department administrators.
EPAF-Electronic Personnel Action Form
Unlike LDCAs, which are a cost transfer of prior payroll expenses, EPAFs initiate labor code changes for future payroll expenses. It’s initiated by department administrators in Banner Self Service.
Quick link to AMS (only available within UCH internal network): https://ets.uchc.edu/
Contacts
When completing a cost transfer, please address all of the following items:
- Justification – provide a detailed explanation that justifies the need to transfer an expense that had been previously approved on another fund. Include in your justification why the charge was originally charged to the fund from which it is being transferred and how the expenditure benefits the new fund
- Required Documentation – Provide SPS with supporting documentation
- Timeliness – process all cost transfers within 90 days of the end of the calendar quarter in which the charge occurred or earlier if required as a result of a financial reporting deadline
The following list represents some acceptable reasons for cost transfers between funds:
- To correct a clerical error on an original transaction (e.g. a transposition of fund numbers)
- To transfer salary to align with actual effort devoted
- To transfer expenditures to a new fund number representing a new budget period for the same award
- To remove expenditures determined to be not allowable/allocable to this fund after review of fund financial statements
- To move expenditure in part or in whole for items that were later used for purpose/project other than originally intended or determined to benefit more than one project
The following list represents some unacceptable reasons for cost transfers between funds:
- To transfer costs to resolve a fund overdraft to another sponsored fund
- To transfer costs to spend the balance of an award
Refer to UConn Health’s cost transfer policy for more information regarding cost transfers Cost Transfer Policy.
The Principal Investigator (PI) or his/her designee should periodically monitor encumbrances and communicate any problems with the appropriate department (such as Purchasing or Accounts Payables).
All encumbrances must be reviewed and closed at the award expiration date to ensure the accuracy of the final financial report.
A list of open encumbrance can be viewed through form FGIOENC (Banner) and My Funding (AMS).
Open purchase orders can be closed by adding a comment to the purchase order and directing the comment to Last Name “Team” and First Name “Solutions” in HuskyBuy. A reason for closing out a purchase order should be included in the comment.
All overdrafts are the responsibility of the Principal Investigator (PI). Overdrafts on a fund will result in a negative cash position until they are resolved. Overdrafts result from expenditures made to the fund in error, project expenditures in excess of the awarded budget, or expenditures that are charged after the project end date.
If expenditures were made to the fund in error, after the end date, or in excess of the approved budget, a cost transfer should be initiated by the PI or his/her designee to move the expenditures to the appropriate fund(s). All cost transfers must be fully documented and processed in a timely manner (See Cost Transfer Policy).
All deficits should be cleared within the fiscal year that they occur, especially those charges that are to be transferred to a departmental fund. The PI is responsible for reviewing sponsored funds on a regular basis for overdrafts.
It is the responsibility of the PI and his/her department to clear any remaining deficits within 60 days of fund expiration. This will allow the sponsored fund to be closed within the time specified in the agreement and be removed from UConn Health’s financial system (Banner) in a timely fashion. Failure by the PI and his/her Department Head, Center Director or Chair to identify an appropriate fund to which to allocate the over draft will cause SPS to shift the deficit to an unrestricted departmental fund or to any of the PI’s discretionary funds.
It is the responsibility of the Principal Investigator (PI) to charge expenditures to his/her sponsored program in strict accordance with the budget specified in the agreement. PIs should avoid incurring overdrafts on projects. The PI or designee should review each account’s financial status on a regular basis. Detailed and summary financial project reports are available to PIs and designees in UConn Health’s financial system (Banner) and SPS’ Award Management System (AMS). Funds should be reviewed carefully for incorrect salary distribution, incorrect charges, and other errors.
Project-to-date accounting information in Banner and AMS can also be used as a management tool to determine the award balance available for expenditures, the spending level of each cost category (e.g., salary, travel, equipment), and the status of open encumbrances. Discrepancies should be followed up and resolved immediately. Any questions regarding a fund should be directed to the SPS.