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Multi-institution grants bring together expertise from different universities and research centers to tackle complex scientific problems. But collaboration multiplies administrative requirements. A single-institution grant involves one PI and one administrative office. A multi-institution grant involves multiple PIs, multiple offices, different accounting systems, and varying interpretations of federal regulations.
Under OMB Uniform Guidance 2 CFR 200.332, the prime institution serves as the pass-through entity responsible for monitoring all subrecipients. This responsibility cannot be delegated. Federal auditors hold the prime institution accountable for subrecipient compliance, regardless of where problems originate.
What Federal Law Requires
Risk Assessment Before Execution
OMB Uniform Guidance section 200.332(b) requires pass-through entities to evaluate each subrecipient's risk before executing the subaward. The assessment must consider:
- Prior experience with similar subawards
- Results of previous audits, including Single Audit findings
- New personnel or financial systems at the subrecipient
- Federal awarding agency monitoring results
Risk level determines monitoring intensity. Higher-risk subrecipients need more frequent oversight, detailed invoice review, and potentially site visits. Document the risk level and rationale in writing.
Complete Subaward Agreements
Federal regulation 200.332(a) requires every subaward agreement to include:
- Federal Award Identification Number (FAIN)
- Award date and performance period
- Amount of federal funds obligated
- Federal agency name and CFDA number
- Applicable compliance requirements from 2 CFR Part 200
- Indirect cost rate
The agreement must also specify the statement of work, budget breakdown, payment schedule, reporting requirements with due dates, and modification terms. The NIH Grants Policy Statement Section 11.3 defines these as consortium arrangements where the prime institution maintains overall project direction and monitoring.
Ongoing Monitoring Activities
Section 200.332(d) requires pass-through entities to monitor subrecipient activities throughout the award. Required monitoring includes:
Invoice Review: Examine each invoice for allowability, allocability, and reasonableness. Verify charges align with the approved budget. Request supporting documentation for unusual costs. Confirm cumulative payments do not exceed the subaward budget.
Progress Reports: Review reports according to the established schedule. Assess whether the subrecipient is meeting milestones. Identify problems early before they jeopardize the project.
Financial Reconciliation: Track spending against budget throughout the project. Monitor burn rate for over-spending or under-spending patterns. Compare invoices to progress reports for consistency.
Site Visits: Conduct visits when risk assessment indicates need, when problems arise, or when the federal sponsor requires them. Document findings and follow up on corrective actions.
Single Audit Compliance
Non-federal entities that expend $750,000 or more in federal awards annually must undergo a single audit. Pass-through entities must:
- Verify every qualifying subrecipient has completed the required audit
- Obtain and review the audit report and corrective action plan
- Issue a management decision on findings within six months
- Follow up to ensure corrective action occurs
- Consider audit results in future monitoring plans
Why Multi-Institution Coordination Is Challenging
Different Systems and Processes
Subrecipients use different financial systems, institutional policies, fiscal years, and compliance frameworks. One processes invoices monthly, another quarterly. One charges indirect costs on modified total direct costs, another on total direct costs. One uses actual fringe benefit costs, another uses predetermined rates. The prime institution reconciles all these variations.
Reporting cycles differ across institutions. One subrecipient reports quarterly, another semi-annually. Federal regulations leave room for interpretation on operational details like adequate documentation, when budget adjustments need prior approval, and effort documentation. Administrative contacts change frequently, requiring the prime institution to maintain current information and adapt to different communication preferences.
Changes Cascade Across Institutions
A single modification to the prime award triggers updates to multiple subaward agreements, budget revisions at each institution, revised statements of work, and new approvals at both prime and subrecipient institutions.
When the federal sponsor reduces the prime budget by 10 percent, each affected subrecipient needs formal modification, internal approvals at both institutions, revised payment schedules, and updated tracking. PI changes require notification to the sponsor, potential subaward modifications, updated records at subrecipients, and coordination across administrative offices. Project closeout cannot occur at the prime until all subrecipients have closed, each following their own internal timeline and procedures.
Common Administrative Problems
Invoice Processing: Subrecipients submit invoices in different formats with varying levels of detail and documentation. When the prime institution's accounts payable rejects invoices for formatting issues, payment delays frustrate subrecipients. When invoices show unexpected costs like unapproved equipment or excessive travel, administrators must determine allowability and whether modification is needed before payment.
Communication Breakdowns: The prime PI communicates scientific progress directly with sub-PIs while research administrators coordinate financial and compliance matters. These parallel conversations sometimes convey conflicting information. The prime PI may tell the sub-PI that a budget adjustment is approved, but the formal modification has not been executed. Response time expectations vary across institutions, creating tension.
Compliance Verification: Invoice review catches some issues but not everything. Progress reports show technical performance but may not reveal compliance problems. Federal regulations do not specify when site visits are needed. The prime institution cannot audit every transaction but maintains real oversight responsibility within practical limitations.
What Federal Auditors Look For
Auditors verify that prime institutions actually performed required monitoring. Common audit findings include inadequate documentation, missing risk assessments, incomplete subaward agreements, and insufficient evidence of ongoing oversight.
Required Documentation
Risk Assessments: Written assessments performed before subaward execution and updated periodically. Must document factors considered, risk level determination with rationale, and monitoring approach based on risk. Common problems: missing assessments, assessments done after execution, no connection between risk level and actual monitoring.
Complete Subaward Agreements: Must include all elements from section 200.332(a) including FAIN, CFDA number, federal agency, performance period, budget amount, compliance requirements, and indirect cost rate. Common problems: missing federal identifiers, vague statements of work, undefined reporting schedules, absent compliance language.
Monitoring Evidence: Documentation showing dates reviewed, approver names, substantive evaluation notes, and follow-up actions. Must be proportional to assessed risk level. Common problems: no documentation, receipt acknowledgment only, no follow-up on issues.
Invoice Approval: Documentation showing each invoice was reviewed for allowability, allocability, and reasonableness before payment. Common problems: payments without documented review, payments exceeding subaward amount, costs not aligned with approved budget.
Single Audit Follow-Up: When subrecipients have audit findings, documentation showing the prime institution obtained the audit report, reviewed relevant findings, issued management decisions within six months, and verified corrective action. Common problems: missing management decisions, delayed responses, no follow-up verification.
Prime Institution Accountability
Federal auditors hold the prime institution responsible for subrecipient compliance. Stating that the institution trusted the subrecipient does not satisfy audit requirements. Claiming the subrecipient did not respond requires documentation of requests and escalation. The prime institution is liable for subrecipient non-compliance when it relates to the subaward.
How Systematic Approaches Support Compliance
Centralized Tracking
When all subaward information lives in one system, research administrators see every active subaward with performance period, budget, key contacts, and current status. Dashboards show subawards organized by prime grant, subrecipient, administrator, or status. Filters identify subawards requiring attention like overdue reports or pending invoices.
Automated reminders alert administrators when actions are due. Escalation occurs when deadlines pass without response. The Key Solutions Research Administration Suite provides centralized subaward management integrated with the prime award, allowing sub-awardees to build budget portions through collaborative portals.
Standardized Workflows
Consistent processes reduce variation and missed steps. Invoice review workflows route submissions to designated reviewers, track approval or questions, and monitor days in each status. Progress report workflows generate requests based on subaward schedules and maintain complete report history. Risk assessment workflows prompt assessments at initiation, trigger monitoring plans based on risk level, and track completion.
All correspondence is documented in the system. Emails are automatically logged. Phone conversation notes are recorded. When auditors ask about communication with a specific subrecipient, the complete record is immediately available.
Integrated Documentation
Audit-ready files build automatically as work occurs. Each subaward file contains the executed agreement, all modifications, risk assessment, monitoring plan, and correspondence organized chronologically. Invoice files include every invoice received, review notes, supporting documentation, payment records, and cumulative spending. Progress report files contain all submissions, review comments, and follow-up correspondence. Audit follow-up files include the subrecipient's Single Audit report, findings, management decision, corrective action plan, and verification.
Portfolio Visibility
Management needs visibility to identify issues before they become problems. Spending reports show each subrecipient's obligated amount, invoiced amount, paid amount, and remaining balance to identify under-utilization or potential over-runs. Outstanding submission tracking shows pending items, days outstanding, and responsible administrators to identify bottlenecks. Compliance reports show which subrecipients have current audits on file, which have findings requiring decisions, and which have pending corrective actions.
Moving Forward
Multi-institution grants enable research that single institutions cannot accomplish alone. The administrative complexity is real. The prime institution carries legal responsibility for monitoring subrecipients, verifying compliance, and ensuring federal funds achieve intended purposes across multiple organizations with different systems.
The monitoring requirements under OMB Uniform Guidance are federal obligations, not optional practices. Federal auditors verify compliance. Audit findings result when monitoring is inadequate or undocumented.
If your institution manages multiple subrecipients, ask yourself: Can you quickly produce documentation showing invoice reviews, progress evaluations, and risk assessments? Do you have consistent procedures across all subawards? Can you respond to audit requests without gathering materials from emails, spreadsheets, and filing cabinets?
Research administration platforms that integrate subaward management with grants administration maintain complete documentation automatically, route tasks through defined workflows, and generate compliance reports. The Key Solutions Research Administration Suite provides these capabilities, supporting institutions in meeting pass-through entity responsibilities while managing multi-institution collaboration complexity.
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