What Is a Subrecipient and What Is Their Role?

A subrecipient is a non-federal entity that receives a portion of a federal award, such as a grant, from another entity known as a pass-through entity. The subrecipient uses these funds to implement programmatic activities, contributing directly to the overall objectives of the original federal award.

Key Characteristics of a Subrecipient

A subrecipient carries out a portion of the programmatic effort of a federal award, as defined in the Uniform Guidance (2 CFR 200). This means they are involved in achieving the program’s objectives, not merely providing goods or services. Subrecipients have responsibility for programmatic decision-making, including determining who is eligible to receive federal assistance and how the program is implemented.

Performance measurement for a subrecipient is directly tied to whether the federal program’s objectives were met. They use federal funds to carry out a program for a specified public purpose. Applicable federal program compliance requirements flow down from the pass-through entity to the subrecipient.

How Subrecipients Differ from Contractors

Distinguishing between a subrecipient and a contractor (vendor) is important because different rules and regulations apply to each relationship under the Uniform Guidance. A subrecipient performs a substantive portion of the federal program’s scope of work, creating a federal assistance relationship. In contrast, a contractor provides goods or services that are ancillary to the federal program’s implementation, establishing a procurement relationship.

Subrecipients use funds to carry out a program for a public purpose, while a contractor provides goods or services for the pass-through entity’s own program. Subrecipients exercise programmatic decision-making and discretion. Contractors, however, operate under the pass-through entity’s direction, providing services within their normal business operations, such as equipment repair or data processing.

A contractor’s performance is measured against specific deliverables. They are not typically subject to the same federal program compliance requirements beyond standard contract terms. Contractors often operate in a competitive environment and provide similar goods or services to many different purchasers.

Roles and Responsibilities in Subrecipient Relationships

The relationship between a pass-through entity and a subrecipient involves distinct responsibilities for both parties, as outlined in the Uniform Guidance. The pass-through entity, which is the direct recipient of federal funds, is accountable to the federal awarding agency for the overall performance of the project and the appropriate expenditure of funds by all parties. This includes clear identification of the subaward, such as the subrecipient’s name, Unique Entity Identifier (UEI), Federal Award Identification Number (FAIN), and the period of performance.

The pass-through entity must monitor the subrecipient’s activities to ensure compliance with federal statutes, regulations, and the terms and conditions of the subaward. This oversight involves reviewing financial and performance reports and ensuring the subrecipient takes timely action on any identified deficiencies. They are also responsible for flowing down applicable federal award requirements, including audit requirements, such as the Single Audit if the subrecipient expends $750,000 or more in federal funds during their fiscal year.

The subrecipient must adhere to the terms and conditions of the federal award and applicable laws and regulations. This includes maintaining sound financial management practices, providing accurate performance reports, and cooperating with any audits. The subrecipient is responsible for using federal funds in accordance with the program’s public purpose. They must also provide access to their records and financial statements as required by the pass-through entity.