The Supercircular, 2 CFR Part 200, creates a critical new step for grantees that enter into arrangements with Subrecipients (also known as “delegates” in HS/EHS terminology). Prior to awarding funds to a delegate, a grantee must evaluate the delegate’s risk of noncompliance with the requirements of the federal award. The following factors, at a minimum, should be considered and documented during the initial risk evaluation:

• The Subrecipient’s prior experience with the same or similar subawards;
• The results of previous audits, including whether or not the Subrecipient receives a Single Audit;
• Whether the Subrecipient has new personnel or new or substantially changed systems; and
• The extent and results of Federal awarding agency monitoring of the Subrecipient.

The results of the risk assessment should guide the grantee’s determination of whether to provide a subaward to the Subrecipient. These pre-award assessments should also guide how grantees monitor delegate agencies. For instance, a grantee may choose to impose additional subaward conditions upon a delegate if it determines that the delegate has failed to comply with subaward conditions in the past.

Working with Subrecipients can be a challenge for grantees (and vice versa). Nonetheless, it is important that grantees understand their responsibilities, what needs to be in Subrecipient Agreements under the Supercircular, and how to monitor delegates. For further assistance, please join me on my upcoming webinars, “Defining Relationships in Head Start: Subrecipients and Contractors” and “Understanding Head Start Monitoring.”