Welcome to Feldesman’s Grants Practice Shorts series where we discuss helpful tips and strategies in common areas of federal grant management. Be sure to check out our other installments on our Grants Practice Shorts page.

Organizations serving as pass-through entities play a critical role in ensuring that federal grant funds are properly managed and administered. Federal grant regulations require pass-through entities to assess subrecipient risk, apply appropriate subaward conditions, and monitor subrecipient performance throughout the award period.

Pass-Through Entity Requirements

Federal grant regulations impose a number of oversight and compliance responsibilities on pass-through entities. Among other things, pass-through entities must ensure that subrecipients:

• Comply with applicable Federal statutes, regulations, and the terms and conditions of the subaward
• Meet financial and performance reporting requirements
• Maintain accurate and complete financial records
• Charge only allowable costs to the award
• Retain appropriate supporting documentation
• Submit required reports in a timely manner

See 2 C.F.R. Part 200, Subpart D.

Subrecipient Monitoring and Management

Pass-through entities are expected to maintain effective oversight of subrecipients to ensure compliance with applicable federal requirements and achievement of program objectives. Effective monitoring activities may include: 

• Conducting site visits
• Reviewing invoices and supporting documentation
• Examining audit findings and corrective actions
• Following up on compliance concerns or performance issues

Depending on the level of risk identified, pass-through entities may also impose additional funding conditions, such as enhanced financial reporting requirements, funding restrictions, or additional prior approvals before advancing to subsequent program phases.

Organizations should ensure that their subrecipient monitoring practices are appropriately documented, risk-based, and tailored to the complexity of the award and the subrecipient relationship.

For additional information, please contact Phillip Escoriaza or Adam Oppenheim.