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Additionally, pass-through entities may find the following tools useful to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; (2) Performing on-site reviews of the subrecipient's program operations; and (3) Arranging for agreed-upon-procedures engagements as described in § 200.425 Audit services..
What happens if a pass-through entity rates their subrecipient as low risk, but then determines the subrecipients is a higher risk entity?
If a pass-through entity completes a risk assessment and scores a subrecipient low and then during the award identifies enhanced levels of risk posed by the subrecipient, then the pass-through has the ability to perhaps amend their contractual agreement and add additional terms/conditions to the award to mitigate this risk. Pass-through entities may also choose to increase their monitoring efforts on such subrecipients to ensure that Federal funds are used effectively. Additionally, pass-through entities then use this information during future awards with the subrecipient to enhance the accuracy of their risk assessments (perhaps increase their risk level as a result of this prior knowledge of past performance issues).
What happens if a subrecipient is scored as high risk, but the pass-through entity does not impose any special requirements?
Imposing special requirements on high/medium/low risk subrecipients is an effective way for the pass-through entity to mitigate potential risk and ensure that Federal funds are used effectively and reduce the potential for waste, fraud, and misuse. The purpose of the risk assessment is to allow pass-through entities maximum flexibility to do business with various types (low/medium/high) of risk entities. In each case, special conditions can be developed to mitigate for various levels of risk.
Pass-through entities should remember that in the unfortunate case where Federal funds may be used inappropriately or waste, fraud, or abuse has occurred, the Federal awarding agency may seek remedies or legal action against the prime recipient. They will not seek legal action against the subrecipient, this would be the responsibility of the pass-through entity.
What happens if a subrecipient is rated as higher risk, but the pass-through entity fails to follow through on any special requirements?
2 CFR 200.331 describes the requirements of pass-through entities whenever they enter into a subrecipient relationship with another non-Federal entity (subrecipient) using Federal funds. One of the requirements is to conduct a risk assessment of the subrecipient prior to issuing the Federal award to evaulate that entities risk potential as it relates to Federal laws, regulations, ect. 2 CFR 200.331(a)(2) describes the requirements of pass-through entities to include information in the contractual document with the subrecipient concerning, "all requirements imposed by the pass-through entity to ensure that the Federal award is used in accordance with Federal statutes, regulations, and terms/conditions of the Federal award."
The purpose of the risk assessment is to allow pass-through entities to develop special terms/conditions to mitigate for potential risk posed by subrecipients and help to ensure that Federal funds are used effectively. 2 CFR 200.338 provides guidance to Federal awarding agencies to remedy noncompliance of their prime recipients.
Can pass-through entities allow their subrecipients to fill out the risk assessment?
2 CFR 200.331 describes the requirements of a pass-through entity having to complete a risk assessment on their subrecipients. It does not go into detail about what exactly must be included in the risk assessment because it allows recipients to develop their own risk assessment to meet their needs, expectations, and comfort levels. It also allows pass-through entities to perhaps develop grant specific risk assessments to meet the needs of their various grants. It does not specifically address whether the form may or may not be completed by the subrecipient and subsequently certified by the pass-through entity.
States are granted an enhanced level of autonomy by OMB in the Uniform Guidance. A BMP suggested by the training branch is not to allow subrecipients to complete the risk assessment, because this could potentially create a conflict of interest as subrecipients may inaccurately complete the assessment in order to enhance their ability to do business with the State. As a point of reference, some Service programs initially allowed their subrecipients to complete the Service's risk assessment form, and has subsequently informed those programs to cease this practice. Now all Service programs complete the risk assessment themselves (no subrecipients complete the risk assessment).
What is the role of the USFWS in overseeing implementation of any requirements as result of the risk assessment?
The Service's role in overseeing implementation of the risk assessment is to ensure that its prime recipients follow the requirements of 2 CFR 200 when they are issued Financial Assistance. Our OIG auditors may, during their reviews, test whether prime recipients are following the requirements of 2 CFR 200.331 when it has been determined that they are subawarding Federal funds to subrecipients. If prime recipients are found to not comply with the requirements of 2 CFR 200, then the Service may impose additional conditions on prime recipients as outlined in 2 CFR 200.338 in order to meet our Federal stewardship responsibilities.
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Learning Aids
USFWS_PrimeRecipient_Risk Assessment Form (Excel)
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