Per federal guidance (2 CFR § 200.331b), OSP evaluates each subrecipient’s risk of non-compliance with federal regulations and subaward terms and conditions. Factors may include:

• the subrecipient’s prior experience with the same or similar subawards;
• the results of previous audits or if not subject to annual audit, a review of their annual financial statements;
• whether the subrecipient has appropriate accounting systems in place to manage sponsored funds; and
• the extent and results of federal agency monitoring.

The OSP Subaward Team performs an annual review of a subrecipient’s single audit or financial records to evaluate risk, treating all subrecipient risk assessments consistently across funding source (federal and non-federal). For CSU, examples of high-risk subrecipients may include:

• Entities outside the U.S. or European Union
• Small businesses or start-up companies
• Subrecipients with audit findings

If the subrecipient is deemed by OSP to be high risk, additional oversight may be required throughout the life of the subaward which may include issuing a fixed-price budget, special invoicing instructions, or corrective action plan for high-risk areas.

If you suspect a subrecipient may be high-risk, work with your OSP RA or OSP Subaward Team to ensure appropriate measures are in place, such as issuing a task-based, fixed price agreement or requiring additional subrecipient monitoring.

When in doubt, contact the OSP Subaward Team.