If you use your federal grant funds to pay another party, the entity you pay may be a subrecipient rather than a vendor. If you have a subrecipient of your grant, you are required to provide additional information to the subrecipient as well as maintain additional records. It is not always easy to determine whether you are paying a subrecipient or a vendor. Some entities have characteristics of both; some may not readily fall into either category. Some areas to consider when determining whether your payment is being made to a subrecipient or a vendor are:

Subrecipient

• Determines who is eligible to receive assistance
• Has performance measured against program objectives
• Makes program decisions
• Is responsible for ensuring federal requirements are met
• Uses federal funds to carry out a program, not to provide goods and services

Vendor

• Provides similar goods or services to many different purchasers
• Operates in a competitive environment
• Provides goods or services ancillary to the program
• Is not subject to compliance requirements

If you determine your expenditure is being paid to a subrecipient, a subaward agreement should be signed by you and your subrecipient. The key provisions of a subaward agreement include:

• CFDA name and number
• Federal awarding agency
• Award year
• Scope of work
• Budget
• Program’s authorizing statute
• Administrative requirements
• Requirements you have imposed as a pass-through entity

Please contact Lewis, Hooper & Dick, LLC at (620) 275-926 for further information and other questions.

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