Make Accurate FFATA Reporting Part of Your Subrecipient Monitoring Framework
Your organization manages subrecipient agreements in accordance with Federal regulations, organizational policies, sponsor regulations, and the terms and conditions of the sponsored award. Understanding your obligations under the Federal Funding Accountability and Transparency Act (FFATA) must be part of this overall subrecipient monitoring framework.
Under FFATA, Federal Prime Contractors and Prime Grant Awardees (with certain exceptions) are required to report subrecipient information and executive compensation data on their first-tier subawards and subcontracts. The tool for reporting is the FFATA Subaward Reporting System (FSRS). Reporting in FSRS is required for applicable grants awarded on or after October 1, 2010, and applicable contracts awarded on or after July 8, 2010. All eligible first-tier subawards and subcontracts greater than or equal to $30,000 are subject to FFATA reporting requirements.
Subaward reporting
Accurate classification of subrecipients and subcontractors is critical in ensuring the correct application of indirect rates, budgeting, and accounting of costs. It is also an important step in complying with FFATA which requires the Prime Awardee to distinguish between subawards and subcontracts. A good rule of thumb in making the determination is the ease of replacing the entity if it becomes unable to perform its scope. Normally, subcontractors are businesses that provide routine goods/services with multiple available providers. Subrecipients have specific expertise that, if unavailable, could delay the project.
It is also important to understand when reporting in FSRS is required. When funds are obligated (not disbursed) on a new first-tier subaward in excess of $30,000, the Prime Awardee is required to report details of that agreement in FSRS. This report is due the month following the date of obligation. This is typically the recipient’s “signature” date, not the “start date” of the subagreement.
If the original subaward is less than $30,000, it will not need to be entered into FSRS unless and until it meets or exceeds the $30,000 threshold through subsequent funding amendments.
Executive Compensation
FFATA also requires reporting on executive compensation. If the Prime Awardee or first-tier subawardee in the previous tax year had gross income from all sources under $300,000, the Prime Awardee does not need to report executive compensation for grants awarded to that subawardee. The Prime Awardee will have reported this information in SAM.gov. Similarly, reporting on prime and first-tier subgrants and subcontracts is not necessary if gross income levels in the prior year are under $300,000.
USASpending.gov
FFATA is a law intended to bring transparency and accountability to government spending. To this end, an important component of the law is www.USASpending.gov, a free publicly accessible website containing data on Federal awards, contracts, loans and grants. This searchable site links data from numerous sources including agency financial systems and government-wide award systems to provide detailed information on federal spending. Available data includes information about federal agencies, agency accounts, award types, prime award recipients and subrecipients.
Audit Risk
FFATA compliance is an easy target for audit findings because it is relatively simple for an auditor to cross-check federal information with reported information to see if an entity appears to be following federal requirements. A red flag in FFATA reporting can serve as a red flag for subrecipient monitoring concerns. These flags can result in expanded and more comprehensive audits for an institution’s management systems and infrastructure.
There has been a noticeable increase in the reporting requirements for institutions, especially those with foreign subrecipients. Staying abreast of these changes while maintaining compliance with existing regulations such as FFATA is crucial to avoiding potential pitfalls. Written procedures, training, and a focus on documentation are an organization’s best defense.
After this article went to print, SAM.gov announced that FSRS.gov will be retired and online subaward reporting functions will be brought into SAM.gov in March 2025. Comprehensive training and information will be available to entities with active FSRS.gov accounts between now and March 2025.
Learn more about FFATA with the new SRAI LevelUP mGuide, FFATA Unfolded: Mastering Transparency in Federal Funding – purchase the mGuide today!
Authored by Sarah Senechalle, Associate Director, Award Acceptance,
Northern Illinois University
Authored by Katie Thielk, Award Coordinator,
Northern Illinois University
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