Regulatory & Compliance Oversight
Subaward Oversight: A Report from the Government Accountability Office
On March 26, 2025, the United States Government Accountability Office (GAO) released a report, GAO-25-107315, Recent Guidance Could Enhance Subaward Oversight. In this report GAO reviews various issues with subaward oversight, current approach, and discusses how recent OMB revisions in April 2024 can enhance subaward oversight.
GAO analyzed 3,680 single audit findings between 2022 to 2024 for recipients that issued a subaward and found that 36% of the findings were due to grant recipients’ not ensuring subrecipient’s eligibility to receive federal funds, not reporting subawards on USAspending.gov under the Federal Funding Accountability and Transparency Act, and insufficient monitoring of subaward activities.
GAO selected three grant awarding agencies, Department of Energy (DOE), the Department of Transportation (DOT), and the Environmental Protection Agency (EPA), to provide examples of current oversight approaches on subawards by federal awarding agencies. These approaches include requiring a written request for new subaward activities not included in the original proposal from prime recipients, ensuring prime recipients report subawards greater than or equal to $30,000 on USAspending.gov, requiring prime recipients to submit regular progress reports, reviewing findings from single audits, and monitoring prime recipient’s subaward oversight. These monitoring activities include federal agencies:
- Requiring prime recipients to describe their subrecipient monitoring activities
- Checking intended subaward eligibility in SAM.gov such as subawards with outstanding federal debt and confirming if a payment plan is in place and is being followed.
- Conducting site visits to check prime recipients’ subaward monitoring activities such as subaward agreements, samples of communications with subaward, and any corrective subaward action plans.
- Holding regular meetings with prime recipients
- Providing technical assistance to prime recipients
- Reviewing prime recipients’ invoices to see whether subawards are using funds appropriately
GAO discussed in the article the following recent revisions by the Office of Management and Budget (OMB) in April 2024 that could enhance subaward oversight.
- OMB has revised its regulations making awarding agencies responsible for ensuring that prime recipients report quality subaward data to be displayed on USAspending.gov. This revision should improve subaward data completeness.
- OMB has directed federal awarding agencies to update their award terms to clearly convey to prime recipients that they provide complete subaward descriptions. This guidance should improve subaward descriptions and therefore transparency to public on federal spending.
- OMB has revised the guidance for prime recipients from reporting each obligating action to reporting “total award amount”. This revision may help avoid duplicative reporting of subawards.
- OMB required federal agencies to follow up on single audit findings of the prime recipient prior to October 1, 2024, revisions. Now the responsibility has shifted to the awarding agency in the revised guidance. Per the revised guidance, OMB now requires federal awarding agencies to follow up on single audit findings of subrecipients and take corrective actions. GAO concluded in this article that this would encourage federal agencies to review subrecipients’ single audit findings and enhance the awarding agencies’ oversight.
What does this mean for prime award recipients? Even though the responsibility of reviewing and taking corrective actions on subrecipients’ single audit findings is shifted to the awarding agencies, it could be in the best interest of the prime recipients to continue subrecipient risk assessment and monitoring activities to avoid any delays in issuance of the award and possibly provide support to subrecipients. The prime award recipients may consider including the following activities for ensuring compliance with federal awards.
Pre-Award Activities
- Checking subaward eligibility in SAM.gov to determine disbarment or suspension status
- Conducting subaward risk assessment
Post-Award Activities
- Re-conducting subaward risk assessment before issuing a subaward to make sure that the subrecipient is still in good standing.
- Quality subaward reporting on USAspending.gov
- Regular check-ins with subrecipients on progress toward project aims and invoicing
- Site visits to ensure subaward compliance
- Offering technical support to subawards without a dedicated grants office
- Reviewing subaward single audit findings and following up on corrective action
- Developing and implementing robust internal controls for subaward monitoring
References
Government Accountability Office. (2025). Grants management: Recent guidance could enhance subaward oversight (GAO-25-107315).
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