Subrecipient monitoring
A subaward is a new obligation, not one less thing to manage. Risk-assess, monitor, verify the audit, close it out — and mind that their deadlines sit inside yours.
LAST REVIEWED 28 AUGUST 2026
Passing federal money down to a subrecipient does not pass down the responsibility for it. Under the Uniform Guidance, the pass-through entity stays on the hook for whether that money is spent in compliance — which means a subaward is not one less thing to manage, it is a new set of obligations that sit with you.
It starts with a risk assessment
Before the subaward goes out, 2 CFR 200.332 requires the pass-through entity to evaluate each subrecipient’s fraud risk and risk of noncompliance. That assessment — prior experience with the same or similar awards, the results of previous audits, whether the subrecipient has new personnel or new systems, and whether a Federal agency is already monitoring them directly — then determines how closely you need to watch. Monitoring is meant to be scaled to risk, not applied uniformly.
Then you monitor
The core duty is to monitor the subrecipient’s activities as necessary to ensure the subaward is used in compliance with statutes, regulations and the terms of the subaward. In practice that means:
- reviewing their financial and performance reports;
- site visits to examine operations where the risk warrants it;
- arranging agreed-upon-procedures engagements where useful;
- ensuring the subrecipient takes corrective action on any significant problem that affects the subaward.
Verify the audit, and close it out
Two more obligations bracket the subaward. You must verify that the subrecipient is audited when required — a subrecipient that expends $1,000,000 or more in federal funds in its fiscal year needs a Single Audit, and confirming that is your job, not an assumption you get to make. And each subaward has to carry the required data elements up front and appropriate closeout terms at the end, because the subrecipient’s closeout feeds your own.
This is why Grantwell treats subrecipients as part of the same calendar rather than a separate spreadsheet: the sub’s reports, monitoring checkpoints and closeout sit alongside the prime’s deadlines, so the dependency between their timeline and yours is visible instead of discovered.
This guide is general information about how grant compliance work is commonly organised, not legal, audit or accounting advice. Grant rules change, and terms vary by funder and award — always check your own award documents and the current regulation, and talk to your auditor about your specific circumstances.
Primary sources
- 2 CFR 200.332 — Requirements for pass-through entities — Risk assessment, monitoring, audit verification, required subaward data elements, and subaward closeout.
- Grantwell — The Single Audit threshold — The $1,000,000 threshold you must verify a subrecipient against.
This guide is general information about how grant compliance work is commonly organised, not legal, audit or accounting advice. Grant rules change, and terms vary by funder and award — always check your own award documents and the current regulation, and talk to your auditor about your specific circumstances.