Sneak Preview: EPA Revises Policy for Overseeing Pass-Throughs

June 10, 2016 | By Jerry Ashworth | Post a Comment

xgran_bookshot(The following was excerpted from a recent article in the Federal Grants Management Handbook.) The Environmental Protection Agency (EPA) has updated its internal policy for agency officials responsible for overseeing pass-through management of subawards. EPA Subaward Policy (Grants Policy Issuance 16-01) became effective March 29 and incorporates provisions of the Office of Management and Budget’s (OMB’s) uniform guidance.

The policy, which applies to new financial assistance agreements awarded by EPA and supplemental amendments to existing agreements, supersedes former policy in EPA’s Assistance Administration Manual that referenced the former OMB circulars. It specifically establishes the requirements and procedures for EPA’s program offices when: (1) making determinations regarding subrecipient eligibility; (2) overseeing pass-through entity monitoring and management of subawards; and (3) authorizing fixed amount subawards.

The policy states that EPA’s Office of Inspector General (OIG) had recommended that the agency “enhance its oversight of pass-through entities to ensure that subawards are used in appropriate circumstances, costs are reasonable and that pass-through entities effectively monitor subrecipient performance. This subaward policy includes provisions that respond to the OIG’s recommendations.”

General Principles

The policy provides specific details about the definition of “subaward” and “contract,” and emphasizes that EPA oversight officials should understand the difference between these terms. Although it defers to the uniform guidance definition of both subaward (§200.92) and contract (§200.22), the EPA policy adds that subawards do not include “payments to contractors (including consultants) or to individual program beneficiaries such as trainees, interns or fellows.” It also notes that subawards do not include “loans, loan guarantees, interest subsidies and principal forgiveness, purchases of insurance or similar transactions entered into with borrowers by recipients of revolving loan fund capitalization grants or other EPA financial assistance agreements.”

The policy states that agency program officials must: (1) advise pass-through entities, during post-award monitoring, to have adequate systems in place to comply with the subrecipient monitoring and management provisions in the uniform guidance (§§200.330-.331); (2) ensure that pass-through entities effectively monitor the performance of subrecipients; and (3) prohibit pass-through entities from transferring to subrecipients their responsibility for the completion of their EPA assistance agreement. In addition, EPA personnel must not direct, recommend or suggest that pass-through entities make subawards to particular organizations.

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site.)


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