Steps To Avoid Risky Business in Subrecipient Partnerships

Often times in financial assistance programs, nonfederal entities may have long-standing and established agreements with their subrecipients. However, there are other entities that are applying for or have received grant awards that need to determine which partner(s) they should collaborate with through a subrecipient relationship.

Passing federal funding through to an accountable organization that can operate the grant efficiently can ultimately prove beneficial to all parties involved. However, if funds are mismanaged by the subrecipient, the federal awarding agency may seek corrective actions from the prime recipient to recoup improper payments.

Pass-through entities should consider various steps early in the process to ensure they are minimizing risks when developing subrecipient partnerships. This whitepaper discusses some of the methods to limit subrecipient risks.