Effective date: July 1, 2018
The Non-Federal Entity means a State, local government, Indian Tribe, institution of higher education, or non-profit organization that carries out a Federal award as a recipient or subrecipient.1 State of Wisconsin, County of Racine, and Northwest Concentrated Employment Program (CEP), are examples of Non-Federal Entities.
The Non-Federal Entity is responsible for oversight and operations of the Federal award supported activities. The Non-Federal Entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the Non-Federal Entity must cover each program, function, or activity.2
The Non-Federal Entity must submit performance reports as required by the federal awarding agency or pass through entity to best inform improvements in program outcomes and productivity. These reports will include:
Events may occur between the scheduled performance reporting dates that have significant impact upon the supported activity. In such cases, the Non-Federal Entity must inform the Federal awarding agency or pass-through entity as soon as the following types of conditions become known:
A pass-through entity is a non-Federal entity that provides a subaward to a subrecipient to carry out part of a Federal program.5 The State of Wisconsin and the Southeast Wisconsin Workforce Development Board are examples of pass-through entities.
Among its responsibilities regarding sub-recipients, a pass through entity must:
A subrecipient is a non-Federal entity that receives a subaward from a pass-through entity to carry out part of a federal program. A subrecipient may also be a recipient of other federal awards directly from a federal awarding agency.7 Workforce Resource, Inc. and ADVOCAP are examples of subrecipients, as examples of non-Federal entities that receive subawards from their local Workforce Boards.
Subrecipient oversight and monitoring requirements for the Title 1 WIOA received include:
A subaward is an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a Federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract.9
A contractor is an entity that receives a legal instrument (i.e., contract) by which a non-Federal entity purchases property or services needed to carry out the project or program under a Federal award. The term as used in this part does not include a legal instrument, even if the non-Federal entity considers it a contract, when the substance of the transaction meets the definition of a Federal award or subaward.10 Wisconsin Indianhead Technical College and local Community Based Organizations are examples of Contractors.
The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Payments received for goods or services provided as a contractor are not federal awards,11 therefore, a pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section. 12
Characteristics which support the classification of the non-Federal entity as a subrecipient include when the non-Federal entity:
Characteristics indicative of a procurement relationship between the non-Federal entity and a contractor are when the non-Federal entity receiving the Federal funds:
In determining whether an agreement between a pass-through entity and another non-Federal entity casts the latter as a subrecipient or a contractor, the substance of the relationship is more important that the form of the agreement. All the characteristics listed above may not be present in all cases, and the pass-through entity must use judgment in classifying each agreement as a subaward or a procurement contract.15
"The chief elected official in a local area shall serve as the local grant recipient for, and shall be liable for any misuse of, the grant funds allocated to the local area...unless the chief elected official reaches an agreement with the Governor for the Governor to act as the local grant recipient and bear such liability." [WIOA section 107(d)(12)(B)(i)(I)]