Conducting pre-award subrecipient risk assessments for your research institution

Pre-award subrecipient risk assessments are proactive evaluations conducted by higher education institutions to evaluate the level of experience, compliance history and overall reliability of potential research project partners before entering into a grant or funding agreement. These assessments help institutions identify and mitigate risks, ensuring efficient resource allocation and successful collaboration in research projects and other initiatives.

Why conduct risk assessments?

Recipients of federal awards are required by Uniform Guidance 2 CFR 200.332 to conduct pre-award subrecipient risk assessments. These risk assessments play a vital part in helping an institution become aware of potential legal, reputational and other issues that exist in a potential partner’s institution. Subrecipient risk assessments for potential partners should be completed before entering into any agreements, as required by Uniform Guidance, to ensure the appropriate partners are identified in a timely way to avoid delays with project initiation. Identifying the risk level associated with potential partners is not only important from a compliance standpoint, but it is also integral to safeguarding project success. Risk assessments help evaluate the capabilities and technical expertise of potential partners, minimizing the risk of project failures or delays. In some cases, the results of these risk assessments may reveal it might be too risky to enter into an agreement with the potential partner.

What areas should be assessed?

Key items to assess when performing a risk assessment are financial stability, organizational capacity, compliance and legal issues, risk management policies and general structure of the federal award. The Federal Demonstration Partnership (FDP) provides a helpful template of a Risk Assessment Questionnaire that touches on all the aforementioned areas. While this is a widely accepted standard template, institutions may decide to add additional questions or areas to be assessed based on their own unique needs.

Once risks have been identified after performing the risk assessment, it is important to develop a comprehensive risk mitigation plan. Partners deemed as high-risk (e.g., partners with single audit findings, partners inexperienced in the administration of federal funds, etc.) may require closer monitoring, requiring extensive and/or frequent reporting or imposing specific conditions when passing down federal funds are examples of effective mitigations plans.