SEFA Tutorial
Lesson 2: Agency Responsibilities for Federal Awards
Contractor (Vendor) vs. Subrecipient Determination Responsibilities
Note: CFR’s Uniform Guidance replaced the term vendor with the term contractor. Other sections of the CFR (older versions of federal grant guidance, some of the literature on the AFR Reporting Requirements’ website and sections of the SEFA web application) still use the term vendor to mean contractor. For most of SEFA’s reporting requirements, vendor and contractor are used interchangeably.
Federal guidance for distinguishing between a payment to a contractor for goods and services and a pass-through to a subrecipient is provided in 2 CFR 200.330, such as:
- A contractor is an entity that receives a contract, which is the legal instrument used to purchase goods or services for purposes other than a subaward (see 2 CFR 200.22-23).
- A subrecipient is a state agency that receives a subaward as pass-through from another state agency to carry out the federal program but is not the individual beneficiary of the federal program (see 2 CFR 200.92-93).
- The disbursing agency must make the determination for whether a federal interagency transaction to the receiving agency represents a payment to a contractor for goods or services or pass-through to a subrecipient.
- The receiving agency must use this determination to record the transactions in the SEFA web application and in USAS.
The same agency may be a contractor for one federal award and a subrecipient for another award from the same federal agency, so this determination must be made case-by-case. See the AFR Reporting Requirements’ distinguishing between vendors and subrecipients for more information.
SEFA’s reporting requirements for the disbursing agency’s recording of contractor and subrecipient expenditures and the receiving agency’s recording of revenue are summarized in the following tables:
SEFA Expenditure Reporting Requirements for the Disbursing Agency
| Subrecipient or Contractor Determination of Receiving Agency | Receiving Agency (NSE or Agency) | SEFA Web App Reporting Requirement for Disbursing Agency |
|---|---|---|
| Subrecipient | NSE | NSE pass-through expenditure |
| Subrecipient | Agency | Interagency pass-through expenditure |
| Contractor | NSE | Direct expenditure |
| Contractor | Agency | Direct expenditure |
SEFA Revenue Reporting Requirements for the Receiving Agency
| Subrecipient or Contractor Determination of Receiving Agency | Disbursing Agency (NSE or Agency) | SEFA Web App Reporting Requirement for Receiving Agency |
|---|---|---|
| Subrecipient | NSE | NSE pass-through revenue |
| Subrecipient | Agency | Interagency pass-through revenue |
| Contractor | NSE | Do not report |
| Contractor | Agency | Do not report |
Example 1:
Sample Agency XXX receives the following federal award directly from Sample Federal Agency ZZZ:
- Award amount: $1,000,000
- Program title: ZZZ Federal Awareness Campaign
- ALN: 12.345
- State funding match requirement: none
The program requirements of ZZZ Federal Awareness Campaign states that advertising the federal program is an allowable cost for using the program funds. Sample Agency XXX contracts with Sample University YYY’s printshop to print posters and brochures that advertise the ZZZ Federal Awareness Campaign.
Sample University YYY’s printshop is located within Sample University YYY and charges for printing services and materials in its normal course of business, thereby sending Sample Agency XXX an invoice for $4,000 — a typical price from Sample University YYY’s printshop for similar services and materials.
Sample Agency XXX treats the Sample University YYY’s printshop as a contractor because the Sample University YYY’s printshop:
- Provides printing services and materials as part of its normal business operations
- Provides similar services and materials to many different purchasers
- Operates competitively
- Would offer printing services and materials regardless of the ZZZ Federal Awareness Campaign
- Is not required to comply with the program requirements of the ZZZ Federal Awareness Campaign.
Sample Agency XXX reports the $4,000 for posters and brochures as a direct expenditure for ALN 12.345 in SEFA. Sample University YYY does not report the transaction in SEFA.
Example 2:
Sample Agency XXX receives the following federal award directly from Sample Federal Agency ZZZ:
- Award amount: $1,000,000
- Program title: ZZZ Federal Research Initiative
- ALN: 12.345
- State funding match requirement: none
Sample Federal Agency ZZZ’s federal research Initiative is a research and development grant that requires specific research facilities and staff qualifications to conduct the research. Sample Agency XXX does not have the required facilities or staff. However, Sample Federal Agency ZZZ federal research initiative allows Sample Agency XXX to contract with other agencies to obtain the required facilities and staff. Sample Agency XXX is required to follow all program and administrative requirements of the ZZZ Federal Research Initiative whether Sample Agency XXX contracts the research out or performs the research directly.
Sample Agency XXX determines that Sample University YYY has the required research facilities and the staff qualified to perform the research. Sample University YYY agrees to accept a grant agreement of $850,000 from Sample Agency XXX to perform the research. The grant agreement states that:
- Sample University YYY must adhere to all federal administrative and program requirements of Sample Federal Agency ZZZ’s federal research Initiative.
- Sample Agency XXX monitors Sample University YYY’s activities to ensure that they are progressing in the research objectives of the Sample Federal Agency ZZZ’s federal research Initiative and complying with program requirements.
Sample Agency XXX treats Sample University YYY as a subrecipient because Sample University YYY:
- Has performance measured against the objectives of Sample Federal Agency ZZZ’s federal research Initiative
- Has responsibility for adhering to the compliance requirements of Sample Federal Agency ZZZ’s federal research Initiative
- Would not regularly carry out the research in absence of the federal award
Sample Agency XXX reports the $850,000 pass-through to Sample University YYY for ALN 12.345 as interagency pass-through expenditures in SEFA.
Sample University YYY reports the $850,000 pass-through from Sample Agency XXX for ALN 12.345 as interagency pass-through revenue in SEFA.
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