Contracts and Subawards

Primary Reviewer: Fiscal Expert

Secondary Reviewer: Governance/Administrative Expert

Note: If the health center has a sub-recipient(s), the Governance/Administrative Expert is the Primary Reviewer of element “i” and the Fiscal Expert is the Secondary Reviewer of that element.

Authority: Section 330(k)(3)(I) and Section 330(q) of the Public Health Service (PHS) Act; 42 CFR 51c.113, 42 CFR 56.114, 42 CFR 51c.303(t), and 42 CFR 56.303(t); 45 CFR Part 75 Subpart D; and Section 1861(aa)(4)(A)(ii) and Section 1905(l)(2)(B)(ii) of the Social Security Act

Health Center Program Compliance Manual Related Considerations

Document Checklist for Health Center Staff

  • Procedures for purchasing and procurement, including, if applicable or separate, procedures for contracting and contract management.
  • Policies/procedures for subrecipient monitoring.
  • Most recent annual audit and management letters.
  • If the health center has contracts that support the HRSA-approved scope of project (i.e., to provide health center services or to acquire other goods and services), provide a complete list of these contracts. Include all active contracts and all contracts that had a period of performance which ended less than 3 years ago. In the list, include all of the following information for each contract:
    • Whether the health center utilizes federal award funds to pay in whole or in part for the contract (not applicable to look-alikes);
    • Contractor/contract organization;
    • Value of the contract (if there is a federal share, state the federal share amount);
    • Brief description of the good(s) or service(s) provided; and
    • Period of performance/timeframe (for example, ongoing contractual relationship, specific duration).
  • All subrecipient agreements (if updated since last application submission to HRSA) (not applicable to look-alikes and as applicable for awardees) that support the awardee’s Health Center Program scope of project.

    Note: Per 45 CFR 75.351(c): “In determining whether an agreement between a pass-through entity [Health Center Program awardee] and another non-federal entity casts the latter as a subrecipient or a contractor, the substance of the relationship is more important than the form of the agreement. All of the characteristics [listed above; see 45 CFR 75.351(a) and (b)] may not be present in all cases, and the pass-through entity [Health Center Program awardee] must use judgment in classifying each agreement as a subaward or a procurement contract.”

  • Based on the list of contracts provided prior to the site visit that support the HRSA-approved scope of project:
    • Five contracts AND related supporting procurement documentation for actions that utilize federal award funds. Choose the contracts that utilize the largest amounts of federal award funds.

      Note: The same sample of contracts/agreements is to be utilized for the review of both Contracts and Subawards and Conflict of Interest. The sampling methodologies for Contracts and Subawards are different from Required and Additional Health Services, Clinical Staffing, and Sliding Fee Discount Program, although they may result in some overlap in the contracts/agreements.

    • Sample of five contracts AND related supporting procurement documentation for actions that do NOT utilize federal award funds.
  • Two to three reports or records (for example, monthly invoices or billing reports, data run of patients served, visits provided) drawn from the sample of contractors selected from the list provided prior to the site visit.
  • Documentation of subrecipient monitoring methods (not applicable to look-alikes and as applicable for awardees).
  • Sample of financial and performance reports from within the current project period from the subrecipient, including the subrecipient’s annual audit (not applicable to look-alikes and as applicable for awardees).
  • Documentation of prior approval for contracts for the performance of substantive work (i.e., contracting with a single entity for the majority of health care providers) under the federal award (if applicable).
  • Documentation of prior approval of subrecipient arrangement(s) (not applicable to look-alikes and as applicable for awardees).
  • Documentation of subrecipient monitoring by the health center (that occurred during the current project period).
  • Findings from the health center’s subrecipient monitoring process on subrecipient deficiencies (if applicable) and documentation that the health center has ensured the subrecipient has taken corrective action.
  • The following documentation used by the health center to confirm subrecipient compliance:
    • Subrecipient articles of incorporation, bylaws, or other corporate documents;
    • Subrecipient sliding fee discount program (SFDP) policy;
    • Current subrecipient board roster or Form 6A (the latter, if subrecipient is a Health Center Program awardee or look-alike) indicating current board member characteristics as follows:
      • For all board members: patient status, area of expertise, and percentage income from the healthcare industry; and
      • For patient board members: gender, race, and ethnicity;
    • Subrecipient billing records from within the past 24 months to confirm the patient status of subrecipient board members;
    • Subrecipient’s portion of Uniform Data System (UDS) data for an overview of subrecipient patient population demographic factors (race, ethnicity, and gender); and
    • If the subrecipient board-approved SFDP policy does not state a specific amount for nominal charge(s), other documentation (for example, subrecipient board minutes, subrecipient reports) of subrecipient board involvement in setting the amount of nominal charge(s).

Demonstrating Compliance

  1. Is this a Look-Alike Site Visit?

    Response is either: Yes or No

    NOTE: Because look-alikes do not receive federal funding under section 330 of the PHS Act, any aspects of a requirement that relate to the use of Health Center Program federal award funds are not applicable to look-alikes.

Contracts: Procurement and Monitoring

Select each element below for the corresponding text of the element, site visit team methodology, and site visit finding questions.

The health center has written procurement procedures that comply with federal procurement standards, including a process for ensuring that all procurement costs directly attributable to the federal award are allowable, consistent with federal cost principles.1

Site Visit Team Methodology

  • Review health center’s procedures for purchasing and procurement, including any related to contracting and contract management.
  • Interview health center staff involved in contract procurement and monitoring.

Site Visit Findings

  1. Does the health center have written procedures for procurement?

    Response is either: Yes or No

    If No, an explanation is required.

  2. Do these procedures, at a minimum, ensure that all procurements directly attributable to the federal award will be conducted in a manner providing full and open competition2 and will only include costs allowable, consistent with federal cost principles (for example, do the procedures contain relevant references or citations to 45 CFR Part 75 Subpart E: Cost Principles)?

    Response is: Yes, No, or Not Applicable

    If No, an explanation is required.

NOT APPLICABLE FOR LOOK-ALIKES

The health center has records for procurement actions paid for in whole or in part under the federal award that include the rationale for method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. This would include documentation related to noncompetitive procurements.

Site Visit Team Methodology

Site Visit Findings

  1. Does the health center have any:
    • Active contracts paid for in whole or in part with federal award funds?

      Response is: Yes, No, or Not Applicable

    • Contracts that had a period of performance which ended less than 3 years ago and that were paid for in whole or in part with federal award funds?

      Response is: Yes, No, or Not Applicable

  2. Based on the review of the sample of contracts, was there supporting documentation of the procurement process that addressed the following:
    • Rationale for the procurement method?

      Response is: Yes, No, or Not Applicable

    • Selection of contract type?

      Response is: Yes, No, or Not Applicable

    • Contractor selection or rejection?

      Response is: Yes, No, or Not Applicable

    • Basis for the contract price?

      Response is: Yes, No, or Not Applicable

    If No was selected for any of the above, an explanation is required.

NOT APPLICABLE FOR LOOK-ALIKES

The health center retains final contracts and related procurement records, consistent with federal document maintenance requirements, for procurement actions paid for in whole or in part under the federal award.3

Site Visit Team Methodology

Site Visit Findings

  1. Was the health center able to produce final executed contracts that were awarded within the past 3 years?

    Response is: Yes, No, or Not Applicable

    If No, an explanation is required.

The health center has access to contractor records and reports related to health center activities in order to ensure that all activities and reporting requirements are being carried out in accordance with the provisions and timelines of the related contract (for example, performance goals are achieved, Uniform Data System (UDS) data are submitted by appropriate deadlines, funds are used for authorized purposes).

Site Visit Team Methodology

  • Review two to three reports or records (for example, monthly invoices or billing reports, data run of patients served, visits provided) drawn from the sample of contractors that were selected from the list of contracts provided prior to the site visit.

Site Visit Findings

  1. Based on the review of the sample, does the health center have access to records and reports as necessary to oversee contractor performance?

    Response is either: Yes or No

    If No, an explanation is required.

If the health center has arrangements with a contractor to perform substantive programmatic work,4 the health center requested and received prior approval from HRSA as documented by:

  • An approved competing continuation/renewal of designation application or other competitive application, which included such an arrangement; or
  • An approved post-award request for such arrangements submitted within the project period (for example, change in scope).

Site Visit Team Methodology

  • Review complete list of contracts (provided prior to the site visit) to identify those that support substantive programmatic work.
  • Interview key management or other health center staff involved in procurement or contract oversight.
  • Review the documentation identified by the health center that includes HRSA’s approval of the contracting arrangement for substantive programmatic work.

Site Visit Findings

  1. Based on the list of contracts reviewed and interview(s) with health center staff, does this health center currently contract with a single entity for the majority of health care providers (i.e., substantive programmatic work)?

    Response is either: Yes or No

  2. IF YES: Was the health center able to produce documentation of prior approval by HRSA (i.e., the arrangement was included in a HRSA-approved application or post-award request)?

    Note: Only select “Not Applicable” if this is a Look-Alike Initial Designation Site Visit.

    Response is: Yes, No, or Not Applicable

    If No, an explanation is required:

The health center’s contracts that support the HRSA-approved scope of project include provisions that address the following:

  • The specific activities or services to be performed or goods to be provided;
  • Mechanisms for the health center to monitor contractor performance; and
  • Requirements for the contractor to provide data necessary to meet the recipient’s applicable federal financial and programmatic reporting requirements, as well as provisions addressing record retention and access, audit, and property management.5

Site Visit Team Methodology

  • Review entire sample of contracts (both those that utilize and those that do not utilize federal award funds) that support the HRSA-approved Health Center Program scope of project.

Site Visit Findings

  1. Does the health center have one or more contracts to provide health center services or to acquire other goods and services in support of the HRSA-approved scope of project?

    Response is either: Yes or No

  2. IF YES: Based on the sample of contracts reviewed, do these contracts contain provisions that address the following areas:
    • Specific activities or services to be performed or goods to be provided by the contractor?

      Response is: Yes, No, or Not Applicable

    • How the health center will monitor contract performance?

      Response is: Yes, No, or Not Applicable

    • Data reporting expectations and intervals for such reporting?

      Response is: Yes, No, or Not Applicable

    • Provisions for record retention and access, audit, and property management?

      Response is: Yes, No, or Not Applicable

    If No was selected for any of the above, an explanation is required.

Subawards: Monitoring and Management

Select each element below for the corresponding text of the element, site visit team methodology, and site visit finding questions.

NOT APPLICABLE FOR LOOK-ALIKES

If the health center has made a subaward,6 the health center requested and received prior approval from HRSA as documented by:

  • An approved competing continuation/renewal of designation application or other competitive application, which included the subrecipient arrangement; or
  • An approved post-award request for such subrecipient arrangements submitted within the project period (for example, change in scope).

Site Visit Team Methodology

  • Review Form 8: Health Center Agreements.
  • Review most recent annual audit and management letters to determine if subrecipients were identified in the audit report, including the amount of the subawards.
  • Review all subrecipient agreements that support the HRSA-approved Health Center Program scope of project.
  • Review the documentation identified by the health center that includes HRSA’s approval of the subrecipient arrangement.

Site Visit Findings

  1. Has the health center made any subawards (new or continuing) during the current project period?

    Response is: Yes, No, or Not Applicable

  2. Was the health center able to produce documentation of prior approval by HRSA of the subrecipient arrangement (i.e., arrangement was included in the last approved Service Area Competition (SAC) application or was approved through a separate post-award request)?

    Response is: Yes, No, or Not Applicable

    If No, an explanation is required.

NOT APPLICABLE FOR LOOK-ALIKES

The health center’s subaward(s) that supports the HRSA-approved scope of project includes provisions that address the following:

  • The specific portion of the HRSA-approved scope of project to be performed by the subrecipient;
  • The applicability of all Health Center Program requirements to the subrecipient;
  • The applicability to the subrecipient of any distinct statutory, regulatory, and policy requirements of other federal programs associated with their HRSA-approved scope of project;7
  • Mechanisms for the health center to monitor subrecipient compliance and performance;
  • Requirements for the subrecipient to provide data necessary to meet the health center’s applicable federal financial and programmatic reporting requirements, as well as provisions addressing record retention and access, audit, and property management;8 and
  • Requirements that all costs paid for by the federal subaward are allowable consistent with federal cost principles.9

Site Visit Team Methodology

  • Review all subrecipient agreements that support the HRSA-approved Health Center Program scope of project.

Site Visit Findings

  1. Does the health center’s subrecipient agreement(s) include provisions that address the following:
    • The portion of the health center project that will be carried out by the subrecipient (i.e., sites, services provided) and how?

      Response is: Yes, No, or Not Applicable

    • All Health Center Program requirements applying to the subrecipient?

      Response is: Yes, No, or Not Applicable

    • The applicability of any other distinct statutory, regulatory, and policy requirements of associated programs and benefits (for example, requirements that will apply if the subrecipient participates in the 340B Drug Pricing Program)?

      Response is: Yes, No, or Not Applicable

    • Mechanisms for the health center to monitor subrecipient compliance and performance?

      Response is: Yes, No, or Not Applicable

    • The data the subrecipient must collect and report back to the awardee (for example, UDS data)?

      Response is: Yes, No, or Not Applicable

    • Record retention and access, audit, and property management (if applicable)?

      Response is: Yes, No, or Not Applicable

    • Requirements that all costs paid for under the subaward are consistent with federal cost principles?

      Response is: Yes, No, or Not Applicable

    If No was selected for any of the above, an explanation is required.

NOT APPLICABLE FOR LOOK-ALIKES

The health center monitors the activities of its subrecipient to ensure that the subaward is used for authorized purposes and that the subrecipient maintains compliance with all applicable requirements specified in the federal award (including those found in section 330 of the PHS Act, implementing program regulations and grants regulations in 45 CFR Part 75). Specifically, the health center’s monitoring of the subrecipient includes:

  • Reviewing financial and performance reports required by the health center in order to ensure performance goals are achieved, UDS data are submitted by appropriate deadlines, and funds are used for authorized purposes;
  • Ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the subaward that may be identified through audits, on-site reviews, and other means; and
  • Issuing a management decision for audit findings pertaining to the subaward10

Site Visit Team Methodology

  • Review all subrecipient agreements that support the HRSA-approved Health Center Program scope of project.

For the remaining methodology, review documentation from all subrecipients, not to exceed a total of five subrecipients. For a health center with more than five subrecipients, select the subrecipients that receive the largest amounts of Health Center Program subaward funds:

  • Review/interview on the policies/procedures for subrecipient monitoring.
  • Review documentation of subrecipient monitoring by the health center (from within the current project period).
  • Review findings from the health center’s subrecipient monitoring process on subrecipient deficiencies (if applicable) and documentation of ensuring the subrecipient’s corrective action.
  • Review sample of financial and performance reports received from the subrecipient, including the subrecipient’s annual audit.
  • Interview health center staff who provide oversight of subrecipient activities. Review the following documentation used by the health center to confirm subrecipient compliance:
    • Subrecipient articles of incorporation, bylaws, or other corporate documents;
    • Subrecipient sliding fee discount program (SFDP) policy;
    • Current subrecipient board roster or Form 6A (the latter, if subrecipient is a Health Center Program awardee or look-alike) indicating current board member characteristics as follows:
      • For all board members: patient status, area of expertise, and percentage income from the health care industry; and
      • For patient board members: gender, race, and ethnicity.
    • Subrecipient billing records from within the past 24 months to confirm the patient status of subrecipient board members;
    • Subrecipient’s portion of UDS data for an overview of subrecipient patient population demographic factors (race, ethnicity, and gender); and
    • If the subrecipient board-approved SFDP policy does not state a specific amount for nominal charge(s), other documentation (for example, subrecipient board minutes, subrecipient reports) of subrecipient board involvement in setting the amount of nominal charge(s).
Notes
  • ​Self-attestation by the subrecipient is not sufficient to confirm compliance.
  • The health center awardee is responsible for ensuring that the subrecipient meets all of the Health Center Program requirements applicable to the health center awardee’s federal award. For example, when a health center awardee that receives a 330(e) award has a subrecipient that—independent of the subaward—also receives a 330(h) award directly from HRSA, the 330(e) awardee ensures that the subrecipient meets all 330(e) requirements.

Site Visit Findings

  1. Does the health center have a process for monitoring the activities of the subrecipient during the current project period? Specifically, does the process ensure that the subrecipient maintains compliance with all Health Center Program requirements and all other applicable requirements specified in the federal award, including, if necessary, implementing corrective actions?

    Response is: Yes, No, or Not Applicable

    If Yes OR No, an explanation is required describing the health center’s monitoring methods.

  2. Does the health center have a specific process for receiving and reviewing financial and performance reports (including the subrecipient’s annual audit) during each project period that addresses the following areas:
    • Achievement of performance goals?

      Response is: Yes, No, or Not Applicable

    • Submission of UDS data by appropriate deadlines?

      Response is: Yes, No, or Not Applicable

    • Use of funds for authorized purposes?

      Response is: Yes, No, or Not Applicable

    If No was selected for any of the above, an explanation is required.

  3. Did the health center receive and review the following reports from the subrecipient during the current project period:
    • Financial reports, including the subrecipient’s audit?

      Response is: Yes, No, or Not Applicable

    • Performance reports, including submission of data for the health center’s UDS reporting?

      Response is: Yes, No, or Not Applicable

    If No, an explanation is required, including specifying which reports the health center did not receive or review.

  4. Has the health center identified any deficiencies with the subrecipient’s financial or performance reporting during the current project period, including any in the subrecipient’s annual audit?

    Response is: Yes, No, or Not Applicable

  5. IF YES: Is there documentation that the health center ensured the subrecipient took timely corrective action on the identified deficiencies?

    Response is: Yes, No, or Not Applicable

    If No, an explanation is required specifying what deficiencies remain.

  6. Was the health center able to document that each subrecipient is currently compliant with Board Composition requirements, as demonstrated through the following:

    Note: Select “No” if the health center is unable to provide documentation that verifies that the subrecipient is in compliance OR if the documentation provided does not demonstrate subrecipient compliance.

    • Is the subrecipient’s board currently composed of at least 9 and no more than 25 members?

      Response is: Yes, No, or Not Applicable

    • Are at least 51 percent of subrecipient board members classified by the subrecipient as patients?

      Note: Select “Not Applicable” only if the subrecipient has an approved waiver from the awardee (only available if the health center awardee receives an award under section 330(g), 330(h) and/or 330(i) and does not receive an award under section 330(e)).

      Response is: Yes, No, or Not Applicable

    • Was the health center able to confirm that individuals classified by the subrecipient as patient board members have received at least one in-scope service at an in-scope service site within the past 24 months that generated a health center visit?

      Note: Select “Not Applicable” only if the subrecipient has an approved waiver from the awardee (only available if the health center awardee receives an award under section 330(g), 330(h) and/or 330(i) and does not receive an award under section 330(e)).

      Response is: Yes, No, or Not Applicable

    • Are patient board members as a group representative of the subrecipient’s patient population in terms of race, ethnicity, and gender consistent with the demographics reported in the health center’s UDS report?

      Note: Select “Not Applicable” only if the subrecipient has an approved waiver from the awardee (only available if the health center awardee receives an award under section 330(g), 330(h) and/or 330(i) and does not receive an award under section 330(e)).

      Response is: Yes, No, or Not Applicable

    If No OR Not Applicable is selected for any of the above, an explanation is required.

  7. Was the health center able to document that each subrecipient is currently compliant with Board Authority requirements by demonstrating that the subrecipient’s articles of incorporation, bylaws (either for the subrecipient’s board or, if applicable, the co-applicant of a public agency subrecipient), or other corporate documents (for example, co-applicant agreement) outline the following required health center authorities and responsibilities:
    • Holding monthly meetings?

      Response is: Yes, No, or Not Applicable

    • Approving the selection (and termination or dismissal, as appropriate) of the subrecipient’s Project Director/CEO?

      Response is: Yes, No, or Not Applicable

    • Approving the subrecipient’s health center project annual budget and applications?

      Response is: Yes, No, or Not Applicable

    • Approving the subrecipient’s health center services and the location and hours of operation of health center sites?

      Response is: Yes, No, or Not Applicable

    • Evaluating the performance of the subrecipient’s health center project?

      Response is: Yes, No, or Not Applicable

    • Establishing or adopting policy related to the operations of the subrecipient’s health center project?

      Response is: Yes, No, or Not Applicable

    • Assuring the subrecipient operates in compliance with applicable federal, state, and local laws and regulations?

      Response is: Yes, No, or Not Applicable

    If No is selected for any of the above, an explanation is required.

  8. Was the health center able to document that each subrecipient is currently compliant with sliding fee discount program (SFDP) requirements by demonstrating that the subrecipient’s SFDP policy includes language or provisions that address all of the following:

    Note: Select “No” if the health center is unable to provide documentation that verifies that the subrecipient is in compliance OR if the documentation provided does not demonstrate subrecipient compliance.

    • Uniform applicability to all patients?

      Response is: Yes, No, or Not Applicable

    • Definitions of income and family (or “household”) (for example, any inclusions or exclusions in how they are defined)?

      Response is: Yes, No, or Not Applicable

    • Methods for assessing patient eligibility based only on income and family size?

      Response is: Yes, No, or Not Applicable

    • The manner in which sliding fee discount schedule(s) are structured to ensure charges are adjusted based on ability to pay (for example, flat fee amounts differ across discount pay classes, a graduated percent of charges for patients with incomes above 100 percent and at or below 200 percent of the Federal Poverty Guidelines (FPG))?

      Response is: Yes, No, or Not Applicable

    • The setting of a nominal charge(s) for patients with incomes at or below 100 percent of the FPG?

      Note: Select “Not Applicable” if the subrecipient does not charge patients with incomes at or below 100 percent of the FPG.

      Response is: Yes, No, or Not Applicable

    If No was selected for any of the above, an explanation is required.

  9. Was the health center able to document that each subrecipient’s SFDP policy ensures that any/all charge(s) for patients at or below 100 percent of the FPG will be:

    Notes:

    • Select “No” if the health center is unable to provide documentation that verifies that the subrecipient is in compliance OR if the documentation provided does not demonstrate subrecipient compliance.
    • Select “Not Applicable” if the health center does not charge patients with incomes at or below 100 percent of the FPG.
    • The subrecipient’s SFDP policy may state how the nominal charge will be determined AND/OR the amount of the nominal charge(s). If the SFDP policy does not state a specific amount for nominal charge(s), other documentation (for example, board minutes, reports) of board involvement in setting the amount of nominal charge(s) may be utilized.
    • A flat fee?

      Response is: Yes, No, or Not Applicable

    • Nominal from a patient’s perspective (for example, based on input from patient board members, patient surveys, advisory committees, or a review of co-pay amount(s) associated with Medicare and Medicaid for patients with comparable incomes)?

      Response is: Yes, No, or Not Applicable

    • Not based on the actual cost of the service?

      Response is: Yes, No, or Not Applicable

    If No was selected for any of the above, an explanation is required.

  10. Was the health center able to describe how it has (if the health center identified subrecipient noncompliance) or would (if the health center has not identified subrecipient noncompliance to-date) ensure that the subrecipient resolves noncompliance with Health Center Program requirements:

    Response is: Yes, No, or Not Applicable

    If Yes OR No, an explanation is required. IF NO: describe the deficiencies in the health center’s process. IF YES: describe the health center’s process. IF THE HEALTH CENTER HAS IDENTIFIED SUBRECIPIENT NONCOMPLIANCE: specify the requirements and how the health center has confirmed or will confirm subrecipient compliance.

NOT APPLICABLE FOR LOOK-ALIKES

The health center retains final subrecipient agreements and related records, consistent with federal document maintenance requirements.11

Site Visit Team Methodology

  • Review all subrecipient agreements that support the HRSA-approved Health Center Program scope of project.
  • Review documentation of subrecipient monitoring.
  • Review sample of financial and performance reports received from the subrecipient.

Site Visit Team Findings

  1. Was the health center able to produce final (executed) subrecipient agreements that have been awarded within the past 3 years and related financial and other performance records?

    Response is: Yes, No, or Not Applicable

    If No, an explanation is required.

 

Footnotes:

  • 1. See 45 CFR 75 Subpart E: Cost Principles.
  • 2. As defined by 45 CFR 75.329(f), procurement by “non-competitive proposals” is procurement through solicitation of a proposal from only one source.
  • 3. See 45 CFR 75.361 for HHS retention requirements for records.
  • 4. For the purposes of the Health Center Program, contracting for substantive programmatic work applies to contracting with a single entity for the majority of health care providers. The acquisition of supplies, material, equipment, or general support services is not considered programmatic work. Substantive programmatic work may be further defined within HRSA Notices of Funding Opportunity (NOFOs) and applications.
  • 5. For further guidance on these requirements, see the HHS Grants Policy Statement (PDF - 1.22 MB).
  • 6. Specifically, the purpose of a subaward is to carry out a portion of the federal award and creates a federal assistance relationship with the subrecipient, while the purpose of a contract is to obtain goods or services for the health center’s own use and creates a procurement relationship with the contractor.
  • 7. Subrecipients are generally eligible to receive Federally Qualified Health Center (FQHC) payment rates under Medicaid and Medicare, 340B Drug Pricing Program, and Federal Tort Claims Act (FTCA) coverage. However, such benefits are not automatically conferred and may require additional actions and approvals (for example, submission and approval of a subrecipient FTCA deeming application).
  • 8. For further guidance on these requirements, see the HHS Grants Policy Statement (PDF - 1.22 MB).
  • 9. See 45 CFR 75 Subpart E: Cost Principles.
  • 10. Per 45 CFR 75.521, the management decision [issued by the health center to the subrecipient] must clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action.
  • 11. See 45 CFR 75.361 for HHS retention requirements for records.