In the 2024 updates to the Uniform Guidance, the OMB added the terms ‘first-tier subrecipient’ and ‘second-tier subrecipient’ to clarify requirements for each. Here’s what you need to know.

A first-tier subrecipient is an entity that receives federal funds directly from a primary recipient to carry out part of a federal program.

A second-tier subrecipient is an entity that receives federal funds from a first-tier subrecipient; in essence, the subrecipient of your first-tier subrecipient.

The updated guidance clarifies that recipients are only responsible for managing first-tier subrecipients. Key activities continue to include:

• Requiring they have a Unique Entity Identifier (UEI) to receive funding.
• Ensuring subawards include required contractual provisions.
• Performing pre-award risk assessments inclusive of fraud prevention, cybersecurity, and non-forced labor.
• Monitoring fiscal and programmatic performance, and ensuring corrective action is taken on all significant developments.

So what should you do?

As a recipient, review your subrecipient management policies, procedures, and controls against the updated guidance. Close any compliance gaps, strengthen risk assessment activities, and update forms and subaward templates to get things streamlined and up to date.

As a first-tier subrecipient, ensure you have a good handle on the updated guidance because all of those provisions flow down to you, too. This includes maintaining controls to manage your own subrecipients should you have any.

How Vendor Centric Can Help.

Our advisors have extensive experience in Uniform Guidance policies, procedures, and training. We offer a variety of cost-effective solutions to help you update your policies and procedures and educate your staff.

Schedule a consultation to learn how we can help.