Revised SFMP - Final Version

Subrecipient Financial Management
Policy
Document #: POL-FIN-SFM-023 Revision #: 01
Document Owner: Office of Finance Date Last Updated: 12/31/13
Author: Joseph Potyraj Status: Released
General Description
Scope: A subrecipient agreement signed by both parties must be in place before funding can be issued to a
subrecipient. The Country Representative must ensure that all necessary CRS approvals have been obtained,
and all applicable CRS policies followed, prior to signing a subrecipient agreement.
This revised policy, which is effective March 1, 2014, covers all project funding issued by Headquarters and
Country Programs via subrecipient agreements regardless of the funding source. All new subrecipient
agreements signed on or after March 1, 2014 must comply with this revised policy. Agreements signed on or
after March 1, 2014 that are retroactive to an earlier date are also bound by the revised policy’s provisions.
Any forecasting, funding, reporting or monitoring requirements defined in subrecipient agreements signed
prior to March 1, 2014 date will remain in effect through the terms of those agreements.
If a material amendment is made to a subrecipient agreement that was signed prior to March 1, 2014, the
amended agreement must comply with the requirements of the revised subrecipient policy. If an amendment
to a pre-existing agreement is not material in nature, the amended agreement will not be subject to the revised
policy’s requirements. Amendments that increase the amount of funding to be committed to a subrecipient or
that change the agreement period are not material amendments. Questions as to what constitutes a material
amendment should be directed to the Office of Legal Counsel.
This policy does not apply to amounts disbursed as cash contributions, which are recorded in Account 6901.
Those payments do not represent advances and do not require the submission of financial liquidation
documentation by the payees. Refer to the policy entitled Cash Contributions to Partners Policy
(POL-FIN-CCP-018) for the accounting rules for those payments. .
This policy also does not apply to payments made to organizations, both non-profit and for-profit, for
contracted activities. Country Programs should consider using contracts, not subrecipient agreements, as the
funding medium when deliverables can be clearly defined and measured and the nature of the activities
warrants such treatment. Payments to entities that operate as contractors and not as subrecipients must be in
accordance with the requirements of the Advances to Vendors Procedure (PRO-FIN-REC-009.10) and
properly supported as per CRS’ Documentation Policy (POL-FIN-DOC-008) and the accompanying
Documentation Matrix. Since the nature of the activities dictates the nature of the relationship, an entity can
serve as a contractor or as a subrecipient on different projects.
Although the primary focus of this policy is on management of subawards that provide cash resources, the
attached assessment checklist includes a questionnaire on the subrecipient’s inventory management practices.
That inclusion is intended to ensure that the required annual assessment of each subrecipient is comprehensive.
Nevertheless, commodity management practices are outside the purview of this pronouncement. Refer to the
Food Assistance Commodity Management Manual (FACMM), donor regulations, and other documents for
guidance on managing and reporting on purchased and donated inventoriable goods.
Purpose: This policy is intended to:

• Establish defined financial criteria for relationships with subrecipients
• Aid Country Programs in establishing effective management of and accountability for funding issued
to subrecipients
• Clarify roles and responsibilities for Country Programs’ financial monitors
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POL-FIN-SFM-023 Released
Office of Finance – Subrecipient Financial Management Policy 12/31/13
• Assist Country Programs in meeting the Agency’s objective of subrecipient organizational

sustainability
Description:
1.0 Introduction
(a) CRS recognizes that its relationships with its subrecipients are critical to achieving its goals and objectives.
Working with subrecipients optimizes the talents and resources of each party, maximizes program impact, and
better serves the poor. When CRS engages local subrecipients, those close affiliations allow CRS to focus on
developing their capacities and on increasing their organizational sustainability.
(b) A healthy rapport is one founded in a spirit of cooperation and mutual respect. Each party’s rights and
responsibilities should be well-defined. Consistent application of the following practices and tools, as described in
this policy, will help Country Programs to establish strong, productive relationships with subrecipients by:
i. Conducting assessments of subrecipients’ financial capacities
ii. Helping subrecipients develop and implement internal control improvement plans, when warranted
iii. Clarifying and enforcing CRS’ subrecipient forecasting, funding, and reporting requirements
iv. Performing ongoing monitoring of subrecipients’ financial management performance
v. Providing financial and compliance capacity strengthening as needed
(c) For A-133 subrecipients, the assessments, internal control improvement plans, monitoring visits, and capacity
strengthening (as needed) required by this policy are in addition to the A-133 external audits that their
organizations undergo annually.
2.0 Capacity Assessments

2.1 Background
(a) A formal assessment of a subrecipient’s financial processes and internal control must be conducted before making
the initial financial commitment to award funds to the subrecipient. The Country Representative is responsible for
formally notifying the subrecipient if CRS intends to perform an assessment. The assessment should be conducted
by a designated member of the Country Program’s Finance Department and/or a member of the Country Program’s
internal audit team, its compliance staff or its Head of Operations. Ideally, a pertinent member of CRS’
Programming Team should also participate.
(b) The Country Program should conduct the assessment in a participatory fashion with the subrecipient. CRS’
evaluator(s) should work with a staff member appointed by the subrecipient to:
i. Set the date for the assessment
ii. Identify the subrecipient’s staff to be involved
iii. Perform the assessment
iv. Jointly analyze and present the findings to the subrecipient
(c) There are two checklists issued with this policy – a standard version required for assessments of most subrecipients
and a scaled down version for small subrecipients. The standard subrecipient assessment entails evaluations of the
following:
i. Financial personnel
ii. Financial systems
iii. Documentation and recordkeeping
iv. Internal control
v. Financial reporting
vi. Inventory control (Over such items as commodities and prepositioned materials)
vii. Fixed assets management
viii. Receivables management
ix. Other assets and payables
x. Procurement function
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(d) The scaled down assessment checklist version for small subrecipients includes control statements on all of the
above topics, except for inventory and other assets and payables. A subrecipient that meets all of the following
criteria should be classified as a “Small Subrecipient”:
i. Its total expenses (program value) for the last three fiscal years have averaged less than $250,000.*
ii. The subrecipient is not expected to make any major purchases using CRS’ funds during the period of the
agreement. (A “Major” purchase is defined as one that will cost $5,000 or more.)
iii. There are no plans for the subrecipient to issue CRS funds to lower tier subrecipients during the
agreement period.
iv. The subrecipient will not be managing commodities from the U.S. Government or other public donors
during the agreement period.
* A “small” subrecipient that is forecasting significant growth during the course of the agreement period should be
assessed using the standard assessment tool prescribed for the larger subrecipients.
(e) The applicable Subrecipient Assessment Checklist issued with this policy must be used to perform the assessment.
To ensure global consistency, there should be no substitutes for the standard tools. If a donor has an assessment
requirement and will not accept CRS’ checklist as a substitute for its own assessment tool, then the donor’s
assessment checklist should be used in addition to, and not in place of, CRS’ checklist.
(f) The incremental costs of performing an assessment for a project that has not yet been developed (a pre-assessment)
should be recorded in a specific private non-cost share allocation project set up in DSN 1550 to record this type of
cost. Incremental costs include travel (transportation, hotel, per diem and incidentals), as well as the salaries and
benefits of employees whose time is otherwise directly charged to a project or a grant. The cost of salaries and
benefits for Project Support Pool employees who work on assessments should remain in that pool.
(g) Each checklist consists of a series of assessment statements. A weighted value has been assigned to each statement
depending on the significance of the control. The degree or the frequency with which the control is exercised will
also affect the rating. Each assessment is scored to allow the Country Program to stratify its subrecipients, both A-
133 and Non-A-133, into three levels of perceived risk.
i. A subrecipient that receives an assessment equal to or greater than 90% of the maximum achievable score
is categorized as having strong internal controls that meet most standards.
ii. An organization whose overall assessment score is equal to or greater than 75% but less than 90% of the
maximum achievable score is considered to have sufficient internal controls with some improvement
needed.
iii. A subrecipient that scores below 75% of the maximum achievable score is rated as having inadequate
internal controls with substantial improvement required.
(h) All responsibilities of CRS as a prime recipient of grant awards generally flow down to its subrecipients. When
CRS signs funding agreements with its grant donors, it generally accepts responsibility for the actions of its
subrecipients. CRS is also expected to exercise good stewardship over subawards made from private funds.
Therefore, CRS must exercise due diligence prior to executing a subagreement with any organization. The use of
an assessment tool allows the Country Program to perform an objective evaluation and to document the basis for its
appraisal. The assessment tool also provides a means whereby CRS can determine how to utilize its monitoring
resources most effectively and efficiently. Stratifying subrecipients will enable CRS to place increased focus on
those that require more assistance in developing their financial management skills and in complying with donor
requirements.
(i) The ultimate goal is for all subrecipients to achieve and sustain a “strong internal controls; meets most standards”
rating. This can be achieved through the combined efforts of the subrecipient and CRS to review each assessment,
develop an internal control improvement plan, if warranted, and address the areas in which weaknesses have been
identified. Those subrecipients who are able to significantly improve their internal controls will benefit from
reductions in document submission and testing requirements, as well as cutbacks in reporting and monitoring
frequencies.
(j) For those subrecipients who rate as having strong internal controls that meet most standards, the assessments
should be conducted at least biannually (every two years) after the initial assessment. Subrecipients rated as
having sufficient internal controls with some improvement needed or having inadequate internal controls with
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substantial improvement required, must be assessed annually. The Country Representative must ensure that every
currently active subrecipient is assessed in accordance with the requirements.
(k) Information obtained by CRS during its ensuing monitoring visits may be used to aid in performing assessments in
subsequent years, thereby reducing the amount of time needed to perform the assessment and the level of
involvement by both parties. In the interest of efficiency, subsequent assessments can be combined with
monitoring visits. If a Country Program has multiple current agreements with a given subrecipient, only a single
assessment is needed.
(l) Use of the Subrecipient Assessment Checklist will aid in ascertaining whether the subrecipient organization has
basic financial controls in place, such as the following:
i. An authorization chart, indicating who is authorized to approve commitments, disbursements, and other
financial transactions and to sign checks
ii. A formal chart of accounts
iii. A single general ledger maintained in accordance with double-entry accounting disciplines and with an
audit trail
iv. Cashbooks for recording all cash transactions and running balances for cash-on-hand funds
v. Standard journal entry forms or voucher documents that are used for recording all financial transactions
vi. The appropriate documentation to support each financial transaction, including timesheets signed by
employees and approved by their supervisors for all salaries and wages charged to CRS’ projects
vii. A planning process that provides detailed reliable and realistic estimates of the organization’s annual
operating budgetary needs, as well as its estimated cash flow, capital expenditures, and project spending
viii. An internal control system that provides for complete segregation of duties or that has compensating
controls if duties cannot be fully segregated
ix. Secure filing systems that allow for easy, complete retrieval of financial documents
(m) The employee designated by the Head of Operations to lead the assessment team must furnish a report on the
assessment to the subrecipient and CRS’ Head of Operations within seven calendar days of the conclusion of the
assessment visit. The Head of Operations should ensure that copies of the assessment report are distributed to the
Country Representative, the pertinent CRS Program Manager, the Head of Programming or Chief of Party, and the
Finance Manager. Systems or controls for which material or significant improvements are needed should be
emphasized in the report.
2.2 Global Assessment Considerations

This policy primarily focuses on country-specific assessments of subrecipients, but allowances must be made,
when warranted, for global considerations. The Operational Standards & Systems Team (OSS) may, upon review
of an organization’s A-133 audit, determine that an A-133 subrecipient warrants treatment as having “inadequate
internal controls; substantial improvement required,” regardless of the in-country assessment rating. In such cases,
OSS’ decision will override the local assessment. Country Programs will be notified when such treatment is
necessary.”
2.3 Special Assessment Scenarios

(a) Unless the project will be funded by private allocation or the Country Program has no plans to work with the
subrecipient again in the near future, an assessment must be conducted regardless of the amount of the proposed
subaward. For amounts less than $25,000 to be paid to local partners in conjunction with small non-cost share
projects funded by private sources, consideration should be given as to whether treatment as a contribution is
appropriate, in which case no assessment would be needed. Some other factors to consider are the partner’s staff
size, the cost effectiveness of operating through a subrecipient agreement, security issues that would prevent CRS
from conducting assessment and monitoring activities, and whether CRS has staff in the country in which the
partner will be performing its project activities.
(b) If circumstances warrant the use of a local governmental agency as a subrecipient, the Country Program should
attempt to perform an assessment. If CRS is denied access or not permitted by local law to conduct an assessment,
the Country Program should document the restriction(s) encountered. The subrecipient in this case should be
considered as having inadequate controls with substantial improvement required and subjected to the document
submission and monitoring requirements for that subrecipient category.
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(c) If the Country Program will be working with a department or office within a larger entity, a determination needs to
be made as to whether the assessment should be conducted for the larger entity or solely for the department or
office in question. The Country Program needs to gain an understanding of the larger entity’s structure and where
the responsibility for the pertinent subdivision’s controls lies. Visits to other related departments or offices may be
necessary to gain the perspective needed to make an informed decision regarding the focus of the control
assessment. All subrecipient agreements, however, must be signed with the legal entities that will be implementing
the project, not with operating subdivisions within the legal entities.
(d) During the initial stages of a declared emergency, the Country Program may not have the opportunity to conduct a
full scale assessment of the organizations with which it will be partnering. Prior to entering into new subrecipient
agreements with prospective subrecipients, the Country Representative or equivalent official (CR) should consult
with the Deputy Regional Director / Management Quality (DRD/MQ) and the Regional Finance Officer to identify
areas of risk. Mitigating controls may need to be implemented or the Country Program may need to perform
customized interventions, depending upon the degree of confidence in the subrecipients’ internal control systems.
(e) During an emergency, all new subrecipients for whom assessments cannot be conducted prior to signing the
subrecipient agreements must be categorized as having inadequate internal controls. As soon as conditions permit,
the Country Program should conduct a full assessment of each new subrecipient. The CR will have a period of up
to ninety days after the subrecipient agreements go into effect to have assessments of the new subrecipients
conducted. In the event that assessments cannot be performed within the ninety-day period, the CR must seek the
approval of the Regional Director to extend the assessment period to 180 days. Requests for extension beyond 180
days must be approved by the Regional Director and the Senior Director, Finance Systems & Operations. If the
assessment reveals that the new subrecipient has sufficient or strong internal controls, then the subrecipient
agreement can be amended, if warranted.
3.0 Internal Control Improvement Plans

(a) A Country Program that has an existing or prospective subrecipient with an assessment below 75% of the
maximum achievable score for a given functional area should ensure that the subrecipient prepares an Internal
Control Improvement Plan (ICIP) using the format furnished with this policy. The Country Program should assist
the subrecipient in preparing the plan if requested. Subrecipients are also expected to attend to those controls for
which material or significant improvements are needed as identified in an ICIP, even if they score above 75% of
the maximum achievable score for a given functional area. The deficiencies noted by the assessment team, as well
as the subrecipient’s ICIP, must be communicated in writing between the parties.
(b) CRS’ Head of Operations is responsible for ensuring that the subrecipient organization prepares an Internal Control
Improvement Plan within sixty calendar days of receipt of a written notification from CRS. CRS may assist
the subrecipient in developing the plan, but the ownership of the plan must remain with the subrecipient. The Head
of Operations should review the plan to verify that it covers all known significant issues. During the review
process, the Country Program should ensure that internal controls that could severely compromise the safeguarding
of the resources are addressed first. Until those issues are addressed, the subrecipient should work with the
Country Program to implement mitigating controls. The ICIP should include a calendar that provides specific
dates for implementation of the internal control improvements needed. The subrecipient will be bound to
implement the improvements within the dates shown in the calendar. In no case should any improvement be
scheduled for full implementation more than six months after the issue was detected and formally communicated in
writing.
(c) In the event corrective actions are not completed within the time frame specified in the ICIP, the Head of
Operations, with written approval from the Country Representative, may extend the deadline. A maximum of two
extensions, not to exceed three months each, may be added, thereby extending the period for implementing the
Improvements cited in the plan to one year.
(d) If an agreement is less than a year in duration and the subrecipient acknowledges that it will not be able to make
the necessary changes during the course of the agreement period, CRS reserves the right to impose additional
requirements intended to mitigate the risk in the subrecipient’s control or process that has been determined to be
substandard.
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(e) If the subrecipient’s capacity is a contributing factor, CRS’ Country Program should offer to work with the
subrecipient to implement the corrective measures needed.
(f) The ICIP should address the subrecipients' controls over all of its financial activities, not just those that are directly
related to those projects funded by CRS. In the ICIP, the subrecipient should indicate which control issues apply to
its entire organization and those which apply only to CRS' projects. If the ICIP is deemed to be satisfactory, the
Head of Operations should have copies routed to the Country Representative (or delegate), the Head of
Programming (or equivalent), the pertinent Program Manager, and the Finance Manager.
(g) If a Country Representative, having obtained the approvals required per CRS’ policies, elects to execute a
subrecipient agreement with an organization that has inadequate internal controls and for which significant
improvements are required, CRS’ Head of Operations in close collaboration with the Program Manager assigned
for overseeing the related project is responsible for ensuring the subrecipient addresses all issues identified in the
ICIP within the specified time frame. At the Country Representative’s discretion, the corrective actions may be
completed after the subrecipient agreement commences unless the original donor’s requirements state otherwise.
(h) During the ensuing monitoring visits, the employee designated by the Head of Operations to serve as CRS’
monitoring team leader should confirm via physical inspection or testing that all corrective actions reported as
having been performed by the subrecipient have, in fact, been implemented. Comments regarding the results of
that verification process, along with any other issues of significance that surfaced during the visit, must be included
in the monitoring team’s Financial Monitoring Trip Report, using the attached standard form.
(i) CRS’ Country Program should offer technical assistance and should also determine whether financial aid is
warranted to help the subrecipient make the necessary changes. The Country Program should consider using the
Institutional Strengthening Guide and various Finance policies, procedures, or tools to build the subrecipient’s
financial capacity. Click on this link Finance Policies and Procedures to access CRS’ financial pronouncements.
4.0 Forecasting Requirement

After a subrecipient agreement has been signed, the subrecipient is required to submit a cash forecast for every quarter
of the agreement period. In each quarterly forecast submission, the subrecipient must show its cash needs for each
month of the forecasted quarter separately. The first quarter’s cash forecast for every subrecipient shall be due by the
tenth calendar day after the day on which the subrecipient signs the agreement. The submission deadlines for the
subsequent forecasts will differ depending upon the frequency upon which funding is furnished to the subrecipient as
explained below:
i. For those subrecipients who are funded monthly, the ensuing forecasts are due by the fifteenth calendar
day of the month that precedes the forecasted quarter. Subrecipients that are funded monthly will have the
opportunity to adjust their forecasted cash needs for the second and third months of each quarter, but the
total cash provided to them for each quarter cannot exceed the amount they originally forecasted for the
quarter. In the event a subrecipient finds it necessary to increase its quarterly cash forecast midway
through the quarter, approval must be obtained from the Country Representative or an authorized delegate
to increase the amount of funding to be issued by CRS to that subrecipient for that quarter.
ii. For those subrecipients who are funded quarterly, the forecasts are due by the fifteenth calendar day of the
first month of the new quarter.
5.0 Funding Rules

5.1 Funding for A-133 Subrecipients
The funding for A-133 subrecipients should be furnished as follows:
i. If an A-133 subrecipient has been assessed as having “strong internal controls; meets most standards” or
as possessing “sufficient internal controls; some improvement needed,” the funding should be provided no
less frequently than quarterly. The funding should be sent in the first month of each quarter and cover the
following:
• The three months forecasted by the subrecipient
• Plus a “buffer”
• Less the cumulative difference between the funding furnished by CRS and the expenses reported by
the subrecipient for the agreement
• Less any amounts disallowed by CRS that have not been refunded by the subrecipient.
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ii. If the A-133 subrecipient is assessed as “having inadequate internal controls; substantial improvement
required, the funding should be computed as follows:
• The initial funding tranche should cover the subrecipient’s projected cash needs for the first two
months of the agreement period.
• For the first two months of all succeeding quarters of the agreement period, the Country Program
should issue monthly advances to the subrecipient, computed as follows:
i. Subrecipient’s forecast for the month
ii. Less the difference between the funding furnished by CRS for the most recent report month
and the expenses reported by the subrecipient for that month
iii. Less any amounts disallowed by CRS that have not been refunded by the subrecipient
For the final month of each quarterly report period, the funding must be calculated in a manner that ensures that the
total funds sent to the subrecipient for the quarter do not exceed the subrecipient’s forecast for that quarter.
iii. The “buffer” represents the funding that is intended to cover the subrecipient’s project-related expenses
during the month after the end of the forecasted quarter. The “buffer” is intended to allow the
subrecipient sufficient time to close its books after the quarter ends and for it to submit an accurate
liquidation report to the Country Program for processing and issuance of the succeeding advance. The
buffer is computed by taking the average of the three months’ expenses or one-third of the total expenses
forecasted for the applicable quarter. The advance covering the last quarter of the agreement should not
include a funding “buffer.”
5.2 Funding for Non-A-133 Subrecipients

Funding should be issued to all Non-A-133 subrecipients in the following manner:
i. The initial funding tranche for each agreement should cover the first two months of the subrecipient’s
projected cash needs for the agreement period.
ii. For the first two months of all succeeding quarters of the agreement period, the Country Program should
issue monthly advances to the subrecipient, computed as follows:
• Subrecipient’s forecast for the month
• Less the cumulative difference between the funding furnished by CRS and the expenses reported by
the subrecipient for the agreement
• Less any amounts disallowed by CRS that have not been refunded by the subrecipient
For the final month of each quarterly report period, the funding must be calculated in a manner that
ensures that the total funds sent to the subrecipient for the quarter do not exceed the subrecipient’s
forecast for that quarter.
5.3 Funding – Other Factors to Consider

(a) The Country Representative has the option to fund all subrecipients on a monthly basis so long as the Country
Representative sets that out in the subrecipient agreement. (Placing all subrecipients on a monthly funding cycle
will help to minimize the monthly distortions in project expenses and in allocating Project Support Pool Costs.)
(b) After the initial tranche, the amount of the funding provided to all subrecipients can be affected by the following
factors:
i. Material or repeated instances of unsupported costs that are subsequently disallowed by CRS or of costs
questioned by CRS’ auditors
ii. A subrecipient’s inability to consistently meet submission requirements with regard to the quality,
accuracy and/or timeliness of its cash forecasts and/or liquidation reports
iii. Systems or controls for which material or significant improvements are needed as detected by auditors or
CRS, or revealed by subrecipient management
(c) If there are impediments beyond the control of the subrecipient that could adversely impact the Country Program’s
ability to provide funding to a subrecipient in time to meet its commitments, the Country Representative may elect
to move up the timing of the cash transfers to that subrecipient. That decision must be documented in writing and a
signed copy should be maintained on file in the Country Program’s Finance Department. This discretionary option
should be exercised only on an exception basis and should not constitute the norm for cash transfers to all
subrecipients.
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(d) Each project with a given subrecipient stands on its own merits. If a subrecipient is delinquent in reporting or
forecasting for a given project but is current in reporting and forecasting on all other CRS projects in which the
subrecipient participates, the delinquency on the given project will not affect CRS’ funding to the other projects.
(e) The funding approach prescribed in this policy supersedes the previous requirement that a subrecipient liquidate at
least seventy-five percent (75%) of its outstanding balance in order to qualify for a succeeding advance. The new
rule is that if a subrecipient fails to submit a liquidation report for a given period, no additional funding should be
provided to that subrecipient until a liquidation report is received. When one or more liquidation reports have not
been submitted by a subrecipient for a given project, the entire balance due from that subrecipient for that project
will be considered to be delinquent. The difference between the amount advanced to a subrecipient for a given
period and the amount reported as expense by the subrecipient for that period will be taken into consideration when
issuing the next advance to that subrecipient.
(f) The Country Representative may refrain from issuing advances for a given project if there are concerns that cash
previously advanced for that project has been diverted to another project for which CRS has withheld funds due to
the subrecipient’s reporting delinquencies.
(g) It is imperative that subrecipients comply with the reporting deadlines stated in this policy and that Country
Programs process the subrecipients’ liquidation reports in an expeditious manner. The turnaround time for a
Country Program to review, approve, and record a subrecipient’s liquidation report and to issue the next funding
tranche should not normally exceed fifteen calendar days. The funding process, if administered properly, should
ensure that compliant subrecipients have sufficient cash to meet their CRS project needs.
6.0 Subrecipient Reporting

(a) The designated frequency of the report submissions should be consistent with that associated with the
subrecipient’s assessment rating. Provision should be made in the subrecipient agreement or an attachment thereto
that enables CRS to change the frequency of the report submission requirements if the subrecipient’s assessment
rating changes significantly during an agreement period. Subrecipients who score less than 75% of the maximum
achievable score on the assessment or who have control systems that are in need of material or significant
improvements present greater risks for the Agency. Consequently, the reporting and monitoring frequencies will
be greater for those subrecipients.
(b) Monthly reporting is the ideal frequency for all subrecipients. The standard minimum reporting frequency will
vary depending on the amount of the subrecipient agreement. The dollar thresholds stated in this policy are based
upon the full, estimated amount of the subrecipient agreement, when such amount is known. When the estimated
amount is not known, the obligated amount should be used. The standard reporting frequencies are explained
below.
6.1 Reporting Frequency for all A-133 Subrecipient Agreements

The reporting frequency for A-133 subrecipients is as follows:
i. A-133 subrecipients with assessment scores equal to or greater than 90% of the maximum achievable
score) – No less frequently than quarterly
ii. A-133 subrecipients with assessment scores equal to or greater than 75%, but less than 90% of the
maximum achievable score) – No less frequently than quarterly
iii. A-133 subrecipients with in-country assessment scores below 75% of the maximum achievable score or
that globally have been rated by OSS as having inadequate internal controls with substantial improvement
required – Monthly
6.2 Reporting Frequency for all Non-A-133 Subrecipient Agreements

The reporting frequency for Non-A-133 subrecipients is as follows:
i. Non-A-133 subrecipients with assessment scores equal to or greater than 90% of the maximum achievable
score – Monthly
ii. Non-A-133 subrecipients with assessment scores equal to or greater than 75%, but less than 90% of the
maximum achievable score – Monthly
iii. Non-A-133 subrecipients with assessment scores below 75% of the maximum achievable score – Monthly
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6.3 Reporting Requirement for Retroactive Agreements

If an agreement is retroactive, a reimbursement request for expenses incurred by the subrecipient during the retroactive
period must be submitted within fifteen calendar days of the date on which the subrecipient signs the agreement. The
subrecipient should use the liquidation report format for that purpose.
6.4 Liquidation Reporting – A-133 Subrecipients

(a) All A-133 subrecipients that operate on an advance basis are required to submit liquidation reports to account for
their expenses against funding provided by CRS. Country Programs or Regions may use their own liquidation
formats as long as their report versions contain at a minimum all information that appears on the Liquidation
Report Templates furnished as attachments to this policy. A-133 subrecipients that are rated as having strong or
sufficient internal controls are not required to submit copies of supporting documentation with their liquidation
reports, regardless of the size of the agreement, if the subrecipients’ liquidation reports provide the necessary
financial information and their past liquidation reports have proven to be reliable and accurate.
(b) For agreements equal to or greater than $100,000 with A-133 subrecipients designated as having “inadequate
internal controls; substantial improvement required,” the Country Representative has the option to decide whether
or not copies of all supporting documentation should accompany the monthly liquidation reports. For agreements
less than $100,000 with this type of A-133 subrecipient, the subrecipients are required to submit copies of the
supporting documentation with their liquidation reports since the required monitoring visits only need to take place
every six months.
6.5 Liquidation Reporting – Non-A-133 Subrecipients

(a) For all agreements with Non-A-133 subrecipients that fall under the “strong internal controls; meets most
standards” designation the standard mandatory reporting requirement will be the monthly submission of an
approved, accurate, and timely liquidation report that contains all necessary information.
(b) For agreements greater than or equal to $50,000 with Non-A-133 subrecipients categorized as “having sufficient
internal controls; some improvement needed,” the monthly reporting submission requirements consist of the
following:
i. Approved accurate liquidation report that contains all necessary information
ii. Copy of the bank statement for the segregated bank account required for CRS’ funding
iii. Copy of the approved bank reconciliation for the pertinent bank account
(c) For agreements less than $50,000 with Non-A-133 subrecipients that are rated as “having sufficient controls; some
improvement needed,” copies of the documentation supporting the reported expenses are required in addition to the
monthly liquidation report and copies of the bank statement and bank reconciliation for the segregated bank
account. The supporting documentation requirement for agreements below $50,000 with Non-A-133 subrecipients
that have sufficient controls with some improvement needed compensates for the fact that the standard monitoring
frequency for their agreements is annual, whereas at least three visits per year are required when their agreements
are above $50,000.
(d) For all agreements with Non-A-133 subrecipients that rate as having inadequate internal controls with substantial
improvement required, copies of the supporting documentation, pertinent bank statement and bank reconciliation
are always required in addition to the monthly liquidation report.
6.6 Report Deadlines

(a) For all agreements with quarterly reporting requirements, the standard deadline for submission of the interim
financial liquidation reports is the fifteenth calendar day of the month following the end of the reported quarter.
For all agreements with monthly reporting requirements, the standard deadline is the fifteenth calendar day of the
following month. In the event CRS is required to regularly report to a donor by a specified date that necessitates
moving up the report deadline for its subrecipients, an accelerated reporting date should be incorporated into the
related subrecipient agreements.
(b) The standard deadline for the submission of the final financial liquidation report is fifteen calendar days after the
subrecipient agreement’s expiration or termination. The Country Program must ensure that all advances to
subrecipients for each project are cleared in full via submission of liquidation reports and/or return of unused
funds, along with copies of the supporting documentation, if applicable, within thirty days of the subrecipient
agreements’ expiration dates.
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(c) For each subrecipient agreement associated with a grant award or subaward, the Country Program must arrange to
have the subrecipient agreement end a minimum of thirty days before the award’s expiration date. Doing so will
provide more time for the Country Program and the Office of Finance to perform a final review of the financial
activities of the grant and to meet the grant donor’s or prime recipient’s final reporting deadline. If it becomes
necessary to have a subrecipient agreement end less than thirty days prior to the expiration of CRS’ prime award,
the Country Program will need to document why that exception has been made. In addition, the subrecipient
agreement should specify the measures to be taken to ensure that the subrecipient’s final report will be submitted in
time to allow CRS to close the grant before the donor’s deadline.
6.7 Documentation Standards

As a general rule, the original documents that support the subrecipient’s reported expenses should be retained by the
subrecipient. Extenuating circumstances might dictate that a Country Program should have a subrecipient submit its
original documents to CRS with the liquidation report, if local law does not dictate otherwise. In those instances, the
subrecipient should retain copies of the voucher documents in its files. Situations which could warrant requiring the
subrecipient to send its original documents to CRS would include:
i. Donor requirements
ii. CRS has had no previous experience with the organization or the subrecipient is a new organization
iii. There is an insecure operating environment due to such factors as war, civil unrest, or an emergency
iv. The subrecipient has historically had weak controls and the subrecipient received a rating below 75% of
the maximum achievable score during CRS’ pre-award assessment
v. The subrecipient’s long-term organizational sustainability is questioned
vi. The subrecipient’s record retention and filing capabilities are suspect
6.8 Report Information Requirements

(a) The liquidation report submitted by the subrecipient should furnish the following general information at a
minimum:
i. Subrecipient’s name, address, and phone number
ii. Report Period
iii. CRS’ Project Title and Project Number (if applicable)
iv. Date the report is being submitted
v. Names and titles of staff who prepared and approved the report, along with their signatures
(b) Liquidation reports submitted by Non-A-133 subrecipients must be reported using CRS’ general ledger account
numbers, whereas A-133 subrecipients are required to report to CRS by cost categories. The Country Program
should meet with each subrecipient to map the pertinent expense accounts as recorded in the subrecipient’s general
ledger to CRS’ corresponding general ledger accounts (for Non-A-133 subrecipients) or report cost categories (for
A-133 subrecipients) using the applicable Subrecipient Expense Account Mapping Chart. (The Revised Monitoring
Materials attachment to this policy contains templates for the two Mapping Chart formats.) The Country
Program’s Finance Department should retain a copy of the Mapping Chart for each subrecipient for reference when
processing liquidation reports and performing monitoring visits. The charts should be updated as needed. In the
event a grant donor requires the use of a specialized report format, the Country Program will need to work with its
subrecipients to meet that requirement.
(c) At a minimum, subrecipient liquidation reports should contain all of the information listed below. If a donor
requires additional information, the report format can be modified to accommodate the donor’s requirements. The
budget line items can be replaced by those specific to each project. The expense information reported by the
subrecipient should be shown by line item and in total for the project for the following:
i. Actual expenses for the report period
ii. Budgeted expenses for the report period
iii. Actual expenses for the fiscal year-to-date
iv. Budgeted expenses for the fiscal year-to-date
v. Actual expenses from the inception of the project
vi. Budgeted expenses from the inception of the project
(d) The report should also contain this additional data:

i. Previous advance balance for this project per the subrecipient’s records
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ii. Advances received from CRS during the report period

iii. Cash returned to CRS during the report period
iv. Current advance balance for this project per the subrecipient’s records
v. A separate section to be filled out by CRS that reconciles the subrecipient’s ending balance to that per
CRS’ records
(e) A subrecipient must submit a separate liquidation report for each CRS project it administers. Reporting for
multiple projects should not be combined on a single liquidation report. Separate reporting formats are required for
A-133 and Non-A-133 subrecipients. See the Subrecipient Financial Liquidation Report templates in the
Monitoring Materials attachment for the recommended formats that contain the minimum amount of information
needed.
6.9 Funding and Reporting Currency

All expenses must be reported in the currency in which CRS provided the funding and the currency mentioned in the
subrecipient agreement must be the same as that in which the funding will be furnished by CRS.
7.0 Monitoring of Subrecipients

(a) It is essential that the Country Program engage in ongoing financial monitoring of all subrecipients that have a
local presence in the country in which the project activity takes place. The monitoring visit should not be
presented as an audit exercise. Monitoring should be viewed as an integral part of the ongoing mutual capacity
building and relationship strengthening efforts, which are key components of CRS’ partnership strategy. CRS’
financial monitoring visits should be used as opportunities to introduce new or changing accounting practices and
as occasions for mutual learning.
(b) If significant improvements in financial management capacity or internal controls are warranted, those needs
should be identified during the assessments and monitoring visits. Shortcomings noted during monitoring efforts
should be communicated in writing to the appropriate members of the Country Program’s and the subrecipient’s
management teams. Needs for material and/or significant improvements should be addressed and resolved before
an additional funding agreement is signed with the subrecipient. The effort to address and resolve shortcomings
should be a collaborative endeavor between the subrecipient and CRS as a capacity strengthening activity.
(c) CRS’ Finance personnel should participate in the financial monitoring of subrecipients. Ideally, there should be
teams of monitors with representatives from CRS’ Project Management and Finance Departments working with the
subrecipient’s program and financial staffs.
(d) Financial monitoring costs should be charged as follows:

i. Financial monitors who are members of the Country Program’s Finance, Compliance, Management
Quality, or Internal Audit staffs should charge their salaries, benefits, supplies, and the computer
equipment assigned to them to the Country Program’s Project Support Pool
ii. Travel costs associated with the monitoring trips, including transportation expenses, lodging, meals and
incidental costs should be directly charged to the benefiting projects
7.1 Financial Monitoring for A-133 Subrecipient Agreements Greater than or Equal to $100,000
The minimum frequency of monitoring visits for these subrecipient agreements should be as follows:
i. Subrecipients with strong internal controls that meet most standards – Every six months, commencing
with month seven of the agreement period
ii. Subrecipients that have sufficient internal controls with some improvement needed – Every four months,
commencing with month four
iii. Subrecipients that have inadequate internal controls with substantial improvement required – Every three
months, commencing with month three
7.2 Financial Monitoring for A-133 Subrecipient Agreements Less than $100,000
The minimum frequency of monitoring visits for these subrecipient agreements is as follows:
i. Subrecipients with strong internal controls – Every twelve months, commencing with month thirteen
ii. Subrecipients with sufficient internal controls – Every twelve months, commencing with month thirteen
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iii. Subrecipients with inadequate internal controls – Every six months, commencing with month six
7.3 Financial Monitoring for Non-A-133 Subrecipient Agreements Greater than or Equal to $50,000
The minimum frequency of monitoring visits for these Non-A-133 subrecipient agreements should be as follows:
i. Subrecipients with strong internal controls – Every six months, commencing with month six
ii. Subrecipients with sufficient internal controls – Every three months, commencing with month four of
the agreement period
iii. Subrecipients with inadequate internal controls - Quarterly visits, commencing with month three of
the agreement period
7.4 Financial Monitoring for Non-A-133 Subrecipient Agreements Less than $50,000
The minimum frequency of monitoring visits for these Non-A-133 subrecipient agreements should be as follows:
i. Subrecipients with strong internal controls – Every twelve months, commencing with month twelve
ii. Subrecipients with sufficient internal controls – Every twelve months, commencing with month twelve
iii. Subrecipients with inadequate internal controls – Every six months, commencing with month six of the
agreement period
7.5 Concluding Visit

In addition to the monitoring performed during the course of the agreement period, the Country Programs must conduct
a monitoring visit that covers the final liquidation report for the subagreement after the subaward ends and before the
grant or project closure has taken place. This visit should be considered to be an integral part of the standard closure
process for every subrecipient agreement.
7.6 Pre-Trip Planning

Each financial monitoring team should perform a pre-trip planning session before a visit. The session should culminate
in the selection of those areas upon which the monitoring team plans to focus. During the planning session, in addition
to the obvious logistical concerns, the following factors, where applicable, should be taken into consideration:
i. The overall results of CRS’ previous annual financial capacity assessment of the subrecipient and any
controls that warranted significant or material improvement, as noted during that assessment and reported
in the subrecipient’s ICIP
ii. Additional unresolved areas for improvement noted during previous monitoring visits
iii. Audit findings pertaining to the subrecipient
iv. Matters communicated to CRS by the subrecipient, such as changes in its organizational structure,
staffing, financial processes, and instances of fraud or other financial irregularities
7.7 Financial Monitoring Trip Reports

(a) CRS’ monitoring team must document each visit with the preparation of a Financial Monitoring Trip Report using
Finance’s standard form, which is an attachment to this policy. If the monitoring team has any recommendations
for improvement, those should be included in the report along with the subrecipient’s response. Within seven
calendar days of the completion of the monitoring visit, the completed report should be submitted to the Country
Program’s Head of Operations and Finance Manager, with copies distributed to the Head of Programming/Chief of
Party (or a delegate), the pertinent Program Manager, and the subrecipient. If the Country Program has an internal
audit or compliance unit, the heads of those departments should also be copied on the monitoring trip report.
(b) To ensure that all necessary financial review tasks are performed, monitors must use the Monitoring Checklist
furnished with this policy. Every effort should be made to perform all review tasks listed in the monitoring
checklist during each visit. If some tasks are not completed, the monitors must ensure that those tasks are carried
out in the next trip to that subrecipient.
(c) During their visits, CRS’ monitors are required to review the subrecipients’ transactions and to document the
review tasks performed. Suggested workpaper formats for reviewing the subrecipients’ cash disbursements,
general journal vouchers, effort reporting, and employee benefits transactions are attached to this policy. The
attached workpaper formats are not mandatory, but the Country Program should develop a standard format for use
by all of its financial monitors. Each transaction examined must be listed individually in the monitoring visit
workpapers, specifying the review tasks performed, the results of the tasks performed, and the exceptions noted.
All transactions selected for review must be examined without exception during each visit. Each document
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examined by a CRS monitor should be date stamped as “Liquidated (or Paid) by CRS” to serve as evidence of
CRS’ review and to ensure that the document cannot be used to support another liquidation report.
(d) CRS’ monitors should ensure that ample coverage is obtained on all of the project’s major activities and material
expense categories, so that a broad spectrum of expense categories is reviewed. Additional coverage should be
attained in those areas in which the subrecipient has had deficiencies as noted during external audits, CRS’
financial assessments and previous monitoring visits, and as revealed by the subrecipient’s management team.
CRS’ monitors may use either a judgmental or statistical sampling method to select the transactions to be reviewed,
but should document in the workpapers the method chosen and the rationale for that decision.
(e) The employee designated by the Head of Operations to serve as the monitoring team leader should ensure that the
results obtained from the documentation testing and other review tasks performed culminate in written conclusions
that are placed in the team’s workpapers. All deficiencies, weaknesses, irregularities, questioned costs, or
disallowed costs that are detected during a monitoring visit should be fully supported in the workpapers,
communicated in writing to the subrecipient’s management team, and summarized in the Financial Monitoring Trip
Report. Copies of correspondence informing the subrecipient of any issues noted during monitoring visits and the
corrective actions needed should be attached to the trip reports.
7.8 Internal Control Improvement Plans Resulting from Monitoring Visits

(a) In the event that an ICIP is needed, the Head of Operations is responsible for ensuring that the subrecipient submits
an Internal Control Improvement Plan within sixty calendar days of receipt of CRS’ written notification. See
Section 3.0 of this policy for more details.
(b) On occasion it might be necessary to extend a deadline or to meet with the subrecipient to develop an ICIP
implementation timetable that is more realistic. Repeated instances of a subrecipient’s inability to perform
corrective actions in a timely or comprehensive manner may warrant that the Country Program undertake one or
more of the following actions, depending upon the gravity of the situation:
i. Render assistance to the subrecipient to implement the corrective measures
ii. Temporarily cease or reduce funding until the corrective measures are implemented
iii. Increase the frequency of reporting or monitoring visits, documentation submission requirements, and/or
level of document review coverage needed
iv. Require the subrecipient to undergo a project-specific audit
v. In extreme cases, deobligate funding, cancel the agreement, and/or eliminate the subrecipient from future
subaward consideration
7.9 Testing Coverage Requirements

During each visit, CRS’ monitors are required to review documentation supporting a minimum of the following
percentages of expenses charged to each CRS project by a subrecipient. The coverage requirements apply to all
projects, regardless of the funding source and the amount of the subrecipient agreement.
Supporting Documentation Review Requirements for Subrecipients’ Expenses

Coverage Required*
Subrecipient Category A-133 Subrecipients Non-A-133 Subrecipients
Strong Internal Controls 25% 50%
Sufficient Internal Controls 50% 75%
Inadequate Internal Controls 100% 100%
* Expressed as a percentage of the total expenses paid or accrued locally that were charged to each CRS project
Country Programs may increase coverage above the specified minimum levels for subrecipients with strong or
sufficient internal controls if deemed necessary. When a large number of exceptions are detected, CRS’ monitoring
team should increase its sample size as appropriate to obtain greater assurance that the results of the review are truly
representative of the total transaction population. The sampling should not be limited to a few high-value transactions.
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8.0 Reimbursement Basis Subrecipients

(a) CRS reserves the right to operate on a reimbursement basis for selected subrecipients. In this type of relationship,
CRS provides funding after the fact to a subrecipient organization upon receipt of a liquidation report of the
expenses incurred and verification of the documentation supporting the subrecipient’s reported expenses.
(b) Some subrecipients may choose to operate on a reimbursement basis. When a subrecipient is funded on a
reimbursement basis, the pertinent Program Manager and the Finance Manager are obligated to ensure that all
efforts are made to process liquidation reports and/or to conduct onsite monitoring in an expeditious and effective
manner so as to provide for timely and accurate reimbursement of that subrecipient organization.
(c) When a Country Program has a working relationship with a reimbursement basis subrecipient, at CRS’ fiscal year-
end the Country Program must accrue for all costs incurred by the subrecipient during CRS’ fiscal year that have
not yet been reported by the subrecipient. When the Country Program makes such an accrual, it should reduce the
outstanding commitment with that subrecipient to ensure that the expense is not duplicated in the Country
Program’s budget comparison reports. When the Country Program reverses the accrual in the following fiscal
year, it will also need to increase the commitment by the amount of the reduction booked at year-end.
(d) Reimbursement basis subrecipients are required to submit cash forecasts to CRS. Such costs need to be
incorporated into CRS’ own cash projections. Advance notification of reimbursement basis subrecipients’
anticipated expenditures enables Country Programs to project their cash needs more accurately. Such notice can
also serve as an information source for the Country Program’s year-end accrual. Reimbursement basis
subrecipients are subject to the same deadlines for cash forecast submissions that apply to advance basis
subrecipients.
9.0 Treatment of Subrecipient Expenses That Are Unsupported, Questioned, or Disallowed

9.1 Unsupported Costs
(a) Unsupported costs are those expenses that have not been adequately documented by the subrecipient. These costs
might be noted during the liquidation report processing phase or during a monitoring visit. To resolve unsupported
costs, typically the subrecipient might need to submit more documentation or a more comprehensive explanation.
Additional verification efforts might be necessary on CRS’ part to ensure that the reported charges are allowable
and properly documented.
(b) If the costs have been determined to be unsupported at the time the subrecipient submits its liquidation report, the
Country Program’s Finance Department should make the determination and then inform the pertinent Program
Manager. Based on the Country Program’s communication protocol, the designated employee should notify the
subrecipient in writing of the unsupported costs and what efforts will be necessary to resolve them. If the
discovery of the inadequately documented costs takes place during the course of a monitoring visit, CRS’
monitoring team must document that determination in its workpapers, listing the reference numbers, payees (if
applicable), voucher descriptions, and amounts of the vouchers that were inadequately supported. The issue should
be summarized and noted in the Financial Monitoring Trip Report and the full details should be communicated in
writing to the subrecipient for immediate follow-up.
(c) The accounting rules for recording unsupported costs are as follows:
i. If the unsupported costs pertain to a Non-A-133 subrecipient and are detected before the applicable
liquidation report has been processed by CRS, the accounting entry in the related grant or project would
be a debit to A/C 6170 – Unsupported Costs – Non-A-133s and a credit to A/C 6166 – Subrecipients’
Expense – Interim or to A/C 6907 – Awards to Non-A-133s – No ICR - Open. No entry should be made
to the receivable (A/C 1231) or contra-receivable (A/C 1232), but the amount of the unsupported costs
should be deducted from the total expenses reported by the subrecipient when the Country Program
processes and records that report. After this entry is booked, the subrecipient’s records and the Country
Program’s open receivable with that subrecipient will differ by the amount of the unsupported costs.
ii. If the inadequately documented expenses pertain to a Non-A-133 subrecipient and are detected after the
applicable liquidation report has been processed by CRS, during an ensuing monitoring visit, for example,
the accounting entry in the related grant or project would be a debit to A/C 6170 and a credit to the
applicable expense account(s) in the subrecipient expense account range - Accounts 6151 to 6193 or to
A/C 6908 – Awards to Non-A-133s – No ICR - Settled. The Country Program would also need to debit
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the receivable (A/C 1231) and to credit the contra-receivable (A/C 1232) to set up the unsupported costs
as a receivable.
iii. If the unsupported costs pertain to an A-133 subrecipient and are detected before the applicable
liquidation report has been processed by CRS, the accounting entry in the related grant or project would
be a debit to A/C 6909 – Unsupported Costs – A-133s and a credit to A/C 6906 – Awards to A-133
NGOs - Open. No entry should be made to the receivable (A/C 1231) or contra-receivable (A/C 1232),
but the amount of the unsupported costs should be deducted from the total expenses reported by the
subrecipient when the Country Program processes and records the report.
iv. If the unsupported costs pertain to an A-133 subrecipient and are detected after the applicable liquidation
report has been processed by CRS, the accounting entry in the related grant of project would be a debit to
A/C 6909 and a credit to A/C 6904 – Awards to A-133s - Settled. The Country Program would also need
to debit the receivable (A/C 1231) and to credit the contra-receivable (A/C 1232) in the same donor
source/project to set up these costs as a receivable.
(d) Any unsupported costs charged to a grant award that have been outstanding for more than three months as of CRS’
fiscal year-end must be reclassified to DSN 1550 or DSN 2280 as a charge against the Country Program’s private
allocation. In this case, the inadequately documented costs, as well as the receivable and the contra-receivable
balances, must be reclassified from the grant to the private allocation project. The entry to reclassify such costs for
a Non-A-133 subrecipient would be a debit to A/C 6170, a debit to A/C 1231, and a credit to A/C 1232 in the
private allocation project and offsetting entries to the same accounts in the grant. The entry for an A-133
subrecipient would be a debit to A/C 6909, a debit to A/C 1231, and a credit to A/C 1232 in the private allocation
project and offsetting entries to the same accounts in the grant. A cross reference to the original unsupported
voucher should be made on the reclassification entry.
(e) If any of the unsupported costs are resolved favorably in the following fiscal year, those costs may be reclassified
back to the grant using the pertinent expense account codes and the balances in the related receivable and contra-
receivable accounts should be reduced by the same amount. Care must be exercised to ensure that the appropriate
historical foreign exchange rates are used to convert foreign currencies back to U.S. dollars.
9.2 Questioned Costs

(a) Questioned costs are those costs that have been identified by auditors (both HQ internal and external) as being one
or more of the following:
i. Unallowable
ii. Unreasonable
iii. Unallocable
iv. Not in conformity with the terms and conditions of the donor agreement
v. Inconsistent with the governing policies or regulations of the donor and/or CRS’ policies and procedures
vi. Not in accordance with GAAP
vii. Inadequately documented
(b) Questioned costs that were charged to a grant and that have not been resolved within ninety days or which remain
unresolved as of CRS’ September 30 fiscal year-end must be reclassified from the grant to the Country Program’s
private allocation. The reclassified expenses cannot be charged to Donor Source 1050, a cost share project, or to
Unallocated Direct Expenses – Project 9199. The account numbers used for the reclassification should be the same
as those that were utilized for the original charges to the grant award. Care must be exercised to use the
appropriate historical foreign exchange rates so the U.S. dollar equivalent of the reclassification entry equals the
original charges to the grant. If any of the questioned costs are resolved favorably in the following year, those
costs may be reclassified back to the grant if the grant has not yet been closed.
9.3 Disallowed Costs

(a) The subrecipient is required to refund any amounts advanced or reimbursed for costs that are found by CRS or its
auditors to be: (1) unallowable, unallocable and/or unreasonable; (2) not incurred within the obligation period; (3)
not spent in accordance with the terms and conditions of the subrecipient agreement; (4) due and owing after an
audit, close-out, or other review; (5) unexpended within thirty calendar days after the end of the subrecipient
agreement obligation period, except for severance or pension expense, which may be accrued; (6) otherwise
required to be refunded under the terms of the subrecipient agreement; or (7) inadequately documented. Any
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expense transactions for which the subrecipient cannot produce any supporting documentation or for which the
documentation ultimately is determined to be inadequate must be treated as disallowed costs.
(b) If the disallowed costs are detected at the time the liquidation report is submitted, CRS will deduct the disallowed
amount from the subrecipient’s reported expenses and will record only the net amount of allowable expenses. If
the costs are disallowed subsequent to CRS’ recording of the liquidation report, the subrecipient will be notified
accordingly. The disallowed amount will be reclassified back to the receivable account on CRS’ books and the
amounts previously reported by the subrecipient and expensed by CRS will be reduced by the amount of the
disallowance. The amount disallowed should be refunded by the subrecipient with fifteen calendar days of
discovery unless the Country Program opts to deduct the disallowed amount from the next funding tranche due to
the subrecipient.
(c) The general journal entry needed when CRS disallows costs that were previously liquidated for an A-133
organization is as follows:
• Debit – A/C 6906 – Awards to A-133 NGOs – Open
• Credit – A/C 6904 – Awards to A-133 NGOs - Settled
• Debit – A/C 1231 – Funds Disbursed to Subrecipients – Reports Pending
• Credit – A/C 1232 – Funds Disbursed to Subrecipients – Reports Pending – Contra
(d) The general journal entry needed when CRS disallows costs that were previously liquidated for a Non-A-133
organization is as follows:
• Debit – A/C 6166 / 6907– Subrecipients’ Expense - Interim
• Credit – The applicable expense account(s) charged when CRS recorded the liquidation report
• Debit – A/C 1231 – Funds Disbursed to Subrecipients – Reports Pending
• Credit – A/C 1232 – Funds Disbursed to Subrecipients – Reports Pending - Contra
(e) Note that in each case it was necessary to reestablish the receivable and contra-receivable balances that had been
reduced when the liquidation was processed. There is no impact upon the commitment or contra-commitment
balances. If a subrecipient is required to keep the funding received from CRS in a segregated bank account, any
refund made to CRS for disallowed costs must be disbursed from the subrecipient’s private funds and not from the
segregated account.
10.0 Segregated Bank Account Requirement

(a) Non-A-133 subrecipients that have been assessed as having sufficient internal controls with some improvement
needed or as having inadequate internal controls with substantial improvement required must keep all of the funds
received from CRS in a segregated bank account. That bank account must be interest-bearing (where practicable
and practical) and may include funds from CRS’ private funds and grant funds (both USG and Non-USG).
(b) The segregated bank account requirement is based upon the last complete assessment that takes place prior to the
date that a subrecipient agreement is signed. A segregated bank account requirement will remain in place for the
full duration of an agreement even if the Non-A-133 subrecipient’s assessment rating changes favorably during the
agreement period. CRS reserves the right to require a Non-A-133 subrecipient to use a segregated bank account
for CRS’ funds if the subrecipient’s assessment rating changes adversely during the course of an agreement period.
(c) All A-133 subrecipients and the Non-A-133 subrecipients that have been assessed as having strong internal
controls that meet most standards are not required to have segregated bank accounts for funds furnished by CRS
unless so mandated by the grant donor.
11.0 Audits and Reviews

(a) A U.S. based non-federal, non-profit entity that expends $500,000 or more in its fiscal year in federal (U.S.
Government) awards from all sources, whether directly from the U.S. government or via another U.S. based non-
federal entity, is obligated to have a single or program-specific audit conducted for that year in accordance with the
provisions of OMB Circular A-133 and the Single Audit Act Amendments of 1996, which require an applicable
U.S. based organization to:
i. Maintain internal control for federal programs
ii. Comply with the laws, regulations, and the provisions of contracts or grant agreements
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iii. Prepare appropriate financial statements, including the schedule of expenditures of federal awards (SEFA)
iv. Ensure that the required single audits are properly performed and submitted when due
v. Follow up and take corrective actions on audit findings
(b) A foreign (Non-U.S.) subrecipient that expends $300,000 or more of USAID funds in the subrecipient’s fiscal year
is required to undergo an independent annual audit each year it equals or exceeds that threshold. The audit should
follow the USAID Inspector General’s guidelines and include examinations of the subrecipient’s financial
statements and its U.S. Government subawards. A foreign subrecipient that expends less than $300,000 of USAID
funds in its fiscal year is exempt from the audit requirement, but must make its records available upon request to
USAID or CRS. The subrecipient may charge audit costs to CRS’ project or subaward only if such costs were
included in the approved budget or if so directed by CRS.
(c) Every subrecipient must give CRS’ internal and independent external auditors access to the subrecipient’s records,
financial statements and other information as deemed necessary by CRS to comply with OMB Circular A-133 or
any other audit or review requirement.
(d) CRS, its direct grant donors and any indirect grant donors reserve the right to:
i. Perform at any time a review of a subrecipient’s subaward activities and related records
ii. Conduct or require additional audits, including limited-scope audits
iii. Carry out other reasonable reviews of the subrecipient as may be necessary to ensure that funds were
properly used in accordance with the terms of the subrecipient agreement
(e) Subrecipient audits should be completed in a timely fashion, and copies of audit reports should be submitted to the
Country Program’s designated contact person as soon as they are available. Audit reports should include at a
minimum all management letters, comments, findings or adjustments specific to CRS’ project(s) or subawards.
(f) CRS’ subrecipients should ensure that their lower-tier subrecipients comply with the OMB Circular A-133 and
USAID audit requirements, when applicable. Subrecipients should also make certain that their lower-tier
subrecipients allow CRS’ internal and independent external auditors access to their financial records, financial
statements and other information as deemed necessary to comply with the review or audit requirements of CRS or
its donors.
12.0 Lower-Tier Subrecipient Monitoring

(a) CRS’ subrecipients must have systems in place to evaluate and monitor their lower-tier subrecipients to ensure that
they have adequate internal controls and are in compliance with the recordkeeping and documentation
requirements of CRS and its donors. CRS’ subrecipients should conduct an initial capacity assessment for each of
their lower tier subrecipients.
(b) If a subrecipient works through a related business entity, such as a subsidiary, affiliate, or a company in which the
subrecipient owns a minority interest, it is imperative that the responsibility for assessing and monitoring the lower
tier subrecipient is clearly defined in the subrecipient agreement. Prior to signing the agreement, the assessment
and monitoring obligations and CRS’ expectations should also be openly communicated to the management team
that will be tasked with these duties.
(c) If a subrecipient has lower-tier subrecipients, but does not have standardized assessment and monitoring tools, the
Country Program should have the subrecipient use CRS’ tools to aid in those processes and should assist the
subrecipient in their implementation.
(d) If a subrecipient has a lower-tier subrecipient that it cannot assess or monitor and CRS is prevented from
performing those functions, then the subrecipient agreement must contain a clause that requires the lower-tier
organization to be examined by an external auditor and a copy of the audit report to be furnished to CRS.
13.0 Special Consideration – Subrecipient with No Local Office

(a) When CRS works with a subrecipient that has no local office in the country where the project activities are being
performed, special considerations are warranted. The pertinent requirements from the following list should be
written into the agreement with that subrecipient as applicable:
Page 17 of 33
i. If the subrecipient is subject to the A-133 audit requirement, that organization will be required to send
CRS a copy of its A-133 audit report for every year of the agreement.
ii. If the subrecipient has been rated as “a low-risk auditee” in its most recent A-133 audit report, no project
specific audit will be required, but CRS reserves the right to examine or have its agent examine all
documents that support the subrecipient’s charges to CRS’ project.
iii. For a subrecipient agreement greater than $250,000 with an A-133 organization that did not qualify as a
“low-risk” auditee in its most recent A-133 audit report, a project specific audit will be required.
iv. For a subrecipient agreement less than $250,000 with an A-133 organization that did not qualify as a
“low-risk auditee” in its most recent A-133 audit report, there is no project specific audit requirement, but
CRS reserves the right to examine or to have its agent examine all documents that support the
subrecipient’s charges to CRS’ project.
v. For subrecipient agreements greater than $100,000 with a Non-A-133 organization, a project specific
audit will be required.
vi. For subrecipient agreements less than $100,000 with a Non-A-133 organization, a project specific audit
will not be required, but CRS requires the right to examine or have its agent examine all documents that
support the subrecipients’ charges to CRS’ projects.
(b) The Overseas Support Department maintains a list that shows whether various A-133 organizations have been rated
as low risk. The list can be accessed through the following link (A-133 Risk Ratings List) by selecting “Open
Hyperlink” via a right click on your mouse. The site is currently located at:
https://global.crs.org/communities/BusinessDevelopment/Lists/A133Organizations/Allitems.aspx.
Responsibility:
• Finance Managers
• Heads of Operations / Deputy Country Representatives
• Program Managers
• Heads of Programming
• Country Representatives
Requirements
Approvals: Senior Director, Finance Systems & Operations
Relevant Knowledge: Basic Management Concepts
Definitions:
A-133 Subrecipient
A U.S.-based non-federal, non-profit organization that expends $500,000 or more against
Federal (U.S.G) awards in a fiscal year and that is subject to the audit requirements of
OMB Circular A-133.
Audit Trail
A paper or electronic path that gives a detailed, documented history of a financial
transaction. It enables a reviewer to trace the transaction from the general ledger or
another book of original entry back to the applicable source document, such as a vendor’s
invoice.
Double-Entry Bookkeeping
The use of two-sided entries when recording all financial transactions so as to keep the
accounting books in balance. The totals of the two sides of each transaction, known as
debits and credits, must always agree. Debits represent increases to assets and expenses
and reductions to liabilities and revenues. Credits represent increases in liabilities and
revenues and decreases in assets and expenses.
Page 18 of 33
Foreign Subrecipient
Within the context of this policy means an entity that is based in a country other than the
United States.
Liquidation Report
A financial report containing the prescribed information submitted by a subrecipient to
account for expenses it incurred against a CRS project. Within the context of this policy,
refers to reporting submitted by subrecipients who operate on a reimbursement basis, as
well as those that are funded by CRS in advance of their project expenditures.
Lower-Tier Subrecipient
An entity that has a subrecipient relationship with one of CRS’ subrecipients.
Pass-Through Entity
An entity (such as CRS) that provides an award to a subrecipient to carry out a grantor’s
program.
Non-A-133 Subrecipient
The term pertains to any foreign subrecipient or a U.S. based subrecipient that expends
less than $500,000 in its fiscal year against Federal awards and which is not covered by
OMB Circular A-133. (Applicable subrecipients are subjected to the audit requirements
per the terms of the financial provisions of CRS’ USAID subaward agreements.) This
term also includes a for-profit entity if the funding relationship is that of a prime recipient
and a subrecipient.
Questioned Costs
Within the context of this policy means expenses charged by a subrecipient to a CRS
project and for which an external or HQ internal auditor has expressed reservations about
their allowability in an audit finding:
(1) Which resulted from a violation or possible violation of a provision of a law,
regulation, contract, grant, cooperative agreement, or other agreement or document
governing the use of funds provided by CRS,
(2) Where the costs, at the time of the audit, are not supported by adequate
documentation; or
(3) Where the costs incurred appear unreasonable and do not reflect the actions a
prudent person would take in the circumstances.
Significant Improvement Needed

This term is used for a condition in which there is a shortcoming, or a combination of
shortcomings, in internal control that is less severe than a situation in which substantial
improvement is needed, yet important enough to merit attention by those charged with
governance.
Subrecipient
A subrecipient relationship exists when funding from a pass-through entity is provided to
perform a portion of the scope of work or objectives of the pass-through entity’s award
agreement with the donor. (A-133 Compliance Supplement for 2013, Page 5-2-4)
Substantial Improvement Required

This term is used to describe a condition in which a major shortcoming, or a combination
of major shortcomings, in internal control exists, such that there is a reasonable possibility
that a material misstatement of the entity’s financial statements will not be prevented, or
detected and corrected on a timely basis.
Page 19 of 33
Unsupported Costs
Costs recorded by a subrecipient against a project funded by CRS that have been found to
be inadequately documented during a Country Program’s reviews of the subrecipient’s
liquidation documentation or during monitoring visits.
Records and Notes

Special Notes/Appendix
1. The prior, written approval of the Senior Director, Finance Systems & Operations is required for all requested
deviations from this policy.
2. Special consideration is warranted for a subrecipient that falls into one or more of the following categories:
• An organization that is unable or unwilling to undergo subrecipient assessments
• An organization that is unable to prepare an ICIP or that is unable to commit to implement one
prepared on its behalf
• An organization that consistently makes no effort to implement improvements cited in one or more
ICIPs
• An organization that is a CRS subrecipient in an outlying country to which CRS’ monitors are denied
access or for which access is greatly inhibited due to security reasons or travel restrictions imposed by
the pertinent country’s government
All organizations that fall into one or more of the above categories will be treated as having inadequate
internal controls with substantial improvement required for the entire duration of their subrecipient
relationship with CRS. As a consequence, such organizations will be:
• Assessed annually (if conditions allow)
• Funded monthly
• Obligated to report monthly
• Required to submit copies of documentation supporting all expenses with each liquidation report
3. In the event that a Country Program discovers that certain requirements of this policy cannot be incorporated
into a given subrecipient agreement, its Country Representative must contact the Regional Finance Officer and
the Deputy Regional Director for Management Quality for guidance and resolution before signing that
agreement.
4. The financial assessment checklist, monitoring checklist, report forms and voucher review workpapers
provided with this policy are intended to serve as tools in evaluating subrecipients and in ensuring compliance
with the requirements of CRS and its donors. Those tools are integral components of this policy. Country
Programs should work closely with subrecipients to ensure that ICIPs are developed and implemented to
address deficiencies detected during the assessment, monitoring and document review phases of the
subrecipient relationship.
5. The subrecipient shall retain financial records, supporting documents, statistical records and all other
subaward-related records and documents for a period of three years from the expiration or termination of the
grant (from CRS’ donor, if applicable) or subrecipient agreement, or after final payment, resolution of any
litigation, claim or audit, whichever is later. However, the subrecipient shall, at a minimum, retain such
records for the period required by local law or a donor, if longer.
6. Each Country Program should keep a central database or files that contain the following for each of its
subrecipients: financial assessments, monitoring trip reports, monitoring checklists and supporting
workpapers, ICIPs, audit reports (for local subrecipients), and any additional communications between the
Country Program and the subrecipient regarding financial matters or internal control issues. The records
should be retained for a minimum of three years from the expiration or termination of each subaward, with the
Page 20 of 33
intent of supporting the assessment classifications assigned to subrecipients, the progress made by
subrecipients against identified issues, and the expense verification activities performed by CRS.
7. Over the course of time, the Country Program will need to take into account changes in the subrecipient’s
assessment level as noted during the ongoing assessment and monitoring activities. The subrecipient’s
progress (or regress) may necessitate changes in the reporting, document submission, and monitoring
requirements.
8. Subrecipients should be encouraged to develop Charts of Accounts that meet their needs. They are not
required to use CRS’ Chart of Accounts in their general ledgers for expenditures against CRS’ projects. The
Country Program should ensure that every subrecipient’s expenses are mapped to the appropriate CRS expense
account (for Non-A-133 subrecipients) or cost category (for A-133 subrecipients) using the Expense Account
Mapping Chart formats provided with this policy.
9. Country Programs are encouraged to maintain an updated schedule of their anticipated assessment and
monitoring visits and to incorporate the staffing, travel, and other cost considerations into their annual budgets
and budget amendments.
10. When CRS requires a subrecipient to undergo a project specific audit, the audit requirement should be
incorporated into the subrecipient agreement language and a provision for the estimated cost of that audit
should be included in the amount of the subrecipient award.
Attachments
• Appendix 1 – Requirement Summaries
• Appendix 2 - Examples of Forecasting, Funding, Reporting, & Monitoring Activities
• Excel file containing the following assessment materials for standard subrecipients:
o Subrecipient Assessment Guidance
o Subrecipient Financial Assessment Checklist
o ICIP (for weaknesses or deficiencies detected during assessments) (required format)
• Excel file containing the following assessment materials for small subrecipients:
o Subrecipient Assessment Guidance
o Subrecipient Financial Assessment Checklist
o ICIP (for weaknesses or deficiencies detected during assessments) (required format)
• List of documents to have available for an assessment visit (Word file)
• Excel file containing the following monitoring materials:
o Subrecipient Financial Liquidation Report Templates (format examples)
o Financial Monitoring Trip Report Form (required format)
o ICIP (for weaknesses or deficiencies detected during monitoring visits) (required format)
o Monitoring Checklist (required format)
o Voucher, Effort Reporting, and Employee Benefits Transaction Review Workpapers (examples)
o Expense Account Mapping Charts – Subrecipient accounts to CRS’ accounts (required formats)
o Schedules of Forecasting, Funding, Reporting, and Monitoring Requirements
o Examples showing financial activities with subrecipients that have strong internal controls,
sufficient internal controls, and inadequate internal controls
Related Documents
The following is a list of other documents related to the current document. Changes you make to
the current document may affect the documents listed.
Policy
POL-OSD-GEN-001
Agreements
Page 21 of 33
POL-FIN-DOC-008
Transaction Documentation
POL-FIN-ICS-024
Internal Control Policy
Procedure
PRO-FIN-REC-009.04
Funds Disbursed to Subrecipients – Reports Pending
Other
Subrecipient Agreement Templates
Attachment to POL-OSD-GEN-001
Overseas Support Department’s Agreements Review and Approval Policy Chart
Attachment to POL-FIN-DOC-008
Documentation Matrix
Authorization History:
Rick Estridge
Vice President, Overseas Finance
Rick.Estridge@crs.org
CRS/Baltimore
Contributing Authors:
The following are subject matter experts who contributed to this document:
• Office of Finance
• Regional Finance Officers
• Operational Excellence Department
• Operational Standards and Systems Team (OSS)
• Partnership and Capacity Building Unit
• Internal Audit Department
• Country Representatives
• Deputy Regional Directors / Management Quality
Distribution/Routing List
All persons or areas listed below should receive a controlled copy of this document
once it is approved:
Country Program Financial Managers
Country Representatives
Country Program Heads of Operations
Deputy Regional Directors / Management Quality
Deputy Regional Directors / Program Quality
Regional Finance Officers
Director – Operational Excellence Department
Director – Operational Standards & Systems
Director – Resource Acquisition and Donor Engagement Department
Director – Humanitarian Response Department
Page 22 of 33
Partnership and Capacity Building Unit

Regional Directors
Director – Program Impact and Quality Assurance Department
Office of Finance
Director of Internal Audit Department
Vice President / Chief Learning Officer
Other HQ/Support Departments via Intranet
Page 23 of 33
Appendix I – Requirement Summaries
14.0 Requirement Summaries

The forecasting, funding, reporting, monitoring and transaction review coverage requirements for Country Programs
and their subrecipients have been summarized in the following tables:
14.1 A-133 Subrecipient Agreements Greater than or Equal to $100,000

Summary for A-133 Subrecipient Agreements Greater than or Equal to $100,000
Minimum Requirements
Subrecipient Number of Review
Type Forecast Funding Reporting Monitoring Visits Coverage
Strong Quarterly Three months, Quarterly Every six During year one 25%
Internal plus buffer months, starting - one visit, in of local
Controls with month succeeding expenses
seven years - two
(Note 2) visits (Note 3)
Sufficient Quarterly Three months, Quarterly Every four During each 50%
Internal plus buffer months, starting year – three of local
Controls with month four visits (Note 3) expenses
(Note 2)
Inadequate Quarterly 1st tranche for Monthly Every three During each 100%
Internal two months, (Note 1) months, starting year - four of local
Controls then monthly with month visits (Note 3) expenses
three
14.2 A-133 Subrecipient Agreements Less than $100,000

Summary for A-133 Subrecipient Agreements Less than $100,000
Strong Quarterly Three months, Quarterly Every twelve During year one 25%
Internal plus buffer months, starting – no visits, in of local
Controls with month succeeding expenses
thirteen years one visit
(Note 2) per year
(Note 3)
Sufficient Quarterly Three months, Quarterly Every twelve During year one 50%
Internal plus buffer months, starting – no visits, in of local
Controls with thirteen succeeding expenses
(Note 2) years – one visit
per year
(Note 3)
Inadequate Quarterly 1st tranche for Monthly, with Every six During each 100%
Internal two months, copies of months, starting year – two visits of local
Controls then monthly supporting with month six per year expenses
documents (Note 3)
Page 24 of 33
Appendix I – Requirement Summaries (continued)
14.3 Non-A-133 Subrecipient Agreements Greater than or Equal to $50,000

Summary for Non-A-133 Subrecipient Agreements Greater than or Equal to $50,000
Strong Quarterly 1st tranche for Monthly Every six During each 50%
Internal two months, months, starting year – two visits
Controls then monthly with month six per year
(Note 3)
Sufficient Quarterly 1st tranche for Monthly Every three During year one 75%
Internal two months, months, starting - three visits, in
Controls then monthly with month four succeeding
years – four
visits
(Note 3)
Inadequate Quarterly 1st tranche for Monthly, with Quarterly Four visits each 100%
Internal two months, copies of starting with year
Controls then monthly supporting month three (Note 3)
documents
14.4 Non-A-133 Subrecipient Agreements Less than $50,000

Summary for Non-A-133 Subrecipient Agreements Less than $50,000
Strong Quarterly 1st tranche for Monthly Every twelve During each 50%
Internal two months, months, starting year – one visit
Controls then monthly with month per year
twelve (Note 3)
Sufficient Quarterly 1st tranche for Monthly, with Every twelve During each 75%
Internal two months, copies of months, starting year – one visit
Controls then monthly supporting with month per year
documents twelve (Note 3)
Inadequate Quarterly 1st tranche for Monthly, with Every six During each 100%
Internal two months, copies of months, starting year – two visits
Controls then monthly supporting with month six per year
documents (Note 3)
14.5 Notes to the Requirement Summaries

Note 1 – As a standard rule, A-133 subrecipients lacking adequate internal controls that sign a subrecipient agreement
greater than or equal to $100,000 with CRS are not required to submit supporting documentation with their monthly
liquidation reports for that agreement. The Country Representative has the option to require A-133 subrecipients with
inadequate internal controls to submit supporting documentation with the liquidation reports for such agreements,
unless the subrecipient agreement states otherwise. However, quarterly onsite monitoring must be performed for all
agreements equal to or greater than $100,000 with A-133 subrecipients rated as having inadequate internal controls,
even if the subrecipients are required to submit copies of the supporting documentation with their liquidation reports.
Note 2 – The monitoring visits for those subrecipients who report quarterly have been scheduled to occur in the month
following the end of the quarter so that the monitors can review the documentation supporting the most recent reported
quarter.
Note 3 - An additional monitoring visit must take place after the agreement expires and before grant/project closure.
Page 25 of 33
Appendix II – Examples of Forecasting, Funding, Reporting, & Monitoring Activities
15.0 Examples
The following examples depict the timing of activities in various scenarios and the impact those activities have upon
the outstanding balances with subrecipients that operate on an advance basis. The dates shown in each illustration are
those from the subrecipient’s perspective for forecast submissions, receipts of funding, submissions of liquidation
reports, and notification of costs disallowed during a monitoring visit.
The explanations for the abbreviations that appear in these illustrative tables are as follows:
1. F/C = Cash forecast submitted by the subrecipient
2. QFDG = Quarterly funding sent by CRS to the subrecipient = Amount forecasted by the subrecipient for the
upcoming period, plus buffer, when applicable, as adjusted for the cumulative difference between the funding
previously provided for this agreement and the amount of expenses reported by the subrecipient, net of
amounts disallowed by CRS that have not been refunded by the subrecipient.
3. MFDG = Monthly funding sent by CRS to the subrecipient = Amount requested by the subrecipient for a given
month as adjusted for the difference between the amount forecasted (requested) by the subrecipient for a
period two months prior and the expenses reported by the subrecipient for that month, less any costs
disallowed by CRS that have not been refunded by the subrecipient
4. REP = Liquidation report submitted to CRS by the subrecipient
5. VAR = Difference between CRS’ funding for the period versus the subrecipient’s reported expenses. (A
bracketed amount means that the subrecipient’s expenses exceeded the total amount advanced for the report
period. An unbracketed amount denotes that the subrecipient’s expenses were less than the funding.)
6. DIS = Costs that were disallowed by CRS
7. REF – Refund received by CRS from the subrecipient as a reimbursement for disallowed costs (shown as a
bracketed amount)
8. Buffer – Additional funding to cover the period after the current quarterly reporting period ends and before the
next funding tranche is to be sent to the subrecipient. (Equals 1/3 of the current quarter’s forecast.)
Color coding has been used to highlight the linkage between the quarterly cash forecasts submitted by the
subrecipient, CRS’ funding for the related forecast periods, and the subrecipients’ ensuing liquidation reports.
15.1 Subrecipient Agreement Greater than or Equal to $100,000 with an A-133 Subrecipient that Has Strong
Internal Controls; Meets Most Standards
The following table illustrates the cash forecast and liquidation report submission deadlines for a hypothetical A-133
subrecipient, Monocles for All, that has strong internal controls and that signed a subrecipient agreement above
$100,000 with CRS/Burkina Faso. The table also shows rough approximations of the dates that a Country Program
would be expected to fulfill its funding and monitoring responsibilities. The agreement amount is $6,000,000 and its
period runs from January 1, 2014 through December 31, 2014. The agreement was signed on December 27, 2013. The
initial cash forecast is due by January 6, 2014.
A-133 Subrecipient Agreement > $100,000 – Monocles for All – with Strong Internal Controls
Ref. Description Date F/C QFDG REP VAR DIS Balance
1 1st F/C – Jan. 1/06/14 $400,000 $0
1 1st F/C – Feb. 1/06/14 500,000 0
1 1st F/C – Mar. 1/06/14 600,000 0
1 QFDG – 1st Qtr.+ Buffer 1/17/14 $2,000,000 2,000,000
1 1st REP – Jan.-Mar. 4/14/14 ($1,452,000) 548,000
1 VAR – 1st REP 4/14/14 $548,000 548,000
2 2nd F/C – Apr. 4/14/14 750,000 548,000
2 2nd F/C – May. 4/14/14 450,000 548,000
2 2nd F/C – Jun. 4/14/14 519,000 548,000
2 QFDG – 2nd Qtr. + Buffer 4/29/14 1,744,000 2,292,000
2 2nd REP – Apr.-Jun. 7/11/14 (1,750,000) 542,000
2 VAR – 2nd REP 7/11/14 (6,000) 542,000
3 3rd F/C – July 7/11/14 615,000 542,000
Page 26 of 33
3 3rd F/C – Aug. 7/11/14 453,000 542,000

3 3rd F/C – Sept. 7/11/14 450,000 542,000
DIS – 1st Visit 7/23/14 $8,500 550,500
3 QFDG – 3rd Qtr. + Buffer 7/29/14 1,473,500 2,024,000
3 3rd REP – July-Sept. 10/15/14 (1,553,970) 470,030
3 VAR – 3rd REP 10/15/14 (80,470) 470,030
4 4th F/C – Oct. 10/15/14 460,000 470,030
4 4th F/C – Nov. 10/15/14 419,000 470,030
4 4th F/C – Dec. 10/15/14 384,000 470,030
DIS Reversal 10/28/14 (8,500) 461,530
4 QFDG – 4th Qtr. 10/29/14 782,500 1,244,030
Totals $6,000,000 $6,000,000 ($4,755,970) $0 $1,244,030
Number of Months’ Funding in Ending Balance 3.0
• In the above example, the amounts of the funding tranches were computed as follows;
o For the first quarter, the funding represents the total amount forecasted by the subrecipient
($1,500,000) for the quarter, plus one-third of that total ($500,000) as a funding buffer.
o For the second quarter, the amount funded is the net of the total amount forecasted/requested by the
subrecipient ($1,719,000), plus one-third of that total as a funding buffer ($573,000) reduced by the
difference between the amount funded and the amount liquidated for this subaward ($548,000) for the
previous quarter.
o For the third quarter, the amount funded is the net of the amount forecasted by the subrecipient for the
quarter ($1,518,000), plus one-third of that total as a funding buffer ($506,000), net of the cumulative
difference between the amount funded and the amount liquidated for this subaward ($542,000) and the
amount disallowed on the previous week’s monitoring visit ($8,500).
o For the fourth quarter, there is no funding buffer since the agreement period will end on December 31.
The amount funded is computed as the net of the total amount obligated to the subrecipient
($6,000,000) per the agreement, less the cash transferred to the subrecipient for the first three quarters
of the agreement period ($5,217,500).
In this example, the Country Program adjusted its receivable balance for this subrecipient on July 23 for the amount of
costs disallowed during CRS’ monitoring visit. In late July, the subrecipient booked an entry to reduce its expenses for
the amount of the costs disallowed by CRS. The expenses reported by the subrecipient on October 15 were net of the
$8,500 reduction. After the Country Program was able to verify that the subrecipient had reduced its reported expenses
for the third quarter, it reversed the $8,500 entry made on July 23 since that entry was no longer needed.
15.2 Subrecipient Agreement Greater than or Equal to $100,000 with an A-133 Subrecipient with Sufficient
Internal Controls
The following table illustrates the cash forecast and liquidation report submission deadlines for a hypothetical A-133
subrecipient, Selective Compassion, that has sufficient internal controls and that signed a subrecipient agreement with
CRS above the $100,000 threshold. Approximations of the dates that a Country Program would be expected to fulfill
its funding and monitoring responsibilities are also shown. The amount of the agreement, which was signed on
December 30, 2013, is $3,000,000 and its period runs from January 1, 2014 through December 31, 2014. The initial
cash forecast is due by January 9, 2014.
A-133 Subrecipient Agreement > $100,000 – Selective Compassion – with Sufficient Internal Controls
Ref. Description Date F/C QFDG REP VAR DIS Balance
1 1st F/C – Jan. 1/09/14 $200,000 $0
1 1st F/C – Feb. 1/09/14 300,000 0
1 1st F/C – Mar. 1/09/14 226,000 0
1 QFDG–1st Qtr. + Buffer 1/23/14 $968,000 968,000
1 1st REP – Jan.-Mar. 4/14/14 ($711,000) 257,000
1 VAR-1st REP 4/14/14 $257,000 257,000
2 2nd F/C – Apr. 4/14/14 320,000 257,000
2 2nd F/C – May 4/14/14 240,000 257,000
2 2nd F/C – June 4/14/14 232,000 257,000
DIS – 1st Visit 4/23/14 $3,000 260,000
2 QFDG-2nd Qtr.+ Buffer 4/29/14 796,000 1,056,000
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2 2nd REP – Apr.-June 7/15/14 (787,000) 269,000

2 VAR – 2nd REP 7/15/14 9,000 269,000
3 3rd F/C – July 7/15/14 240,000 269,000
3 3rd F/C – Aug. 7/15/14 310,000 269,000
3 3rd F/C – Sept. 7/15/14 230,000 269,000
DIS Reversal 7/25/14 (3,000) 266,000
3 QFDG-3rd Qtr. + Buffer 7/28/14 774,000 1,040,000
Totals $2,538,000 ($1,498,000) $0 $1,040,000
• In the above example, the funding tranches were computed as follows:
o For the first quarter, the funding represents the total amount forecasted by the subrecipient ($726,000)
for the quarter, plus one-third of that total ($242,000) as a funding buffer.
o For the second quarter, the amount funded is the net of the total amount forecasted by the subrecipient
($792,000), plus one-third of that total as a funding buffer ($264,000) reduced by the cumulative
difference between the amount funded and the amount liquidated for this subaward ($257,000) and the
costs disallowed on the April 23 monitoring visit ($3,000).
o For the third quarter, the amount funded is the net of the amount forecasted by the subrecipient for the
quarter ($780,000), plus one-third of that total as a funding buffer ($260,000), net of the outstanding
balance in the receivable account ($266,000).
In this example, the Country Program adjusted its receivable balance for this subrecipient on April 23 for the amount of
costs disallowed during CRS’ monitoring visit. In early May, the subrecipient booked an entry to reduce its expenses
for the amount of the costs disallowed by CRS. The second quarter’s expenses reported by the subrecipient on July 15
were net of the $3,000 reduction. After the Country Program was able to verify that the subrecipient had reduced its
reported expenses for the second quarter, it reversed the $3,000 entry made on April 23 since that entry was no longer
needed.
15.3 Subrecipient Agreement Greater than or Equal to $100,000 with an A-133 Subrecipient with Inadequate
Internal Controls
An illustration of the activity involving an A-133 subrecipient that has inadequate internal controls and whose
agreement with CRS exceeds the $100,000 threshold appears below. The subrecipient, Food for Few, signed an
agreement with CRS/Burkina Faso covering the period of January 1, 2014 through December 31, 2014 for $360,000 on
December 26, 2013. In this example, the subrecipient is required by terms of its subrecipient agreement to submit
photocopies of the supporting documentation with its monthly liquidation report. However, that document submission
requirement will have no impact upon the frequency of the monitoring visits that the Country Program needs to
perform.
A-133 Subrecipient Agreement > $100,000 – Food for Few – Inadequate Internal Controls
Ref Description Date F/C MFDG REP VAR DIS Balance
1 1st F/C – Jan. 1/03/14 $35,000 $0
1 1st F/C – Feb. 1/03/14 39,000 0
1 1st F/C – Mar. 1/03/14 27,000 0
1 MFDG – Jan./Feb. 1/17/14 $74,000 74,000
1 1st REP – Jan. 2/14/14 ($33,000) 41,000
1 VAR – Jan. 2/14/14 $2,000 41,000
1 MFDG-Mar. 2/28/14 25,000 66,000
2 2nd F/C – Apr. 3/14/14 30,000 66,000
2 2nd F/C – May 3/14/14 38,000 66,000
2 2rd F/C – June 3/14/14 28,500 66,000
1 2nd REP – Feb. 3/14/14 (39,500) 26,500
1 VAR – Feb. 3/14/14 (500) 26,500
2 MFDG – Apr. 3/26/14 30,500 57,000
DIS – 1st Visit 3/28/14 $500 57,500
REF 4/07/14 (500) 57,000
1 3rd REP – Mar. 4/15/14 (27,700) 29,300
Page 28 of 33
1 VAR – Mar. 4/15/14 (700) 29,300

2 MFDG – May 4/28/14 38,700 68,000
2 4th REP – Apr. 5/15/14 (28,800) 39,200
2 VAR – Apr. 5/15/14 1,200 39,200
2 MFDG – June 5/29/14 27,300 66,500
Totals $195,500 ($129,000) $0 $66,500
o The funding tranche sent to the subrecipient for the months of January and February was the sum of
the amounts forecasted by the subrecipient for those months.
o The funding for the months of March and June has been determined using the formula described on
Page 7 of the policy that limits the total funding issued to a subrecipient for a given quarter to its
forecast for that quarter.
o The funding for the months of April and May is the net of the amount of the subrecipient’s forecasted
cash needs for those months, adjusted for the spending variances for the months February and March,
respectively.
• When CRS/Burkina Faso disallowed the costs on March 28, it recorded an entry to increase the receivable
balance for this subrecipient and to reduce the subrecipient expenses it had previously booked. The refund
check (REF) from the subrecipient for the costs that were disallowed on March 28 was received and deposited
on April 7. When CRS/Burkina Faso deposited the check, it credited (reduced) its open receivable balance for
this subrecipient.
15.4 Subrecipient Agreement Greater than or Equal to $50,000 with a Non-A-133 Subrecipient with Strong
Internal Controls
The following table illustrates the cash forecast and liquidation report submission deadlines for a Non-A-133
subrecipient, Touts les enfants de Dieu, that is assessed as having strong internal controls and whose subrecipient
agreement with CRS exceeds the $50,000 threshold. Also shown are rough approximations of the dates that a Country
Program would be expected to fulfill its funding and monitoring responsibilities. The term for the $1,200,000
agreement runs from January 1, 2014 through December 31, 2014. Since the subrecipient agreement was signed on
December 31, 2013, the initial cash forecast is due by January 10, 2014.
Non-A-133 Subrecipient Agreement > $50,000 – Touts les enfants de Dieu – Strong Internal Controls
Ref. Description Date F/C MFDG REP VAR DIS Balance
1 1 F/C – Jan.
st
1/10/14 $80,000 $0
1 1st F/C – Feb. 1/10/14 120,000 0
1 1st F/C – Mar. 1/10/14 110,000 0
1 MFDG – Jan./Feb. 1/24/14 $200,000 200,000
1 1st REP. – Jan. 2/14/14 ($86,000) 114,000
1 VAR – Jan. 2/14/14 ($6,000) 114,000
1 MFDG – Mar. 2/27/14 110,000 224,000
1 2nd REP. – Feb. 3/14/14 (121,000) 103,000
1 VAR – Feb. 3/14/14 (1,000) 103,000
2 2nd F/C – Apr. 3/14/14 130,000 103,000
2 2nd F/C – May 3/14/14 100,000 103,000
2 2nd F/C – June 3/14/14 105,000 103,000
2 FDG – Apr. 3/27/14 131,000 234,000
1 3rd REP – Mar. 4/15/14 (113,000) 121,000
1 VAR – Mar. 4/15/14 (3,000) 121,000
2 MFDG – May 4/29/14 103,000 224,000
2 4th REP – Apr. 5/14/14 (129,000) 95,000
2 VAR – Apr. 5/14/14 1,000 95,000
2 MFDG – June 5/28/14 101,000 196,000
2 5th REP – May 6/13/14 (97,000) 99,000
2 VAR – May 6/13/14 3,000 99,000
Page 29 of 33
3 3rd F/C – July 6/13/14 115,000 99,000

3 3rd F/C – Aug. 6/13/14 103,000 99,000
3 3rd F/C – Sept. 6/13/14 119,000 99,000
3 MFDG – July 6/27/14 112,000 211,000
2 6th REP – June 7/15/14 (109,000) 102,000
2 VAR – June 7/15/14 (4,000) 102,000
3 MFDG – Aug. 7/28/14 107,000 209,000
DIS – 1st Visit 7/30/14 $500 209,500
REF 8/07/14 (500) 209,000
Totals $864,000 ($655,000) $0 $209,000
• In the above example, the funding tranches were computed as follows
o The funding tranche sent to the subrecipient for the months of January and February was the sum of
the amounts forecasted by the subrecipient for those months.
o The funding for March and June was adjusted using the formula on Page 7 of the policy to ensure that
the total amount of funding provided during the first and second quarters of the agreement period did
not exceed the forecasted needs for those quarters.
o The funding for April has been increased by $1,000 from the $130,000 originally forecasted for that
month to compensate for the $1,000 spent by the subrecipient in excess of the amount forecasted for
February, the last liquidation report processed before the April funding tranche was issued.
o The funding for May includes an additional $3,000 to compensate for the difference between the
amount forecasted for March and the amount expensed by the subrecipient in that month.
o The funding for July represents the amount originally forecast for that month ($115,000) less the
amount underspent in May ($3,000), the last liquidation report processed prior to the issuance of the
July funding tranche.
o The funding for August is the sum of the original forecast for that month ($103,000) plus additional
funds to cover the difference between the sum forecasted for June ($105,000) and the amount
expended by the subrecipient in that month ($109,000).
• The Country Program received and deposited a refund check (REF) from the subrecipient on August 7 for the
costs that were disallowed on July 30.
15.5 Subrecipient Agreement Greater than or Equal to $50,000 with a Non-A-133 Subrecipient with Sufficient
Internal Controls
The following table illustrates the cash forecast and liquidation report submission deadlines for a Non-A-133
subrecipient, Amour sans limite, that has sufficient internal controls and whose agreement with CRS is above the
$50,000 threshold. The table also shows rough approximations of the dates that a Country Program would be expected
to fulfill its funding and monitoring responsibilities. The term for the $360,000 agreement, which was signed on
December 30, 2013, runs from January 1, 2014 through December 31, 2014. The initial cash forecast was submitted
on January 8, a day before the submission deadline.
Non-A-133 Subrecipient Agreement > $50,000 – Amour sans limite – Sufficient Internal Controls
1 1st F/C – Jan. 1/08/14 $45,000 $0
1 1st F/C – Feb. 1/08/14 28,000 0
1 1st F/C – Mar. 1/08/14 26,000 0
1 MFDG – Jan./Feb. 1/23/14 $73,000 73,000
1 1st REP – Jan. 2/13/14 ($40,000) 33,000
1 VAR – Jan. 2/13/14 5,000 33,000
1 MFDG – Mar. 2/27/14 21,000 54,000
1 2nd REP – Feb. 3/14/14 (25,500) 28,500
1 VAR – Feb. 3/14/14 2,500 28,500
2 2nd F/C – Apr. 3/14/14 36,000 28,500
2 2nd F/C – May 3/14/14 40,000 28,500
2 2nd F/C – June 3/14/14 33,000 28,500
2 MFDG – Apr. 3/27/14 33,500 62,000
Page 30 of 33
1 3rd REP – Mar. 4/14/14 ($24,500) 37,500

1 VAR – Mar. 4/14/14 1,500 37,500
2 MFDG – May 4/29/14 38,500 76,000
DIS – 1st Visit 4/30/14 $1,000 77,000
REF 5/07/14 (1,000) 76,000
2 4th REP – Apr. 5/14/14 (37,700) 38,300
2 VAR – Apr. 5/14/14 (1,700) 38,300
2 MFDG – June 5/28/14 34,700 73,000
Totals $200,700 ($127,700) $0 $73,000
o The funding for the months of January and February was the sum of the amounts forecasted by the
subrecipient for those months.
o The funding for the months of March and June has been calculated using the formula described on
Page 7 of this policy that ensures that the funding sent to a subrecipient for a given quarter does not
exceed the subrecipient’s original forecast for that quarter.
o The funding for the months of April and May is the net of the subrecipient’s original forecast for
those individual months as adjusted for the spending variances between the amounts forecasted and
expended by the subrecipient for February and March, respectively.
• CRS/Burkina Faso received and deposited a refund check (REF) on May 7 for costs that were disallowed by
its monitors on April 30.
15.6 Subrecipient Agreement Greater than or Equal to $50,000 with a Non-A-133 Subrecipient with Inadequate
Internal Controls
The following table illustrates the activity between CRS/Burkina Faso and a hypothetical Non-A-133 subrecipient,
Soeurs et frères, that has inadequate internal controls and that signed a $96,000 agreement with CRS. The agreement
period and initial cash forecast submission date are the same as that used for the previous example. In this example, the
subrecipient is bound by terms of the agreement to submit photocopies of all supporting documentation with its
monthly liquidation report. Per the policy, CRS/Burkina Faso is required to perform quarterly monitoring visits.
Non-A-133 Subrecipient Agreement > $50,000 – Soeurs et frères – Inadequate Internal Controls
1 1st F/C – Jan. 1/08/14 $5,000 $0
1 1st F/C – Feb. 1/08/14 9,000 0
1 1st F/C – Mar. 1/08/14 7,000 0
1 MFDG – Jan./Feb. 1/23/14 $14,000 14,000
1 1st REP – Jan. 2/13/14 ($3,000) 11,000
1 VAR – Jan. 2/13/14 $2,000 11,000
1 MFDG – Mar. 2/27/14 5,000 16,000
1 2nd REP – Feb. 3/13/14 (9,500) 6,500
1 VAR – Feb. 3/13/14 (500) 6,500
2 2nd F/C – Apr. 3/13/14 10,000 6,500
2 2nd F/C – May 3/13/14 8,000 6,500
2 2nd F/C – Jun. 3/13/14 8,500 6,500
2 MFDG – Apr. 3/27/14 10,500 17,000
DIS – 1st Visit 3/28/14 $500 17,500
REF 4/08/14 (500) 17,000
1 3rd REP – Mar. 4/11/14 (7,700) 9,300
1 VAR – Mar. 4/11/14 (700) 9,300
2 MFDG – May 4/25/14 8,700 18,000
2 4th REP – Apr. 5/14/14 (8,800) 9,200
2 VAR – Apr. 5/14/14 1,200 9,200
2 MFDG – June 5/28/14 7,300 16,500
2 5th REP – May 6/13/14 (7,900) 8,600
Page 31 of 33
2 VAR – May 6/13/14 100 8,600

3 3rd F/C – July 6/13/14 6,000 8,600
3 3rd F/C – Aug. 6/13/14 7,000 8,600
3 3rd F/C – Sept. 6/13/14 4,000 8,600
3 MFDG – July 6/26/14 5,900 14,500
DIS – 2nd Visit 6/28/14 200 14,700
Totals $51,400 ($36,900) $200 $14,700
o The funding for the months of January and February was the sum of the amounts forecasted by the
subrecipient for those months.
o The funding for April, May, and July represents the amount requested by the subrecipient for those
months, as adjusted for the spending variance between the amount forecasted by the subrecipient and
the amount it expended for the months of February, March, and May, respectively.
• CRS/Burkina Faso received and deposited a refund check (REF) on April 8 for costs that were disallowed by
its monitors on March 28.
15.7 Subrecipient Agreement Less Than $100,000 with an A-133 Subrecipient that Has Inadequate Internal
Controls
The following table illustrates the cash forecast and liquidation report submission deadlines for a $71,000 agreement
with a hypothetical A-133 subrecipient, Meager Morsels, that is rated as having inadequate internal controls. The table
also shows rough approximations of the dates that a Country Program would be expected to fulfill its funding and
monitoring responsibilities. The agreement period runs from January 1, 2014 through December 31, 2014. Since the
agreement was signed on December 31, 2013, the initial cash forecast was due and was submitted on January 10, 2014.
A-133 Subrecipient Agreement < $100,000 – Meager Morsels – with Inadequate Internal Controls
1 1st F/C – Jan. 1/10/14 $4,000 $0
1 1st F/C – Feb. 1/10/14 5,000 0
1 1st F/C – Mar. 1/10/14 6,000 0
1 MFDG – Jan./Feb. 1/21/14 $9,000 9,000
1 1st REP – Jan. 2/14/14 ($3,000) 6,000
1 VAR – Jan. 2/14/14 $1,000 6,000
1 FDG – Mar. 2/27/14 5,000 11,000
1 2nd REP – Feb. 3/14/14 ($5,600) 5,400
1 VAR – Feb. 3/14/14 (600) 5,400
2 2nd F/C – Apr. 3/14/14 7,000 5,400
2 2nd F/C – May 3/14/14 4,000 5,400
2 2nd F/C – June 3/14/14 9,000 5,400
2 MFDG – Apr. 3/27/14 7,600 13,000
1 3rd REP – Mar. 4/14/14 ($5,400) 7,600
1 VAR – Mar. 4/14/14 $600 7,600
2 MFDG – May 4/28/14 3,400 11,000
2 4th REP. – Apr. 5/15/14 (9,000) 2,000
2 VAR – Apr. 5/15/14 (2,000) 2,000
2 MFDG – June 5/28/14 9,000 11,000
2 5th REP – May 6/13/14 (7,000) 4,000
2 VAR – May 6/13/14 (3,000) 4,000
3 3rd F/C – July 6/13/14 8,000 4,000
3 3rd F/C – Aug. 6/13/14 6,000 4,000
3 3rd F/C – Sept. 6/13/14 5,000 4,000
3 MFDG – July 6/27/14 11,000 15,000
Page 32 of 33
DIS – 1st Visit 06/30/14 $1,300 16,300

REF 07/07/14 (1,300) 15,000
2 6th REP – June 07/15/14 (6,000) 9,000
2 VAR – June 07/15/14 3,000 9,000
3 MFDG – Aug. 07/28/14 3,000 12,000
Totals $48,000 ($36,000) $0 $12,000
o The funding furnished for January and February was that as requested by the subrecipient in its initial
cash forecast.
o The funding for each of the months of April, May, July, and August is the amount forecasted by the
subrecipient for those months, net of the subrecipient’s spending variances for the months of
February, March, May, and June, respectively.
• Since the agreement is less than $100,000, it is not necessary to conduct the initial monitoring visit until the
sixth month of the agreement period. In light of the fact that the subrecipient’s assessment revealed it has
inadequate controls, the Country Program requires it to submit supporting documentation with its monthly
liquidation reports.
• CRS/Burkina Faso received and deposited a refund check (REF) on July 7 for costs that were disallowed by its
monitors on June 30.
15.8 Notes on Other Subrecipient Agreement Scenarios

1. No examples have been provided for the agreements less than $100,000 with A-133 subrecipients that have
strong or sufficient internal controls since the forecasting, funding, and reporting requirements are the same as
those for A-133 agreements above $100,000. The monitoring requirements differ for A-133 subrecipient
agreements under $100,000, however, since they start with month thirteen.
2. No examples have been provided for agreements less than $50,000 with Non-A-133 subrecipients since the
forecasting, funding, and reporting requirements are the same as those for Non-A-133 agreements above
$50,000 with the following exceptions:
a. Country Programs are not required to conduct monitoring visits for agreements below $50,000 with
Non-A-133 subrecipients with strong or sufficient internal controls until month twelve of the
agreement period.
b. Non-A-133 subrecipients with sufficient internal controls that sign agreements less than $50,000 are
required to submit supporting documentation with their monthly liquidation reports to compensate for
the longer intervals between monitoring visits.
c. Monitoring visits for agreements under $50,000 with Non-A-133 subrecipients assessed as having
inadequate internal controls occur every six months, whereas the monitoring visits for agreements
above $100,000 with Non-133 subrecipients that have inadequate internal controls occur every three
months.
Page 33 of 33

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Subrecipient Financial Management

Purpose: This policy is intended to:

• Assist Country Programs in meeting the Agency’s objective of subrecipient organizational

2.0 Capacity Assessments

2.2 Global Assessment Considerations

2.3 Special Assessment Scenarios

3.0 Internal Control Improvement Plans

4.0 Forecasting Requirement

5.0 Funding Rules

5.2 Funding for Non-A-133 Subrecipients

5.3 Funding – Other Factors to Consider

6.0 Subrecipient Reporting

6.1 Reporting Frequency for all A-133 Subrecipient Agreements

6.2 Reporting Frequency for all Non-A-133 Subrecipient Agreements

6.3 Reporting Requirement for Retroactive Agreements

6.4 Liquidation Reporting – A-133 Subrecipients

6.5 Liquidation Reporting – Non-A-133 Subrecipients

6.6 Report Deadlines

6.7 Documentation Standards

6.8 Report Information Requirements

(d) The report should also contain this additional data:

ii. Advances received from CRS during the report period

6.9 Funding and Reporting Currency

7.0 Monitoring of Subrecipients

(d) Financial monitoring costs should be charged as follows:

7.5 Concluding Visit

7.6 Pre-Trip Planning

7.7 Financial Monitoring Trip Reports

7.8 Internal Control Improvement Plans Resulting from Monitoring Visits

7.9 Testing Coverage Requirements

Supporting Documentation Review Requirements for Subrecipients’ Expenses

8.0 Reimbursement Basis Subrecipients

9.0 Treatment of Subrecipient Expenses That Are Unsupported, Questioned, or Disallowed

9.2 Questioned Costs

9.3 Disallowed Costs

10.0 Segregated Bank Account Requirement

11.0 Audits and Reviews

12.0 Lower-Tier Subrecipient Monitoring

13.0 Special Consideration – Subrecipient with No Local Office

Approvals: Senior Director, Finance Systems & Operations

Relevant Knowledge: Basic Management Concepts

Significant Improvement Needed

Substantial Improvement Required

Records and Notes

Partnership and Capacity Building Unit

Appendix I – Requirement Summaries

14.0 Requirement Summaries

14.1 A-133 Subrecipient Agreements Greater than or Equal to $100,000

14.2 A-133 Subrecipient Agreements Less than $100,000

Appendix I – Requirement Summaries (continued)

14.3 Non-A-133 Subrecipient Agreements Greater than or Equal to $50,000

14.4 Non-A-133 Subrecipient Agreements Less than $50,000

14.5 Notes to the Requirement Summaries

Appendix II – Examples of Forecasting, Funding, Reporting, & Monitoring Activities

3 3rd F/C – Aug. 7/11/14 453,000 542,000

2 2nd REP – Apr.-June 7/15/14 (787,000) 269,000

1 VAR – Mar. 4/15/14 (700) 29,300

3 3rd F/C – July 6/13/14 115,000 99,000

1 3rd REP – Mar. 4/14/14 ($24,500) 37,500

2 VAR – May 6/13/14 100 8,600

DIS – 1st Visit 06/30/14 $1,300 16,300

15.8 Notes on Other Subrecipient Agreement Scenarios

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