Ep. 4 - Pass through Challenges: managing subrecipients and contracts

Ep. 4 - Pass through Challenges: managing subrecipients and contracts

In this episode, Jasmine Markanday unpacks one of the most confusing compliance areas for grant recipients: how to correctly classify a partner as a subrecipient or a contractor under 2 CFR 200.331.

From avoiding costly audit findings to building monitoring plans, Jasmine walks through the rules, real-life examples, and documentation tips every grants professional needs to confidently manage pass-through funding. Whether you’re with a nonprofit, university, or public agency, if you work with subawards or contracts, this episode is for you.


What You’ll Learn:

  • How to determine if an entity is a subrecipient or a contractor under 2 CFR 200.331.
  • Why proper classification protects your funding and your organization.
  • Monitoring requirements for subrecipients, from risk assessments to site visits.
  • Contractor compliance essentials, including procurement standards and invoice accuracy.
  • Common pitfalls in pass-through funding and how to avoid them.
  • What to include in subaward agreements to ensure compliance and accountability.


Key Takeaways:

  • Misclassifying a partner can lead to audit findings, penalties, or funding loss.
  • Subrecipients carry out a portion of the federal award and are subject to program compliance; contractors provide goods/services and operate in a competitive market.
  • Use a classification checklist to document your decision-making process.
  • Build monitoring plans for subrecipients that include regular reviews, clear deliverables, and risk-based oversight.
  • Tailor agreement templates for each subaward or contract to spell out responsibilities, reporting, and compliance requirements.


Pro Tip:

Don’t guess when classifying — use documented criteria and keep your reasoning on file. This not only supports compliance but also strengthens your defense in the event of an audit.


Connect with Us:

Instagram: @markandayconsulting

LinkedIn: @markandayconsulting

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Quote to Remember:

"Funders may not say it plainly, but they will hold you accountable for how you classify and manage subrecipients and contractors." — Jasmine Markanday