3. Basic Grants Management Principles

Recipient/Subrecipient/Vendor Status

There is a distinction between the status of recipient, subrecipient, and vendor. Federal awards expended as recipient or subrecipient are subject to audit under OMB Circular A-133. In contrast, a vendor supplies either goods or services.

The functions performed by the agency determine the status as subrecipient or vendor. For example, when a Federal award is received by a subrecipient agency, the following may be completed by the organization:

• Determination of client eligibility for the program;
• Is subject to performance measurement by the Federal agency;
• Responsible for programmatic decision making;
• Must adhere to Federal program compliance requirements;
• Uses Federal funds to carry out a program of the organization as compared to providing goods or services for a program of the pass-through entity.

In contrast, payment for goods and services received by a vendor are when the organization:

• Provides the goods and services within normal business operations;
• Provides similar goods/services to many different purchasers;
• Operates in a competitive environment; and
• Provides goods or services that are ancillary to the operation of the Federal program.

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