Report PDF - US Environmental Protection Agency

TDOT’s Policy Statement 22 pertaining to subrecipient contract monitoring 4
identifies a vendor as:
a dealer, distributor, merchant, or other seller providing goods or services
that are required for the conduct of a Federal program. These goods or
services may be for an organization’s own use or for the use of
beneficiaries of the Federal program.
Further, the policy refers to the use of characteristics identified in OMB Circular
A-133, Section 210, Subparts (b) and (c) to distinguish a subrecipient from a
vendor.
Table 1 presents OMB Circular A-133, Section 210 characteristics for
determining whether a subrecipient or vendor relationship exits. 5
Table 1: Characteristics of a subrecipient versus a vendor
A subrecipient organization:
A vendor organization:
Determines who is eligible to receive what
federal financial assistance.
Has its performance measured against
whether the objectives of the federal
program are met.
Has responsibility for programmatic
decision-making.
Has responsibility for adherence to
applicable 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.
Source: OMB Circular A-133 and the EPA OIG.
Provides goods and services within normal
business operations.
Provides similar goods or services to many
different purchasers.
Operates in a competitive environment.
Provides goods or services that are
ancillary to the operation of the federal
program.
Is not subject to compliance requirements
of the federal program.
The OIG conducted an analysis of TDOT’s four grant contract awards using
OMB’s relationship characteristics. With one exception, we concluded that the
relationships for the four awards are indicative of the characteristics of a vendor;
not a subrecipient. In summary, TDOT’s awardees did not:
Determine who is eligible to receive federal funds.
Have their performance measured against the objectives of the program.
Have responsibility for making program decisions.
Use federal funds to carry out a program of their organization.
4 State of Tennessee, Department of Finance and Administration Policy 22, Subrecipient Contract Monitoring
(Revised 7/1/04).
5 Per OMB Circular A-133, it is not expected that all of the characteristics will be present and judgment should be
used in determining whether an entity is a subrecipient or a vendor.
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