Responsibility: KE Contracting Services
Prepared by: Subawards Functional Group
Updated: November 21, 2025
Issuing a new subaward
Before the Subawards team can draft and negotiate a subagreement, ASU must first receive and accept an award. This is for a variety of reasons:
- ASU cannot issue a subaward without prime award terms and conditions to flow down to our subrecipients.
- Issuing subawards prior to receiving an award invites risk to the University and the unit.
Subrecipients who decide to begin the project before receipt of the subaward must use their own internal processes to determine risk and decide whether or not to issue an “at-risk/advance” account. The entity does so at their own risk and the ASU PI should make no monetary promises to the other university.
My subrecipient has never worked with ASU before. How can I help them become familiar with our institutional requirements?
The Subawards Team has prepared information specifically to assist subrecipients with administrative and fiscal management responsibilities resulting from subawards issued by ASU. Please provide your colleagues at the subrecipient institution with a link to the Subrecipient Information page. RAs can also share the Subawards Welcome Packet (editable Word or PDF version) found here.
Drafting the subaward agreement
The Contracting Service’s Subawards Team will review the documents received from the subrecipient and the prime award to determine the appropriate agreement. All documents and registrations should be received before a subagreement is drafted, but there are some project-specific instances where a subagreement can be drafted for review while final documentation is being collected. Once drafted, the agreement is sent to the ASU PI to review, comment, and approve. It is only at this point that the agreement will be sent to the subrecipient for their review and signature.
Only individuals designated signature authority can legally sign a subagreement on behalf of the university. Any subagreements drafted on unapproved templates or signed by someone other than an authorized signatory will be considered null and void.
Types of agreements
ASU has five main types of agreements. Each of these serve as the basis for beginning the drafting process. They are modified to suit the particular circumstances. Additional information about the types of subaward agreements and amendments can be found in the Subaward Team work instructions here.
| Type of Agreement | When used |
| Federal Demonstration Partnership Subagreement | Used in instances when the prime award is a federal grant or cooperative agreement. |
| Subcontract | Used in instances when the prime award is a federal or non-federal contract. |
| Subagreement | Used in instances when the prime award is a non-federal grant or cooperative agreement. |
| Letter of Understanding | Used in instances when ASU is collaborating with another University in the State of Arizona (e.g. University of Arizona or Northern Arizona University). |
| Authorization to Proceed | Used in instances when 1) ASU has not yet received the award, but the award is anticipated in the near future or 2) ASU has received the award, but the subaward negotiations are taking longer than anticipated and there are time-constrained costs that need to be expensed. A subaward agreement will be issued at a later date when the award is received or negotiations have finalized. This agreement type is rare and requires additional approvals. |
Subaward amendments
After a subaward is issued, a modification to the subaward agreement is necessary if there is a change to any of the following:
- ASU PI
- Subrecipient key personnel
- Transfer of subaward to another institution
- Statement of work
- Budget
- Period of performance
- Other terms and conditions
A modification to a subaward agreement may be prompted if a modification to the prime award is received by the Awards Management Team (AMT) or the department submits an Award Change Request. If requesting a modification to change the statement of work or budget/budget justification, upload revised versions of these documents to the Award Change Request in ERA. If the budget is increasing beyond the original obligated amount, an additional cost price analysis may be required.
Time and fund extensions
The PI will receive an automatically-generated Sponsored Project Notice stating that the project account is ending within 60 days. Below is additional guidance based for the scenarios described in the notice:
| Action | Sufficient funds remain in parent and/or child account | Insufficient funds remain in parent and/or child account |
| Additional time | Complete an Award Change Request in ERA requesting that the subaward be modified. Don’t forget to include a reason for why the additional time and/or funds are needed by the subrecipient. | Confirm the additional funds are coming from the sponsor.If yes, advise subrecipient that additional funds have not yet arrived from the sponsor and that the modification will need to wait for the new funds to arrive. Do not promise the subrecipient additional funds. They can only be provided to the subrecipient when/if additional funds arrive at ASU. ASU will only issue modifications after receipt of funds. If the subrecipient wishes to continue the project without a modification, they must do so at their own risk.If no, additional funds may be not provided to the subrecipient unless additional funds come in from sponsor. |
| Additional funds | Confirm whether the sponsor allows for a no cost extension of the parent account.If yes, complete an Award Change Request in ERA requesting a no cost extension sufficient to allow the project subaward to be completed. If no, the child account may not be extended past the current end date of the parent account. | |
| Additional time and funds: Review the sections on time and funds above. Take the action(s) noted. | ||
Subaward invoicing
Subrecipients are required to submit invoices to [email protected] on a monthly or quarterly basis, depending on the terms and conditions of the agreement. Once received, the AMT GCO conducts an initial review and routes the invoice to the PI for approval. Once the PI gives his/her approval, AMT provides sponsored approval, and then sends the invoice to Accounts Payables for processing and payment.
How are subaward invoice payments processed?
- AMT receives subaward invoice.
- AMT ensures the invoice is prepared in accordance with the requirements of the subaward.
- In the event of any issues with the invoice, AMT will work directly with the subrecipient to correct the invoice.
- Once reviewed, AMT will send the subaward invoice to the PI for approval.
- Once PI approval is received, AMT will send the subaward invoice to Accounts Payable to be entered into Workday for payment.
- Once in Workday, the supplier invoice will be routed to the Grants Manager for approval.
- Once the Grants Manager approves, AP will release payment.
What should an ASU PI consider when reviewing an invoice from a subrecipient?
PI should confirm that:
- The invoice is for the right account
- The invoice is for expenditures within the period of performance
- The cumulative amount is less than or equal to the subaward total
- Expenditures are allowable, allocable and reasonable for work performed to date
- Required deliverables have been received (e.g.., progress reports, technical reports etc.)
- The expenses align with the subaward budget
Subaward closeout & audit documentation
Subaward closeout
The unit must ensure that the final invoice is received from the subrecipient and that it is reviewed and approved no later than 60 days after the end date of the subaward. The PI should also receive the final technical report within the 60-day period.
Once a final invoice is received and processed, the Subawards Team can close the Workday Supplier Contract (SCON). Requests to close an SCON should be sent to [email protected] with the subaward contract number (ASUB number) and a written confirmation that all invoices have been processed.
Audit documentation
Adequate audit documentation must be maintained to demonstrate compliance with ASU, Sponsor, state, federal, and other applicable requirements. The unit is the only location technical reports received from subawardees are maintained. KE Contracting Services manages all ASU-issued subagreements, and can help identify any requirements specific to the particular sponsored agreement. Typically, subaward agreements and expenditure support are maintained centrally with Research Operations. Direct all audit inquiries to the Fiscal Oversight Team of Research Operations, which serves as the audit liaison for all sponsored audit and review requests (FIN 205-01 / RSP 510-02). For additional information and frequently asked questions, see the Audit Readiness page.