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