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Business and Financial Policies and Procedures

Review and Pay Subrecipient Invoices

Policy Statement

The University of Illinois may issue a subaward to a subrecipient for the purpose of performing a portion of the scope of work under an award for a sponsored project. In issuing a subaward, the University assumes responsibility for the oversight of programmatic and financial activities of the subrecipient throughout the life of the subaward, including but not limited to the determination of subrecipient versus contractor, assessing subrecipient’s capacity to perform, and subrecipient’s compliance with award terms. The Principal Investigator shall be responsible for confirming the subrecipient performs the awarded scope of work and all costs are reasonable and in accordance with the terms of the award.

Before you Begin

The Principal Investigator (PI) is responsible for reviewing, certifying and approving all invoices, in consultation with the business manager as required, with regard to the subrecipient’s performance. In some cases, the PI may delegate this authority to a designee who can attest to the performance of the subrecipient. When this occurs, written documentation must be kept on file. For Urbana and Springfield, notify and provide this documentation to the Grants and Contracts Office.

Encumbrance Number – An encumbrance must be established in Banner before an invoice can be paid. After a subaward has been fully executed, a copy of the subaward agreement is sent to the PI and the Grants and Contracts Office (GCO). Additional details for each campus are as follows:

Chicago – GCO creates the encumbrance number upon receipt of the executed subaward and sends the encumbrance number to the unit business manager upon issuance.

Urbana – GCO creates the encumbrance number upon receipt of the executed subaward. The encumbrance number can be found in Banner or on the sub-invoice cover letter provided with each sub-invoice.

Springfield – The department business manager forwards an Encumbrance Request form to GCO. GCO creates an encumbrance for the amount of the subaward. The encumbrance number will be sent to the unit business manager upon issuance.

Final Invoice – In order for the University to comply with its financial reporting requirements, subrecipients are required to submit a final invoice within the timeframe specified in the subaward. The final invoice should not be paid until the subrecipient has met all subaward requirements. In the event that a final invoice is received from the subrecipient after the specified time period has lapsed, payment may be denied. PIs and unit business managers are responsible for obtaining final closeout information, including invoices, from their subrecipients.


To review and pay subrecipient invoices, the PI or delegate should:

  • Review each invoice with regard to applicable regulations and the terms and conditions of the award.
  • Ensure the costs are reasonable (e.g. in line with the amount of work being reported or deliverables submitted), allowable in accordance with the cost principles, and incurred within the project period.
  • Ensure any cost sharing commitment has been satisfied and that appropriate documentation is received from the subrecipient. The subrecipient’s cost sharing must meet the criteria specified in the University’s cost sharing policy. If a subaward includes a cost sharing commitment from a subrecipient, this should be reported on the subrecipient’s invoices, including the cumulative cost sharing total.
  • Investigate any charges which appear to be unallowable, unusual or excessive, and resolve them prior to submitting the invoice for payment.
  • Submit the approved invoice for payment using the Request a General Encumbrance/Wire Transfer Payment form following the instructions found on Non-Purchase Order Invoices webpage.
  • Make sure the final invoice is submitted by the subrecipient within the timeframe specified in the subaward or payment may be denied.

For the Chicago campus, the Subrecipient Monitoring – Invoice Checklist may be used to help ensure the invoice meets the criteria for completeness and compliance prior to release of payment.

Forms Used in this Procedure

Request a General Encumbrance/Wire Transfer Payment

Subrecipient Monitoring - Invoice Checklist – Chicago

Additional Resources

Non-Purchase Order Invoices

Last Updated: July 12, 2015 | Approved: Senior Associate Vice President for Business and Finance - July 7, 2015

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