The Importance of Understanding the CARES Act Subrecipient Agreement

As a legal professional, I am constantly amazed by the complexity and depth of the laws that govern our society. One such law that has caught my attention recently is the CARES Act, and specifically the subrecipient agreement that is a crucial part of it.

What is the CARES Act Subrecipient Agreement?

The CARES Act, or the Coronavirus Aid, Relief, and Economic Security Act, was passed in 2020 to provide emergency financial assistance to individuals and businesses affected by the COVID-19 pandemic. One important aspect of this act is the subrecipient agreement, which is a contract between the primary recipient of CARES Act funding and a subrecipient who will be carrying out specific activities or services funded by the CARES Act.

Why Important?

Understanding the CARES Act subrecipient agreement is crucial for both the primary recipient and the subrecipient. It outlines the terms and conditions of the funding, the responsibilities of each party, and the reporting and compliance requirements. Failing to comply with the terms of the agreement can have serious legal and financial consequences.

Case Study: The Impact of Non-Compliance

In a recent case, a nonprofit organization received CARES Act funding to provide housing assistance to individuals affected by the pandemic. However, they failed to properly document the use of the funds and did not meet the reporting requirements outlined in the subrecipient agreement. As result, required repay full amount funding subject additional penalties.

Key Components of the Agreement

Here are some of the key components that are typically included in a CARES Act subrecipient agreement:

Component	Description
Scope work	Details specific activities services subrecipient providing funding
Budget	An itemized budget outlining how the funds will be used
Reporting requirements	Details of the reporting schedule and the specific information that must be provided
Compliance	Expectations for compliance with all applicable laws and regulations

The CARES Act subrecipient agreement is a critical component of ensuring that CARES Act funding is used effectively and in accordance with the law. Legal professionals must ensure that their clients fully understand and comply with the terms of the agreement to avoid legal and financial repercussions.

 

CARES Act Subrecipient Agreement

This agreement is made and entered into on this [Insert Date] by and between [Insert Subrecipient Name], located at [Insert Address] (hereinafter referred to as “Subrecipient”) and [Insert Prime Recipient Name], located at [Insert Address] (hereinafter referred to as “Prime Recipient”).

Article 1: Purpose
The purpose of this agreement is to establish the terms and conditions under which the Subrecipient will receive funding and carry out activities as a subrecipient of the Prime Recipient under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Article 2: Responsibilities Prime Recipient
The Prime Recipient shall provide the Subrecipient with the necessary funding and resources to carry out the activities specified in this agreement. The Prime Recipient shall also monitor the activities of the Subrecipient to ensure compliance with the CARES Act and all applicable laws and regulations.

Article 3: Responsibilities Subrecipient
The Subrecipient shall use the funding provided by the Prime Recipient solely for the purposes outlined in this agreement. The Subrecipient shall also maintain accurate records and documentation of all activities and expenditures related to the CARES Act funding.

Article 4: Compliance
The Subrecipient shall comply with all applicable federal, state, and local laws and regulations, including but not limited to the requirements of the CARES Act. The Subrecipient shall also cooperate with any audits or reviews conducted by the Prime Recipient or any authorized government agency.

Article 5: Termination
This agreement may be terminated by either party upon written notice if the other party fails to fulfill its obligations under this agreement. In the event of termination, the Subrecipient shall return any unexpended funds to the Prime Recipient.

IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the date first above written.

[Insert Subrecipient Name]

______________________________

[Insert Prime Recipient Name]

______________________________

 

10 Popular Legal Questions About Cares Act Subrecipient Agreement

Question	Answer
1. What is the CARES Act Subrecipient Agreement?	A Cares Act Subrecipient Agreement is a legal contract between a primary recipient and a subrecipient that outlines the terms and conditions for the distribution and use of funds allocated under the Cares Act.
2. What are the key elements of a Cares Act Subrecipient Agreement?	The key elements of a Cares Act Subrecipient Agreement include the scope of work, budget and funding arrangements, reporting and compliance requirements, and the termination clause.
3. What are the legal implications of signing a Cares Act Subrecipient Agreement?	Signing a Cares Act Subrecipient Agreement creates legal obligations and responsibilities for both the primary recipient and the subrecipient, including compliance with federal regulations and reporting requirements.
4. Can a Cares Act Subrecipient Agreement be amended?	Yes, a Cares Act Subrecipient Agreement can be amended through a formal process that involves mutual consent and documentation of the changes.
5. What happens if a subrecipient fails to meet the requirements of the Cares Act Subrecipient Agreement?	If a subrecipient fails to meet the requirements of the agreement, the primary recipient may take corrective action, including withholding funds or terminating the agreement.
6. How does a Cares Act Subrecipient Agreement impact audit and monitoring?	A Cares Act Subrecipient Agreement may subject the subrecipient to audit and monitoring by federal agencies to ensure compliance with the terms of the agreement.
7. What are the reporting requirements under a Cares Act Subrecipient Agreement?	Reporting requirements typically include regular financial and programmatic reports to the primary recipient, as well as compliance with federal reporting guidelines.
8. Can a subrecipient transfer funds to another entity under a Cares Act Subrecipient Agreement?	Any transfer of funds to another entity must be in accordance with the terms and conditions of the Cares Act Subrecipient Agreement and federal regulations.
9. What are the consequences of non-compliance with a Cares Act Subrecipient Agreement?	Non-compliance may result in financial penalties, legal action, or loss of funding for the subrecipient.
10. How can legal counsel assist with drafting and negotiating a Cares Act Subrecipient Agreement?	Legal counsel can provide guidance on federal regulations, compliance requirements, and best practices for structuring and negotiating a Cares Act Subrecipient Agreement to protect the interests of both parties.