A billing agreement does not flow down any of the terms of the prime award to the non-grantee institution; it is simply a mechanism whereby the grantee institution can reimburse the non-grantee institution for the salary and fringe of certain project personnel. Thus, the prime grantee institution retains full responsibility for compliance issues related to the personnel covered by the billing agreement. For example, for an award subject to the PHS financial conflict of interest regulations, the grantee institution, rather than the individual’s home institution, would be responsible for ensuring compliance with the regulations if the individual meets the definition of Investigator.
With a subaward agreement, the prime recipient flows down the applicable terms of the prime award to the subrecipient institution. While the prime recipient maintains certain subrecipient monitoring obligations, the subrecipient also assumes responsibility for ensuring compliance with the terms of the award. Continuing with the financial conflict of interest example, under a subaward agreement, the subrecipient institution assumes responsibility for ensuring compliance with the regulations for their own personnel.