Effective Date: April 1, 2016

Applicable FAM Policies: 805 - Contributions

Applicability: GNWT Departments and Public Agencies

This interpretation provides guidance on establishing an agreement pursuant to an ongoing contribution. It is to be applied in conjunction with the Interpretation Bulletin, Funding Agreement Application and Requirements and for ongoing Agreements effective on and after April 1, 2017.

An ongoing contribution is used to fund a multi-year project of an organization. This approach is appropriate when the project will last over one year and the funder wants to maintain a measure of control over outcomes or program delivery methods in a timely basis.

INTERPRETATION

Financial Accountability and Administration

An agreement for an ongoing contribution should:

• State and substantiate the recipient's projected expenses during each government or public agency fiscal year in which the transfer agreement exists;
• Include an estimate of all expected income, in relation to the same project, the recipient will receive from all sources during each fiscal year in which the agreement exists, including but not limited to:
  • Other contributions, block funding, grants and grants-in-kind;
  • Borrowed money;
  • Interest on deposits and investments;
  • Fee collection; and,
  • Other fundraising activities, gifts, etc.
• Schedule contribution payments on a monthly, quarterly, seasonal, annual or another basis according to the recipient's cash flow requirements;
• Obligate the recipient to expend or reimburse contributed funds within specified times (aligned with the funder’s fiscal year) and to return any uncommitted funds within specified times;
• Where appropriate, obligate the recipient to account for all contributed funds:
  • Provide reports and audited financial statements appropriate to the recipient's cash flow, the nature of the recipient's operations and the annual contribution amount; and,
  • Meet the requirements for accountable advances (FAM 815).
• Include information requirements to assess the recipient’s continuing eligibility for funding.

Contribution funds must only be expended for the purpose to which they are appropriated/budgeted. If the recipient has surplus uncommitted (i.e., "lapsed") ongoing contribution funds at the end of a funder’s fiscal year, the funds should either be returned to the Government or Public Agency within the 120 days following the year-end fiscal cycle or, be deducted from the first ongoing contribution payment(s) in the new fiscal year. However, this approach should not discourage the recipient from creating program savings and more effective program delivery alternatives.