This revised policy is effective June 1, 2000. It replaces the Policy on Transfer Payments dated October 15, 1996 and the Policy on Repayable Contributions. It also incorporates policy related to transfer payments previously contained in separate policy documents and in specific Treasury Board decisions. The approved terms and conditions for existing transfer payment programs continue to apply until the earlier of their expiry date or March 31, 2005, at which point Departments must obtain Treasury Board approval to replace or renew such terms and conditions.
2.1 Transfer payments are transfers of money, goods, services or assets made from an appropriation to individuals, organizations or other levels of government, without the federal government directly receiving goods or services in return. Payments that are made in exchange for goods or services are contracts and are subject to the Government Contract Regulations, Trade Agreements and the Contracting Policy.
2.2 The major types of transfer payments are grants, contributions and "other transfer payments" as defined in Appendix A.
2.3 The type of transfer payment that a department uses to meet its program objectives is determined by the departmental mandate, business lines, clients and an assessment of risks. All transfer payments are subject to public scrutiny and must be managed in a manner that is open and transparent to the public, and with due regard to economy, efficiency and effectiveness. Basic principles of parliamentary control, authority and accountability establish the boundaries within which decisions are made on the use and management of transfer payments.
3.1 See Appendix A for definitions related to this policy.
3.2 In this policy, references are made to "grants" or "contributions" when provisions apply to a specific type of transfer payment, and to "transfer payments" when the provisions apply to all types of transfer payments.
To ensure sound management of, control over and accountability for transfer payments.
It is government policy:
This policy applies to all "departments" as defined in section 2 of the Financial Administration Act (FAA). In the event of a conflict between the provisions of this policy and the legislation authorizing a transfer payment, the legislation will prevail.
7.1.1 Departments must establish policies and procedures to ensure that:
7.1.2 Where a department is required to report to the Treasury Board within this policy, it may do so as part of its Annual Reference Level Update (ARLU) submission, unless otherwise noted herein.
7.2.1 Departments must establish policies and procedures to ensure that transfer payments are not made to federal departments. Any other organization may receive a grant or a contribution, provided it meets the eligibility and entitlement criteria and conforms with any applicable contribution agreement.
7.2.2 Where a department is considering a grant or a contribution to a Crown corporation listed in Section 85 and Part I of Schedule III to the Financial Administration Act, it must consult with the Treasury Board Secretariat to determine whether specific Treasury Board approval is required. Care must be taken to ensure that a grant or contribution is not, and does not become, a substitute for financing a Crown corporation's ongoing operating or capital requirements.
7.2.3 Recipients must respect and comply with the Conflict of Interest and Post-Employment Code for Public Office Holders and the Conflict of Interest and Post-Employment Code for the Public Service. Where an applicant employs or has a major shareholder who is either a current or former (in the last twelve months) public office holder or public servant in the federal government, compliance with the Code(s) must be demonstrated.
7.3.1 Departments must obtain Treasury Board approval of the terms and conditions for a class of grant recipients, and the terms and conditions of all contribution programs either to a specific recipient or a class of recipients. Exceptions are legislation that specifically authorizes a Minister to establish such terms and conditions and specifies the amount and the recipient as well as those instances where the Treasury Board has specifically delegated authority to do so to the responsible Minister.
7.3.2 The responsible Minister may approve technical changes and exceptions to the terms and conditions governing grants and contributions previously approved by the Treasury Board, as follows:
7.3.3 The responsible Minister must not make amendments to terms and conditions approved by Treasury Board related to:
7.3.4 Within the purpose, dollar limits and restrictions prescribed by Parliament in the applicable vote, the Treasury Board may authorize new contributions and changes in the amounts to be paid, without further Parliamentary approval.
7.3.5 When legislation requires that terms and conditions be approved by the Governor in Council, Treasury Board Submissions must include an appropriate draft Order in Council.
7.3.6 Terms and conditions, program literature and agreements must include provisions for cancellation or reduction of transfer payments in the event that departmental funding levels are changed by Parliament.
7.3.7 Terms and conditions of transfer payment programs will be approved by the Treasury Board for no more than five years, or such other term as the Treasury Board may determine for specific programs. Departments must assess, through a formal program evaluation or similar review, and report back on the effectiveness of the transfer payments when requesting renewal of terms and conditions.
7.4.1 A separate vote is required in Estimates when proposed expenditures on transfer payments within a fiscal year equal or exceed five million dollars for any program, or as otherwise defined by Parliamentary convention.
7.4.2 Payments of grants, other than statutory grants made pursuant to specific program legislation, are authorized by Parliament through an Appropriation Act by the words "the grants listed in the Estimates" in the vote wording of the program concerned. This wording extends the legislative authority of the Appropriation Act to the grants listed in the transfer payment tables of the Estimates where potential recipients and the maximum amount that may be paid are identified. Grants can not be increased or redirected to other recipients without the authority of Parliament.
7.4.3 In the Estimates, classes of grant recipients may be listed when it is not possible to list the intended recipients or the specific amount to be paid to each. Such grouping of grants into a class shall normally be restricted to small payments made to groups of individuals or organizations who meet the eligibility criteria. Where classes are used, the description must clearly identify the intended group of recipients and the nature of the program or purpose of the grant.
7.4.4 The Appropriation Act does not create an entitlement to a payment. Except where legislation specifies "there shall be paid..." there is no obligation to pay a grant, even where a recipient has been named in the Estimates.
7.4.5 Parliament is informed about planned transfer payment programs through the transfer payment tables included in Part II of the Main Estimates or in Supplementary Estimates. For each transfer payment program with transfers in excess of five million dollars, the Departmental Report on Plans and Priorities must include supplementary descriptive material, such as stated objectives, expected results and outcomes, and milestones for achievement.
7.4.6 The cost of audit, evaluation and monitoring activities undertaken by the department related to transfer payments must be charged to the department's operating vote, unless specific vote wording allows these costs to be charged to a transfer payment vote.
7.4.7 Departments must account for transfer payments in the Public Accounts as required by the annual Receiver General Directives on the Public Accounts. Departments must include in the Departmental Performance Report evidence of results achieved, related to results commitments and specific planned results in Reports on Plans and Priorities for each transfer payment program with transfers in excess of five million dollars.
7.5.1 Departments must establish policies and procedures to ensure that:
7.5.2 Departments must account for grants and contributions as outlined within the relevant Treasury Board Accounting Standards.
7.6.1 Transfer payments should not be paid to recipients in advance of need; payments should be timed to correspond as closely as practicable to recipients' cash flow requirements.
7.6.2 Since most grants are intended to provide financial support over time or require the recipient to continue to meet eligibility requirements, grants should be paid in installments, based on the cash flow requirements of the recipient.
7.6.3 Departments must base any provision for advance payment of a contribution on prudent cash management principles, i.e. the amount of each advance should be limited to the immediate cash requirements based on a monthly cash flow forecast from the recipient taking into account any outstanding advances. In order to reduce the risk of overpayments, a portion of a contribution should only be paid following the final accounting for the contribution by the recipient.
7.6.4 Where installment payments and advance payments are necessary to meet program objectives, departments must be guided by the provisions of Appendix B.
7.6.5 Advance payments of contributions must not be made to a recipient in one fiscal year when the related expenditures of the recipient are not likely to be incurred until the following fiscal year. Advances required for the new year should be issued as of April 1 and charged to an appropriation in the new year. In exceptional circumstances where a department deems it necessary to meet program objectives and is permitted under the agreement, an advance may be made prior to the end of the year, but must not exceed the expenditures expected to be incurred by the recipient during April.
7.6.6 Where a contribution agreement extends beyond one fiscal year and an advance has been provided to a recipient in one fiscal year to meet the projected expenditures of the recipient in that fiscal year, and some portion of the advance has not yet been used by the recipient at the end of the fiscal year, the department may allow the unused portion to be carried forward as an advance for the new year in cases where the amount of the unused advance is not significant (i.e. not in excess of the expected expenditures of the recipient in the month of April).
7.6.7 Advance payments of contributions are not accountable advances in the context of section 38 (3) of the Financial Administration Act and the Accountable Advance Regulations.
7.6.8 Departments must seek Treasury Board approval for any exception to this cash management policy. Exceptions will be considered where the department can demonstrate that the added administrative costs of more frequent payments are greater than the additional interest costs of the government in paying faster or that government policy or program objectives would be compromised.
7.6.9 Where exception to this cash management policy has been approved by Treasury Board, departments must, in arriving at the amount of the transfer payment, deduct the amount of interest cost reasonably expected to be incurred by the government for such an exception, unless otherwise approved by the Treasury Board.
7.7.1 All assistance to a recipient's capital projects must be in the form of a contribution, and not a grant, unless otherwise approved by the Treasury Board.
7.7.2 Departments must establish policies and procedures to ensure the government does not become liable for a loan, lease or other contractual obligation entered into by a recipient of a contribution to acquire an asset.
7.8.1 Departments must establish policies and procedures to ensure that where a contribution is made to a business and is intended to allow the business to generate profits or to increase the value of the business, the business is required to repay the contribution or to share the resulting financial benefits with the government commensurate with its sharing of the risks.
7.8.2 Repayment of a contribution is not required where:
7.8.3 The responsible Minister for the Treasury Board approved program, or delegate, may exempt recipients from the requirement to repay a contribution, where:
7.8.4 Where required, contributions are to be repaid, in whole or in part commensurate with the level of risk shared with the recipient, and based on specific criteria defined within contribution agreements. In particular:
7.8.5 Departments and agencies may negotiate specific terms of repayment to suit the particular capacities and concerns of the prospective recipient within the context of this policy. Departments are accountable for ensuring that reasonable recoveries are made and that the government's interests are visible in contribution agreements.
7.8.6 Departments must establish policies and procedures to ensure that the recipients of repayable contributions are tracked to determine when conditions for repayment come into effect.
7.8.7 Once any conditions for repayment have come into effect, departments must record the amount repayable in the departmental accounting system as an amount due to the Crown and initiate collection action. These accounts must be managed in accordance with the Policy on Receivables Management. In the event that an account becomes uncollectable, the department may write-off the account in accordance with the Debt Write-off Regulations.
7.9.1 All aspects of this policy that refer to grants also apply to conditional grants, including endowment funding. Specific policy related to conditional grants will be added at a future date.
7.10.1 Normally, intellectual property created by a recipient of a transfer payment remains with the recipient. Departments may consider the need for determining whether shared rights to intellectual property created by a recipient should be negotiated as part of a transfer payment. Where appropriate, the potential for sharing in intellectual property rights should be defined in program terms and conditions.
7.11.1 A written agreement between the department and a recipient of a grant is required. However, for grants involving lower risks and materiality, the use of application forms for class grants and exchange of correspondence with recipients is acceptable. A potential recipient of a class grant must meet any requirements for eligibility and entitlement set out for the grant program. The recipient of a grant is not required to account for the types of expenditures for which the grant is used.
7.11.2 Where a grant is paid in installments, the recipient is not required to meet any conditions other than continuing eligibility for and entitlement to the grant.
7.11.3 Since a grant is unconditional, there is no unexpended balance to return unless the grant is of a type that requires continuing eligibility (e.g. a scholarship) and the recipient ceases to be eligible. Amounts paid after the expiry of eligibility or paid on the basis of fraudulent or inaccurate application or in error are subject to recovery action.
7.11.4 Departmental officials may be represented on an advisory committee or board established by a recipient in relation to a grant or contribution provided by the department. Such involvement must not be seen to be exercising control on the committee or board or on the use of the funds. Departmental officials must respect and comply with the Conflict of Interest and Post-Employment Code for Public Office Holders and the Conflict of Interest and Post-Employment Code for the Public Service.
7.11.5 There must be a written agreement between the department and the recipient of a contribution which identifies the conditions of the contribution, the expected results to be achieved, the obligations of the parties involved and the conditions for payment.
7.11.6 Since the payment of a contribution is conditional on performance and achievement, the recipient of a contribution must meet and continue to meet the specific terms and conditions of the agreement prior to a payment being made. The recipient must also account for the use of the funds to meet eligible expenditures and report on the results actually achieved. Finally, the recipient must account for all funds received from all sources for a given project.
7.11.7 Contributions are subject to audit to ensure that all conditions, both financial and non-financial, have been met. The right of the department to undertake an audit must be clearly established in the contribution agreement, whether or not it is exercised.
7.12.1 The amount of money remaining from an advance payment at the end of a contribution agreement and the amount of any disallowed disbursements are debts due the Crown and must be recorded as receivables and recovered. Where a recipient has failed to provide an accounting or has not used the contribution for authorized purposes, a demand for an accounting or repayment may be issued pursuant to sections 76(1)(b) and (c) respectively of the Financial Administration Act.
7.12.2 Refunds of overpayments must be credited to the vote to which the payment was originally charged when the refund is received in the same fiscal year as the original charge or during the extended accounting period at the end of that fiscal year. When received in a subsequent fiscal year, the refund must be recorded as non-tax revenue and not credited to the vote.
7.12.3 Repayments of contributions as required by section 7.8 of this policy must not be credited to a vote unless the vote wording or some other Parliamentary authority authorizes such repayments to be credited against the transfer payments expenditures in the vote.
7.12.4 Interest must be charged on overdue repayments, and appropriate conditions to define the department's rights to do so must be included in the terms of the agreements, in accordance with the Interest and Administrative Charges Regulations. Where the agreement is silent on this matter, the Interest and Administrative Charges Regulations apply. The due date for repayable contributions is to be determined by the agreement. Where a refund of overpayments is required, the due date is to be no later than the date that the recipient is required to report back to the department on the results achieved or expenditures incurred.
7.13.1 Departments must obtain a statement from a potential recipient about other sources of proposed funding for a project, either through information on application forms or other suitable means, prior to approving a contribution in excess of $100,000 or providing a grant in excess of $100,000.
7.13.2 For grants and contributions in excess of $100,000, the department should ensure that the amount of the grant or contribution it makes is appropriate where a project is anticipated to receive a grant and/or a contribution from more than one program in a department, from more than one department or more than one level of government. The department must take into account the other sources of funds (which includes private sector contributions), including the expectation that the recipient must contribute its own funds towards the eligible cost of the project. Provision for repayment is to be included in the agreements covering the grant or contribution in case more funding of this nature is provided from federal, provincial and municipal sources than was anticipated.
7.13.3 Specific limits to the Total Government Assistance, (e.g. 50% of eligible project costs), must be considered by departments in developing and proposing Terms and Conditions for grant and contribution programs.
7.14.1 Departments must respect the obligations made by Canada as a signatory to international multilateral agreements to prevent inappropriate trade barriers when proposing terms and conditions for transfer payment programs and when negotiating agreements with recipients.
7.15.1 Transfers of non-monetary assets or benefits (e.g. provision of a vehicle to a recipient, the use of departmental office space, the transfer of land to a recipient, etc) with an aggregate value of $100,000 or more must be recorded and accounted for as a transfer payment within the context of the Treasury Board Policy on Accounting for Non-Monetary Transactions and within the context of the Treasury Board Accounting Standards.
7.16.1 Refer to the policy on Payables at Year-End for information on year end accounting treatment.
7.16.2 Section 7.6 above addresses the limitations for advances covering two fiscal years.
Departments are expected to adhere to procedural requirements. However, if they use other procedures instead, they must be justified and documented.
8.1.1 Treasury Board submissions for program approval of terms and conditions for grants to a class of recipients or for contributions should include the following:
8.1.2 In order to deal with possible foreign exchange fluctuations, a department should consult with Treasury Board Secretariat where it is proposing a payment based on an assessment made by an international organization for Canada's contribution to the organization or its projects.
8.2.1 Contribution agreements are to be agreed to by the department and the recipient, taking into account the provisions of Appendix C.
8.2.2 In some instances, items such as allowable expenditures and financial limitations are already included in brochures and other material describing the particular program. When this is the case, the provisions included in such descriptive material need not be duplicated in a formal contribution agreement. Instead, acknowledgement of acceptance of the terms and conditions contained therein may be referred to in the contribution agreement.
8.2.3 Advice from departmental legal services should be sought for appropriate wording in contribution agreements.
8.3.1 Departments must develop policies and procedures for adequate monitoring of results achieved under contribution agreements and for obtaining suitable information from recipients and from third parties delivering programs to ensure departmental accountability.
8.3.2 Where a contribution is paid on the basis of achievement of performance objectives or the reimbursement of expenditures made, the recipient will provide an accounting statement and statement of progress against the achievement of performance objectives at the time of claiming for a payment. Contribution agreements should call for at least an interim and a final accounting of the use of funds and the results achieved, except for small contributions of short duration where the minimum requirement would be a final accounting (including provision for reporting against performance objectives).
8.3.3 To properly control advance payments, timely accounting must be obtained from recipients. Where practicable, an advance should be accounted before any further advances are issued. Where advances are issued monthly and accounting for them monthly is neither practical nor cost-effective, they may be accounted for bi-monthly or quarterly, provided that there is reasonable assurance that the funds are being spent for authorized purposes.
8.3.4 Departments should determine the required frequency of accounting by recipients that minimizes the administrative costs of itself and the recipient, taking into account appropriate risk factors, the likelihood of failure or diversion of funds by the recipient to other purposes, and the department's previous experience with the recipient.
8.4.1 Departments may contract with a contractor, through a service contract subject to policies related to contracting (Contracting Policy, Interim Policy on Indemnification in Contracting and Policy on Title to Intellectual Property Arising Under Crown Procurement Contracts) to administer, manage or deliver a grant or contribution program whereby the contractor carries out activities such as the review of applications for grants or contributions or the pre-audit of claims for payment. The contribution agreements with the recipients are signed by the department and payments are made by the department.
8.4.2 The arrangements for contractor delivery should reflect the following control framework:
8.4.3 Departments may provide a contribution to a recipient that in turn further distributes payments to ultimate beneficiaries. This is the case when initial recipients have considerable independence on their choice of final recipients with minimal guidance from departments (e.g. a university association which distributes funds to researchers based on a peer review process). Contribution agreements between the department and the initial recipient in such circumstances should take into account the provisions of items 1 and 2 of Appendix C. Any overpayments in the hands of such an initial recipient at year-end or program-end must be accounted for and refunded if necessary under provisions of this policy.
8.5.1 Departments are responsible for determining whether recipients have complied with the terms and conditions applicable to the contributions. This responsibility includes the audit of recipients when deemed necessary.
8.5.2 Departments must develop a risk-based audit framework for the audit of contributions including:
8.5.3 An audit of a recipient of a contribution may be undertaken by a departmental audit group or by an auditor under contract to the department.
8.5.4 The department may choose to rely on an opinion from a recipient's external auditor regarding compliance to any or all terms and conditions of the contribution. Such an opinion should be supported by audited financial statements and/or a statement of disposition of federal contribution funds. The department should obtain agreement from audit agents that contribution audits will be conducted according to generally accepted auditing standards and in conformity with the provisions of this policy.
8.5.5 Departments should adopt a single audit approach wherever appropriate. Departments and agencies should coordinate their activities in developing and carrying out their contribution audit plans by entering into cross-servicing agreements for audit coverage where feasible.
8.5.6 Departments should determine the scope of federal contribution audits where recipients are provincial departments or agencies after giving due consideration to prior audits undertaken by the province.
8.5.7 Departments should annually forward its plans for the audit of contribution recipients who are jointly funded by both the federal and provincial governments to the appropriate provincial officials.
8.5.8 Audits of recipients should be based on the suggested procedures for the audit of contributions contained within the Treasury Board publication Guide on the Audit of Federal Contributions.
8.6.1 Where a contribution or a grant is provided to non-governmental organizations serving the members of both official language communities, federal institutions must apply the official languages policy entitled "Grants and Contributions".
9.1 Departmental internal audit plans must include provision for the review of internal management policies, practices and controls of transfer payment programs. Terms of reference for audits should include determination of whether transfer payments are managed in accordance with this policy and an assessment of the adequacy of the departmental processes to track whether recipients have complied with the requirements of applicable contribution agreements.
9.2 Treasury Board Secretariat will monitor the effectiveness of this policy by reviewing departmental internal audit and program evaluation reports, conducting reviews where warranted, and assessing proposed terms and conditions for transfer payment programs.
9.3 This policy will be reviewed at least once within each 5 year period.
This policy is issued under the authority of section 7 of the Financial Administration Act .
Financial Administration Act
Part IV of the Official Languages Act
Debt Write-off Regulations
Interest and Administrative Charges Regulations
Policy on Delegation of Authority
Policy on Interdepartmental Charging and Transfers Between Appropriations
Policy on Payables at Year End
Policy on Account Verification
Policy on Receivables Management
Policy on Accounting for Non-Monetary Transactions
Official Languages Policy for Grants and Contributions
Treasury Board Accounting Standard on Transfer Payments (to be issued)
Policies are found on the internet: http://www.tbs-sct.gc.ca/common/policies-politiques-eng.asp
Treasury Board Guide on the Audit of Federal Contributions
Treasury Board Submissions Manual
Treasury Board Information Bulletin on the Delegation of Financial Authorities dated October 23, 1996
Guide on Financial Arrangements and Funding Options
Canada Customs and Revenue Agency Publication B-067 Goods and Services Tax Treatment of Grants and Subsidies
TB Circular 1995-3: Reduction of administrative overhead and paper burden related to Treasury Board submissions
Enquiries about this policy should be directed to your departmental headquarters. For interpretation of this policy, departmental headquarters should contact:
Financial Management and Accounting Policy Division
Comptrollership Branch
Treasury Board Secretariat
L'Esplanade Laurier
300 Laurier Avenue West
Ottawa, Ontario
K1A OR5
Telephone: (613) 957-7233
Facsimile: (613) 952-9613
For the purpose of this policy, the following definitions apply:
Advance payments (paiements anticipés) - are payments, under the terms of a contribution agreement, that are made before the performance of that part of the contribution agreement for which the payment is being made.
Audits (vérifications) - are examinations of a recipient's accounts, records, or other evidence deemed necessary in the circumstances.
Business (entreprise) - is a commercial enterprise, industrial establishment, the activities of buying and selling, trade and merchandising by individuals, companies and other legal entities. Business can include colleges, universities, institutes and associations, hospitals and laboratories, non-governmental organizations and councils, enterprises operated by native band councils, and individuals and partnerships whose primary aim in seeking federal government financing is to earn profits or to increase the value of assets in the pursuit of profits.
Contribution (contribution) - is a conditional transfer payment to an individual or organization for a specified purpose pursuant to a contribution agreement that is subject to being accounted for and audited. Contributions would also include Alternate Funding Arrangements and Flexible Transfer Payments which represent types of contributions that were developed for the Department of Indian and Northern Affairs to meet their unique program objectives.
Contribution agreements (accords concernant une contribution) - are undertakings between a donor department and a prospective recipient of a contribution which describe the obligations of each.
Due diligence (diligence raisonnable) - reasonable care or attention to a matter, which is good enough to ensure that provided funding would contribute to the intended objectives of the transfer payment and stand the test of public scrutiny. This includes: (a) being guided by an understanding of the purpose and objective to be achieved; (b) supported by competence and capability of information, resources and skills; (c) a shared commitment to what needs to be done and an understanding of respective authorities, responsibilities and accountabilities; and (d) ongoing monitoring and learning to ensure reassessment and effectiveness.
Grant (subvention) - is a transfer payment made to an individual or organization which is not subject to being accounted for or audited but for which eligibility and entitlement may be verified or for which the recipient may need to meet pre-conditions.
Installment payments (versements) - are a series of partial payments of a grant made over a period of time.
Other transfer payments (autres transferts) - are transfer payments based on legislation or an arrangement which normally includes a formula or schedule as one element used to determine the expenditure amount; however, once payments are made, the recipient may redistribute the funds among the several approved categories of expenditure in the arrangement. Examples of other transfer payments are transfers to other levels of government such as Equalization payments as well as Canada Health and Social Transfer payments.
Programs (programmes) - are groups of related activities designed to achieve specific departmental objectives as approved by Parliament and as described in the Estimates.
Progress payments (paiements réguliers) - are payments, under the terms of a contribution agreement, that are made after the performance of that part of the contribution agreement for which the payments are made but before satisfaction of the entire contribution agreement.
Project (projet) - refers to a set of activities or functions that a recipient proposes to undertake with the contribution funds provided by a department.
Repayable contributions (contributions remboursables) - are contributions, all or part of which are repayable or conditionally repayable according to the terms of the contribution agreement.
Total government assistance (total de l'aide gouvernementale) - in relation to calculating the stacking of assistance from governments, is calculated on the basis of the following types of federal, provincial and municipal assistance towards the same eligible costs:
Transfer payments (transferts) - are payments which are made on the basis of an appropriation for which no goods or services are directly received (but which may require the recipient to provide a report or other information subsequent to receiving payment). Three types of transfer payments are grants, contributions, and "other transfer payments".
Terms and conditions (conditions) - are the general and specific requirements which must be approved by Treasury Board prior to creating a transfer payment program.
i. Installment payments of grants
Grants are normally paid in installments to correspond to the cash flow requirements of the recipient. The minimum number of installment payments is determined according to the total value of the grant as follows:
Total Value of annual grant | Number of Installments |
up to $100,000 | one |
$100,001 - $500,000 | two |
$500,001 - $1,000,000 | four |
Over $1,000,000 | monthly |
Departments should use the payment scheduling capacity of their financial systems to minimize the amount of time and administrative effort required for making installment payments.
ii. Advance payment of contributions
Contributions are normally paid on the basis of achievement of performance objectives or as reimbursement of expenditures incurred. Where advance payments are necessary, they should be limited to the immediate cash requirements of the recipient and not exceed the following payment frequency:
Total Value of annual amount | Duration of Agreement | ||
Less than 4 months | 4 months or longer | ||
Initial Advance | Subsequent Advances | ||
Up to $24,999 | 90% | 90% | N/A |
$25,000 - $100,000 | 90% | Up to 75% | Quarterly |
$100,001 - $250,000 | 50% | first quarter | Quarterly |
$250,001 - $500,000 | 50% | first quarter | Monthly, beginning in 4th month |
Over $500,000 | Monthly | First month | Monthly |
For agreements of less than 4 months, the schedule represents the maximum percentage that may be paid out initially, with the balance payable monthly or at the end of the agreement.
The amount of each advance payment would correspond to its frequency, e.g. a quarterly advance would be for the approximate amount of expenditures expected to be incurred by the recipient in the following three months.
1. Basic provisions to be included within contribution agreements:
2. Additional provisions to be included in contribution or contractual agreements with third parties or recipients who further distribute the contribution amounts: