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1.1 The present document contains the text of the policy, as approved on February 10th, 2000 and is effective immediately.
2.1 The government's intent in this policy is to optimize the process for disposing of surplus moveable Crown assets, consistent with its overall objectives of modernizing comptrollership and increasing the use of private sector service providers wherever feasible and justifiable in terms of costs.
2.2 The Surplus Crown Assets Act (R.S., c. S-20, s. 1.) was amended in 1993 to provide departments with additional options for the disposal of surplus moveable assets, subject to terms and conditions to be prescribed by Treasury Board of Canada. Associated with the passage of this amendment, Treasury Board of Canada Secretariat (TBS) authorized six pilot projects to evaluate the feasibility of alternate mechanisms for disposal. TBS then carried out analysis and interdepartmental consultation at the national and regional levels to determine what disposal terms and conditions would be appropriate. Consequently, Treasury Board has approved the policy and guidelines herein to provide departments and agencies with direction and guidance on the disposal of surplus moveable Crown assets.
3.1 To provide the best overall outcome for the government of Canada in its disposal of surplus moveable assets, to the end that
3.1.1 the highest net value is obtained through disposal;
3.1.2 there is an open opportunity for Canadians to participate in the disposal;
3.1.3 the disposal process is characterized by prudence, probity and integrity;
3.1.4 the health and safety of persons and the environment are protected; and
3.1.5 heritage items are treated appropriately.
4.1 Surplus Crown assets are to be disposed of by means of sale to the public at market value. However, under circumstances set out in the Appendix, Section 5, the minister through whom a department reports to Parliament may authorize disposal of a surplus Crown asset through gratuitous transfer, through sale to a limited market, or through sale at other-than-market value. The department that has custody or control of an asset (the custodian) is to be responsible for identifying and declaring assets which are surplus to its requirements. The custodian is responsible for all costs of ownership throughout an asset's life-cycle (planning, acquisition, operation and disposal) and is either entitled to net benefits or is responsible for net costs on disposal of that asset.
4.2 Wherever feasible and cost-effective, surplus Crown assets are to be sold to the general public by private sector contractors. Sales are to be conducted under contracts and standing offers put in place by Public Works and Government Services Canada (PWGSC) and used by all departments. In cases where sale by a contractor is not feasible or cost-effective, disposal by sale is to be conducted by PWGSC itself. To the greatest extent practicable, the benefits and costs of sales are to be assigned directly to the respective custodians.
4.3 Mechanisms, channels and statements of work for the disposal of surplus Crown assets are to be developed through consultation with representatives of user departments in disposal panels. (User departments are those with these or similar assets.) Disposal panels are to respond to users needs in an efficient and timely manner. Custodians wishing to introduce alternative disposal mechanisms are to present their proposals to the applicable disposal panel for consideration. If the proposal is accepted, the new mechanism is to be established by PWGSC for the use of departments as appropriate. If the disposal panel does not accept the proposal, the initiating department may make a submission to Treasury Board requesting approval to use an alternative mechanism. This submission must present a clear business case showing that the proposed disposal mechanism will result in greater overall benefit to the Crown than those already put in place by the disposal panel. The submission must also set out the audit process that the department will use to verify that these benefits are actually realized.
4.4 In cases where the estimated costs of a disposal (described in the Appendix, Section 9) are likely to exceed the proceeds of sale, a custodian may choose not to sell the asset, but instead to dispose of it by:
4.4.1 gratuitous transfer to a Crown corporation or to another level of government;
4.4.2 gratuitous transfer to a recognized charitable or non-profit organization;
4.4.3 for assets located outside Canada, gratuitous transfer to a government, charity or non-profit organization recognized by the host country, by any treaty organization of which Canada is a member, or by the United Nations; or
4.4.4 destruction of the asset in an environmentally appropriate manner and with due regard to public scrutiny.
4.5 Surplus assets are sold, donated or transferred "as is, where is," with no warranty as to condition, serviceability or fitness for use. The government assumes no liability for accident, injury or loss resulting from the use of the asset subsequent to disposal.
4.6 Custodians are responsible for ensuring that any restrictions regarding disposal that were imposed as a condition of original purchase (e.g. international agreements or treaties, licensing requirements) are respected, and are imposed on any subsequent buyer with full force and effect. It is the custodian's responsibility to ensure that the buyer of any such assets can be relied on to meet these obligations. Where such assets are being sold for museum display or scrap, it is the custodian's responsibility to ensure that the assets are permanently disabled to the satisfaction of all parties to the original purchase agreement.
4.7 Custodians must take into account the heritage value of surplus assets. When appropriate, representative examples of surplus equipment will be preserved and made available to organizations such as federal, provincial, municipal and not-for-profit museums, or municipalities, Canadian Legions and veteran associations. With the exception of items designated for federal museums and Canadian Forces museums, all lethal equipment (e.g. military and police weapons and weapon delivery systems) must be rendered permanently inoperable.
5.1 This policy applies to departments as defined in Section 2 of the Financial Administration Act and optionally at their discretion to federal bodies as defined in Section 2 of the Surplus Crown Assets Act.
6.1 Disposal panels are to be formed, each consisting of representatives from user departments and from PWGSC.
6.2 If a pilot project department has a contract with a private sector disposal service in force when this policy takes effect, the department may continue to use this contract service for a maximum of five years from the effective date of this policy, provided that this use is compliant with the original memorandum of understanding of the pilot project.
6.3 Private sector disposal mechanisms that have been found successful during the pilot projects are to be used to the greatest extent possible when establishing permanent mechanisms for the use of all departments. Where deemed suitable by the applicable disposal panel and to the extent permitted by contracting regulations, disposal contracting arrangements under pilot projects may be expanded to accommodate the disposal requirements of other departments and used as a basis for future operations. In such cases, the applicable disposal panel will initiate expansion of these contracts with the assistance of PWGSC.
6.4 Custodians must put into place appropriate measures to monitor sales and reconcile proceeds for all assets sold through contractors and through PWGSC.
6.5 Custodians must set up appropriate accounting procedures for disposal revenues and expenditures in accordance with Treasury Board accounting policy and practices. (See Appendix Section 9.14.1 below.)
7.1 To assess the utility of this policy, information will be obtained from sources such as meetings of disposal panels, reviews of receipts and selling costs from surplus asset disposals, custodian departmental monitoring, internal audits and program evaluations.
7.2 A Treasury Board Secretariat led, inter-departmental evaluation of the policy will be conducted and concluded within a three year period from the effective date of the policy.
8.1 Please direct all enquiries about the implementation or application of this policy to:
Senior Materiel Advisor
Materiel and Project Management Division
Treasury Board of Canada Secretariat
Telephone Number: (613) 957-0205
Facsimile Number: (613) 952-1381
1.1 These guidelines are provided to assist government departments in managing their disposal operations. In general, disposal operations should aim to recover residual investment from assets that are surplus to government requirements. In some cases, however, the public interest may out-balance the need to maximize disposal revenues. In other cases, where assets have no residual value, they should be removed from government ownership at minimum cost.
1.2 The guidelines provided in this chapter proceed from the following general principles:
1.2.1 Surplus assets should normally be sold at fair market value in a manner that maximizes revenue and minimizes expenses. To the greatest extent feasible and cost-effective, the actual selling should be done by the private sector.
1.2.2 In exceptional circumstances, valuable surplus assets may be transferred gratuitously or sold at less than fair market value when, in the opinion of the custodial minister, such action serves the public interest better than sale on the open market.
1.2.3 Assets with little or no market value may be transferred gratuitously or may be scrapped in an environmentally acceptable manner when, in the opinion of the custodial minister or persons duly authorized by that minister, this is the most cost-effective means of disposal and will withstand public scrutiny.
1.2.4 To the greatest extent feasible, the general public should have the opportunity to purchase surplus Crown assets.
2.1 Custodians should ensure that all disposals conform to applicable federal laws and regulations, including but not limited to the Criminal Code of Canada, the Financial Administration Act, the Surplus Crown Assets Act, the Atomic Energy Control Act, the Explosives Act, the Hazardous Products Act, the Pest Control Products Act, the Official Languages Act, the National Archives Act, the Conflict of Interest and Post-Employment Code for the Public Service, Government Contracts Regulations, other Treasury Board policies, and all applicable provincial, municipal and local laws and regulations. Applicable taxes should be collected and remitted on all sales. These would include the GST, PST or HST in Canada, or locally applicable taxes for sales conducted outside Canada.
3.1 The disposal of surplus Crown assets attracts considerable interest in industry and the general public. Public servants and contractors involved in the disposal process should demonstrate prudence, probity and integrity in all their actions. Care should be taken to avoid any actual or perceived conflict of interest.
4.1 Value of Assets
4.1 Whether an asset has marketable value or not, owning it costs money. With low-value assets, the costs of storage, handling and administration can quickly add up to more than the value of the item. With high-value items, the capital tied up in it is unavailable for other expenditures. Timely identification and disposal of surplus assets is therefore essential.
4.1 Transfer to Another Department or Agency
4.2 Where practical and cost-effective, a custodian who determines that an asset is no longer required should offer the asset to other government departments or agencies before declaring it surplus. Should a need be found for the asset elsewhere within government, a transfer may be arranged directly between the disposing and receiving custodian, including payment of shipping, handling and administrative costs incurred by the disposing custodian to effect the transfer.
4.3 Declaring an Asset Surplus
4.3.1 Assets no longer required by government should be declared surplus promptly, and disposal action initiated. Typical reasons for disposal include:
18.104.22.168 the asset is no longer needed due to changes in operational requirements;
22.214.171.124 the asset is technologically obsolete or incompatible with other assets;
126.96.36.199 the asset has reached the point at which it is most economical to dispose of it (from age, usage, mileage, etc.), thus minimizing through-life costs;
188.8.131.52 the asset is beyond economical repair;
184.108.40.206 the costs of capital tied up, storage, handling, etc., cannot be justified when compared with the cost of alternatives, such as rental or just-in-time procurement; and,
220.127.116.11 continued possession or use of the asset contravenes occupational health or safety standards, or the asset contains hazardous materials, and so forth.
4.4 Preparing an Asset for Disposal
4.4.1 It is the custodian's responsibility, before transferring an asset or releasing it for sale, to search it thoroughly in order to find and remove all:
18.104.22.168 government and departmental property markings, inventory stickers, etc.;
22.214.171.124 ammunition, pyrotechnics, drugs or other dangerous or controlled substances;
126.96.36.199 hazardous material (see Section 10 below);
188.8.131.52 classified, protected or other sensitive information contained in hard copy, electronic storage media, microfiche or other form which, if disclosed, would result in a breach of the Official Secrets Act or Privacy Act, or would otherwise cause embarrassment to the government (see Section 8.2.4 below for guidance on erasing data from computer hard disks and removable disks);
184.108.40.206 classified equipment, such as Tempest or other encryption equipment and high-security safes; and,
220.127.116.11 valuable material (e.g. cash, securities, precious metals, tools, jigs and fixtures) in containers which are intended to be sold empty, such as safes, cabinets, filing cabinets and tool boxes.
5.1 Disposal for proceeds: This category consists of assets where the anticipated revenue from the sale exceeds the expected costs of sale (e.g. transportation, handling and storage where necessary, advertising, preparing for and conducting the sale, recording and distributing the proceeds) and for which the custodian wishes to seek an open-market price. Assets in this category are to be disposed of using processes established by the applicable disposal panel.
5.2 Trade-in: This category consists of assets that are offered as partial payment for purchases of new items. Assets in this category are to be disposed of as part of the procurement contract for the new item. (NOTE: Trade-ins are not authorized for passenger vehicles, station wagons and light trucks, or for computers and related equipment addressed in Section 8.2, Computers for Schools Program, below.)
5.3 Sale to a limited market, or sale at other-than-market value: This category consists of assets that the government has decided to sell to a restricted group of purchasers at what may be less than open-market price, in order to meet specific or general program purposes of government. (For example, this might include artifacts sold at a nominal price to bona-fide museums for display purposes.) The terms of such sales must be approved by the minister through whom the custodian department reports to Parliament. An officer of PWGSC should normally conduct sales of this type. Contractors should not normally be used.
5.4 Gratuitous transfer (donation) of valuable assets: This category consists of assets which have marketable value, but which are being donated to recipients which a custodian minister designates in order to meet specific or general program purposes of government. Some donations are pre-approved as part of an ongoing government program (e.g. the Computers for Schools Program). In all other cases, the donation must be approved by the minister through whom the department reports to Parliament. Gratuitous transfers should normally be carried out by an officer of the custodian department. Contractors should not normally be used.
5.5 Cost-minimizing disposal: This category consists of low-value assets where the anticipated costs of selling the goods exceeds expected proceeds of sales. In this situation, a custodian may dispose of assets by donating them to a Crown corporation, a federal agency, another level of government, or a charitable or non-profit organization. Failing that, custodians may arrange for the assets to be recycled or otherwise disposed of in a manner that is environmentally appropriate and will withstand public scrutiny. These actions should normally be carried out by the custodian department. (NOTE: Custodians should consider whether scrap accumulated over time, e.g. scrap metal shavings, might be disposed of under disposal for proceeds, Sections 5.1 and 6.)
5.6 Military artifacts: The Minister of National Defence or an appropriately qualified person specifically designated by the Minister may authorize the disposal of military artifacts through gratuitous transfer, sale to a limited market, or sale at other than market value. This authority is intended for disposal of military items for heritage, historical, memorial, museological, static display or like purposes to recipients such as community oriented organisations (e.g. Canadian legions), museums, other levels of government and non-profit organisations. Any such disposal should carry with it a prohibition of subsequent transfer or sale without the expressed permission of the Minister of National Defence.
6.1.1 All government departments and agencies conducting disposals for proceeds (Section 5.1 above) will use disposal processes put in place by PWGSC. These disposal processes will be developed in consultation with national and regional disposal panels consisting of representatives from user departments and agencies. A representative from TBS is to be included in the membership of national disposal panels, and may be included in regional panels. Disposal panels will identify and develop disposal channels, mechanisms and contract statements of work appropriate to the particular national or regional surplus assets assigned to them. In all cases where it is feasible and cost-effective, PWGSC will retain the services of private sector contractors to perform required transportation, handling, storage, marketing and sales, and the collection and remittance of proceeds.
6.2 Responsibility of the Custodian in Disposal for Proceeds
When a custodian declares an asset surplus and opts to dispose of it for proceeds, the custodian is responsible for:
6.2.1 contacting the appropriate disposal agent for the item (a contractor or PWGSC, as determined by the disposal panel) to arrange the sale;
6.2.2 considering in consultation with the designated disposal agent what preparatory work should be done to maximize the net return on the sale of the asset, and deciding who will do any work selected;
6.2.3 setting a minimum acceptable sale price for the asset, if the custodian so wishes;
6.2.4 providing the disposal agent with information about the asset's condition and related documentation required to facilitate the sale;
6.2.5 making the asset available to the disposal agent at the agreed time and location, and in the agreed condition for sale;
6.2.6 monitoring the progress of the sale, receiving and reconciling proceeds of the sale, and paying all applicable fees and expenses;
6.2.7 resolving disputes and addressing ministerial inquiries related to sales of custodian's assets conducted by the contractor;
6.2.8 maintaining appropriate accounting records in accordance with applicable Treasury Board policy (see Section 14);
6.2.9 notifying PWGSC and the disposal panel of any difficulties or shortcomings encountered in the disposal process, and collaborating with PWGSC in monitoring the performance of the contractor;
6.2.10 participating as a member in the disposal panel that is responsible for this type of asset, or providing user input to it; and
6.2.11 requiring that materiel managers obtain appropriate materiel management training and certification.
6.3 Responsibilities of PWGSC in Disposal for Proceeds
In disposal for proceeds, PWGSC is responsible for:
6.3.1 establishing and chairing disposal panels and providing administrative support and expertise on the disposal process for disposal panels;
6.3.2 collaborating in the management of the disposal process and services;
6.3.3 providing strategic, procedural and technical advice on the disposal of surplus government assets;
6.3.4 putting into place disposal service contracts and standing offers, and arranging necessary ministerial authorization for the execution of contracts, bills of sale and documents transferring ownership;
6.3.5 providing disposal services directly, including the management of proceeds, in cases where the use of contractor services is not feasible or cost-effective; and
6.3.6 monitoring the performance of contractors to ensure compliance with contract terms and conditions, timely completion of all required tasks and the integrity and transparency of the disposal process. This monitoring will be carried out using reports from users and contractors, including electronic reports where feasible.
7.1 Custodians may trade in surplus assets as partial payment for new procurements. When doing so, custodians should ensure that credit offered for trade-in reflects fair market value, and that the procurement contract clearly stipulates terms and conditions of the trade-in. Custodians should ensure that appropriate records of trade-in activity are kept for accounting and audit purposes. Trade-ins are not authorized for cars, station wagons or light trucks, or for any computer equipment identified in Section 8.2, Computers for Schools Program.
8.1 In cases where the asset has marketable value exceeding the projected cost of sale, a decision to dispose of the asset at lower than market value or by gratuitous transfer constitutes a donation from the government to the recipient. Forgoing potential revenue is equivalent to an expenditure of funds. This decision must be taken by the minister through whom the custodian reports to Parliament. The person authorizing this sale or transfer should ensure that the arrangement constitutes the best use of the asset, and that the decision would withstand the test of public scrutiny.
8.2 Computers for Schools Program:
8.2.1 The federal government has committed itself to make Canada the most connected nation in the world. Industry Canada's Computers for Schools (CFS) Program, an important initiative in support of this "connectedness" agenda, has a mandate to collect surplus desktop and laptop computers and associated peripherals, refurbish them and donate them in fully working condition to elementary and secondary schools and public libraries. A rigorous allocation procedure has been put in place to ensure equitable distribution of these assets across Canada.
8.2.2 All personal computers (MS-DOS/Windows and MacIntosh) and associated monitors, keyboards, mice, printers, modems, servers, hubs, network cards, disk operating systems and related equipment which become surplus to government requirements must be offered intact to the Industry Canada Computers for School Program. Custodians are not authorized to sell, trade, donate or otherwise dispose of these assets prior to making this offer. Custodians are responsible for disposal of any equipment that is not accepted by the CFS Program.
8.2.3 The configuration of incoming computers is carefully monitored and recorded by CFS. Custodians should ensure that surplus computers are not "cannibalized" or otherwise rendered unusable prior to transfer. The practice of removing hard drives, random access memory (RAM) and other essential components from computers before transferring them should only be done in those rare situations where security requirements dictate it.
8.2.4 The data on the hard drives of all computers received at CFS facilities are thoroughly erased and the disks reformatted. Custodians with sensitive data may obtain RCMP-approved software from their local CFS centre to erase data on hard drives prior to transfer. In the National Capital Region, custodians may request that a technician from the CFS Program perform this work at their site. Bulk erasing of removable magnetic disks is also available from the CFS Program. Custodians who are considering removing hard drives from computers for security reasons should contact CFS to explore possible alternatives before taking this action.
8.2.5 This guideline is not intended to restrict the practice of loaning computers to employees for use at home, provided this use is a valid operational requirement. Furthermore, this guideline does not apply to mainframe computers.
8.2.6 Further information on the Computers for School Program may be obtained by telephoning 1-800-268-6608.
9.1 Where the custodian estimates that the market value of an asset is less than the costs that would be incurred to sell it through the disposal-for-proceeds process (direct handling, transportation and warehousing costs, marketing costs, sales fees and commissions, staff costs, etc.), the custodian may:
9.1.1 gratuitously transfer the asset to a Crown Corporation, federal agency, provincial government, First Nation, municipal government or school board in Canada;
9.1.2 gratuitously transfer the asset to a recognized charity or non-profit organization located in Canada;
9.1.3 for assets located outside Canada, gratuitously transfer them to a recipient similar to those in Sections 9.1.1 and 9.1.2 which are recognized by the host country, any treaty organization of which Canada is a member, or the United Nations; or,
9.1.4 if other options are not feasible, consider disposing of the asset as unsellable scrap and having it removed as waste, provided that such action will not cause harm to the environment.
9.2 Custodian departments that make gratuitous transfers of low value items under paragraph 9.1.1 to 9.1.3 above are to take suitable measures to ensure that the recipients are selected in a way that would be perceived by the public to be fair, equitable and transparent. Appropriate records are to be kept for such disposals and they should be subject to periodic audit or review. Departments should establish other internal controls to prevent abuse, as appropriate. Possible measures to prevent real or perceived abuse could include but need not be limited to the following:
9.2.1 Two individuals could be required to approve the use of cost-minimizing disposal.
9.2.2 Two or more individuals, different than those who approved the cost-minimizing disposal, could be used to select the recipient. Representatives from the private sector, other levels of government or the general the public who do not have a direct interest in the selection could be invited to participate.
9.2.3 A final approval signature for gratuitous transfer of assets. Those who approved use of the cost-minimizing disposal and who selected the recipient could be excluded from signing.
10.1 Hazardous products include those which are or may contain compressed gas, flammable or combustible material, oxidizing material, poisonous or infectious material, corrosive material, dangerously reactive material or contaminated oily fluids, heavy greases or waxes. The treatment of these products is addressed in the Hazardous Products Act and they are covered by the Workplace Hazardous Material Information System (WHMIS).
10.2 Dangerous goods include drugs covered under the Food and Drugs Act, radioactive substances covered under the Atomic Energy Control Act, explosive substances covered by the Explosives Act, and pesticides covered by the Pest Control Products Act.
10.3 When preparing hazardous materials for disposal, the disposing custodian is responsible for ensuring that the goods are labeled in accordance with WHMIS requirements and for providing the accompanying Material Safety Data Sheet. The custodian is responsible for arranging and paying for testing to identify hazardous materials or liquids contained in surplus assets prior to disposal.
10.4 Disposal panels establishing procedures for the disposal of hazardous or dangerous goods are to consult the PWGSC Real Property Branch, Architecture and Engineering Services Sector, Environmental Services Directorate, for advice.
11.1 The disposal of books, periodicals and related material is covered by the National Libraries Act and the National Archives Act.
11.2 The disposal of artwork should be done in consultation with the Canada Council Art Bank.
11.3 Intellectual property owned by the Crown is subject to the Surplus Crown Assets Act and may be disposed of in accordance with these guidelines for disposal.
11.4 When a safe is declared surplus, it must be inspected by the Security Engineering Section (SES) of an RCMP detachment to determine whether it is commercially saleable or if it must stay within federal government control. Safes identified as manufactured to government specifications, if serviceable, must be retained within the custodian department or transferred to another federal government department or agency. Government pattern safes that are unserviceable must be dismantled by RCMP SES personnel, who will retain the pieces of the mechanism that are considered sensitive. The remaining shell or body may then be disposed of through any of the disposal mechanisms previously outlined.
12.1 Where practical, custodians with surplus assets at remote sites and outside Canada should dispose of these for proceeds. In areas where there is a PWGSC presence, contracts with either domestic or foreign contractors should be established by PWGSC for use by departments or agencies.
12.2 Alternatively, if cost-effective, the disposal service agencies of foreign governments may be used through arrangements negotiated by PWGSC.
12.3 Where there is no PWGSC presence, departments may make their own arrangements directly with domestic or foreign contractors or agencies. In such instances, the advice of the applicable disposal panel should be solicited.
12.4 When no suitable disposal-for-proceeds option is available, deployed assets should be relocated to a convenient Canadian city for sale only if the anticipated proceeds of sale exceed the anticipated relocation and selling costs.
12.5 When it is not practical for custodians to dispose of assets for proceeds and the relocation of assets is not cost-effective, custodial departments should use the options described in Section 9.1 as appropriate. In foreign countries, possible recipients would include host governments and other organizations, such as humanitarian agencies and not-for-profit groups that are recognized by the host country, by any treaty organization of which Canada is a member, or by the United Nations. Custodial departments may adapt procedures as required to suit local customs and conditions provided that these procedures comply with Canadian and local standards of ethics and environmental protection. Custodial departments are responsible for ensuring that the necessary delegated authority is given to managers of on-site responsibility centres.
13.1 Proceeds from all sales of surplus Crown assets are payable to the Receiver General for Canada and are to be deposited in the Consolidated Revenue Fund. Departments have the authority to spend an amount equivalent to the net proceeds of these sales (i.e. gross proceeds, less selling fees and direct expenses incurred by the contractor and/or PWGSC). Amounts received may be applied to disposal, operating and capital expenditures only and may not be used for transfer payments. This does not apply when the moveable asset was forfeited pursuant to an Act of Parliament, and in this case spending authority is not established.
14.1 The Surplus Crown Assets Act provides that an amount equivalent to the proceeds from the sale of surplus assets may, subject to such terms and conditions as the Treasury Board may prescribe, be paid out of the Consolidated Revenue Fund (CRF) for the purposes of the selling department. This is not a vote-netting authority. The revenue from the disposal must be deposited in the CRF as non-tax revenue to the department. Expenditures against the authority created by the deposit of the proceeds will be made from the CRF and be reported by the department as expenditures against statutory authority in the Public Accounts. (Refer to the Surplus Crown Assets Act, 1992; Sections 3, 14 and 15.) The following accounting procedures will apply:
14.1.1 The Receiver General will establish within the accounts of Canada two accounts for each department or agency. One account, Proceeds from Disposal of Surplus Crown Assets, will be a non-tax revenue account used to track the yearly revenue from disposals and increase in the authority under the Surplus Crown Assets Act. The account number will be made known to the department. The second account, Spending of Proceeds from Disposal of Surplus Crown Assets, will be a budgetary expenditure account with statutory non-lapsing authority. It will be used to record the use of the authority under the Surplus Crown Assets Act during the fiscal year.
14.1.2 Departments will receive proceeds from sales directly from disposal service contractors, will reconcile these payments against assets sold by the contractor and credit the proceeds to the account for Proceeds from Disposal of Surplus Crown Assets.
14.1.3 Where the costs of a disposal service exceed the revenue from that disposal, the department will verify the disposal contractor's invoice to confirm compliance with the contract, and will then pay the invoice out of appropriate departmental resources.
14.1.4 Contractors will provide PWGSC with an information copy of any transaction records submitted to custodians that PWGSC requires to verify compliance with contracts.
14.1.5 Departments will draw from the account for Proceeds from Disposal of Surplus Crown Assets for requirements and record these withdrawals in the account for Spending of Proceeds from Disposal of Surplus Crown Assets.
14.1.6 Departments will decide who is authorized to make expenditures against this authority and will establish normal commitment and expenditure controls. Departments will track the size of the authority and the amount used and unused during a fiscal year. Payables at Year-End (PAYE), where appropriate, may be set up against this authority.
14.1.7 The authority to spend an amount equivalent to the proceeds deposited in the account for Proceeds from Disposal of Surplus Crown Assets will carry over into the following fiscal year, subject to Treasury Board terms and conditions.
14.2 In principle, the department and or agency must use its spending authority under the Surplus Crown Assets Act in the fiscal year in which the authority was generated. In the event that the custodian has unused spending authority from the disposal of surplus Crown assets at the end of the fiscal year, that authority will be carried forward to be used in the subsequent fiscal year only.
14.3 Questions regarding these accounting procedures should be directed as follows:Policy and Cash Management:
Cash Management Division
Treasury Board of Canada Secretariat
Central Accounting and Reporting Directorate
Receiver General for Canada