CHAPTER 32 PUBLIC GRANTS

INTRODUCTION


1.   This chapter prescribes the procedures to be followed in accounting for the
     government grants listed in Annex A. Accounting instructions for NPF grants are
     provided in Chapter 10.


REFERENCES


2.   Annex A indicates the regulations and instructions which prescribe:

     a.  Conditions under which units may be entitled to grants;

     b.  Purposes for which the grants may be expended; and

     c.  Methods by which grants are to be claimed.


ACCOUNTING


3.   Grants shall be accounted for through the appropriate trust account in the
     accounting records of the Base Fund. A separate trust account shall be maintained
     for each grant received by the unit. Where a unit receives an initial and an annual
     maintenance grant, separate accounts shall be maintained for each.


4.   At the beginning of each public fiscal year or soon thereafter, for each grant
     to which the base is entitled, the B Admin O shall prepare the claim or other
     documentation necessary to effect receipt of the funds and pass all documentation
     to the NPFAO.


5.   The NPFAO shall verify the accuracy of the documentation and take the
     following action:

     a.  Pass the claims to the Public Funds Accounting Officer for processing
         and cheque issue; and

     b.  Record the submission as:

         DR  A/Rec - Receiver General

         CR  Grant (Specify)


6.   Upon settlement of the claim, the NPFAO shall record the transaction:

     DR  Cash/bank

     CR  A/Rec - Receiver General


7.   Expenditures chargeable to a grant shall be charged directly to the
     appropriate trust account. Expenditures in excess of the unexpended balance of the
     account may not be charged thereto. Where such occasions arise, the matter shall
     be referred to the B Admin O for resolution. Where the overexpenditure cannot be
     absorbed by Base Fund, the matter shall be referred to the BComd for further action
     as deemed necessary. Where the expenditure covers the purchase of fixed assets,
     they shall be treated in accordance with Chapter 28.


ADMINISTRATION


8.   For the proper and efficient administration of grants, the BComd, B Admin O
     and members of the Base Fund committee where applicable, shall familiarize
     themselves with the relevant orders.


9.   In addition to the requirements set out in paragraphs 3 to 7, the NPFAO
     shall:

     a.  Ensure that all invoices are approved for payment; and

     b.  Keep the appropriate committee informed of the financial position of
         each grant to ensure that expenditures do not exceed entitlement.


10.   When a ship is decommissioned or a unit undergoes a change in status in
      accordance with  CFAO 27-9, any unexpended balance of each grant shall be
      refunded to the Receiver General or, where so authorized, transferred to the new
      unit or ship. Settlement of the unexpended balance of these grants shall have first
      claim on the assets of the Base Fund.