ASSETS FOR INDIVIDUAL CLIENTS

Purchase of assets for individual clients is not an eligible expense. Assets (or depreciable items over two hundred fifty dollars ($250.00)) are not intended to remain with the client (e.g. computers, massage tables, etc.). Any asset used as part of a funded training program ultimately belongs to the Government of Canada, and must be retained by the MNBC–MHRDA (or its Service Delivery Organizations on behalf of the MNBC) when the training has concluded. If a client needs such items as part of his or her training program, the MHRDA Program Coordinator may determine if the leasing/rental of required equipment should be included in the client’s funding.

GENERAL CAPITAL ASSETS GUIDELINES

HRSDC requires an up-to-date list of capital assets be maintained by the MNBC–MHRDA, which is then verified by the auditor. This process is also required at the Regional level. (Refer to the Finance Manual Appendix for the MNBC Schedule of Fixed Assets.)

The list must form part of the auditor’s reporting structure; e.g., be attached to the management letter and/or summarize current data on financial statements. The list includes:

• All items purchased,
• Cost,
• Serial number (if applicable),
• Date of acquisition(s), and
• Date of last up-date.

REPORTING OF ASSETS

• HRSDC requires that assets purchased by the MNBC–MHRDA be expensed in the fiscal year, and recorded at cost.
• The MNBC–MHRDA may choose to capitalize and amortize assets over their useful life. If the MNBC–MHRDA capitalizes assets, then the two approaches must be reconciled. However, appreciating assets may not be amortized. Amortization is an expense on the income statement.
• Reconciliation: Total Expenses – Amortization Expense + Purchase Price = Total Expense (HRSDC).
• These policies must be disclosed in notes to financial statements.

DISPOSITION OF ASSETS

• This section outlines the MNBC–MHRDA requirement for disposing of capital assets that are related to training under the MNBC’s agreement with HRSDC.
• The MNBC must preserve and be accountable for any assets costing two hundred fifty dollars ($250.00) or more acquired with the contribution provided by HRSDC, under the MHRDA. The MNBC must not lease or lend to another agency without HRSDC’s consent; and use them only for the purposes of the programs during the funding period unless:
1. HRSDC authorizes their disposition,
2. Replacement of assets subject to wear is necessary, or
3. The assets that have become outdated require replacement.
• This requirement to preserve assets must follow through any financial assistance agreements the MNBC has with third parties (e.g. Regional Service Delivery Organizations), and the resulting agreements must contain a provision governing the disposition of any preserved assets upon termination of their agreements.

TERMINATION OF AGREEMENT

Upon termination of this agreement or the end of the funding period, any assets should be dealt with as follows:

1. Sold at fair market value and the funds realized from such sale be applied to the costs of the program to offset HRSDC's contribution to the costs of the program,
2. Turned over to another person or designate approved by HRSDC (in the case of an employee or participant, a T4/T4A will need to be issued), or
3. Disposed of in such a manner as may be determined by HRSDC.