Contribution Funds for Non-governmental Organizations - a Handbook

3.0 Costs eligibility

General rules:
To be claimed, costs must be reasonable, directly and clearly related to the project, and approved in the agreement’s budget. If the recipient is managing a number of projects, the name of the project to which the expense is related (or an identification number) should appear on the invoice to facilitate identification and to ensure that expenses related to the project are kept separate from the others.

As a rule, expenses must have been incurred during the period covered by the agreement in order to be claimed. The date an expense is incurred (which is usually not also the date the invoice is paid) refers to the date the good was purchased or, for a service, the date the work was actually done. Expenses incurred prior to the effective date of the contribution agreement but paid for during the period covered by it are not considered eligible unless the agreement specifically states otherwise.

Similarly, deposit payments or advance payments made to suppliers for work to be done after the end of the period covered by the contribution agreement will not be considered eligible expenses.

Only the days worked from the beginning of the period covered by the agreement to the last day of that period will be considered eligible for salary expenses and consultant fees.

In all situations where the recipient believes that such costs should be eligible, the recipient must obtain the Department of Justice Canada’s written consent or the cost may be disallowed.
Salary and benefit expenses:
When approved in the agreement’s budget, salary and benefit expenses must be reasonable and correspond to actual salaries and benefits paid. Salaries should be supported by a valid contract with each employee, and there should be a timekeeping system to ensure that the time charged to the project corresponds to the time the employee actually worked on it. Time sheets should be signed by the employees and approved by their supervisor. Any overtime worked should be documented and approved as well by the employee’s supervisor.
When a project calls for subcontracting, and subcontracting costs are claimed, these costs must be supported by a valid contract signed by both parties and stating the nature of the work to be done, the results expected, the time frame that applies, the applicable rates, the payment structure, and the total amount of the contract. Any invoices flowing from this contract should show the nature of the work done in detail, the time (or the portion related to the project) charged to the recipient, the period during which the work was performed, and the amount charged.

The selection process of the subcontractor, including any calls for tender, should also be documented. In all cases, the amounts charged by the subcontractor must be reasonable and correspond to the market price for similar services. Comparative data showing the research done to obtain the best value for price should therefore be kept on file.
Travel costs:
When included in the budget, travel costs must respect Treasury Board standards and rates. The recipient should always verify the current rates on Treasury Board’s Internet site, where they are updated regularly. Flights must be supported by tickets and boarding passes. Each trip should be authorized by the proper authority, and a detailed expense report should be produced, signed and approved. Expense reports should also be supported by receipts or invoices and kept on file for future reference.
Administration costs:
All administration and other indirect expenses charged to the project must be supported not only by invoices and original documents but also by details of the methodology used to allocate common costs to the project. The allocation base used should be discussed with the Department of Justice Canada at the outset of the project to ensure acceptance and to reduce the risk of costs being identified as ineligible at the end of the project. Full documentation of the allocation base makes it possible to determine whether the portion of the cost charged to the project was reasonable. Administration costs claimed should correspond to actual costs incurred and paid for.
In-kind expenses:
Claims for in-kind expenses must be documented. The evaluation methodology used to put a dollar value to those expenses or contributions must be sound, and should be provided to the Department of Justice Canada at the outset of the contribution agreement.