Dear Sir,
We are a principal recipient of foreign funds and we have given sub grants to some organization.Out of the subgrant money , the subgrantee have purchased several assets which includes Furniture and equipment.
As part of the contract , it is mentioned that Assets can be taken over by principal recipient after the end of contract period .
My question is that can we (principal recipient) take over the assets bought by sub grantee out of these funds? ( the invoice of the assets is in the name of sub grantee).
Regards,
Jiwan
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Dear All, 6th March 2014
It is disturbing that such questions come up between us as Voluntary Organisations working for a common cause. Normally, many of us sign agreements in good faith or even helplessly. Most of these agreements even with funding agencies are one way traffic. So, to me it is not legal but an ethical question- a question of morality. If Jewan is in turn going to give back, not so good but fine. Otherwise, it is not correct to ask the assets back.
Such legalities bring us in bad light in the eyes of others. I do not know if the question is asked for academic reason. But, otherwise t is not correct.
I JUST WILL NOT GIVE BACK, COM WHAT MAY.
With Regards,
V.B.Chandrasekaran
Chatti Mahatma Gandhi Aashramam
Chatti Post, Chinthur Mandal
Khammam District, Andhra Pradesh
Pin Code: 507129
Email: verivaan2049@yahoo.com antarbharatid2010@gmail.com
Mobile: +919490109328 +918297976970
Dear friends,
From the little experience that I have, donors usually do not take over the assets purchased from grant fund. The assets (as listed) are handed over to the implementing agency at the end /completion of the project.
However in this case, since it is between the principal recipient and the subgrantee, in my view, the terms as laid out in the agreement should stand.
Pema
Wonderfully comprehensive reply by Mr. Sastry.
Grant conditions reign supreme. Rest of the issues are subservient to Grant Terms. Adequate disclosures should be made in the Notes to Accounts of both, Grantor and Grantee upon takeover. However, these takeovers shall be recorded at Nominal Value of Re. 1. Please refer Para 7.1 and 17 of Accounting Standard – 12.
Dear,
This is depending upon the terms of the contract/grant agreement. If it is mentioned clearly that “After completion of the Project Assets purchased out of Grant will be surrender or returned back to Funder or it can be retained only with their consent only.” If it is like this either we have to surrender/returned it or ask for the permission to retain it.
The same will be applicable to the sub grantee…as the same rule/terms will be applicable to them also.
Normaly Funder is not asking for the same but if the cost is so high and used for shorter period or it is useful to others…it can be taken back…
Hope it would sort out the issue.
Regareds
DNSurati
Dear Jiwan,
Greetings from Hyderabad!
As per your mail it seems to be very clear that the assets, after the completion of the project period will be taken over by your organization. As per my understanding you can very much take over the assets from the sub grantee but the these assets will be treated as a “kind contribution” to your organization from the sub grantee. You will have reflect the assets at a nominal value in your books and can keep a photocopy of the invoice for your reference. In case of the sub grantee, the assets will have to written off in the books once they are handed over to you.
Generally in the case of such handing over of the assets, if the asset is new then the acquisition cost is recorded in the books of recipient organization and if the asset is old then it is recorded at a nominal value.
If the asset is procured from FC funds then the same will have to be recorded in the FC books. The recipient will also have to file form FC-7 to the MoHA.
This is my understanding of the issue.
Thanks and regards,
B V Soma Sastry