(a) The purpose of this chapter is to set forth the procedures for handling pass-through grants, which are governed by AS 37.05.315. The procedures are designed to minimize any liability or loss to the City which may arise from administering such grants, while at the same time maximizing the amount of such grant funds going to the purposes of the grants.

(b) Loss or liability may arise out of the following: administrative costs, loss of interest income, ineligible expenditures, and the grantee’s failure to perform. Most administrative costs can be determined soon after the completion of construction or of the grant project. Ineligible expenditures can be determined only after a State audit. A grantee’s failure to perform can only be determined after a term equal to the practical life of the facility constructed with the grant funds.