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Canadian Government Seeks Comments on Grant Programs

(Sept. 5, 2006) The Canadian federal government is asking nonprofit organizations and other interested parties to submit their comments and opinions about how to make the current system of grant and contribution programs less burdensome and more efficient.

In June, an independent blue-ribbon panel was established to make recommendations on how the existing Treasury board Policy on Transfer Payments could be streamlined and made easier for recipients while still giving the government sufficient control and accountability.

To that end, the panel prepared a consultant paper to provide background information about the current grant process; interested parties then can complete an online workbook with their thoughts and feedback on specific issues.

The deadline for completing the workbook is Sept. 15, 2006.

Paperwork, Reporting and Funding Concerns

The Canadian government has more than 700 grant and contribution programs that accounted for 13 percent, or $24.8 billion, of net federal government expenditures in 2004–2005.

For all such programs, two comprehensive documents must be prepared: a results-based management and accountability framework and a risk-based audit framework. Regular program evaluations must also be completed. These documents, as well as all other policies, apply to all programs, regardless of size and purpose, and there is little differentiation among programs or the needs and capacities of recipient groups.

The consultation paper notes several concerns that the government and those in the voluntary sector have regarding the current grant system:

  • The burden of the audit and increased reporting requirements for all organizations and grants, regardless of size
  • Excessive processing time for applications
  • The need to reapply for funding annual even when a project is multiyear or long-term in nature
  • Recipients of funding from different departments must submit different paperwork to each and may be audited by each
  • A shift away from providing core funding to focusing on specific project-based funding
  • Funding that is sporadic and unpredictable
  • The effort and cost of producing the results-based management and accountability framework and the audit are substantial, and their usefulness and practical to link to other programs is uncertain

Questions to Consider

To address those concerns, the panel is already considering ideas such as program-specific exceptions, tailored control frameworks, special case provisions, multiyear funding approvals and consolidated reporting and auditing processes.

The panel will be speaking with members of the government and grant and contribution recipients to gain feedback and perspectives on these issues. It also will be consulting with nonprofits and regulators in other jurisdictions and countries.

While the panel is interested in hearing comments about any issue related to the grants program, it also has developed a series of specifics for participants to answer:

  1. What is the approximate cost of the administrative processes (application, reporting, audit, evaluation) as a percentage of the dollar value of the transfer payment received? What is a reasonable target for this percentage?
  2. What is the best technique to introduce flexibility into the transfer payments framework in a way that maintains appropriate accountability and control?
  3. How important is transparency of the systems to the application and administration processes?
  4. Is there an opportunity for a web-based application and administration system to decrease the paper burden for recipients of grants and contributions?
  5. What are the challenges to implementing a more integrated application and reporting system that makes effective use of technology?
  6. What are the best practices in Canada or abroad that can provide examples of how the application and administration processes could be improved?
  7. What are the perceived risks to the appropriate use of public funds for this program and its recipients, and which elements of the control framework are most important for mitigating this risk? What percentage of grant and contribution payments has been subject to material misuse in the past decade?
  8. Would another government instrument, such as a tax incentive, a direct service contract or some form of harmonization among levels of government, be more cost effective in achieving the program objectives?

The consultation paper, workbook and additional background information can be found at the independent blue-ribbon panel website.

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