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Panel Recommends Fundamental Reform in Canadian Grant System

(Feb. 26, 2007) An independent blue-ribbon panel commissioned by the Treasury Board has recommended substantial changes in how the Canadian government administers its federal grant and contributions program.

The Canadian government grants nearly $27 billion annually, a significant percentage of which goes to registered charities and other nonprofit organizations. The panel spent six months reviewing the grant program, consulting with 1,100 grant recipients and more than 500 federal administrators of these programs.

The panel laid out 32 recommendations to not only simplify the administration of grants and contributions, but also to strengthen the accountability of the system. The recommendations center around four major principles:

  1. Respect the recipients—they are partners in a shared public purpose. Grant and contributions programs should be citizen-focused. The programs should be made accessible, understandable and usable.
  2. Dramatically simplify the reporting and accountability regime—it should reflect the circumstances and capacities of recipients and the real needs of the government and Parliament.
  3. Encourage innovation—the goal of grant and contribution programs is not to eliminate errors but to achieve results, and that requires a sensible regime of risk management and performance reporting.
  4. Organize information so that it serves recipients and program managers alike.

Changes in Funding and Application Process

Funding and how funding should be operated and managed were key questions, and the panel developed a number of proposals, including:

  • Encourage the multiyear funding of projects that are multiyear in nature.
  • Encourage the reduction in the number of cost categories in funding agreements and allow recipients greater latitude to shift funds among categories.
  • Identify circumstances where core funding is a cost-effective supplement to project-specific funding.
  • Adopt the principle that funding levels for programs delivered through a third party should reflect the full cost of program delivery.

In addition, the recommendations call for significant changes in the following areas:

  • Definitions: Simplify the current wide variety of grants and contributions into three broad instruments: unconditional grants, specific project-related contributions and longer-term contributions.
  • Single view of the client: To enable recipients to deal more easily with government, the government should improve horizontal coordination in program administration. This will reduce duplication and redundancy and lighten the reporting burden on applicants and recipients.
  • Streamlined application process: Simplify the grant and contribution application process and make it more transparent and easily accessible.
  • Reporting requirements: Monitoring and reporting requirements in the policy framework for grant and contribution programs should be streamlined and clearly connected to a demonstrable need. The government should apply the concept of “accreditation” as a means of tailoring reporting requirements to the capacities, circumstances and track record of recipient organizations.
  • Audit: As a general rule, recipients of grants and contributions should be subject to audit no more than once a year, regardless of the number of funding agreements in place. To avoid unnecessary audits, the government should encourage consolidated audit planning for recipients whose projects are funded from more than one program and encourage departments to perform a regular cycle of random audits based on the annual financial cycle of the recipient organization.

The panel also focused on implementation, noting that fundamental change will be a long-term process. It divided its recommendations into short- (immediate), mid- (up to 18 months) and long-term (three years) goals and developed a timeline for many of them.

About the Panel

The panel was formed in 2006 and was comprised of the following members:

  • Frances Lankin, president, United Way of Toronto and former Ontario Cabinet Minister (chair)
  • Marc Tellier, president, Yellow Pages, Montreal
  • Ian Clark, president, Council of Ontario Universities, former Secretary of the Treasury Board

The panel’s website includes the full report and recommendations as well as a summary presentation of the findings.

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