Findings

Good Practices

Alberta Region has established a Grants and Contribution Committee chaired by the Assistant Deputy Minister. (A variation of this meeting occurs in British Columbia where grants and contributions are the discussion at the Senior Managers’ weekly meeting). Once a month, a meeting is held where the project assessment officers present potential projects. A discussion ensues involving other assessment officers, the Director General, Operations, and the Assistant Deputy Minister, where merits and fit with departmental objectives was determined. The results of that meeting were that a project was determined to be a good fit and proceeded to the due diligence process; it required more information and would be presented again at a future meeting; or, it was determined that the proposed project should be declined. As a result of this meeting, input from various sources was provided on each project, thereby increasing transparency. The result was that the successful projects were determined to be a good fit for WD by furthering departmental objectives, while aligning with the overall WD mandate. Other regions may wish to consider implementing a similar system as this was held to be a good practice. The audit of the Financial Management of Grants and Contributions recommended that a meeting approach to review of proposals be examined, and this audit concurs with that recommendation.

In Manitoba Region, an initiative was undertaken to follow up on completed projects. The objective of the review was threefold: to provide valuable information on success stories; lessons learned; and, encourage further engagement with recipients. Results were collected for target groups and sectors of the economy. By obtaining this follow-up information on completed projects, WD was able to amass valuable information that could feed into future programming and project selection. Useful information on impacts of funding was collected that could assist in reporting on results for the region. This was found to be a good practice and something that should be considered in other regions as well.

Recommendation:

Consideration should be given to following up on the success of completed projects when anticipated results have been achieved. Although this may be years after project completion, this practice would help to assess the long-term impacts and influence future decision-making and resource allocation.

Improving Transfer Payment Management and Compliance with Treasury Board Policies and the Guide on Grants, Contributions and Other Transfer Payments

The audit reviewed 60 project files, including files from Alberta, Saskatchewan, Manitoba and British Columbia.The project files selected covered all programs and provided a good representative sample. Checklists were completed for each file, comparing the file contents with the requirements of Appendix C: Requirements for Contribution Agreements of the Policy on Transfer Payments. The files were found to be complete with respect to requirements of the policy particularly since standardization of the Contribution Agreements and the use of the online system to generate project documents. However, opportunities to strengthen and develop an enhanced grants and contributions management system were noted.

Contribution agreements were found to provide a narrative on the project, however could benefit from including a more enhanced description of the project, along with an explanation of what constitutes acceptable costs eligible for reimbursement in more detail than was currently available. File reviews completed found that although acceptable costs for reimbursement were outlined briefly, detail provided on allowable costs was limited. Providing specifics would clarify allowable costs for the claimant, and would result in claims filed which are more accurate.Monitoring and payments officers would profit from receipt of an acceptable claim, allowing processing times to be reduced.

Important dates in the Contribution Agreements were not always acknowledged and followed up on in a prompt manner. Project completion dates as indicated in the contribution agreements passed before amendments were filed.Reporting dates, including progress reports, final reports and due dates for claims to be filed against advances were exceeded. Late amendments to contribution agreements project end dates were completed in seven cases from the sample of 60 projects reviewed or in approximately 12 per cent of the files. It should be noted, that in those cases noted, there was no change made to the scope of the project.

Opportunities for improvement in grants and contribution management were noted where start dates in contribution agreements were earlier than the signing date of the agreements to allow for claiming of costs prior to the signing of the agreement, although this practice has since been corrected. Also noted were claims for costs after the project end date as outlined on the Contribution Agreement without an amendment completed, or reimbursement for an ineligible expense without adequate authorization.

Advances were provided that required accounting for by a claim being filed within 90 days. In one region examined, 33 per cent of the files reviewed included advances issued at year-end with the need for the advance not always apparent. Claims were often filed past the required period and on occasion significantly past that date. At times the claims were not sufficient to absorb the advance paid and a subsequent claim would account for the remainder of the advance. In one case, a significant advance was recovered where interest on the recovery was not assessed in accordance with the Policy on Transfer Payments and the Interest and Administrative Charges Regulations even though the recipient fully expected to pay interest on the funds received.

Final reporting did not always contain information on the agreed upon indicators. Attempts are now being made to follow-up on recipients to report on indicators before the files are closed off, so it is apparent that progress is being made in this area.

Risk was assessed and recorded on projects when initial project documents were completed and again on an ongoing basis as claims are received. Further progress could be made to utilize this valuable information to formulate project audit work and, in fact, work is underway to establish such a system. Risk information will be one consideration in project audit selection, as currently the Monitoring and Payments working group is working on developing an enhanced risk-based audit plan for future audit work.

In addition to assessing compliance with the Policy on Transfer Payments, the audit also reviewed the compliance with requirements for program evaluations in the department. Program evaluations were found to be completed as required by Treasury Board, and recommendations followed up on to ensure appropriate action had been taken.

In summary, project files were found to be complete; however, opportunities to strengthen the contribution management system at WD exist. A more formalized and possibly automated process to track significant dates on the project could be established so that officers can be proactive in monitoring important upcoming dates. Project description in the Contribution Agreements could be strengthened in particular with respect to a more detailed description of eligible costs.Risk information should further feed into project audit work so that those projects deemed to be highest risk are exposed to appropriate scrutiny.

Recommendation:

Contribution agreement management should be strengthened so important dates in the contribution agreement are recognized and acted on consistently. Key dates include: project completion date, due date for filing claims against advances and regular progress report filing due dates. Automation of contribution agreement management could assist officers by producing a report identifying important upcoming dates to the project, thereby facilitating proactive action. As a means of soliciting further compliance and clarity, contribution agreements should include more details on the project description and more detail around what constitutes an eligible and ineligible cost.

Consistency between Regions

Communication between the regions, as well as between the regions and Headquarters occurs through weekly Director General plus calls, participation in the monitoring and payments working group and through training provided. Enhancements to existing communication could further streamline processes, avoid duplication, increase efficiency, and is critical in management of pan-western projects. Regular scheduled meetings to share best practices, seek advice on upcoming issues and develop training needs were identified as having potential benefits.

In Alberta Region, consideration has been given to developing a Request for Proposal document that could have potential benefits in other regions as well. A Request for Proposal has been developed and used successfully in Saskatchewan for the Canada Celebrates Saskatchewan sub-program. This tool would be used as a means to broaden the client base and provide opportunity for WD to enter into relationships with new proponents. Currently WD clients are often repeat clients and have participated with WD on a number of projects. The opportunity to locate new potential clients was seen as a chance for WD to move in new directions and expand into new areas, while still fulfilling the overall mandate of the department.

Recommendation:

As a means of improving transparency and broadening the client base, consideration should be given to developing a Request for Proposal document for certain initiatives, as was done in Saskatchewan with the Canada Celebrates Saskatchewan sub-program. It is anticipated that the request for proposals will identify a number of pan-western projects. To further consistency between the regions and to manage such pan-western projects, communication and information sharing between the regions and Headquarters should be enhanced by appropriate means such as regular meetings, conference calls or informal ad hoc discussions.

Performance Measurement

As with other departments and organizations, performance measurement at WD is new and evolving. Defining success has been a challenge throughout the department, but work is underway to identify meaningful indicators and accumulating results in a manner that makes the information available for departmental reporting. Developing relevant indicators that are not only collectable, but also collected and used to educate future decision-making is the ultimate goal.

Indicators should be selected that are specific, measurable, achievable, realistic and timely (SMART), giving consideration to available resources.

With respect to collection of performance information, officers were unclear as to who would ultimately be responsible to follow-up and ensure that performance information was collected. The result is that the information is not always collected or made available for decision-making.

Recommendation:

Continue refining the project performance measurement process to facilitate accumulating results-based information linked to departmental strategic outcomes.  Clarification of roles and responsibilities around performance measurement should be undertaken and communicated to all staff involved at all stages of the management of contribution agreements.