ARCHIVED - Canada's New Government Acting to Improve Grant and Contribution Programs

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• Backgrounder - Summary of the Report of the Independent Blue Ribbon Panel on Grants and Contributions
• Backgrounder - Canada's New Government Acting to Improve Grant and Contribution Programs

February 14, 2007

Ottawa - The Honourable Vic Toews, President of the Treasury Board of Canada, today announced a series of immediate actions to improve how grant and contribution programs are managed. The measures are a first step in response to the report of the independent blue ribbon panel on grants and contributions. In their report, From Red Tape to Clear Results, panel members Frances Lankin and Ian Clark outlined their findings and recommendations to make the delivery of grant and contribution programs more efficient, while ensuring greater accountability.

"Grants and contributions are cornerstones of the delivery of government programs to Canadians. These programs provide real benefits to people such as promoting physical activity and healthy eating to school children and providing employment programs for disabled Canadians," Minister Toews said. "That is why we promised, in the Federal Accountability Action Plan, to reduce unnecessary red tape to make these programs work better for Canadians. I want to thank the panel and those around them, who donated their time and expertise to this process, for their hard work and impressive report."

The panel concluded that there is a need for fundamental change, that it is both possible and necessary to simplify administration while strengthening accountability, and that sustained leadership at political and public service levels is required.

"Our report reflects the work of a great many people who realize how important grant and contribution programs are to so many Canadians. Our recommendations are relevant, affordable and feasible," said Ms. Lankin. "The fact that there is so much to be done should not lead to the conclusion that the task is simply too large or too difficult to undertake. Rather, it should lead to the conviction that it is time to begin," added Mr. Clark.

The actions announced today will begin the process of change under clear leadership to strengthen accountability for the management and the results of these programs. They include the following:

• The President of the Treasury Board will lead in the development of an action plan to reform the administration of grants and contributions with a view to ensuring they deliver clear results in the most effective and efficient way possible within a sensible risk management framework. The government will continue to consult with the recipient community as this action plan is developed.
• As a first step in the development of this action plan, Treasury Board Secretariat will work with selected departments to examine business processes to identify opportunities for improved service and efficiencies. Based on the results of this review, departments will develop their own action plans to streamline internal practices and reduce administrative burdens.
• The government will establish a centre of expertise on grants and contributions, to share best practices, and to promote innovation in program administration.

"Time and money are being wasted administering rules and processes that add little to results and nothing to accountability. The actions I am announcing today will allow for programs to be managed more effectively and efficiently and to deliver real results. These actions deliver on our promise to strengthen accountability and management and make these programs work better," Minister Toews added. "We are getting back to first principles- delivering good programs to Canadians."

Each year, the government delivers nearly $27 billion to Canadians through more than 800 grant and contribution programs.

"Panel members were thoughtful, qualified individuals and the process allowed for considerable sector input. Looking forward, we urge the government to focus on taking action and on continued meaningful engagement of the recipient community in the implementation process," says Georgina Steinsky-Schwartz, President and CEO of Imagine Canada.

"It is important that government periodically review its practices and that those affected have the opportunity to participate," said Terry Goodtrack, Chief Operating Officer of the Aboriginal Healing Foundation. "I look forward to reductions-brought about by these recommendations-in the administrative burden placed upon First Nations communities."

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For more information, contact:

Mike Storeshaw
Director of Communications
Office of the President of the Treasury Board
(613) 957-2666

Robert Makichuk
Chief, Media Relations
Treasury Board of Canada Secretariat
(613) 957-2391

Gary Breen
Blue Ribbon Panel
(613) 762-4673

 

If there is a discrepancy between any printed version and the electronic version of this news release, the electronic version will prevail.

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Backgrounder:

BACKGROUND

As promised in the Federal Accountability Action Plan the President of the Treasury Board commissioned an independent blue ribbon panel, comprised of Frances Lankin, Marc Tellier and Ian Clark, to recommend measures to make the delivery of grant and contribution programs more efficient while ensuring greater accountability. Mr. Marc Tellier had to withdraw from the panel for business considerations. His insights and contributions to the panel's work were very appreciated.

The panel's mandate was to:

• review the draft Policy on Transfer Payments, along with its directives and related departmental practices;
• identify barriers to access for applicants for government grant and contribution programs and recommend changes to government-wide and departmental policies and practices to ensure that the government delivers those programs in a fair, economical and efficient manner;
• give consideration to eliminating legislative barriers and constraints to the effective and efficient delivery of grant and contribution programs; and,
• assess whether instruments other than grants and contributions can better achieve policy outcomes for Canadians in receipt of government support.

Consultation Process

The panel's findings are based on research and information gathered from five sources:

1. Extensive on-line consultations with recipients and federal program managers to identify key issues, challenges and possible solutions for the administration of federal transfer payments.
2. Previous reports and studies including:
   • recent studies on grant and contribution programs and their management in Canada, the United States and the United Kingdom,
   • work undertaken by the not-for-profit sector and by the federal government through the Voluntary Sector Initiative and the Task Force on Community Investments, and
   • reports of the Auditor General of Canada and parliamentary committees.
3. Face-to-face meetings with representatives from the voluntary and business sectors, Aboriginal representatives, research and science sector and federal program managers.
4. Further rounds of electronic consultation: Individuals and organizations were invited to submit reports, discussion papers and other documents for the panel's consideration and an online discussion on grants and contributions with academics and other experts from across Canada. All submissions and summaries of discussions may be found on the panel's website.
5. Finally, the academic community was engaged through a web-based virtual forum and the consultation process culminated in a symposium in November 2006 hosted by the School of Public Policy and Governance at the University of Toronto.

Profile of Participants

Almost 1,100 recipients of grants and contributions from a variety of sectors and regions completed workbooks for the panel's consultation exercise. Of these participants, 60 per cent worked in the not-for-profit or voluntary sector, 24 per cent in the business sector and 12 per cent in the Aboriginal sector. Almost half of the recipients indicated that they received the majority of their federal grants and contributions as short term (e.g., one year) funding.

Almost 550 federal program managers completed workbooks for the panel's consultation exercise. Many of these respondents had considerable experience working with grants and contributions; nearly 40 per cent reported having more than 10 years of experience working with transfer payments.

PANEL'S KEY CONCLUSIONS AND RECOMMENDATIONS

An overarching thrust of the report is the need for widespread cultural change and sustained leadership within the federal government in order to create meaningful change in grant and contribution programming.

The key conclusions of the Panel are broken down into three main areas:

1. That there is a need for fundamental change in the way the federal government understands, designs, manages and accounts for its grant and contribution programs.
2. That it is possible to simplify administration while strengthening accountability, and that it is absolutely necessary to do the first in order to ensure the latter-the panel identifies the current morass of rules and red tape as serving only to undermine accountability and hamper sensible reporting and evaluation.
3. That making changes in an area of government as vast and multi-faceted as grants and contributions will require sustained leadership at the political and public service levels. The findings and recommendations of the panel, by themselves, are not enough. The crucial ingredient is the commitment of the public service to work with program recipients on a sustained program of change.

General Recommendations

In short, the panel indicated that the federal government's administrative practices need to be more citizen-focused and emphasize respect for the recipient as partners in a shared public purpose. A simplification of the reporting and accountability regime is critical to reflect the circumstances and capacities of recipients and the real needs of the government and Parliament.

This echoes the views put forward by the Auditor General of Canada who emphasized the need for streamlined application, reporting and audit requirements for grant and contribution programs in her May 2006 report. It is also in line with the results from parliamentary committees who have examined the administration of federal grant and contribution programs and have recommended the development of standardized, user-friendly application processes, building capacity to better deliver programs and ensuring that stakeholders are effectively consulted in the drafting of policies and programs.

The panel is also of the view that innovation should be encouraged, within a sensible risk management framework, to achieve better results rather than completely eliminate errors. A better organization of information will also contribute to better administrative practices and tracking of results.

The report features 32 recommendations to cut red tape and strengthen accountability broken down into the following 15 groups:

• Definitions: Treasury Board should simplify the wide variety of grants and contributions into three broad instruments - unconditional grants; specific project-related contributions; and longer-term contributions.
• Program Objectives: The objectives established in the funding agreement for a particular recipient under a grant and contribution program should be clearly defined, realistic and measurable in practical terms.
• Single View of the Client: To enable recipients to deal more easily with government, the Treasury Board Secretariat and relevant departments 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: To improve the system for managers and recipients alike, the Treasury Board Secretariat should work with departments to simplify the grant and contribution application process and make it more transparent and easily accessible.
• Better Service: Treasury Board Secretariat should encourage departments to work with recipients in publishing, within three years, clear service standards for grant and contribution programs that can be understood by all parties.
• Information Sharing: To reduce the burden on clients and improve service, Treasury Board Secretariat should clarify the privacy issues related to the sharing of recipient information between departments to ensure that relevant information about federal investments in grants and contributions is easily available across government.
• Funding: Treasury Board Secretariat should:
  1. encourage the multi-year funding of projects;
  2. encourage the reduction in the number of cost categories in funding agreements and allow recipients greater latitude to shift funds among categories;
  3. identify the circumstances where core funding is a cost-effective supplement to project-specific funding; and,
  4. adopt the principle that funding levels for programs delivered through a third party should reflect the full cost of program delivery.
• Risk Management: Treasury Board Secretariat should develop a risk management approach for grants and contributions that tailor oversight and reporting requirements according to variables such as amount of money involved, credibility and track record of the recipient, and sensitivity of the project.
• Accountability Documents: Treasury Board's current accountability documents governing grant and contribution programs are unnecessarily complex, time-consuming and expensive. Moreover, they seem to have little practical application. They should be replaced by simplified documents (or a single document) flexible enough to accommodate program and project differences and focused on realistically measurable objectives.
• 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 the recipient organization.
• 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, Treasury Board Secretariat should:
  1. encourage consolidated audit planning for recipients whose projects are funded from more than one program; and,
  2. encourage departments to perform a regular cycle of random audits based on the annual financial cycle of the recipient organization.
• Evaluation: Treasury Board Secretariat should ensure that:
  1. program evaluations measure program-related objectives that are clearly defined and realistic; and,
  2. data collection and reporting requirements are specified accordingly.
• Business Processes: Treasury Board Secretariat should support selected departments and agencies in conducting a thorough mapping of grant and contribution business processes to identify opportunities for improved service and increased efficiency, and to share best practices. All departments and agencies should have completed such a business process review for their grant and contribution programs within three years.
• Data Improvement: Treasury Board Secretariat should develop a standardised coding system to categorize grant and contribution expenditures to allow improved analysis of where federal funds are being spent and for what program purposes.
• Implementation: To make early progress on this agenda for change, Treasury Board Secretariat should:
  1. assemble clusters of relevant departments to act as a "vanguard for change" by taking up the short-term initiatives identified in this report;
  2. emphasize clarity and reduce complexity in streamlining application, reporting and audit requirements;
  3. establish a centre of expertise in the government, with an advisory board of departmental funders and program recipients, to assist departments in exchanging best practices in the administration of grants and contributions, and in promoting innovation in program administration;
  4. develop government-wide training programs for personnel responsible for the administration of transfer payment programs;
  5. partner with lead departments to improve the current system of recipient access to information about grants and contributions, including web-based notices, e-mail alert systems, key word search capacity, and electronic application and tracking processes; and,
  6. make it easier for clients to obtain access to multiple levels of government through a single electronic interface such as MERX and Strategis here in Canada, or Grants.gov and GrantsLink which serve applicants for government support in the U.S. and Australia.

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Backgrounder:

The Government of Canada has welcomed the recommendations of the blue ribbon panel and is taking early steps to address the panel's key conclusions:

1. There is a need for fundamental change in the way the federal government understands, designs, manages and accounts for its grant and contribution programs.
2. It is possible and necessary to simplify administration while strengthening accountability.
3. Making these changes will require sustained leadership at the political and public service levels.

The actions announced today focus on three streams: sustained leadership, simplifying rules and clarifying accountabilities, and adopting a citizen-centred approach to managing programs.

Sustained leadership

Why it is important

Strong and sustained leadership from all levels of the public service is required to cut red tape and make grant and contribution programs more effective and efficient for all Canadians.

Actions:

• The President of the Treasury Board will lead in the development of an action plan to reform the administration of grants and contributions to strengthen accountability for the management and the results of these programs. The government will continue to consult with the recipient community as this action plan is developed.
• The government will invite the Panel to return to review the government's progress.

Clarify rules and strengthen accountability

Why it is important:

To facilitate change across departments and agencies, the Treasury Board Secretariat must clarify and simplify its policies and provide the right tools for program managers to administer grants and contributions in a way that focuses on results within a sensible risk management framework. Furthermore, bringing about change will require fostering a community where experts on grants and contributions can share information on the management of these programs.

Actions:

• The Policy on Transfer Payments will be renewed by the end of 2007 - along with other related Treasury Board policies, tools and guides that govern grants and contributions - to take into account the recommendations of the Panel and of the Auditor General of Canada.
• Treasury Board Secretariat will work with selected departments to examine business processes to identify opportunities for improved service and efficiencies.
• The government will establish a centre of expertise on grants and contributions, to share best practices, and to promote innovation in program administration.

Citizen-centred approach

Why it is important:

As the administrators of programs, departments and agencies play a central role in bringing about change to how grants and contributions are managed and delivered. Departments need to review their own practices to streamline their application and approval processes, establish service standards, and tailor their reporting requirements to the size and purpose of the program and capacities of the recipients.

Actions:

• In the fall of 2007, a group of departments and agencies involved in the delivery of grant and contribution programs will use the results of the examination of business processes to prepare action plans outlining how they will streamline their practices to reduce administrative burdens within the risk management framework.
• Once streamlined rules and processes are in place, training programs will be introduced to ensure program managers have the right skills and capacities to manage programs within a new administrative framework.

These are the first steps towards implementation of system-wide change under clear leadership. In the end, these changes will allow program managers and recipients to focus on delivering results and managing programs effectively and efficiently, rather than managing burdensome processes.