Guide on Grants, Contributions and Other Transfer Payments
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5 Mandatory plans and frameworks
This section's objective is to clarify TB requirements for new or renewed submissions for transfer payments programs. It is mainly aimed at program managers who develop new transfer programs or manage existing ones and program analysts in Treasury Board who approve these programs. Because this section provides only a general overview, consult your local evaluation professionals for more detailed guidance.
The Policy on Transfer Payments stipulates that Treasury Board submissions for program approval of terms and conditions for class grants or for contributions must include a results-based management and accountability framework and a risk-based audit framework to cover audit and evaluation plans.
It is expected that most departments already have in place some of the elements required for the above frameworks. Unless it is the first time a department engages in transfer payments, departmental frameworks or plans may already have sections specifically covering existing transfer programs.
In these cases, the relevant framework should be adjusted to the new or modified program and updated to reflect current policy requirements. If such a framework does not exist for the program being considered, it will need to be developed before the submission is sent to TB for approval.
5.1 Results-based management and accountability framework
The Policy on Transfer Payments requires that each Treasury Board submission for programs or initiatives with transfer payments include a Results-based Management and Accountability Framework (RMAF) dealing with accountability, evaluation and reporting requirements. The frameworks should help achieve a number of goals related to the results-based management agenda:
- to set clear roles and responsibilities for the main partners involved in delivering the program or initiative (a
sound governance structure);
- to ensure clear and logical design that ties resources to expected results (a results-based logic model
that shows a logical sequence of resources, activities, outputs and key results for the program or initiative);
- to have a sound performance measurement strategy that allows managers to track progress, measure
results, support subsequent evaluation work, learn and make ongoing adjustments for improvement;
- to set out any evaluation work that is expected to be done over the life cycle of the program;
- to ensure adequate reporting on results.
If successfully developed, the framework should represent:
- an understanding between the partners on what they aim to achieve, how they plan to work together to achieve it,
and how they will measure and report on results;
- a tool for better management, learning and accountability throughout the life cycle of the program or initiative;
- an early indication that the program or initiative is set up logically, with a strong commitment to results and a good chance to succeed.
A results-based management and accountability framework should convincingly demonstrate a department's intention and capacity to measure performance against key results commitments on an ongoing basis (ongoing performance measurement) and periodically through program evaluation. A sound performance measurement strategy should cover:
- Main activities of the program (what will be done?)
- Clients or target populations (who will benefit?)
- Expected results (what will be achieved?)
- Performance indicators (how will we objectively know?)
- Data sources (where will we get the information?)
- Methodological considerations (how will we measure and analyse, and at what costs?)11
Additional information and guidance on developing results-based management and accountability frameworks is available at Centre of Excellence for Evaluation (CEE) website.
5.2 Internal audit plan and risk-based audit framework
An audit plan's content depends on many factors such as management requests, legal obligations, pre-established cycles, and needs and expectations of central agencies or other partners. But in order to use internal audit resources where they are most needed, risk should be a driving force in planning. A risk-based audit framework is a coherent and disciplined approach to detect, assess and respond to risk.
For a transfer program, the auditors will consider the procedures and controls in place to identify and assess risks, and decide on an audit strategy. The strategy will be reflected in the annual audit plan, or in a stand-alone document if the new or renewed program is developed after the annual audit plan is published. Risk management is discussed in Section 7.
Remember that the audit function's main role is to provide assurance on proper program management and administration. This applies to both conditional and unconditional transfer programs, new or renewed.
Under certain circumstances, internal audits may involve looking at individual contribution agreements. This can happen when program managers request an internal audit when a problem is suspected, when program internal controls, such as financial and operational monitoring have failed, or when available program officers lack the capacity or expertise to handle the issues or when they themselves appear to be part of the problem.
Therefore, the internal audit plan included in a TB submission should mainly address how and when internal audits will determine that the transfer program is adequately managed and administered. It may also indicate, if it is deemed necessary to supplement or assess the effectiveness of program monitoring, when and how it will audit individual contribution agreements.
Auditing transfer programs and agreements is covered in Section 9.
Note that auditing agreements does not relieve program managers of their responsibilities to ensure effective monitoring of contribution agreements under their responsibility.
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