2000 December Report of the Auditor General of Canada

1. That the departments clarify all grant and contribution program objectives, and include them in their annual Performance Reports to Parliament for the period ending 31 October 1999.

Industry Canada included the objectives for all its active grant and contribution programs as at 31 July 1999 in the Performance Report released in the fall of 1999.

The Department informed us that in preparing its Performance Report for the period ending 31 October 1999, it realized that it would be impractical, within the constraints of the Treasury Board format, to include over 45 programs' objectives. Rather than present only the Multiculturalism Program's objectives, the Department undertook to identify, for subsequent reports, appropriate means to report equally on all programs.

2. That the departments begin to report actual outcomes against the expected results in their performance reporting to Parliament, beginning for the period ending 31 March 2000.

We reviewed a draft of the relevant section of Industry Canada's 1999-2000 Performance Report, which presented actual results of active grant and contribution programs up to 31 March 2000. The text referred the reader back to the previous year's Performance Report for information on the objectives of the programs. While the presentation of results was more in the form of outputs than outcomes and not necessarily linked to expected results, we conclude that the Department has made a good start in responding to this recommendation.

We reviewed an advance copy of Canadian Heritage's Performance Report. It presents a list of the transfer payment programs with transfers in excess of $5 million (per the requirement of the government's new Policy on Transfer Payments) with page references to sections of the report where more information on the program is presented. The information provided varied widely for the different programs and included statements of purpose, activity levels, or some outputs and outcomes where they could be linked to departmental strategic objectives.

3. That the departments review the decision-making processes for all grant and contribution programs and that they ensure that all eligible applications for funding are assessed against the criteria approved by the Treasury Board.

Following our audit, Industry Canada directed that submissions requesting approval of projects clearly demonstrate how the proposal meets all relevant program authorities and how the project will contribute to attaining the objectives of the program. The submissions should also address how the project meets the eligibility criteria and how the project has been assessed against the assessment criteria. These requirements were also added to the pre-approval integrity review conducted on all contributions greater than $500,000, and to the post-approval review conducted at year end on a sample of contributions less than $500,000.

The findings of Canadian Heritage's internal audit show that the Department's decision-making processes for the Multiculturalism Program did not at the time of the audit ensure that applications were assessed against the criteria approved by the Treasury Board. The Department implemented remedial actions, including mandatory due diligence training for all staff and managers who have grant and contribution responsibilities, a new grant and contribution information management system, and clarified accountabilities.

4. That the departments audit periodically all their grant and contribution programs and report the results of these audits in their annual performance report to Parliament, beginning fiscal year 2000-01.

Industry Canada's management control framework produced in March 2000 indicates the status of audits (completed or under way) for all its grant and contribution programs.

The Department's 2000-01 review plan targets a selection of grant and contribution programs for audits of recipient compliance with program terms and conditions, use of funds, and, where deemed appropriate, an examination of program management and delivery.