2006 May Status Report of the Auditor General of Canada

The role of the Treasury Board Secretariat

6.24 The Treasury Board Secretariat should ensure that

• the types of transfer payments available to departments meet the variety of needs for their programs,
• the definitions of transfer payment types and their associated requirements are consistent, and
• guidance is provided on how to select transfer payment types so that selections are consistent across departments.

(6.21–6.23)

The Treasury Board Secretariat's response. Agreed. The Treasury Board Secretariat is pleased that the Office of the Auditor General has recognized that the existing policy and guidance, as well as the review and approval by the Treasury Board of program terms and conditions, provides a basis for effective control of transfer payments.

Further improvements are being considered through the policy review and other guidance to enable consistent approaches across government that allow for a better balance between risks, control, and accountability for results.

The Treasury Board Secretariat is committed to incorporating departmental, central agency, and stakeholder experiences into policy revision. In this regard, it hopes to increase the number of transfer payment options available to departments, thereby responding to their various needs while continuing to allow for flexibility as further needs arise.

The Treasury Board Secretariat will update the accompanying guidance material to facilitate consistent approaches across government, including the selection of suitable transfer payment instruments. The implementation strategy being considered for the proposed revisions to the Policy on Transfer Payments will facilitate an integrated approach to sharing knowledge and best practices through training programs and interdepartmental activities.

6.31 The Treasury Board Secretariat should establish and co-ordinate an interdepartmental working group on transfer payments to discuss concerns about applying the Policy on Transfer Payments and share best practices for managing grants and contributions.
(6.27–6.30)

The Treasury Board Secretariat's response. Agreed. Interdepartmental initiatives that focus on exchange of knowledge and best practices in transfer payments are key success factors. Results of departmental consultations in the review of the Policy on Transfer Payments reveal that there is strong support for the re-establishment of such an interdepartmental working group. The Treasury Board Secretariat is including such an initiative as part of its planned implementation strategy for the proposed revisions to the Policy on Transfer Payments.

6.34 The Treasury Board Secretariat should continue to monitor the work of the Task Force on Community Investment and amend the Policy on Transfer Payments and guidance for transfer payments as necessary.
(6.32–6.33)

The Treasury Board Secretariat's response. The Treasury Board Secretariat is committed to continuing its engagement with the Task Force on Community Investments and to building on the lead role it played in the development of the Voluntary Sector Initiative guidance publication, A Code of Good Practice on Funding. The Secretariat will continue to be involved both at the Steering Committee and working levels so as to better understand the needs of the voluntary sector. This understanding will feed into ongoing processes related to improvements to the Policy on Transfer Payments, and to the accompanying directives, guidance materials, and practices.

The role of departments and agencies

6.54 Indian and Northern Affairs Canada should strengthen its grant and contribution management controls by

• preparing a risk-assessment of recipients to determine the appropriate frequency and depth of monitoring and reporting,
• completing the development and implementation of its automated management system for grants and contributions, and
• providing necessary training to its program officers.

(6.38–6.53)

Indian and Northern Affairs Canada's response. Indian and Northern Affairs Canada agrees with this recommendation. The Department recognizes the importance of the issues raised in this chapter and is committed to improving and strengthening its grants and contributions management processes.

The development of a new First Nations and Inuit Transfer Payment System is the most important initiative currently under way, which will further improve and strengthen management practices. The Office of the Auditor General is supportive of this automated grants and contributions management system.

Indian and Northern Affairs Canada recognizes and fully supports the importance of providing ongoing training to its staff. It also recognizes the need to adopt a risk-based approach to manage all grants and contributions, and determine eligibility and the appropriate level of monitoring and reporting.

The Department will continue to work closely with the Treasury Board Secretariat to develop a Policy on Transfer Payments that meets both departmental and recipient needs.

6.64 The government should co-ordinate and implement a single audit process for the recipients of transfer payments from federal programs.
(6.56–6.63)

The Treasury Board Secretariat's response. Agreed. There is a need to reduce the audit burden placed on recipients while ensuring an appropriate level of control and accountability. A coordinated single recipient audit regime will be pursued to the extent possible.

The Treasury Board Secretariat's commitment to improving management aims to better promote horizontal management and the integration of activities that will assist departments to focus on exchanges of knowledge and promotion of best practices. Program design and administration must be client focused including, wherever possible, common and integrated recipient audit requirements. Interdepartmental initiatives will be undertaken to facilitate implementation and to highlight best practices in areas of streamlined recipient auditing.

6.68 The Treasury Board Secretariat and departments, while balancing risk, control, and accountability for results, should streamline the application, reporting, and audit requirements for grants and contributions in ways that would reduce the administrative burden on recipients.
(6.65–6.67)

The Treasury Board Secretariat's response. Agreed. The administrative burden on recipients must be reduced through streamlined application, reporting and audit requirements to the extent possible.

The proposed revisions to the Policy on Transfer Payments and to the supporting guidance material will provide best practices on how to streamline application, reporting, evaluation, and audit requirements. Interdepartmental initiatives will enable the sharing of knowledge and best practices between departments on how to reduce the administrative burden. Guidance will also be provided on reducing the administrative burden on the recipient population.

Periodic assessments of departmental transfer payment programs will address the extent to which streamlined application, reporting, and audit requirements are being implemented, which would in turn reduce the administrative burden on recipients.