HUMA Committee Report

RECOMMENDATIONS

The Performance Report of the Department of Human Resources Development should provide detailed annual information to Parliament and the public about how the commitments in Strengthening Grants and Contributions at HRDC have ensured that payments to recipients of grants and contributions meet financial and program requirements.

HRDC should ensure that it has the necessary expertise to administer grant and contribution programs and that the department allocates more resources to hiring and training financial administrators with appropriate educational and professional qualifications.

HRDC should better integrate financial managers into its program design and delivery operations. To ensure that program managers adhere to proper financial standards and procedures, greater oversight must be part of the changing role of the financial community if HRDC is to achieve higher levels of prudence and probity.

The forthcoming Auditor General’s report on HRDC grants and contributions should provide guidance on ways to balance efficiency and flexibility in terms of program delivery and the need for sound financial management.

HRDC should give a higher priority to the Department's three-year plan to develop a system that tracks the performance history of project sponsors and a system that integrates the Department’s financial and administrative systems. The plan should be put in place sooner than the three years promised in the Action Plan.

To promote transparency, HRDC should ensure that it has an information system accessible to the public on the departmental Web site that provides details about individual grant and contribution programs.

HRDC should commission an evaluation of its managerial staffing practices, by a private sector management consulting firm, with a view to improving and supporting managerial continuity and stability in National Headquarters and regional offices throughout the country.

HRDC should treat staffing needs, including training, as one of its highest priorities to enhance administration of grants and contributions. Moreover, the acquisition of additional financial resources to meet these needs should be identified immediately and secured from HRDC’s existing budget, and recouped through supplementary estimates.

HRDC should provide the necessary training to project officers to permit them to educate and assist third-party project sponsors in terms of departmental expectations, and program rules and guidelines.

HRDC should ensure that eligibility criteria governing access to all of its programs are clearly identified, adequately communicated and applied equitably across the country.

This Committee explore the feasibility of establishing project selection advisory groups in communities throughout the country.

HRDC should put in place more comprehensive contribution agreements that outline performance expectations, financial rules and penalties in the event of non-compliance.

HRDC should utilize the necessary financial expertise, whether internal or external, to assess and approve financial proposals and business plans.

HRDC staff should apprise all project sponsors of the importance of meeting the objectives and outcomes of grants and contributions, their obligations under contribution agreements and the consequences of failing to meet these.

HRDC should consider imposing a moratorium on providing funds to project sponsors who do not comply with the terms and conditions of their funding arrangements.

In negotiating agreements under what the Auditor General of Canada calls "collaborative arrangements," HRDC (and other government departments) should ensure that each party receiving federal funds is subject to clearly defined and enforceable requirements to report on, evaluate and audit this spending.

HRDC should not reverse the decentralization of its grant and contribution programs to regional offices. The objectives of sound administration, transparency, and accountability can and should be addressed within the context of regional and local operations that are best able to respond to local needs.

HRDC should ensure that organizations receive money according to their grant or contribution agreement in a timely manner. The Department should guard against over-compensating for the shortcomings found in the 1999 internal audit with a reactive return to unnecessary red tape.

HRDC should strengthen its internal lines of reporting and monitoring to ensure that the delegation of administration and management to regional offices and headquarters is balanced with appropriate measures to ensure accountability.

By 1 June 2001, HRDC should report to this Committee on how it has struck a balance between decentralization, flexibility and control.

This Committee should review quarterly Progress Reports to the Minister and the forthcoming (October 2000) value-for-money audit conducted by the Office of the Auditor General of Canada.

HRDC should continue to operate its National Grants and Contributions Performance Tracking Directorate until it observes, for a sufficient period of time, results that are within established acceptable performance levels. Thereafter, the Internal Audit Bureau should conduct a bi-annual audit of these grants and contributions.

To enhance public confidence, HRDC should ensure that it meets the deadlines contained in its Action Plan and that the public be fully informed in a timely manner of HRDC’s progress in improving the administration of grants and contributions.

The Treasury Board should require all government departments to prepare an action plan with deadlines to address problems identified in future internal audits on grants and contributions. The Treasury Board should use the tools at its disposal to ensure that these plans are implemented and that all financial and administrative problems involving grants and contributions are satisfactorily addressed.

The Treasury Board should become involved to a greater extent in establishing the terms and conditions of grant and contribution programs and should ensure that there is a strengthened and more comprehensive transfer payment policy in place.

The Treasury Board should strengthen its oversight function and become more active in monitoring adherence to a strengthened transfer payment policy and be prepared to use the tools at its disposal to enforce compliance.

The Treasury Board should re-evaluate its ‘use it or lose it’ policy and review its guidelines and regulations that deal with lapsing program funds in order to avoid year-end pressures to disburse funds in a manner that can result in administrative and financial mismanagement.

Treasury Board should develop information management policies and rules with regard to the maintenance and accessibility of electronic records.

Treasury Board, in collaboration with other key government departments, should develop a plan for the system-wide coordination and harmonization of financial databases for organizations that receive grants and contributions.

The government should divide HRDC into several more homogeneous and focused structures.