PACC Committee Report
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Through the grants and contributions Vote, CIDA is authorized to use both Gs&Cs. For any given program or project, it will select the most appropriate
source of funding. Payments in
support of eligible recipients are made in accordance with provisions of contracts, contributions agreements, grant agreements,
standing offer arrangements, administrative arrangements and recipient government contracts
or other forms of arrangements
("contracts, agreements or arrangements"). These programs and projects will be
in accordance with the TB Policy on
Transfer Payments and with these Terms and Conditions (Ts&Cs) for International Development Assistance which
set out the broad parameters
for Gs&Cs.
These contracts, agreements or
arrangements must also respect other relevant TB policies, amongst others, the Government
Contracting Regulations and
the Interdepartmental Charging Policy.
These Ts&Cs are
also complemented by other CIDA policies for International Development Assistance which describe in
further details, each Channel available to the
Agency to provide international assistance.
CIDA will adhere to the applicable requirements of the TB Policy on Transfer Payments. Should CIDA require exemption to portions of this Policy, it will submit a request for exemption to TB. If CIDA uses alternate procedures to those in the Policy, they will be justified and documented, in accordance with Policy requirements.
6.2 Type and nature of expenses
Payments of Gs&Cs will include the CIDA portion of direct program or project expenditures and may also include a reasonable share of overhead expenditures, as agreed to by CIDA and disclosed in the contract, agreement or arrangement.
The specific eligible expenditures will be budgeted in the program or project approval document and reflected in the contract, agreement or arrangement clauses dealing with the budget and terms of payment. These expenditures will normally comprise of the following:
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cost of goods, such as commodities, and all related shipping or transportation costs;
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cost of services, such as salaries and benefits, specific per diem fees, or actual project or program disbursements;
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cost of equipment and related installation or maintenance; and
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other actual or reasonable expenses, or budgeted amounts of expenditures.
The determination of a reasonable share of overhead expenditures reimbursable by CIDA will normally be established in accordance with one of the following methods:
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as a component of fees proposed following a competitive process;
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in accordance with the CIDA Overhead Rate Policy;
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as a negotiated standard or reasonable rate among donor, or recipient organizations; and
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other appropriate means.
Eligible project expenditures will include only the minimum necessary costs to fulfill the project objectives, as agreed to by CIDA. Specific costs will be limited by application of various appropriate standards and techniques. These include the TB travel regulations, where appropriate; limitations on salary rates or consultant per diem fees charged to a project; negotiated costs where warranted; and the exclusion of luxury goods, etc.
The financial authorities delegated to the Minister are presented in Annex A.
Individual programs or projects will be approved at the minimum amount deemed necessary to attain the desired results in accordance with the aspects specific to International Stacking of Assistance (section 4.2).
Where the proposed contribution or grant exceeds the authority of the Minister responsible for CIDA, or does not conform with the Ts&Cs, the approval of the TB will be sought.
Authorities delegated to CIDA positions by the Minister are reflected in the Delegation of Selection Authorities and Contractual and Financial Signing Authorities. This Instrument deals with the authority to approve program or projects, and approve, sign or amend contracts, agreements or arrangements, as well as the authority to approve payments. These positions are generally limited to senior managers, being the Vice-President, Director-General or Director levels, for program or project approvals, and signing of contracts, agreements or arrangements.
To be considered for approval by a senior manager, the program or project should:
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meet the Agency's development objectives and priorities;
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have been reviewed for all application documents (per section 5.0), and stacking (4.2);
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meet the specific objectives and criteria of the Channel, and any additional sub-objectives (e.g. as stated in Regional or Country Policy Framework, sectors recommended for economic or social development within the donor community); and
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present all necessary information for the planning, execution and monitoring functions.
Prior to submission for approval at the appropriate management level, CIDA programs and projects are normally reviewed with the following parties, where appropriate:
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Mission abroad;
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policy units or other interested areas within the Branch or other Branches within CIDA;
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other interested departments or organizations, where appropriate; and
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appropriate sector, financial, or contract specialists.
The current CIDA Delegation of Selection Authorities and Contractual and Financial Signing Authorities is attached as Appendix E.
9.0 BASIS AND TIMING OF PAYMENT
Contribution payments will normally be made as reimbursement of expenses incurred, or paid, by the recipient according to their contract, agreement or arrangement, and based on presentation of acceptable invoices or reports (narrative and/or financial).
Grant payments will be scheduled in accordance with the cash flow requirements as proposed by the recipient and agreed to by CIDA. The timing of payments to some multilateral organizations and international financial institutions may be determined on the basis of urgency (as is the case with humanitarian assistance), or, when required by Canada's overall foreign policy interests and the principles of multilateralism, these payments may be made in a single tranche.
In the event that advance or installment payments are deemed necessary for the project, CIDA will manage these payments either in accordance with the TB Policy on Transfer Payments, or in accordance with the exemption from the basis of timing and payments of the Policy, whichever is most efficient for program delivery.
There are circumstances where the scheduling of payments may not be appropriate. Gs&Cs pursuant to multilateral international agreements or memberships in international organizations will be made in accordance with the payment terms as defined by international agreements.
Most CIDA contributions are exempt from repayment as they meet the policy exemptions stated in the TB Policy on Transfer Payments.
Some contributions to for-profit companies and greater than $100,000 may be repayable. For example, under the Industrial Cooperation activity of the Partnership Channel, repayment is required when the initial contribution towards a feasibility study leads to revenues.
Such projects are monitored, via annual report requirements, up to five years after the initial CIDA contribution, to ensure compliance with the repayable contribution policy requirements. CIDA maintains appropriate and effective follow-up systems to recover contribution amounts and interest deemed repayable.
These Ts&Cs are effective on the approval date and will apply to March 31, 2006.
As an organization managing Gs&Cs through several different channels, CIDA has established effective systems, policies and procedures to ensure that:
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effective financial and program controls are designed and implemented within CIDA Gs&Cs;
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due diligence is exercised in the selection and approval of recipients of transfer payments and in the management and administration of programs and projects;
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the senior financial officer in conjunction with senior management develop efficient and effective accounting and other procedures to ensure that payment requests meet the requirements of the policy on account verification relating to sections 33 and 34 of the Financial Administration Act and the requirements of the Payment Requisitioning Regulations;
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proper program and accounting records and other relevant documents are maintained to provide documentary evidence of decisions made and results achieved, and to enable disclosure of the amounts paid to recipients of such payments;
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a results-based management and accountability framework is prepared which provides for appropriate measuring and reporting of results, as related to the purpose of providing resources through transfers;
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departmental capacity exists to effectively deliver and administer the transfer payment programs including monitoring, learning and training;
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clearly articulate the requirements for the effective operational, financial, and results-based management aspects of programs and projects.
The systems, procedures and policies are subject to review and improvement where deemed appropriate. CIDA offers a program of continuous training and improvement to ensure policies and procedures are understood and adhered to by CIDA staff.
A significant component of CIDA's effective management practices are the Special Programs and Projects Expenses (SPPEs) in direct support of the development, design, monitoring, audit, and evaluation of development assistance programs and projects. SPPEs provide the authority to conduct project-related activities such as project identification, definition and feasibility, which are required prior to the formal approval of the project. SPPEs also provide a mechanism for those activities which are project-related, but not included in the original approved project, usually as a result of evolving project requirements. To improve the execution and implementation of aid projects, those of significant value, or those faced with substantive risks, are monitored through the program or project budget, or through the use of additional SPPE authorities.
The Planning, Reporting and Accountability Structure (PRAS) identifies and describes each of the Agency's lines of business, establishes the objectives of each, and establishes the results the Agency intends to achieve. It also identifies the branch heads as the positions accountable for ensuring that activities within each of the business lines are supported by the Agency, and are managed to best attain those desired results.
The Agency Accountability Framework is an additional component of the results-based management (RBM) approach practiced in CIDA and is consistent with substantive content of the PRAS. The Framework articulates the accountability principles and management conditions to help define the accountabilities of the President, branch heads and managers.
CIDA is committed to RBM and a results-based accountability framework. This is refined in CIDA's Framework of Results and Key Success Factors, to produce more definable results, to make the best use of CIDA's limited resources, and to improve external reporting.
In CIDA's policy statements, RBM means, for each program or project:
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defining realistic expected results;
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identifying beneficiaries and designing programs to meet their needs;
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monitoring progress towards results using appropriate performance indicators;
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managing risks while keeping in mind expected results; and
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reporting on results achieved and resources used.
The commitment to RBM has allowed CIDA to achieve a significant degree of successful implementation and reporting at the project, organization and program level. There remains a challenge to consolidate the reporting at the strategic or PRAS level. CIDA supports RBM through the development of tools and training programs.