PACP Committee Report

GOVERNMENT OF CANADA RESPONSE TO THE REPORT OF THE STANDING COMMITTEE ON PUBLIC ACCOUNTS  ON CHAPTER 4, FIRST NATIONS CHILD AND FAMILY SERVICES PROGRAM - INDIAN AND NORTHERN AFFAIRS CANADA OF THE MAY 2008 REPORT OF THE AUDITOR GENERAL

Introduction

As an area of provincial jurisdiction, child welfare services provided on- and off-reserve must adhere to provincial legislation and standards. Indian and Northern Affairs Canada (INAC) funds the on-reserve services as a matter of social policy. Services are provided by First Nations Child and Family Services (FNCFS) agencies that are designed, managed and controlled by First Nations and delegated by provincial authority.

Prior to the release of the May 2008 Auditor General’s report, INAC had already undertaken an approach to working with its partners including First Nations, FNCFS agency Directors, Provinces and other federal government departments to transition the FNCFS program to an Enhanced Prevention Focused Approach. This national approach being implemented province-by-province supports the delivery of culturally-appropriate prevention and protection services for First Nations children and families living on-reserve, closely reflects reasonable provincial comparability within each respective province.

INAC renewed its FNCFS program authorities in February 2007 to implement the Alberta Response Model on-reserve and to initiate discussions with ready and willing jurisdictions with the capacity to transition to the Enhanced Prevention Focused Approach. The authorities also include a broader and more culturally appropriate range of placement options, including kinship care (care provided by extended family members), post-adoption subsidies (monthly payments to the adoptive parents) and supports (including counselling services and special needs support for children with disabilities) to encourage permanent placement for children.

The Government of Canada announced on April 27, 2007 that it was embarking on a new approach to child welfare in Alberta in partnership with the province of Alberta and Alberta First Nations for implementation of an Enhanced Prevention Focussed Approach. INAC provided increased investments of $98.1 million over a five-year period beginning in 2007-2008.

Through Budget 2008, INAC received authority to continue to transition the FNCFS program in Saskatchewan and Nova Scotia. New investments of $105 million over five years for Saskatchewan and of $10 million over five years for Nova Scotia were announced in July 2008. As well, Canada’s Economic Action Plan announced on January 27, 2009, provided an additional $20 million over two years to continue this transition in additional provinces. With these new provinces on board, it will account for more than 40% of the First Nations on-reserve children in care.

INAC has used the incremental process in three jurisdictions with an emphasis on partnerships, cultural appropriateness, reasonable provincial comparability and accountability. Work will continue using the incremental process and the objective is that all remaining remaining jurisdictions will be ready for transition by 2013.

The Standing Committee on Public Accounts’ recommendations speak to the link between provincial comparability, revising Directive 20-1, moving to a needs based formula and to determining the full costs of the FNCFS Program nationally. This suggests INAC should undertake a one-time simultaneous reform of the program in all provinces. INAC is in fact undertaking similar steps towards reform, however, it is being done province-by-province. Rather than taking a one-size-fits all approach that would overlook community level needs and compromise partnerships and accountability, INAC is addressing provincial comparability, including a needs component in the formula and finalizing the process with a full costing analysis for each jurisdiction. All of this is done at tripartite tables ensuring buy-in by all partners, reasonable comparability with the

respective province and sound accountability aimed at achieving positive outcomes for children and their families. As well, INAC is committing to review Directive 20-1.

Recommendation 1 – Updated Action Plan on OAG Audit

The Committee recommends that Indian and Northern Affairs Canada provide a detailed action plan to the Standing Committee on Public Accounts by 30 April 2009 on the implementation of the Office of the Auditor General’s recommendations included in the May 2008 audit of the First Nations Child and Family Services Program.

Response

INAC supports the Committee on this recommendation and on April 30, 2009 provided the Committee with its Action Plan Implementation Status Update (as of March 31, 2009).

Recommendation 2 – Provincial Comparison

The Committee recommends that Indian and Northern Affairs Canada conduct by 31 December 2009 a comprehensive comparison of its funding to First Nations child and family welfare services agencies to provincial funding of similar agencies and provide the Standing Committee on Public Accounts with the results of this review.

Response

INAC agrees with this recommendation on the understanding that a comparative analysis can only be provided with the limited data we have access to and on a phased basis. This review will require a substantial amount of time and work with the provinces and First Nations. The information available in provincial annual reports is general and the funding provided under their children’s services often includes programs beyond child and family services. Overall, these provincial reports do not contain the level of detail required to make the kind of comprehensive comparison expected by the Committee. Relationships must be strengthened with provincial partners as they are key in providing INAC with the necessary information concerning the funding of their child welfare programs. This is what INAC is doing as it proceeds with the Enhanced Prevention Focused Approach. Provinces must also agree to allow INAC to make this information available to the public.

It should also be noted that due to the complexity of child welfare service delivery across the country, comparability between FNCFS agencies and provincial child welfare providers on-reserve, is challenging. Specifically, child welfare services in the provinces are delivered in a variety of ways. The services can vary by jurisdiction based on need; be provided directly by the province; or by provincially delegated authorities or regional/districts. A province can also fund agencies to deliver the services and/or contract third parties. 

Therefore, INAC cannot commit to conducting such a comprehensive review nor can it be done for all jurisdictions by the timelines required by the Committee. INAC would be able to provide a basic comparison of jurisdictions that are currently under the Enhanced Prevention Focused Approach and where INAC has basic information on salary rates and caseload ratios. INAC expects to complete this first phase by or before December 31, 2009.

As INAC moves forward on transitioning other jurisdictions and as relationships are built with each province at the tripartite tables, INAC will be in a better position to conduct a comparison of funding between FNCFS agencies and provincial systems. This phase will consist of the provinces with whom INAC has not yet developed or completed tripartite accountability frameworks. This phase is expected to be completed by 2012.

As part of the move to the Enhanced Prevention Focused Approach, tripartite accountability frameworks between INAC, First Nations and provinces are established, whereby INAC has been working with the relevant provinces and First Nations to develop Child and Family Service models that reflect reasonable provincial comparability (i.e. funding for services and activities within INAC’s authorities that reflect the range of child welfare activities and services available in the reference province). In particular, INAC has developed new funding models that take into account such cost drivers as provincial salaries, benefits, administrative supports, supervisory supports and caseload ratios so that FNCFS agencies have the resources to enable them to deliver a reasonably comparable level of service.

Recommendation 3 – Definition of "Culturally Appropriate Services”

The Committee recommends that Indian and Northern Affairs Canada include a clear indication of progress made in defining “culturally appropriate services” in its follow-up report on the Office of the Auditor General’s audit of the First Nations Child and Family Services Program to be provided to the Standing Committee on Public Accounts in April 2009.

Response

INAC fully supports First Nations in delivering culturally appropriate child and family services, however, it would be inappropriate for the Government of Canada to formally impose a definition of these services, as the interpretations differ from one First Nation to another based upon their specific and unique community circumstances, beliefs and traditions. As such, it is up to First Nations themselves to define what they consider to be “culturally appropriate services” in their own communities. It is important to emphasize that "The importance of recognizing diversity for public policy is this: no one answer will do for all Aboriginal people.” (Recognizing Diversity – Highlights from the Report of the Royal Commission on Aboriginal Peoples – People to People, Nation to Nation). INAC has had discussions with a number of provincial counterparts and they have indicated similar challenges in attempting to establish a single definition.

INAC is prepared to articulate what is generally understood by "culturally appropriate services" in the form of a guiding principle as follows:

While respecting the provincial governments' constitutional mandate to provide child and family services, the Government of Canada provides funding, as a matter of social policy, to support the delivery of culturally appropriate child welfare services among First Nation communities that acknowledge and respect the values, beliefs and unique cultural circumstances of the communities being served. As such, culturally appropriate services encourage activities such as kinship care options where a child is placed with an extended family member so that cultural identity and traditions may be maintained.

It is important to note, however, that this principle in no way restricts First Nation control and/or interpretation of the types of services needed in individual communities. The relevant stakeholders will be informed of this progress and the FNCFS Program Manual will be updated to include this principle by March 31, 2010. The principle will also guide the development of tripartite frameworks.

In response to the Auditor General, INAC included its progress with “culturally appropriate services” in the Action Plan Implementation Status Update which was discussed at INAC’s Audit Committee, and shared with the Standing Committee on Public Accounts on April 30, 2009. In addition, INAC has previously taken steps towards articulating what is understood to be “culturally appropriate services” as it relates to First Nations child and family services. Specifically, in April 2007, INAC updated its program

authorities for the FNCFS Program nationally to include a broader and more culturally appropriate range of placement options, including kinship care (care provided by extended family members), post- adoption subsidies (monthly payments to the adoptive parents) and supports (including counselling services and special needs support for children with disabilities) to encourage permanent placement for children.

Also, as First Nations transition to the Enhanced Prevention Focused Approach, INAC requires that they outline broad “culturally appropriate” parameters and principles in the tripartite accountability framework. Further to this, FNCFS agencies are required to develop five-year business plans in which they explain how their communities’ unique cultural and traditional characteristics will be reflected in the agencies’ provision of services.

Recommendation 4 – Modifying Directive 20-1

The Committee recommends that Indian and Northern Affairs Canada immediately modify Directive 20-1 for the funding of First Nations child and family services agencies to allow for the funding of enhanced prevention services, and report back to the Standing Committee on Public Accounts on its progress in making this change by 30 June 2009.

Response

INAC shares the Committee’s view that all First Nations children on-reserve should have access to the full range of both protection and prevention services. When INAC began undertaking the transition of its FNCFS program in 2006, INAC examined the possibility of a one-size-fits-all formula that would enable all jurisdictions to immediately move to an enhanced prevention model. However, after INAC fully assessed all the implications of such a transition, including the readiness, capacity and the need to discuss the approach with stakeholders, the decision was made to proceed on a province-by-province basis with ready and willing partners. INAC determined that proceeding otherwise would not have enabled it to take into account differences between the provincial legislation and standards, and would have made it difficult to develop provincial partnerships, reasonable comparability, and accountabilities that are key components of the new approach. For this reason, INAC has been working with First Nations and their respective provinces on implementing province-specific prevention focused models, including funding that takes into account reasonable provincial comparability.

As FNCFS agencies receive their mandate from their respective provinces, the transition to the new approach requires the development of tripartite accountability frameworks in partnership with INAC, provinces and First Nations. These frameworks outline accountability relationships and commitments to a broad set of province-wide goals and to the achievement of improved outcomes for children and families. The frameworks form the context for First Nations-specific agreements at the Recipient level. Not only does this preliminary work ensure FNCFS agencies’ readiness to deliver the services, it is also crucial in facilitating a smooth transition to the Enhanced Prevention Focused Approach and in achieving desired results. It should also be noted that under the Enhanced Prevention Focused Approach, INAC engages with willing First Nations and provincial partners to develop an Accountability Framework and a provincially specific costing model prior to securing a source of funds.

In the meantime, INAC continues to enter into exploratory discussions with other provinces to assess readiness to transition to an Enhanced Prevention Focused Approach. INAC is working with ready and willing partners to implement changes in Child and Family Services on-reserve to help build healthier, stronger First Nations families. The objective is that all remaining jurisdictions will be ready for transition by 2013. INAC is always prepared to explore opportunities to streamline and expedite implementation of the Enhanced Prevention Focused Approach as long as the process is completed in a comprehensive way with ready and willing stakeholders.

For jurisdictions that remain under Directive 20-1, INAC wishes to clarify to the Committee that, through this formula, FNCFS agencies do receive limited funding for prevention services. INAC recognizes that there is a greater need for these services. INAC will review Directive 20-1 and explore options with respect to the funding formula for those jurisdictions that have not yet transitioned to the new approach. INAC will provide the Committee with an update on progress of the review.

Recommendation 5 – Funding Formula based on Need

The Committee recommends that Indian and Northern Affairs Canada ensures that its funding formula for First Nations child and family services agencies is based upon need rather than an assumed fixed percentage of children in care, and report back to the Standing Committee on Public Accounts on its progress in making this change by December 31, 2009.

Response

INAC agrees with the Committee that FNCFS agencies should take into account the varying needs of First Nations communities. INAC wishes to clarify to the Committee that the new costing models developed under the Enhanced Prevention Focused Approach are based on many factors to ensure agencies are provided with stable ongoing funding for both protection and prevention services.

The costing models under the new approach include three distinct funding streams (Operations, Prevention and Maintenance). In each jurisdiction, a costing model is developed based upon discussions among First Nations, the province and INAC, taking into account the respective provincial program salaries and caseloads in determining reasonable provincial comparability within the FNCFS program authorities. The costing model provides an amount for core operations that will not change with the percentage of children in care. The maintenance costs, however, are funded based on actual costs from the previous year, thus on the actual cost of maintaining children out of the parental home. In other words, the maintenance funding stream is based upon need and not upon an assumed fixed percentage of children in care.

It is important to note that the 6% average number of children in care calculation is one of many factors used only to model operations funding which includes the number of protection workers. This is then translated into a portion of the operations funding that agency receives. This 6% number was arrived at through discussions with First Nations Agency Directors and provincial representatives, and was thought to be fairly representative of the overall needs of the communities. Under the Enhanced Prevention Focused Approach, FNCFS agencies have the flexibility to shift funds from one stream to another in order to meet the specific needs of the community. This costing model provides all FNCFS agencies under the new approach with the necessary resources to offer a greater range of child and family services.

Through discussions with provincial and First Nations partners, it is clear that they preferred to create a costing model that would provide recipients stable funding for operations. The majority of partners indicated they would not be supportive of a model that generated more resources for Recipients based upon a higher percentage of children in care. Also, this model ensures that FNCFS agencies supporting communities with lower populations are provided with sufficient funding to operate both prevention and protection programs. Without the fixed percentage formula used to calculate and fund Operations, agencies with a very low percentage of children in care would not have the necessary resources to operate. Moreover, if the operations budget were based upon need rather than a fixed percentage, the agencies could find themselves with widely fluctuating operations budgets year to year which would hamper their ability to plan and provide services. The new costing models provide a stable operating and prevention budget that does not rely on the number of children in care as one of its determinants.

As noted by the Auditor General, the Enhanced Prevention Focused Approach costing models have created substantial increases for agencies. Operations funding in Alberta will have grown by 74% with full implementation of the Enhanced Prevention Focused Approach. As well, agencies have more flexibility to align their resources to priority areas within the new costing model (e.g. agencies may choose to invest more in prevention and shift operations or protection funding to support these activities).  INAC and participating provinces will work more closely with agencies with higher numbers of children in care with a view to ensuring services are provided while also working towards reducing these numbers.

For jurisdictions under the new approach, the costing models developed with stakeholders already take into account reasonable provincial comparability, prevent incentive to take more children into care out of parental home, are flexible, provide the necessary resources to offer a greater range of child and family services and are based on FNCFS agencies’ needs. As well, an evaluation of the new approach in Alberta is planned for 2009-2010, including a review of the costing model and INAC will use these results to determine if any modifications to the new model are required.

Recommendation 6 – Full Costs

The Committee recommends that Indian and Northern Affairs Canada determine the full costs of meeting all of its policy requirements and develop a funding model to meet those requirements.

Response

INAC has consistently assessed full costs of policy requirements as it has transitioned the First Nations Child and Family Services Program to the Enhanced Prevention Focused Approach. 

The Department continues to work with ready and willing partners to complete the transition to the new approach. The costs requirements are determined as INAC moves forward on a province-by-province basis.

Since Budget 2006, the Government of Canada has consistently been investing additional funding into FNCFS Program. For instance, this year $49.5 million will flow to FNCFS agencies in five jurisdictions for enhanced prevention services, and when fully implemented the ongoing additional resources will amount to $61 million annually and there are still other jurisdictions remaining.

Recommendation 7 – Performance Measures

The Committee recommends that Indian and Northern Affairs Canada develop measures and collect information based on the best interests of children for the results and outcomes of its First Nations Child and Family Services Program.

Response

INAC fully agrees with the Committee on the importance of the development of performance measures for the FNCFS Program that focus on the best interests of children as well as on desired program results.

To this end, INAC’s FNCFS Program has developed a Performance Measurement Strategy, with a particular emphasis on results and outcomes. INAC will be engaging First Nations in a comprehensive validation exercise to ensure that the performance indicators are robust and reasonable and that performance measures lead to appropriate data collection that emphasizes results and outcomes. 

As well, in Alberta, Saskatchewan and Nova Scotia, FNCFS agencies are using Business Plans and Annual Reports to plan and report on outcomes. The same planning and reporting mechanism will be used as the Enhanced Prevention Focused Approach is implemented in other provinces. This will improve INAC’s access to information on the outcomes generated by its program funding. As well, for regions not yet transitioned to the new approach, INAC will be transitioning to yearly work plans that are outcome based and focus on program results.

Finally, INAC is in the planning stage of developing an integrated data collection system to ensure that INAC can efficiently collect useful data.  This preliminary stage is the project definition phase which outlines the total project cost estimate providing an estimate of the total cost and annual cash flow for the overall project.  This stage is expected to be completed in 2010 and the documentation will be submitted for appropriate approvals.  Once approved, INAC will begin the project implementation phase.

The data generated by this integrated Information Management System will make it possible to use the full range of information reported by First Nations to the FNCFS programs to provide improved accountability, support evaluation and adjustments of the program as required, inform changes to policy and program development, and improve program delivery, oversight and research.