|
This section deals with policy requirements or specific
elements of a policy requirement that requires further
elaboration or correction. This section does not discuss all
policy requirements since the majority of them are
straightforward and do not need annotation.
In part, this paragraph reads "Where a department is
considering a grant or a contribution to a Crown corporation
listed in Section 85 and Part I of Schedule III to the
Financial Administration Act, it must consult with the
Treasury Board Secretariat to determine whether specific Treasury
Board approval is required."
The conjunction "and" should read "or"
as there are no corporations mentioned in section 85 of the FAA that are
listed in Part 1 of Schedule III.
In part, this paragraph states that "departments must assess,
through a formal program evaluation or similar review, and report
back on the effectiveness of the transfer payments when
requesting renewal of terms and conditions."
This requirement, although not new, is mandatory and should be
noted by departments. The onus falls on departments to show that
lessons learned from sound program evaluation have been taken
into consideration.
Where there are extenuating circumstances, departments may
seek an exemption from TB to defer the requirement. However,
because this obligation is fundamental to achieving expected
results and outcomes and creating appropriate controls, any
deferral runs counter to good program design.
11.3.1 Advances on small contributions
Can an advance payment be made for a contribution's full
amount when that value is small?
A contribution's key attribute is that normally, payment is in
the form of a reimbursement of prescribed costs (i.e., only
eligible expenditures agreed to are reimbursed). Since advances
should be given on an exceptional basis, a holdback provision
will:
- minimize the risk associated with the recipient not using the
money for the purpose contributed; and
- act as an incentive for the recipient to fully account for
all expenditures incurred, resulting in a reduction in
departmental workload.
If officials managing transfer payment programs feel that an
exemption to the hold-back provision is warranted, they must seek
a special exemption within their transfer payment program terms
and conditions at the time their approval or renewal is sought
from Treasury Board.
11.3.2 Instalments of grants and advance payments of
contributions-sub-section 7.6 of the TP policy
- Clause 7.6.4 states that departments must be "guided"
by the provisions of Appendix B regarding instalment and advance
payments. The interpretation of "guided" is that departments
must follow the schedule.
- Clause 7.6.1 states that transfer payments "should"
not be paid to recipients in advance of need. This clause should
instead be read as "transfer payments must not be
paid."
- In clauses 7.6.1 and 7.6.3, reference is made to departments
timing advance payments to a recipient's cash flow requirement. A
cash flow forecast, whether obtained at the time of application
for short projects or received monthly for longer-term projects,
is required for issuing an advance.
- Appendix B states that:
- "advance payments...should...not exceed the following payment
frequency." (This sentence refers to the schedule in the
appendix). The term "not exceeds" may be interpreted by
departments as being acceptable to advance payments less
frequently; that is, instead of making monthly payments, a
department could make quarterly payments. This is not a correct
interpretation. Advances made quarterly cost the Crown more in
interest charges than if monthly advances are made and accounted
for. The phrase "not exceed the following payment
frequency" should be interpreted as "not less frequently
than the following payment frequency."
- "for (contributions) agreements of less than 4 months, the
schedule represents the maximum percentage that may be paid out
initially." This phrase may cause confusion. The sentence
should be read as "can or shall be paid out" and does not
provide any discretion as to whether or not the schedule should
be followed.
The policy states that "where appropriate, the potential for
sharing in intellectual property rights should be defined in the
program terms and conditions."
Departments should be aware of the potential risk in acquiring
IP through transfer payments. It may result in transforming a
contribution agreement into a procurement contract or a licence
agreement that is subject to the Government Contracts Regulations
and trade agreements. For example, licensing issues can arise in
situations where departments stipulate, in transfer agreements,
that they can use the IP developed by the recipient for their own purposes.
To ensure that agreements remain transfer payment
agreements, rather than becoming procurement contracts or licence
agreements, departments should seek legal advice when IP is
acquired or covered in transfer agreements.
Exercise caution when departmental or government officials
participate on advisory committees or boards of directors.
Transfer payment recipients must remain independent of any
control exercised by government officials. (For example, control
may be exercised even in the absence of government participation
on committees and boards. Departments should seek legal advice to
ensure that a partnership relationships with recipients are not
set up, implicitly or explicitly, in the agreements.) Involvement
of departmental or government officials on advisory committees or
boards of directors must not result in them exercising control,
or be seen to be exercising control. Undue influence or control
over advisory committees or boards of directors may result in
financial or legal liabilities on the part of the Crown.
When participating on such advisory committees or boards of
directors, departments should contact their legal personnel when
potential control issues exist.
Departments should be aware of the contents of the official
languages policy entitled "Grants and Contributions." The policy
can be accessed at: http://www.tbs-sct.gc.ca/pubs_pol/hrpubs/offlang/chap1_4_e.asp.
|
