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This Guide is designed to help managers and staff make informed decisions for
creating and managing transfer payment programs within the federal government.
While the Guide is primarily aimed at those officials who manage transfer
payments daily, it also targets those who must correctly choose between
initiating procurement contracts and transfer payments, who design and seek
approval for creating transfer payment programs, who ensure existing and new
programs are communicated effectively to potential beneficiaries, who manage or
ensure accountability for transfer payments, and who report to management and
Parliament.
Based on a life-cycle approach developed by the Office of the Auditor General
(OAG), the Guide identifies the key attributes for properly managing transfer
payments. The life-cycle approach refers to a transfer payment program's normal
cycle, from its creation and implementation to its evaluation. These attributes
are:
- choosing the right funding instrument;
- establishing clear performance expectations;
- ensuring there are precise program eligibility and assessment criteria;
- ensuring fairness so that every eligible Canadian has the opportunity to apply;
- undertaking due diligence;
- choosing worthy projects;
- paying out funds for the agreed purposes;
- resolving project and program performance problems quickly;
- reporting to management that demonstrates a good knowledge of program
performance; and,
- collecting money promptly that is owed to the Crown.
This Guide should be read in conjunction with the Treasury Board Policy on
Transfer Payments (TP policy). It does not provide new policy directives but
does elaborate and interpret policy and procedural requirements.* Where the
Guide uses the directive "must," it does not create a new obligation
but rather reflects an existing obligation under the policy.
The Guide also draws on the requirements of other policies and TB guides that
are relevant to managing transfer payments, including topics such as evaluation,
internal audit and financial management accountability.
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*The exceptions are Section 11 and sub-section 8.5.4, which,
in the latter case, adds a number of new provisions to be included in a
contribution agreement.
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In this Guide, "transfer payments" and "transfer
agreements" are used as generic terms for grants, contributions and other
transfers when there is no need to differentiate them.
The term "departments," unless stated otherwise,
also refers to agencies delivering federal transfer payments.
This Guide uses the words "transfer programs" to
designate programs that are entirely devoted to transfer payments. This term and
the Guide also apply to programs containing at least one distinguishable
transfer payment component.
The following definitions apply to this Guide (although other documents or
publications may give these expressions a slightly different meaning).
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Guide
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Definition
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Comments and examples
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Applicant
(requérant)
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An individual or organization that seeks to enter into a transfer
agreement with a department.
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Example: A not-for-profit organization seeking contribution funding to
create a shelter for the homeless.
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Audit
(vérification)
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A management tool that provides independent, objective assessment
linked to results.
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A management audit assesses the overall management and activities of a
program or part of it.
A financial audit can assess the financial statements' fairness or
include all aspects of a specific transfer agreement.
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Beneficiary
(bénéficiaire)
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An individual or organization that directly benefits from a recipient's
activities but is not party to an agreement with the recipient or ultimate
recipient.
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Example: Jobless workers who have been taught a new trade by an initial
recipient under a transfer agreement
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Monitoring
(monitoring)
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Monitoring refers to the financial and operational control exercised by
program officers over contribution recipients during the life of the
agreement.
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Financial and operational monitoring is covered in Section 9 of
this Guide.
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Outcome
(issue)
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An external consequence attributed to an organization, program, etc.
that is considered significant in relation to its commitments. Outcomes
may be described as: immediate, intermediate or final, direct or indirect,
or intended or unintended.
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Examples: lower unemployment rate, health improvement for a targeted
group, increased industrial activities or productivity, enhanced foreign
trade.
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Output
(operational)
(extrant opérationnel)
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The result of an operational process.
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Examples: the production of a monitoring report, the signing of an
agreement, the release of payments.
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Output (program)
(extrant programme)
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Direct products or services produced through program activities and
delivered to a target group or population.
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Examples: New jobs created, shelters for homeless, research reports,
seminars, direct support to social or economic activities.
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Participant
(participant)
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A generic term designating any person, group or organization that
applies for or receives transfer funds or directly benefits from these
funds.
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Participants can be applicants, recipients, beneficiaries and third
parties (See definitions of these terms in this table).
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Recipient
(destinataire)
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An individual or organization that has entered into a transfer payment
agreement with a department.
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Examples:
- A company that has a contribution agreement with a department to
hire 15 non-qualified jobless workers and teach them a trade. In
return, the department reimburses 50% of the wages paid for six months;
- A social worker who receives a $10,000 grant to support research on
the increase of violence among high school students.
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Result
(résultat)
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In this Guide, this term includes both output and outcome when it is
not necessary to distinguish between them
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Sub-agreement
(accord auxiliaire)
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An agreement between a recipient and an ultimate recipient.
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Example: A Tribal Council as recipient agreements with an Indian Band
as ultimate recipient to provide services to Band members (beneficiary).
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Third Party
(tiers ou tierce partie)
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The policy regards a third party as the initial recipient of a transfer
payment agreement, which in turn disburses funds to an ultimate
recipient.*
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However, the legal definition of "third party" in Black's Law
Dictionary is "one not a party to an agreement or to a transaction
but who may have rights therein."
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Ultimate recipient
(destinataire final)
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An individual or an organization that has entered into an agreement
with a recipient to carry out the objectives of the original transfer
payment agreement.
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Refer to the example under Sub-agreement.
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*In addition to the above definition, the TP policy also refers to a third
party as an agent that administers a program on a department's behalf through a
procurement contract (e.g., conducts due diligence). The agent does not usually
disburse funds, which is the department's responsibility. However, including
agents as third parties leads to an inherent conflict of terms, because in this
case, both the agent and recipient are deemed to be third parties.
In this Guide, the terminology used to identify the various parties involved
in transfer payment agreements varies from the policy. This is due to the
discussion of more complex relationships than are treated in the policy. The
chart below provides examples of how these terms are used.
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Parties Involved Þ
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i.e. Department
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e.g. University
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e.g. Researcher
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Terminology used in TP policy Þ
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third party or initial recipient disburses
the funds to an ultimate recipient
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ultimate recipient or ultimate beneficiary
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Terminology used in Guide Þ
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recipient
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ultimate recipient
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Parties Involved Þ
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i.e. Department
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e.g. University
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e.g. Researcher
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Terminology used in TP policy Þ
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ultimate recipient does not disburse the funds to another party
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no reference in the policy
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Terminology used in Guide Þ
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Recipient
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beneficiary (no funds are received directly but a benefit is attributed
to this party)
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Parties Involved
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i.e. Department
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e.g. Company
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Terminology used in TP policy Þ
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initial or ultimate recipient
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Terminology used in Guide Þ
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recipient
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Parties Involved
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i.e. Department
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e.g. Tribal Council
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e.g. Indian Band
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e.g. Band members
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Terminology used in TP policy Þ
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third party or initial recipient
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ultimate recipient or ultimate beneficiary
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no reference
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Terminology used in Guide Þ
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recipient
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ultimate recipient
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beneficiary
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