Service Canada / Voluntary Sector Joint Working Group Memorandum - December 2005

UPDATE ON NEW DIRECTIVES TO SPECIFIC GRANTS AND CONTRIBUTIONS PROGRAMS

The Service Canada / Voluntary Sector Joint Working Group is pleased to inform you of an initial round of changes to the management of contribution agreements delivered by Service Canada. These changes will begin reducing the administrative burden and will support organizations with their Service Canada funding transitions, while ensuring sound financial management of public funds. By streamlining processes, sponsor organizations and Service Canada will be able to focus more attention on results. Analysis on the best ways to do this and pilots with a number of projects to test new approaches began about six months ago.

Meanwhile, an outcomes working group is examining results for employment programs, which will feed into more changes in the coming months, to strike the right balance between process controls, risk management and better results.

Administrative Changes

The following administrative changes apply to a large quantity of employment-related contribution agreements. Unless otherwise noted, they go into effect January 1, 2006.

1. Standard eligible costs list - all items on the standard list are to be considered in the development of a proposal and the subsequent negotiation of an agreement.
2. Standard cost structure involving four cost bundles and 11 cost categories - this structure clears the way for the possible adoption in the future of a flat rate for administrative overhead on a program-by-program basis. By January 16, 2006, sponsors with Employment Assistance Service agreements with project start dates in January, 2006 will have a choice of methods for calculating the "administrative overhead" portion of their budget. Sponsors may accept the flat rate offered by Service Canada, choose to continue to have payments made based upon actual expenditures, or ask Service Canada to negotiate an independent rate for overhead based on a study conducted by the organization. Other flat rates by program will be developed and implemented shortly.
3. Increased budget flexibility which, as long as the overall value of the agreement does not change, allows for full movement of funds among cost items within a particular cost category (there are 11 in total), and up to 10% of the total of a cost category to another cost category with the exception of "Staff Wages" and "Participant-related Project Costs." This flexibility will now be permissible without the need for approval or an amendment to the contribution agreement.
4. Eliminate the requirement for written proof of other funding (a declaration is sufficient).
5. Eliminate the requirement to keep a separate bank account for each project (which is not a requirement under the federal Transfer Payments Policy).
6. Streamlined internal review committee process.
7. Streamlined audit requirements allowing for one audit per organization in a calendar year for agreements held by organizations that total $500k or more (under development and will be finalized in early 2006).

   >Revised Call for Proposals (CFP) process - many enhancements are already in place and others are being developed (to be finalized in early 2006).

Training

This initial round of changes must be well understood by management and staff of Service Canada and sponsor organizations to be implemented in a consistent manner nationally. Training and other tools have been developed to equip Service Canada staff accordingly. Included in the training plan, is a strategy to provide joint information sessions for staff of Service Canada and sponsors, as well as a comprehensive E-Learning course available on-line to both providing the knowledge needed to apply new administrative measures.

Transition Issues

Should a situation arise that the relationship between Service Canada and a community organization ends due to a close-out of a contribution agreement and where there is potential for the community in question to lose service delivery capacity as a result of the recent round of CFP, it is important that organizations recognize that funding may be available outside the CFP process for projects under $500,000.

Organizations are encouraged to work with Service Canada officials to identify potential gaps in client service affecting the community, and to determine whether the organization could deliver activities to fill any mutually identified gaps. This assumes that no performance issues with the organization have been identified from previous agreements. Organizations can submit applications to their local Service Canada Centre. All funding decisions are made at the local level and take into consideration local community needs, identified priorities and budget availability. As an interim measure, any issues arising from the ongoing implementation of this process may be brought to the attention of the Voluntary Sector Advisory Committee until a Fairness Advisor is in place. Organizations are also encouraged to contact their local Service Canada Centres to find out how they can become involved in the local business planning process for the coming year.

Applying Administrative Changes - Some Interim Considerations

To ensure successful implementation, changes must be applied consistently and in a way that is both equitable and feasible for all concerned. The changes will apply in full to all new agreements and to amendments with a start date for new activity of January 1, 2006 or later. If agreements are being signed in the first few weeks of 2006, steps will be taken to enable sponsors to realize the benefits of the changes fully. Service Canada estimates that over 60% of all sponsors will benefit from the changes within the first five months of 2006.

The same information will also be made available to project sponsors from local Service Canada Centres.

In closing, we encourage your comments and feedback on these changes and their impact, especially once they are implemented, as they will enable us to move forward with additional changes in the months ahead. We acknowledge the collaborative spirit and productive results between Service Canada and the Voluntary Sector. We look forward to building on the momentum in 2006.