DATE:	June 1, 2000	
TO:	Senior Financial Officers and 
Senior Full-time Financial Officers	
SUBJECT:	Grants and Contributions (Policy on Transfer Payments)	

I am pleased to inform you of a new policy on Transfer Payments. It replaces the October 15, 1996 version of the policy and is effective 
June 1, 2000.	

The policy is updated to improve the management of transfer payments as well as to consolidate several existing policy announcements.	

The more significant of the changes are:

•	Previously implicit requirements for effective management, financial and administrative practices are made explicit. This includes an emphasis on departmental responsibilities for due diligence in the approvals of grants and contributions, and for effective practices in the payment of grants and contributions and in the monitoring of the use of funds and achievement of results.

•	Departments seeking approval of grants and contribution programs will be required to provide fuller descriptions of the program, its management and its results-based accountability framework. Those seeking renewal will also require that formal program evaluations results be provided.

•	A requirement for the renewal of terms and conditions of programs within five years, unless otherwise approved by the Treasury Board.

•	Adoption of the principle that transfer payment assistance is provided only at the minimum level to further the attainment of the stated objectives and expected results of the transfer payment program.

•	Application of more effective cash management principles to provide payments to recipients at levels closer to their need. 

•	Incorporation of earlier policies on the stacking of assistance and on repayable contributions.	

EXISTING AGREEMENTS

Existing signed agreements need not be amended to reflect changes in the policy.  Furthermore, in order to provide adequate time to incorporate the new provisions of the policy, only transfer payment agreements signed after August 31, 2000 must reflect the policy changes. However, transfer payment management regimes should be reviewed to ensure they reflect the other aspects of the revised policy for the effective management of departmental transfer payment programs.	

BEST PRACTICES GUIDE

We are also in the process of developing a best practices guide. It will contain information on a number of aspects for effective administration of transfer payments as well as address policy aspects. 	

We also anticipate the development of appropriate training and/or workshops for program officers and the financial community.	

CONSULTATION

I would like to take this opportunity to thank the staff of the departments and agencies who have participated in the development of revision to this policy.  

The policy is available at the following address: http://www.tbs-sct.gc.ca/Pubs_pol/dcgpubs/TBM_142/siglist_e.html.
	
Please contact me to discuss any issues or concerns or have your staff contact Larry Kenney of the Financial Management and Accounting Policy Division at (613-957-9684) or by e-mail at Kenney.Larry@tbs-sct.gc.ca.	

Richard J. Neville
Deputy Comptroller General