Absolutely: thank you.
SDTC goes through a gated process of approval. One of the things we're very conscious of is of course the sensitivity to how much money small companies have. Over 93% of our applicants are small and medium-sized enterprises, with the emphasis on the “s”; therefore, we take them through a process where they can demonstrate their ability and provide information. Not asking them more or less than to take them to that next step is very important.
We often get referred to as a rigorous process. Companies do complain about it. The question always comes down to this: you are getting taxpayers' money and we're accountable for that. We need to make sure that the money is needed, that you are getting it, and that there are deliverables for it and so on.
Once we are satisfied that the project is needed, the components are always there, and the approval is done, we then have a second phase of due diligence, which is actually to sign a contract. At that time, we need to make sure the management is in place, the rest of the funding is in place, and all of the pieces in the project plan and the milestones have been defined.
At that time, a contribution agreement is signed, and SDTC, subject to the need for cashflow, can advance the first installment. If the company is in a good cashflow position, and they have demonstrated why they still need the SDTC money, then we may not advance them the money; we'll do it on a repayment. But as I said, 93% of the applicants are small companies, and therefore cashflow is king.
We advance them the first step. Once they've delivered that first milestone and they've demonstrated they've done what they needed to do, they've delivered.... Now obviously there's risk in a technology, so sometimes performance does not happen, needs to be restated, or taken in a slightly different direction. That's not necessarily a failure; it's just that we need the reporting and we need to make sure the expenses are there. At that time, we will advance them the second one.
Our team evaluates those expenditures. We do spot checks, but we also do audits. We have just finished our third compliance audit in five years. That doesn't include the Auditor General's audit or two interim evaluations. I'm extremely pleased to say that SDTC has received a recognition for all processes being in place, meeting the contribution agreement requirements, and determining that our process is rigorous but appropriate for the use of public funds.