Thank you.
Mr. Chair, thank you for this opportunity to discuss our office's work related to Chapter 2 of our fall 2012 report—Grant and Contribution Program Reforms.
With me today is Frank Barrett, the principal responsible for this audit.
The federal government transfers money to individuals and to organizations of various types, including businesses and other governments. In 2010-11 transfer payments totalled $158 billion. The majority of those payments, $121 billion, were transferred to other levels of government and individuals through programs with ongoing spending authority.
However, a significant portion, $37 billion, was transferred through grant and contribution agreements. Our audit focused on grant and contribution programs.
In our 2006 audit on grant and contribution programs, we found that recipients had expressed concern about the heavy administrative burden associated with applying for programs and with meeting the various requirements of those programs. Later that year an independent blue ribbon panel concluded that the government needed to make fundamental changes in the way it designed and managed its grant and contribution programs.
In May 2008 the government announced an action plan to respond to the panel's recommendations. This plan committed the government to reducing the administrative and reporting burden on recipients of grant and contribution agreements.
In this audit, we looked at the implementation of the government action plan to streamline grant and contribution programs and reduce the reporting burden on recipients.
We assessed the actions of the Treasury Board of Canada Secretariat to meet the commitments made in the government action plan. We also examined specific actions taken by the Treasury Board Secretariat and five federal organizations to meet their respective obligations under the new Policy on Transfer Payments, which was developed by the government in 2008. Our audit work was completed in July 2012.
We found that to date the government has fulfilled most of the commitments it made in its 2008 action plan, which was aimed at increasing efficiencies and reducing the administrative burden on recipients. The Treasury Board Secretariat actively led efforts to develop a new policy on transfer payments. It provided leadership and guidance to federal organizations to make the necessary changes, including coordinating activities across the government.
The other federal organizations we examined have also taken actions on most of their obligations under the new policy on transfer payments. They have consulted with applicant and recipient communities in redesigning their grant and contribution programs, and they have begun to establish service standards. They have also conducted risk assessments of their programs and their recipient communities and have assigned a risk rating to each recipient based on the assessments.
However, Mr. Chair, we also found that neither the Treasury Board Secretariat nor the other federal organizations we audited had assessed the impact of their actions on recipient organizations. Therefore, they were not able to determine the extent to which their actions had helped streamline administrative processes within federal organizations or reduce the administrative burden on recipients.
We also noted that the Treasury Board Secretariat had not provided organizations with adequate guidance to ensure that risk ratings are accurate and remain current, despite the importance of these ratings in determining the controls that should be applied in each case.
Therefore, we found that processes used by federal organizations we examined varied in rigour and depth.
We made two recommendations, both addressed to the Treasury Board Secretariat. The secretariat agreed with both of them. The public accounts committee may wish to ask the secretariat for an update on its efforts to assess the impact to date on the administrative burden of recipients of grant and contribution agreements.
Mr. Chair, this concludes my opening statement. We would be pleased to answer the committee's questions.