Part I: What We Learned About the Proactive Disclosure System
The enormous volume of grants and contributions and the amount of effort required to develop a “big picture” view of Aboriginal specific programming is substantial. Treasury Board has acknowledged that, for 2004 – 2005, thirty-four separate agencies and departments reported program expenditures targeted to Aboriginal people. 7 For the year that we reviewed, 2006 – 2007, Indian and Northern Affairs Canada was the largest program provider, reporting 4,032 grants or contributions, for a total of $4,634,000,049. Health Canada is second, with 987 reported transfers, for a total of $624,001,570. A table summarizing the 2006 – 2007 reported and identified grants and contributions by department is attached as Appendix A.
In the process of compiling the database, we observed several limitations to the existing Proactive Disclosure process. Recognizing that the release of this type of information is relatively new, the Congress urges the Government of Canada to review our concerns and consider the following recommendations.
Non-Disclosed Amounts
The non-disclosure of amounts under $25,000 means that the total grants and contributions reported by a specific department cannot be matched against their corresponding Parliamentary appropriation for a particular year. It is impossible to tell, for example, what percentage of G&Cs for a particular department has actually been reported through the disclosure process. Furthermore, the disclosure requirements do not appear to apply to all federal operations: Canada Mortgage and Housing Corporation, which provides significant funding through a subsidy program for Aboriginal housing, is not included in Proactive Disclosure.
Recommendation(s):
Departments, minimally, should provide a summary statement with their disclosure that indicates the number of unspecified (less than $25,000) grants and contributions and the total amount that is not included in their proactive disclosure listings.
All Agencies and Crown Corporations should be included in the Proactive Disclosure process.
Clarification of Fiscal Year
Even though amounts are posted in the proactive disclosure listing as relating to a specific quarter, the actual date assigned to the transfer, particularly for the 4th Quarter disclosures, are often outside of the 2006 – 2007 fiscal year. This makes it impossible to determine if the contribution is for the past, current, or subsequent fiscal year.
Recommendation:
Proactive disclosure information should specify the fiscal year to which the transfer relates.
Multi-Year Reporting
Many transfers were reported as multi-year contributions. While multi-year agreements allow for more effective planning by recipients (and should generally be encouraged), the reporting of these amounts as a single entry make it difficult for users of the information to analyze or compare contributions on an annual basis. Multi-year reporting also creates the impression of non-spending or non-reporting of significant investments in subsequent years. One example of this within the 2006-2007 fiscal year is the training and employment funding provided by Service Canada under the Aboriginal Human Resources Development Strategy. Significant investments appear in the department’s Main Estimates but these not disclosed in the proactive disclosure reporting system.
Recommendation:
Proactive disclosure should report only single current fiscal year cash flow.
Batched Reporting
INAC and Health Canada, who process many programs through single agreements, disclose multiple contributions in “batches”. This prevents users from being able to determine, for example, how much money is provided to a particular organization for services such as economic development, housing, education, social programs, or home care. These are important issues for community members, both on and off reserve, and the current disclosure methodology is less than adequate.
An additional problem is the further reduction in transparency that occurs as a consequence of INAC’s use of a flexible funding arrangement, known as the DIAND/First Nations Funding Agreement. Funds flowed through these agreements are not publicly reported as separate program allocations.
Recommendation:
Each program area should be disclosed as a separate entry.
Numbered Companies
Several economic development contributions to companies are posted as numbered companies, which provides no useful information to users about the recipient.
Recommendation:
Proactive disclosure should include the company’s operating or trade name, if there is one, and the provision of a bona fide operating or trade name should be a matter or standard disclosure for all grants and contributions.
Presentation of Information
The current method of reporting, department-by-department, and quarter-by-quarter, is extremely cumbersome for users. If an individual wants to know the total G&C profile for a particular organization for the year, more than 120 separate searches are required. This may frustrate all but the most determined citizen in their efforts to understand an organization’s G&C profile.
Recommendation:
Reporting of grants and contributions, rather than being split across departments, should be centralized into one reporting site with standardized reporting criteria for all departments.
Capacity to Follow Up on Reported Transfers
Users of the website information may wish to learn more about a specific transfer that appears on a proactive disclosure listing. There is virtually no information on these sites that directs users how to make further inquiries. The complexity of government departments is such that transfers might be approved at either the national or regional level, and across multiple program areas. Users of information would have a difficult time identifying an appropriate contact person. Furthermore, program officers are bound to follow the provisions of both the Privacy Act and the Access to Information Act, and may find follow-up inquiries difficult to manage.
Recommendation:
Proactive disclosure websites should provide the contact information for follow up inquiries, and departments should develop processes to ensure that further inquiries are responded to in a consistent and timely way.
Third Party Distribution
A number of sizeable transfers are reported as “third party distribution”. This means that the recipient of record redistributes the funds to eligible organizations or clients on behalf of the Government. It is impossible to tell from the government disclosure websites who and how many final recipients there are, and how much they may have received.
Recommendation:
That the recipients of “third party distribution” funding be required to comply with the proactive disclosure of final recipients, provided that the disclosure does not violate the provisions of the Privacy Act.
Insufficient Program Information
Several departments provide information using acronyms, which are not defined on the disclosure site. A further problem is that the actual program may not be identified. For example, the information we entered for Industry Canada did not identify specific contributions related to the Aboriginal Business Canada (ABC) program. For this reason, we were unable to identify much of what we believe may have been contributions to Aboriginal businesses, based on the information provided. In some cases, the address of the recipient or their inclusion on the Procurement Strategy for Aboriginal Business directory was used to verify the Aboriginal nature of the contribution – otherwise they were not included in our database.
Recommendation:
The name of the funding program should be included as a mandatory requirement for routine disclosure.
Additional Issues
Treasury Board requires government departments and grant and contribution recipients to avoid “stacking” program funds. Stacking refers to the potential for multiple government contributions for a single project or initiative. In light of the number of departments and third party distribution recipients who are involved in funding Aboriginal programs, what mechanisms exist across departments to prevent stacking of contributions?
In addition, many Aboriginal organizations are affiliated with each other. For example, Band Council may participate in initiatives managed by its Tribal Council, a Provincial/Territorial Organization (PTO), or one of the National Aboriginal Organizations. What mechanisms exist within government to ensure that each organization is not being provided with separate contributions to work on the same or similar initiatives?
It should be noted that the Government of Canada, through the Canada First Nation Funding Agreement, which was developed in the 1990s, intended to provide a funding instrument that would have consolidated federal funding across multiple departments into a single agreement. To date, however, most federal government departments have not embraced the potential provided by this type of agreement.
The consolidation of funding for single recipients into one agreement would assist the Government of Canada in preventing “stacking” of transfers within a single organization and the duplication of transfers for similar activities across related organizations.
The Congress of Aboriginal Peoples believes that the processing of all Grants and Contributions for Aboriginal organizations should be centralized into one contribution agreement per organization, administered by a central department or agency.
The Royal Commission on Aboriginal Peoples contemplated this approach when it reported in 1991, in its recommendation that the Government of Canada create a new Department of Aboriginal Relations. One of that new Department’s responsibilities would be to allocate funds from the federal government's total Aboriginal expenditures across the government.
