National Initiatives

National Settlement Conference 2
(Calgary - October 2-5, 2003)

Settlement Accord

Appendices:
The Code of Good Practice on Funding

A Code of Good Practice on Funding has been recognized since 2002. Under its terms, the voluntary sector agrees to share a number of responsibilities for good funding practices. They include the following:

• Ensure that impact assessments of funding policies and practices on projects and programs take into account varying circumstances in different regions of the country.
• Ensure that accurate and sufficient information is uniformly available to support quality decision-making and reporting on results.
• Develop evaluation tools (including third-party evaluations) for measuring longer-term outcomes of funding at the departmental and agency program level (as opposed to the project level).
• Establish collaborative processes with clearly delineated roles and responsibilities, and reach decisions about the funding process through collaborative processes.
• Exchange information and build awareness to improve mutual understanding.
• Outline agreed-upon results for financial programs and activities.
• Communicate shared results and successes jointly, wherever possible.

The “good practices” are grouped according to a number of principles. Both the voluntary sector and the Government of Canada have committed to upholding these principles in a number of ways. These have been reported here in chart form for ease of reference.

Principle: Voluntary Sector’s Value

Voluntary Sector Commitments

• Demonstrate and communicate value in the delivery of programs and services.
• Inform federal government departments and agencies of areas in which the voluntary sector possesses particular expertise and knowledge.
• Stay informed about federal government policy and program areas that are relevant to their areas of operation.

Government of Canada Commitments

• Communicate with voluntary sector organizations that may be qualified to compete for research funding alongside the private sector and universities.
• Include as one criterion the “particular value” that voluntary sector organizations bring to specific activities they undertake with the Government of Canada (such as access to networks, knowledge of specific issues, expertise in service delivery, and the ability to promote equality and social inclusion) when considering a funding proposal.
• Include a legitimate proportion of the cost of providing this particular value as part of the budget for a funded activity when it is integral to the project’s successful implementation.
• Establish opportunities for voluntary sector organizations to access federal contracts through means such as:
  • the creation of standing offer lists of voluntary sector organizations that have been “pre-qualified,” and
  • the development of lists of voluntary sector organizations with particular expertise.

Principle: Strengthened Sustainable Capacity

Voluntary Sector Commitments

• Invest in organizational and human resource development management.
• Develop its funding sources and diversify them to the extent possible.
• Demonstrate through the application of equitable and efficient operating policies and practices its readiness to work with government.
• Explore with government funders the possibility of using multi-year funding agreements and identify the potential impact of such agreements on the stability and long-term planning processes of organizations.
• Identify and include infrastructure-type costs, such as information management and information technology, memberships, facilities, human resources and financial management obligations (for example, audits), when developing budget estimates.

Government of Canada Commitments

• Use multi-year funding agreements and develop and implement mechanisms to facilitate their use, in appropriate circumstances, in order to enhance the stability and capacity for longer term planning of organizations.
• Allow a reasonable and flexible transition period when major changes are made to an existing funded activity; use flexible arrangements available to departments and making advance or installment payments to meet program objectives, including the carry-forward of nominal unused advances over year-end.
• Make payments according to an agreed-upon timetable and consider both the size and nature of the proposed funding and the applicant organization.
• In proposed budgets for programs or projects to be delivered by voluntary sector organizations, include among allowable expenditures infrastructure-type costs (such as information management and information technology, memberships, facilities, human resources and financial management obligations—for example, audits) that are integral to successfully implementing eligible initiatives.
• Manage funds effectively to eliminate problems caused by the distribution of a concentrated amount of funding to organizations at the end of the fiscal year.
• Use the Strategic Investment Approach to strengthen the capacity of voluntary sector organizations to collaborate over the longer term with government on key policy and program goals of mutual interest (see Appendix 6 of the Code).

Principle: Cooperation and Collaboration

Voluntary Sector Commitments

• Acknowledge funding sources, including the Government of Canada, in promotional material.
• Use its extensive networks to communicate information and co-ordinate among organizations, as appropriate, to avoid duplication.
• Take steps to stay current with existing government planning tools such as program expenditure priorities and plans, and contribute to these as required.
• Work to improve the effectiveness of the sector’s related planning tools and practices, and work with government funders to identify ways to make programs more responsive to local needs.

Government of Canada Commitments

• Solicit and consider voluntary sector views on better ways to meet new or existing needs through funding programs.
• Provide voluntary sector organizations with access to useful planning tools, and routinely share information on departmental, agency and government-wide priorities and plans (for policies, programs and research), to facilitate long-term planning in voluntary sector organizations.
• Be flexible in implementing new programs that conform to broad federal priorities and, where appropriate, tailor these programs to meet local needs.

Principle: Innovation

Voluntary Sector Commitments

• Identify innovative funding practices to improve existing program delivery.
• Engage with federal departments and agencies in dialogue about innovative funding approaches to address emerging community issues and needs.
• Where appropriate, examine opportunities to share innovative approaches with other voluntary sector organizations and government funders.

Government of Canada Commitments

• Identify and deal with emerging issues that relate to funding policies and practices, and use new funding approaches to satisfy community needs.
• Recognize the potential of voluntary sector organizations as a source for innovations that could be used to advance departmental or agency or program priorities.
• Recognize the benefit of targeting a portion of new program funding for innovation at the design stage, incorporating appropriate risk assessment, risk management and accountability measures.

Principle: Diversity and Equitable Access

Voluntary Sector Commitments

• Implement policies to ensure equality of opportunity, both in employment practices and service provision, and
• Publicize government or other funding policies broadly and share that information across the diverse sector.

Government of Canada Commitments

• Recognize the potential of diverse community organizations (e.g., faith, cultural) to contribute to program development and delivery of services, and demonstrate sensitivity to cultural differences, and
• Make an effort to provide equitable access to funded programs for organizations that may face greater challenges in accessing federal funding (such as groups representing women or visible minorities) by:
  • making information available on existing and new funding programs, including application procedures, in a variety of easily accessible formats,
  • writing application forms in plain language to increase clarity and reduce complexity, and
  • ensuring that eligibility criteria and funding practices do not create unintended barriers for smaller organizations with limited resources or without federal experience.

Principle: Accountability

Voluntary Sector Commitments

• Ensure sound financial management, including accounting procedures that are in accordance with generally accepted accounting principles.
• Provide effective board governance and adhere to ethical fund-raising practices.
• Ensure that sufficient monitoring, internal management and client and funder accountability systems are in place.
• Ensure that organizations have the level of financial expertise needed to fulfil all their financial-management, recording and reporting obligations.

Government of Canada Commitments

• Make application and accountability standards and procedures flexible enough to accommodate a variety of approaches and the limited capacity of smaller organizations, while still ensuring effective protection of, and proper accountability for, public money.
• Take into account monitoring procedures already agreed to by a voluntary sector organization’s other funders, as well as any quality assurance system introduced by the organization, when discussing the content, quality and format of federal information needs.
• Agree on well-defined, measurable results and clear roles and responsibilities.
• Encourage mutual respect for diversity and recognize that different community groups can meet the federal government’s accountability requirements while managing their resources in different ways.

Principle: Transparency and Consistency

Voluntary Sector Commitments

• Ensure openness and transparency of activities and financial records, including management and overhead costs, and volunteer involvement.
• Provide essential financial information and notify the federal government of any changes, delays or irregularities related to funding, in a timely manner.
• Co-operate with any external reviews of funding that may be required, including monitoring, evaluation and audit.

Government of Canada Commitments

• Develop a harmonized process across the Government of Canada to facilitate the joint funding of projects when several departments or agencies are working collaboratively on the same initiative or several initiatives with a common client.
• Ensure a clear understanding and consistent application of the Treasury Board of Canada’s funding policies across the federal government (e.g., transfer payments, contracting, risk management) and make them known to the voluntary sector organizations they work with.
• Clearly state the objectives of funding programs and their eligibility criteria, and ensure that application forms are understandable and concise.
• Use common elements in application and reporting forms across the federal government.
• Ensure that all applicants receive precise information concerning the application process and the stages and timing of decision-making.
• Establish realistic planning time frames, service standards for funding, and performance commitments that define which departments and agencies will provide full information in a timely manner.
• Identify a point of contact for each funding program and include it in the application guide.

Principle: Efficiency and Effectiveness

Voluntary Sector Commitments

• Ensure that systems are in place to monitor and evaluate activities against agreed-upon objectives.
• Ensure the timeliness of responses to accountability requirements.
• Plan program investments strategically.
• Periodically, and in consultation with users, evaluate the use of public funds so that it can meet “value for money” criteria.
• Work with government funders, where appropriate, to develop user-friendly forms and reporting requirements.

Government of Canada Commitments

• Ensure minimum duplication and maximum ease in application and reporting requirements by requiring only essential information and encouraging the development and use across the Government of Canada of generic, user-friendly forms and software, electronic application and reporting procedures, and one-time-only basic boilerplate data, to be updated as required.
• Develop less complex and shorter agreements for lower cost, lower risk projects that will facilitate the application process.
• Use a “risk-based” approach, based on modern financial management principles, that is appropriate to the organization’s level of funding, size and nature, to assess and monitor initiatives.
• Recognize the cost to voluntary sector organizations of monitoring and evaluation by including support toward such costs when they are identified in the budget submitted for an eligible initiative.

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