General Assessment (GA) Workbook - 2014

Table of contents

1. Introduction

The Treasury Board Policy on Transfer Payments (2008) requires that all federal departments/agencies apply a more recipient specific, risk-based approach to managing transfer payments. It is part of federal initiatives to strengthen accountability and improve results for Canadians.

The General Assessment (GA) Workbook was developed to ensure:

The GA process is intended to assist programs to manage arrangements based on the assessed level of risk. The ultimate objective is the effective delivery of public services and management of public funds .

2. How it Works

The GA Workbook identifies potential sources of risk or "Risk Factors". These are subdivided into "Considerations" to be reviewed when evaluating each risk factor.

For each "Consideration" there is a set of descriptions or "Benchmarks" as to what a low, medium and high risk situation looks like. These descriptions are based upon past experience.

To complete the GA Workbook, information about the funded organization is compared to these benchmarks – to see which description is the best match. The GA Report summarizes the findings of all these comparisons and determines a risk level.

3. Completing the GA

A GA will be completed, at least annually for each organization, using information collected throughout the year in managing the funding agreement(s).

The GA will provide a quick snapshot of each funded organization's performance relative to its funding agreement and highlight risks that may impact upon future performance. Organizations are categorized as facing low, medium or high risk.

Upon completion of the GA Report, the department/agency will meet with all funded organizations facing significant risk. The objective is to verify the findings and arrive at a plan for managing these risks – in order to support positive results and avoid negative outcomes.

Certain high risk issues may require resolution before entering into a funding agreement. They will require priority action.

Managing risk identified by the GA may require action by the funded organization, AANDC or third parties (e.g. advisory and support organizations).

Organizations in lower risk situations may be able to take advantage of certain benefits available under the Treasury Board Policy on Transfer Payments.

4. When to Use Part A or B of Workbook

The GA Workbook is divided into two parts:

4.1 Part A

Part A is used for more complex funding relationships with organizations with whom the department/agency has an ongoing relationship (given the department/agency's mandate), and who may manage a broad range of public services.

Part A typically supports the Master (primary) funding agreement with these organizations – which may provide for: core governance, the delivery of ongoing services; and the stream of routine projects they complete (e.g. routine maintenance projects).

In instances, Part B will also be completed for these same organizations, for example, to add a project to the master agreement that requires a specific technical capacity that is not adequately addressed by the Part A.

4.2 Part B

Part B will be used for less complex funding relationships (i.e. to fund a one-time, stand-alone project or to fund various organizations to deliver a specific service).

For example, Part B may be used to assess:

  • an entrepreneur for an economic development project;
  • a Province/Territory regarding delivery of a specific service; or
  • where a new program, project or service is approved for funding that requires a specific technical capacity that is not adequately address by the Part A that has been completed

5. Annual Review of Workbook

The GA workbook is subject to annual review and update based upon experience gained in its use. Comments and suggestions are welcomed from those using it.

6. Additional Information

For the department/agency, materials on the Treasury Board Policy and the department/agency's response to it are available on the department/agency's website or by contacting your Funding Services Office.

For Health Canada (HC), contact the Center of Expertise (CoE) on Grants and Contributions.

For Public Health Agency of Canada (PHAC), contact the Center on Grants and Contributions (CGC).

General Assessment (GA) Workbook: Part A for use with Ongoing Multi-Program Agreements

1. When to Use the GA Workbook: Part A

Part A is used for complex funding relationships with organizations with whom the department/agency has an ongoing relationship (given the department/agency's mandate) and who may manage a broad range of public services.

Part A is completed prior to entering into a funding agreement with these organizations and once annually thereafter or more often as required where a multi-year agreement has been entered into.

2. How to Use the GA Workbook: Part A

The GA Workbook: Part A identifies four potential sources of risk or "Risk Factors". These are subdivided into "Considerations" to be reviewed when evaluating each source of risk.

Annex A provides a summary of these risk factors and considerations.

For each "Consideration" there is a set of descriptions or "Benchmarks" that describes what a low, medium and high risk situation looks like. These descriptions are based upon past experience.

To complete the GA Part A, information about the funded organization is compared to these benchmarks – to see which description is the best match. The GA Report summarizes the findings of all these comparisons and determines a risk level.

3. Forms

Annex B provides the three forms used in completing Part A:

  • Form 1: Organizational Risk Rating
  • Form 2: Program Specific Risk Rating
  • Form 3: Key Findings and Recommendations

Annex A

Part A: Summary of Risk Factors and Considerations

Risk Factor Considerations
1. Governance
2. Planning
3. Financial Management
4. Program Management

For more information, please consult the Breakdown of Risk Factors and Considerations.

Annex B

Form A1: Organizational Risk Rating

Organizational Name:

Risk Factor
Column (1)
Consideration
Column (2)
Consideration
Score
Column (3)
Risk Factor
Score
Column (4)
Weight
Column (5)
Weighted
Risk
Factor
Score
Column (6)
1. Governance 1.1 Capacity of recipient (i.e. governing authority) to Transact Business     x 4 =  
1.2 Familiarity with Agreement  
1.3 Management Framework for Program Management  
1.4 Accountability to Service Population  
2. Planning 2.1 Strategic Plan     x 2 =  
2.2 Operational Plan and Budget  
2.3 Business Continuity Plan  
3. Financial Management 3.1 Financial Position     x 3 =  
3.2 Financial Records and Reporting  
3.3 Finance Function  
4. Program Management

(Information brought forward from Form 2)
4.1 Service / Project Delivery     x 5 =  
4.2 Service / Project Policies and Plans  
4.3 Staff Capacity  
4.4 Reporting  
Total  
Rating (Low 0 to 18.5 ) (Medium >18.5 to 37.5 ) (High >37.5 to 56) (1/3, 1/3, 1/3)  
Step 1:

For each "Consideration" in column 2, determine the "Consideration Score" in column 3, by using the corresponding section of the workbook.

Compare the information you have about the organization to the "low", "medium", "high" benchmark in the workbook and select the best fit. Score "0" for low; "2" for medium; and "4" for high. Score "1" if the best fit is somewhere between "low" and "medium"; and Score "3" if it is somewhere between "medium" and "high".

Enter the score on Form A1. Enter the rationale for the score and recommendations for managing high risk situations on Form A3.

Note:
  1. For risk factor 4 "Program Management" the scores will be brought forward from Form A2 – after its completion.
  2. If information is not available for scoring a consideration, enter "I-2" – (Inconclusive and a score of 2 is applied)
  3. If more than 20% of the scores are "I-2" the GA is deemed not complete.
Step 2:

For each "Risk Factor" in column 1, determine the "Risk Factor Score" to be entered in column 4 by averaging the "Consideration Score" in column 3.

Step 3:

For each "Risk Factor" in column 1, determine the "Weighted Risk Factor Score" in column 6, by multiplying column 4 and column 5.

step 4:

Total column 6 and enter the amount in the "Total" row at the bottom of Form A1.

Step 5:

Determine the "Rating" at the bottom of Form A1, based upon the total calculated in step 4.

Ranges are: (Low 0 to 18.5); (Medium >18.5 to 37.5); and, (High >37.5 to 56) based upon a 1/3, 1/3, 1/3 distribution

Form A2: Program Management Risk Rating

Consideration Score
Consideration Program
# 1
Program
# 2
Program
# 3
Program
# 4
Program
# 5
Program
# 6
Etc. Consideration Score *
* Program consideration scores are weighted based on the Program's proportionate share of the departmental/agency allocations, in order to arrive at the overall consideration score.
5.1 Service/ Project Delivery                
5.2 Service/ Project Policies and Plans                
5.3 Staff Capacity                
5.4 Reporting                
Program                
Program Management (Overall) – this is an average of the four consideration scores. This is transferred to column 4, Form A1 and an overall weight is then applied to arrive at the weighted risk score.  
Step 1:

Form A2 is completed on a program specific basis. For each "Consideration" in column 1, determine the "Score" for columns 2, 3, 4, etc. using the matching page in the workbook.

Compare the information you have about the organization to the "low", "medium", "high" descriptors and select the best fit. Use the same system for scoring as described for Form A1.

Enter the score on Form A2. Enter the rationale for the score and recommendations for managing high risk situations on Form 3.

Step 2:

For each "Consideration" in column 1, calculate the score.Footnote 1 Enter it in the corresponding areas on Form A1.

Step 3:

Calculate the "Average by Program" at the bottom of each of Columns 2, 3, 4, etc.

step 4:

Determine the "Program Management Overall Risk Factor Score" by averaging the "Consideration Scores" in the last column (round to one decimal place). Enter the Score on Form A1, column 4.

Form A3: Key Findings and Recommendations

Form 1 (Organizational Level)
Risk Factor and Consideration Rational for Score Recommendations to Mitigate Risk
1.1 Capacity of recipient (i.e. governing authority) to Transact Business    
1.2 …    
1.3 …    
Etc.    
Form 2 (Program Specific Level)
Risk Factor and Consideration Rational for Score Recommendations to Mitigate Risk
Program #1 (Education)
5.1 Service/ Project Delivery    
5.2 Service/ Project Policies and Plans    
5.3 Staff Capacity    
5.4 Reporting    
Program #2 (Social)
5.1 …    
5.2 …    
Etc.    
Step 1

As you complete Forms A1 and A2, on Form A3 enter a brief rationale for the score, and recommendations for managing high risk situations. This is key information to be generated by the GA.

Breakdown of Risk Factors and Considerations

Risk Factor: 1. Governance

The extent to which the funded organization has stable and well functioning governance for purposes of managing the funding agreement.

Consideration: 1.1 Capacity of recipient (i.e. governing authority) to Transact Business

Is the recipient (i.e. governing authority) able to transact business?

Relevance to Management of Funding Agreements:

As the funding agreement is a legal document, an organization must meet certain requirements to enter into a funding agreement; including:

  • having a defined legal status (e.g. is a First Nation, Aboriginal Representative Organization non-profit corporation or other corporation);
  • maintaining its legal status (e.g. corporations file an annual return with Corporations Canada or provincial/territorial equivalent);
  • having a recipient (i.e. governing authority) which is willing and able to legally bind the organization (e.g. follows the legal process required).

A stable, well functioning recipient (i.e. governing authority) that supports a stable well functioning organization. It is able to respond in a timely manner to decisions required by the department/agency in order to initiate or manage funding agreements. As well, there is a seamless transition between recipients (i.e. governing authority) such that the capacity to make decisions and deliver services is not disrupted.

In the absence of a well functioning recipient (i.e. governing authority), the department/agency may be unable to conduct business with the organization, services may be disrupted and accountability compromised. Default assessment may be required.

Sources of Information / Evidence:
  • The Default Prevention and Management Assessment process is the authoritative source of information regarding default situations (the GA process should reference – not duplicate – that process)
  • Corporation Canada data base or provincial/territorial equivalent
  • Elections schedule and history from the department/agency data base
Benchmarks
Low = 0

If a corporation, it is in good standing with Corporations Canada or its Provincial / Territorial equivalent

Elections or other established processes result in a seamless transition between recipients (i.e. governing authority) and in recipients(i.e. governing authority) which are able to work together to make required decisions.

Where a Management Action Plan is required, it is in place and is achieving the required result.

Medium = 2

If a corporation, it has not filed an annual return or other filing as required by applicable legislation or regulation

There is a potential for service disruption due to a lack of capacity of the recipient (i.e. governing authority) (e.g. there is an upcoming election and there is a history of disruptions resulting from election appeals / split councils)

Where a Management Action Plan is required, a credible plan is in place and is being implemented, but has yet to achieve the required results.

High = 4

The following default situations:

  • A corporation, it has lost its corporate status;
  • The recipient (i.e. governing authority) is unable to provide for the continued operation of public services. (e.g. it is unable to establish a quorum or the vote required to make legally binding decisions);
  • A Management Action Plan is required and the plan is not in place or is not being implemented.

Note: If a Third Party Funding Agreement Manager is required the consideration is automatically scored high.

Justification for Score
Consideration Score (entered on Form A1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Consideration: 1.2 Familiarity With Agreement

Does the recipient (i.e. governing authority) and management team have a sound understanding of the funding agreement?

Relevance to Management of Funding Agreements:

There is a need for the recipient (i.e. governing authority) and Management Team to understand its roles and responsibilities in managing the funding agreement and agreement requirements. In the absence of such an understanding, problems are likely to occur.

Best Practice:

The recipient (i.e. governing authority) and management team understand the terms and conditions of the funding agreement by meeting with the department/agency and securing advice from their own sources (e.g. legal, financial, tribal advisors). Where there is a significant change in recipient (i.e. governing authority) or management team during the life of the agreement, steps are taken to re-establish that understanding. The General Manager has two or more years of experience in managing federal funding agreements. The organization has a strong, ongoing general management function whose role includes supporting stability of the organization across changes in recipient (i.e. governing authority) or in senior program staff.

Sources of Information / Evidence:
  • Observations during field visits
  • Overall fulfillment of existing agreements
  • By-laws, constitution, AGA Resolution
Benchmarks
Low = 0

The organization has a strong ongoing general management function that supports stability within the organization when changes in recipient (i.e. governing authority) or in senior program staff occur, evidenced by the existence of transition planning for new councils; succession planning for staff ); and

There has not been significant turnover of key managers / governance and where this occurs there is evidence of continuity of management function through agendas, BCRs, records of discussion, demonstrating that the governing authority is aware and familiar with the agreement.

Medium = 2

The recipient (i.e. governing authority) and Management Team, has had significant turnover, during the past two years.

Certain key members remain who provide for continuity and stability. When changes in recipient (i.e. governing authority) or in senior program staff occur, there is some evidence that there is a plan in place to lessen disruption.

High = 4

The recipient (i.e. governing authority) and Management Team, has had significant turnover, during the past two years, and few members remain to provide for continuity and stability (e.g. major changes to both the recipient (i.e. governing authority) and Management Team).

There does not appear to be a plan in place to manage the transition of recipient (i.e. governing authority) members or staff.

Justification for Score
Consideration Score (entered on Form A1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Consideration: 1.3 Management Framework for Program Management

Is there a separation between the recipient (i.e. governing authority) and the administrative sides of the organization?

Relevance to Management of Funding Agreements:

Separation of the governance and management functions supports independent oversight of the management of public services and expenditures. In larger organizations such checks and balances are best achieved by having:

  • different individuals occupy position within each function; and
  • a senior manager (e.g. Executive Director), plays a key role in coordinating all management functions and reporting to the recipient (i.e. governing authority).
Best Practice:

In both large and small organizations, integrity of service delivery may be supported by:

  • an Audit Committee which assigns individuals to oversee functions they are not engaged in;
  • delivery of services and the making of expenditures in accordance with well defined policies;
  • a formal appeal process on matters of individuals entitlement;
  • administrative policies to guide sensitive matters (staffing, contracting, travel expenditures);
  • a formal process for the change of any policy within the recipient (i.e. governing authority)'s authority;
  • experienced and knowledgeable staff supporting program and administrative functions;
  • conflict of interest guidelines applicable to those in governance and administrative functions;
  • an independent finance function (see risk factor 4.3);
  • ongoing audit and compliance activities.
Sources of Information / Evidence:
  • Observation during field visits
  • Recent Readiness Assessment/ Default Prevention and Management Assessment Reports
  • Other Planning documents
Benchmarks
Low = 0

The recipient (i.e. governing authority) has a policy and procedure that supports the separation of governance and management functions, the integrity of service delivery, and there is evidence of its implementation

Medium = 2

The recipient (i.e. governing authority) has minimal checks and balances for ensuring the separation between governance and management functions, and the integrity of service delivery, and there is evidence of their implementation

High = 4

The recipient (i.e. governing authority) does not have a policy and procedure or checks and balances that support the separation of governance and management functions, and / or instances of non-compliance have been found to be linked to a lack of checks and balances.

Justification for Score
Consideration Score (entered on Form A1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Consideration: 1.4 Accountability to Service Population

Has the recipient (i.e. governing authority) taken a proactive approach to demonstrating accountability?

Relevance to Management of Funding Agreements:

Funding agreements are premised upon the funded organization accounting to the public it serves and to the department/agency for the funds provided. This accounting is in terms of the results achieved and the means used to achieve them; compared to requirements within the funding agreement. It is only one aspect of the larger accountability relationship between the recipient (i.e. governing authority) and the community it serves.

Where such information is not readily accessible or the recipient (i.e. governing authority) does not hold itself to account, individuals may express concerns to the department/agency or the media. The intended accountability relationship may be eroded and the collective interest of the federal government, funded organization, and service population in maintaining public support for the program may be weakened.

Best Practice:

The recipient (i.e. governing authority) has practical ways to make information available to the public served by the funding agreement as to:

  • the level of services available through the agreement, within available funds, and the policies which govern their delivery;
  • the level of service provided (e.g. annual or program reports);
  • the use of the funds (e.g. the audited statements ); and

The information on the three preceding bullets is available to the service population on the recipient’s (governing authority) website and/or upon request.

Sources of Information / Evidence:

Evidence as to a well functioning system may include:

  • copies of annual reports or other accountability documents;
  • media (positive and negative);
  • organization websites (e.g. posting of accountability documents), protest websites;
  • attendance at or documentation from funded organization meetings with service population (e.g. Annual General Assemblies or other meetings where audited financial statements are presented and explained to the membership).
  • Health Plan
Benchmarks
Low = 0

The organization takes a proactive approach to demonstrating accountability to the public for programs for which funds are provided through the funding agreement. For example:

  • annual reports
  • general meetings
  • public posting of information (organization / community website)
Medium = 2

The organization meets basic requirements in accounting to the public for programs for which funds are provided through the funding agreement (e.g. access to audit or program policy documentation, appeal processes / mechanisms). Information is generally shared upon request only.

High = 4

The organization is not meeting basic requirements in accounting to the public for programs for which funds are provided through the funding agreement; as evidenced by:

  • requests from the public seeking basic accountability information that is required to be provided, upon request, under the funding agreement with the department/agency.
Justification for Score
Consideration Score (entered on Form A1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Risk Factor: 2. Planning

The extent to which planning processes are used to establish, communicate and support achievement of objectives, to align program delivery with funding allocations, and to meet funding agreement requirements.

Consideration: 2.1 Strategic Plan

Does the organization have a strategic plan(s) in place that set multi-year direction in terms of outcomes, performance measures and accountability for Government of Canada (GoC) programs and services?

Relevance to Management of Funding Agreements:

While the organization's strategic or community plan will deal with issues beyond the funding agreement, the two should be mutually supportive in achieving results. In the absence of a strategic plan, day-to-day pressure may divert attention from long-term objectives, resulting in opportunities being missed and scarce resources being depleted.

Best Practice:

The recipient's (i.e. governing authority) strategic plan:

  • Sets a multi-year direction based upon the mission / mandate, vision and values of the organization;
  • Expresses this direction in terms of outcomes to be achieved, performance measurement and accountability (e.g. a "business plan");
  • Sets context and priorities for shorter term plans (e.g. "operational plans") throughout the organization.

The "strategic plan" or plans may be part of a larger "Community Plan". "Community plans" go into depth as to how the strategic plan will be achieved.

Sources of Information / Evidence:
  • Copy of plan shared with the department/agency
  • Reference made to plan during field trips / site visits or by the funded organization during presentations to the department/agency
  • Recent Readiness Assessment/ Default Prevention and Management Assessment Reports
  • Plans posted on organization website
Benchmarks
Low = 0

A strategic or community plan (s) are in place and there is evidence of use to guide long-term development and set the context for shorter term plans (e.g. operational plans and budget; and, other short term program plans). There is a process in place to support the periodic review of achievements against the plan; and periodic update of the plan.

Medium = 2

A strategic or community plan (s) exist but there is limited evidence of use in guiding long term development or priorities in the short term. There is no process in place to support the periodic review of achievements against the plan; or for periodic update of the plan.

OR

A partial plan(s) exist and there is evidence of use to guide long term development and set the context and priorities for shorter term plans.

High = 4

A strategic or community plan does not exist or does exist but there is no evidence of its use.

Justification for Score
Consideration Score (entered on Form A1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Consideration: 2.2 Operational Plan and Budget

Does the organization have an annual operational plan and budget in place?

Relevance to Management of Funding Agreements:

The operational plan and budget are the foundation for an effective annual budget management regime. They allow the organization to identify variances from planned project or service expenditures on a timely basis and take corrective action to manage within its budget, or to seek consent for adjustments as required by the funding agreement.

In the absence of an operational plan and budget, the organization is unable to manage in a methodical and integrated way to meet its obligations within the funding agreement and to advance its strategic plan. Accountability is eroded and there is a risk of disruption to funded projects and services due to financial difficulties experienced by the organization.

Best Practice:

Operational Plan and Budget sets out the services to be delivered by each organizational unit for the next 1 – 3 years, based upon the strategic plan, funding agreement obligations and available resources. It serves as a basis for measuring progress and accounting for results and expenditures. Based upon the operational plan, organizational units prepare more detailed work plans, to guide day-to-day work.

Sources of Information / Evidence:
  • The organization should reference its operational plan and budget for purposes such as setting agreement cash flow
  • Copy of plan shared with the department/agency
  • Reference made to plan during field trips or by funded organization during presentations to the department/agency
  • Recent Readiness Assessment / Default Prevention and Management Assessment Reports
  • Operational plans posted on website
Benchmarks
Low = 0

An operational plan and budget are in place and are regularly updated to align program delivery with funding allocations and to set the context and priorities for current year work plans.

Medium = 2

An operational plan and budget are in place but are not consistently updated or used to set the context and priorities for current year work plans.

High = 4

An operational plan and budget are not in place or are in place but are not used.

Justification for Score
Consideration Score (entered on Form A1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Consideration: 2.3 Business Continuity Plan

Does the organization have a business continuity plan in place to support continuity of the organization and its funded services where an extraordinary or foreseeable event may otherwise have an impact?

Relevance to Management of Funding Agreements:

The challenges faced by an organization change over time and may impact its ability to meet the requirements of its funding agreement. These changes may arise as a result of external events (foreseeable, or extraordinary) or decisions of the recipient (i.e. governing authority) to undertake a major initiative.

Best Practice:

The organization sees change as part of its normal operating environment; tries to foresee change and its potential impacts; and plans accordingly. The organization seeks to balance the demands on it with its capacity to avoid disruption to funded services. For example:

  1. A business continuity plan or emergency management plan is in place to deal with foreseeable events (spring flooding; forest fires, organization building fire) or other foreseeable threats to health and safety; physical assets; or service delivery.
  2. A plan is in place to deal with extraordinary events (e.g. opening or closure of a local industry which may impact service demands; the opening of an all-season road or the early closure of a winter road which may impact service costs; unforeseen loss of key staff etc.) that have or are occurring – to respond to urgent needs or to seek long-term benefits.
Sources of Information / Evidence:
  • Existing documents detailing emergency management plans or other business continuity planning documents
  • Field visits or presentations given by the funded organization
  • Trends in emergency management requirements
  • Comments / reports by Health or Public Safety Officials
  • Media articles
Benchmarks
Low = 0

Issues exist which are within the normal capacity of the recipient (i.e. governing authority) to manage (i.e. it is business as usual); and

The recipient (i.e. governing authority) has a plan in place to manage potential impacts on funded programs from foreseeable emergencies / service disruptions and extraordinary events; and

Where extraordinary events have occurred in the past, there is clear evidence of the plan being successfully exercised or implemented, resulting in continuity of funded services.

Medium = 2

Issues exist that are not within the normal capacity of the recipient (i.e. governing authority) to manage; and

The recipient (i.e. governing authority) has a plan in place to manage potential impact on funded programs from foreseeable emergencies / service disruptions and extraordinary events, however in the past, the recipient (i.e. governing authority) has experienced some difficulties in managing emergencies or extraordinary events and it is not clear if the cause of these has been addressed.

OR

Issues exist which are within the normal capacity of the recipient (i.e. governing authority) to manage (i.e. it is business as usual; and

There is not plan in place to manage potential impacts on funded programs from foreseeable emergencies / service disruptions and extraordinary events.

High = 4

Issues exist that are not within the normal capacity of the recipient (i.e. governing authority) to manage; and

There is no plan in place to manage potential impacts on funded programs from foreseeable emergencies / service disruptions and extraordinary events.

Justification for Score
Consideration Score (entered on Form A1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Risk Factor: 3. Financial Management

The extent to which the funded organization has sound financial management.

Consideration: 3.1 Financial Position

Is the organization in a sound financial position?

Relevance to Management of Funding Agreements:

The strength of an organizations financial position indicates its ability to meet financial obligations. Where an organizations financial position is weak, it is an indicator that they will have difficulty meeting their delivery obligations for funded programs and services.

Three primary indicators are considered when assessing financial position:

  • Liquidity Ratio (threshold: 0.90) – a measure of whether bills can be paid over the coming year);
  • Sustainability (Net Debt) Ratio: (threshold: 0.50) – a measure of whether obligations can be met beyond 1 year; and
  • Working Capital ratio (threshold : 0.80) – a measures of whether this month's bills for service delivery can be paid
Best Practice:

The organization maintains a balance between revenues and expenditures such that it is well positioned to meet its financial obligations in the short and long-term for purposes of delivering public services.

Sources of Information / Evidence:
  • Annual audited financial statement or annual return(e.g. Interim and Final financial reports)
  • Annual Audit Review process
  • Financial Assessment Analysis
  • Financial certification (FN FMB, ISO, etc.)
Benchmarks
Low = 0

The organization is in a sound financial position as evidenced by it:

  • being able to meet its current obligations from current revenues;
  • having a revenue source to offset long term debts;
  • being subject to few recoveries at year-end due to compliance.
  • having financial certification with an association agreed to by the funding department / agency (i.e.FN FMB, ISO), verified current and in good standing.

Results of Financial Assessment indicate a low risk.

Medium = 2

The organization is experiencing difficulty in maintaining a sound financial position, as evidenced by it:

  • being at the financial ratio threshold for default management (i.e. being able to meet its current obligations but facing increasing debt levels which threaten its continued ability to do so);
  • being subject to some year-end recoveries for non-compliance which can be offset by current revenues.

Results of Financial Assessment indicate a medium risk.

High = 4

The organization is in a poor financial position as evidenced by it:

  • not being able to meet its current obligations and service its long-term debt;
  • being dependent on emergency cheque issues and lines of credit;
  • being often subject to year-end recoveries for non-compliance that cannot be offset with current revenues.

Results of Financial Assessment indicate a high risk.

Justification for Score
Consideration Score (entered on Form A1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Consideration: 3.2 Financial Records and Reporting:

Do financial records and reporting meet generally accepted accounting principles (GAAP)?

Relevance to Management of Funding Agreements:

The organization's financial records and reporting system meets the need of its managers for purposes of managing their programs and the needs of the recipient (i.e. governing authority) for purposes of monitoring program delivery and the financial situation.

In the absence of sound financial records and reporting it is not clear that transfer payments have been used for the intended purpose, set forth in the terms and conditions of the funding agreement. The recipient (i.e. governing authority) and the management team lack key information and accountability towards all parties is eroded.

Best Practice:

The funded organization's financial records and reporting meet generally accepted accounting principles (GAAP), as evidenced by an unqualified audit opinion from an independent auditor. Where such an audit is not required due to a lower value agreement, the records meet the financial reporting obligations pursuant to the year-end reporting guide. Effective governance, management, transparency and stewardship of funds are supported.

Sources of Information / Evidence:
  • Annual audited financial statements and/or other financial submissions (e.g. Interim and Final financial reports)
  • Annual Audit Review Process
Benchmarks
Low = 0

The organization has built and maintains strong financial records and reporting capacity; as evidenced by it having:

  • an unqualified opinion or an opinion with minor qualification for the last 3 years; or where an independent audit is not required, has met its obligations pursuant to the year-end reporting handbook.
  • financial policies, procedures and systems being in place and applied (for example, financial reporting is on time, and has been duly reviewed and approved by the recipient (i.e. governing authority).
Medium = 2

The organization has limited financial records and reporting capacity as evidenced by:

  • the most recent audit having a significant qualification; or
  • where an independent audit is not required, difficulties in meeting its obligations pursuant to the year-end reporting handbook as evidenced by significant delays in reporting or report quality issues.
High = 4

There are concerns about the professional quality of recent audits; or

The organization is experiencing significant difficulty in maintaining financial records and reporting as evidenced by:

  • being in default of its obligations pursuant to the funding agreement, due to a denial or adverse opinion or default on other reporting obligations;
  • audits are delayed by a need for the auditor to first reconstruct accounting records at year-end;
  • The applicant has no prior experience and has not demonstrated, in a convincing manner, how it will meet its financial obligations.
Justification for Score
Consideration Score (entered on Form A1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Consideration: 3.3 Finance Function:

Are the qualifications and quantity of the staff supporting the finance function appropriate to the value and complexity of the agreement?

Relevance to Management of Funding Agreements:

As organizations assume increased flexibility with respect to the management of programs and funds, local management requirements increase. The finance function plays an important advisory, support and internal control role for all organizations but particularly within those assuming increased authorities. Financial staff who are members of an accounting society benefit from continuing education, support, a code of ethics and mobility – which allows them to be effective in their role.

Best Practice:

The organization has the capacity to recruit, train and retain appropriate personnel to support the finance function. Personnel should have sufficient education and experience, commensurate with the size and complexity of the agreement. A preference is for a professional accounting designation, including the Certified Aboriginal Financial Manager certification*, for more complex situations.

The Assembly of First Nations (AFN) Chiefs-in-Assembly (Resolution 32, July 2008) supported the professional designation of the Certified Aboriginal Financial Manager (CAFM) as the preferred credential when First Nations are hiring personnel in financial and management positions.

Sources of Information / Evidence:
  • Observations during field visits
  • Recent Readiness Assessment or Default Prevention and Management Assessment Reports
  • Financial staff titles, certifications and descriptions included in recipient work plans, cashflows, budget notes
  • Financial certification (FN FMB, ISO, etc.)
Benchmarks
Low = 0

The organization's management team includes a financial officer who has a professional accounting designation; or

The organization has the capacity to recruit, train and retain appropriate personnel to support the finance function (sufficient education and experience, commensurate with the size and complexity of the agreement, with preference for a professional accounting designation for most complex situations). There have been no gaps in the finance function as a result of temporary vacancies. Alternatively, the organization secures professional financial services on an itinerant basis through an advisory organization or contractual arrangement as appropriate due to the size and complexity of the agreement ; or

The organization has financial certification with an association agreed to by the funding department / agency (i.e. FN FMB, ISO), verified current and in good standing.

Medium = 2

The organization has some capacity to recruit, train and retain appropriate personnel, as evidenced by their ability to bridge vacancies or capacity gaps with temporary measures.

High = 4

The organization has limited capacity to recruit, train and retain appropriate personnel. There have been frequent or long term staff vacancies, including gaps in minimum qualifications, which cannot be effectively bridged through temporary measures.

Justification for Score
Consideration Score (entered on Form A1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Risk Factor: 4. Program Management

The extent to which programs are likely to be delivered in accordance with the terms and conditions of the agreement, and thereby positive results achieved.

Consideration: 4.1 Service / Project Delivery

Has the organization's service population / client experienced disruptions, delays or gaps in service / project delivery, particularly impacting on essential service?

Project: is defined in Part A as the stream of routine projects completed within the recipient's normal capacity (e.g. routine maintenance projects). In contrast Part B is used to support the management of a project that requires a specific technical capacity that is not adequately addressed by the Part A.

Relevance to Management of Funding Agreements:

The essential purpose of the funding agreement is to provide for the delivery of program services /projects.

the department/agency may increase its monitoring and oversight where complaints are received as to problems in service delivery, or consider whether there are other appropriate actions to be taken to mitigate risk that the terms and conditions of the program related funding will not be met.

Sources of Information / Evidence:
  • Observations during field visits
  • Program Compliance / Performance Reviews
  • Program reporting
  • Emergency situations which required a departmental/agency or third party approach to preserve services
  • Recent Readiness Assessment or Default Prevention and Management Assessment Reports
  • Other analysis as required by program
Benchmarks
Low = 0

There are generally no disruptions, delays or gaps in service / project delivery; or if they have occurred it has been infrequent (e.g. due to illness) and has had little to no impact.

Medium = 2

There have been periodic disruptions, delays or gaps in service / project delivery which present some inconvenience or hardship to the population to be served.

High = 4

There is little or no evidence that services / projects can be delivered on a continuous basis, as service delivery disruptions have been frequent and ongoing.

Justification for Score
Consideration Score (entered on Form A1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Consideration: 4.2 Service / Project Policies & Plans

Has the funded organization brought into place service delivery policies and plans as required by the agreement?

Relevance to Management of Funding Agreements:

Policies and plans are in place, as required, to provide for service delivery in a fair, transparent and consistent manner.

Best Practice:

Organizations use flexibility as available under their funding agreement to tailor policies and plans to the specific needs of their client population.

Sources of Information / Evidence:
  • Observations during field visits
  • Program Performance Reviews
  • Program reporting
  • Program evaluations
  • Recent Readiness Assessment or Default Prevention and Management Assessment Reports
  • Other analysis as required by program
  • Other Planning documents
Benchmarks
Low = 0

Policies and plans are in place as required.

Medium = 2

There are some gaps in the policies and plans required for the sound management of the program, which impacts on:

  • the financial sustainability of the program;
  • the fair, transparent and consistent delivery of service.
High = 4

There are major gaps in the policies and plans such that there is little or no evidence that services can be delivered as required.

Justification for Score
Consideration Score (entered on Form A1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Consideration: 4.3 Staff Capacity (Professional/Technical)

Are staff in place to support the program and do they meet minimum qualifications where required?

Relevance to Management of Funding Agreements:

Knowledgeable and experienced staff is important to effective service delivery. The funding agreement requires that certain tasks be performed by qualified staff / contractors to protect the wellbeing of the client population. For example, teachers / water plant operators must be certified, and capital projects must obtain the seal of a professional engineer or architect.

Best Practice:

Human resource strategies are in place to hire, train and retain the staff required to maintain services and their continuous improvement.

Sources of Information / Evidence:
  • Observations during field visits
  • Program Performance Reviews
  • Program reports
  • Program evaluations
  • Recent Readiness Assessments or Default Prevention and Management Assessments Report
  • Program guidance
  • Program job descriptions contained in work plans
  • Other analysis as required by program
  • Other planning documentation
Benchmarks
Low = 0

The organization has the capacity to recruit, train and retain appropriate personnel to support program / service delivery.The organization has staff in place to support the funded services, including meeting minimum qualifications where required.

Medium = 2

The organization has some capacity to recruit, train and retain appropriate personnel to support program / service delivery. The organization needs to continuously manage vacancies, including gaps in minimum qualifications, but is able to bridge these with temporary measures.

High = 4

The organization has limited capacity to recruit, train and retain appropriate personnel to support program / service delivery. There are frequent or long term staff vacancies, including gaps in minimum qualifications, which cannot be effectively bridged through temporary measures.

Justification for Score
Consideration Score (entered on Form A1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Consideration: 4.4 Reporting

Have reporting requirements been met?

Relevance to Management of Funding Agreements:

Reports are provided to the department/agency as required by the funding agreement to demonstrate service delivery and results.

Best Practice:

The recipient (i.e. governing authority) and the department/agency receive periodic program reports which allow it to monitor progress in comparison to the operational plan and budget. Systems are in place to share such information with the client population in a way that is meaningful to them (e.g. through annual reports).

Sources of Information / Evidence:
  • Formal program reporting systems (e.g. GCIMS)
  • Program Performance Reviews
  • Program reports required by the terms and conditions of Funding Arrangements
  • Other analysis as required by program
Benchmarks
Low = 0

The organization has consistently, correctly, and provided all required program reports when due.

Medium = 2

The organization has not been able to consistently provide correct reports within two weeks of the due date.

High = 4

The organization has regularly been unable to provide correct reports within 4 weeks of the due date.

Justification for Score
Consideration Score (entered on Form A1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

General Assessment (GA) Workbook: Part B for use with Project and Specific Service Agreements

1. When to Use the GA Workbook: Part B

Part B of the GA Workbook is used by the department/agency for assessing and managing risks associated with funding agreements (Projects) and recipients.

For example, Part B may be used:

  • to fund an entrepreneur for an economic development project;
  • to fund a Province/Territory to deliver a specific service; or
  • to add a new program, project or service to the funding agreement of an organization for which a Part A has been completed (e.g. to add a project to the master agreement that requires a specific technical capacity that is not adequately addressed by the Part A.).

2. How to Use the GA Workbook: Part B

The GA Workbook: Part B identifies four common sources of risk or "Risk Factors", and an additional source of risk that is identified as "other considerations", to be used where the specific program requirements necessitate the evaluation of an additional area of risk. See Exhibit 1.

For each "Risk Factor" there are a set of descriptions or "Benchmarks" as to what a low, medium and high risk situation looks like. These descriptions are based upon past experience.

To complete the GA, information about the funded organization is compared to these benchmarks – to see which description is the best match. The GA Report summarizes the findings of all these comparisons and determines a risk level.

Exhibit 1: Risk Factors

  1. Governance
  2. Performance History
  3. Financial Stability
  4. Planning and Project Complexity
  5. Other Considerations (if applicable)

Where a current Part A exists for a given organization, certain information from Part A may be used in completing Part B.

3. Standard Weights for Risk Factors

Common risk factors are applied to the delivery of projects and services. These risk factors are considered equal in relative importance and are unweighted, except where:

  • a program chooses to apply a weighting factor specific to their program;
  • the risk factor "other considerations" is not in use and is assigned a weight of 0.

4. Forms

Annex A provides the two forms used to complete Part B:

  • Form B1: Organizational Risk Rating; and
  • Form B2: Key Findings and Recommendation.

Annex A

Form B1 : Organizational Risk Rating

GA for Project/Specific Service Agreements

Organization Name:

h Risk Factor
Column (1)
Consideration
Column (2)
Consideration
Score
Column (3)
Risk Factor
Score
Column (4)
Weight*
Column (5)
Weighted
Risk
Factor
Score
Column (6)
* weight may be adjusted where program deviations have been approved

Rating: e.g. for a project where "Other Considerations" is not used, the ranges are based upon a 1/3 split: (Low bottom 1/3) (Medium middle 1/3 ) (High top 1/3)
1. Governance       x 1 =  
2. Performance History       x 1 =  
3. Financial Stability       x 1 =  
4. Planning and Project Complexity       x 1 =  
5. Other Considerations

(if applicable)
7.1 Market Competition (ABDP) – Example     x 1 =

(or zero where not applicable)
 
7.2 Etc  
7.3 Etc  
Total  
Step 1:

For Risk Factor 1 to 5 in column 1, determine the "Risk Factor Score" in column 4, by using the corresponding section of the workbook.

Compare the information you have about the organization to the "low", "medium", "high" benchmark in the workbook and select the best fit. Score "0" for low; "2" for medium; and "4" for high. Score "1" if the best fit is somewhere between "low" and "medium"; and Score "3" if it is somewhere between "medium" and "high".

Enter the score on Form B1. Enter the rationale for the score and recommendations for managing high risk situations on Form B2.

Step 2:

For Risk Factor 5, in column 1, determine if there are "Other Considerations" to be entered in column 2 based upon the specific needs of the program. Score each consideration in column 2, as in Step 1.

If there are no "Other Considerations" to be scored, enter a score of "0" in column 4. If there were "Other Consideration" to be scored, enter the average score from column 3 in column 4.

Step 3:

For each "Risk Factor" in column 1, determine the "Weighted Risk Factor Score" in column 6, by multiplying column 4 and column 5. These risk factors are considered equal in relative importance and are unweighted, except where:

  • a program chooses to apply a weighting factor specific to their program;
  • the risk factor "other considerations" is not in use and is assigned a weight of 0.
Step 4

Total column 6 and enter the amount in the "Total" row at the bottom of Form B1.

Step 5

Determine the "Rating" at the bottom of Form B1, based upon the "Total" calculated in step 2.

Ranges are based upon a 1/3, 1/3, 1/3 distribution.

Form B2: Key Findings and Recommendations

Risk Factor and Consideration Rational for Score Recommendations to Mitigate Risk
1. Governance    
2. Performance History    
3. Financial Stability    
4. Planning and Project Complexity    
5. Other Considerations if applicable    

As you complete Form B1, on Form B2 enter a brief rationale for the score, and recommendations for managing high risk situations. This is key information to be generated by the GA.

Breakdown of Risk Factors and Considerations

Risk Factor: 1. Governance

Consideration:

Is there a strong oversight function to ensure agreement requirements are met

Relevance to Management of Funding Agreements:

The department/agency enters into agreements with many types of recipients, from large complex organizations with accountability relationships with the public or shareholders, to small, simple organizations. For example, from large hierarchal organizations with Boards/Councils, (which may be governmental, non-governmental or for-profit entities); to sole proprietorships with no employees (owner/operator).

Depending on the organizational form, who is responsible to ensure agreement requirements are met will vary. In large complex organizations the board/council (i.e. governing authority) signs the agreement and ensures that the organization meets its obligations – but does not engage in operations. In contrast, in a small simple organization, the owner/operator may assume all these roles.

Best Practice:

Success of a project/service delivery is highly contingent on the management of the organization. Features contributing to success may be:

  • an experienced recipient (i.e. governing authority) (to oversee management of the agreement) and management team (to manage the project/services), or experienced owner/operator to perform all these functions;
  • a solid track record with this type of agreement;
  • the recipient (i.e. governing authority) or owner/operator having taken action to prevent any past deficiencies from recurring.
Sources of Information / Evidence:

Applicants/recipients:

  • demonstration of capacity within application
  • reference checks based upon application
Benchmarks

Benchmarks were developed for the following (please refer to the following links):

Low = 0

The recipient (i.e. governing authority) and Management Team or business owner/operator has two years experience in managing this type of project/service agreement (i.e. there are no significant changes to the programs being managed or the level of authority being exercised); and The organization has met agreement requirements.

Medium = 2

The recipient (i.e. governing authority) and Management Team or business owner/operator has prior successful experience with this type of project/service agreement; and where larger organizations have had significant turnover over the past two years, they retain certain key members who provide for continuity and stability; or

The recipient (i.e. governing authority) and management team or owner/operator has prior experience with this type of project/service agreement, but has only complied with its requirements after follow-up activities by the department/agency to avoid default; or This organization has not received funding for this type of project service agreement but can provide evidence of its success in other like business lines.

High = 4

The recipient (i.e. governing authority) and Management Team, or business owner/operator has had significant turnover, during the past two years, and few members remain to provide for continuity and stability (i.e. the organization continues on in name only); or

The recipient (i.e. governing authority) and management team or business owner/operator has prior experience with this type of project/service agreement, but defaults have occurred; or This is a new organization or an organization with no experience comparable to this project/service agreement.

Justification for Score
Score (entered on Form B1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Risk Factor: 2. Performance History

Consideration:

Is a stable organization in place with a proven track record in delivering this type of project/service?

Relevance to Management of Funding Agreements:

Organizations over time build the management structures, policies and procedures, business processes, etc. required to respond to client needs.

In a stable environment, the future success of an organization can be inferred from its past successes, or lack thereof. How success is defined varies between organizations, for example:

  • a government/not-for-profit organization can be measured against its success in meeting funding agreement requirements.
  • a for-profit organization can be measured against its return on investment, employment created, contribution to regional infrastructure, etc.
Sources of Information / Evidence:

Applicants/recipients:

  • Demonstration of capacity within application
  • Reference checks based upon application
  • Annual reports
Benchmarks

Benchmarks were developed for the following (please refer to the following links):

Low = 0

If a not-for-profit organization:
Is known to have strong project service delivery capacity, as demonstrated by:

  • past perfromance; and
  • the scope and depth of service delivery capacity is in place to meet current requirements (technical capacity).

If a for-profit organization:
The business has been:

  • in operation for more than 5-years; and
  • its average earnings have been excellent.
Medium = 2

If a not-for-profit organization:
The quality of service delivery provided has varied and the organization is still seeking to establish the scope and breadth of capacity required to produce consistent results.

If a for-profit organization:
Business has been:

  • in operation for 1-3 years and average earnings have been adequate; or
  • non-substantive losses have occurred.or;
  • financial projections identify average earnings over the next 3-years.
High = 4

If a not-for-profit organization:
The quality of service delivery provided by the organization has been consistently poor or in decline. Clear gaps in capacity exist, and the organization has not taken measures to correct them.

If a for-profit organization:
The organization has recently incurred, or is projected to incur significant financial losses.

Justification for Score
Score (entered on Form B1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Risk Factor: 3. Financial Stability

Consideration:

Is the organization in a stable financial position?

Relevance to management of funding agreements:

The organization maintains a balance between revenues and expenditures such that it is well positioned to meet its financial obligations in the short and long terms.

Three primary indicators are considered when assessing financial position (reference the department/agency's draft Directive on Funding):

  • Liquidity Ratio (threshold: 0.90) – a measure of whether bills can be paid over the coming year;
  • Sustainability (Net Debt) Ratio: (0.60) – a measure of whether obligations can be met beyond 1 year;
  • Working Capital Ratio (threshold: 0.80) – a measures of whether this months bills for service delivery can be paid.
Sources of Information / Evidence:
  • Liquidity Ratio (threshold: 0.90) – a measure of whether bills can be paid over the coming year;
  • Sustainability (Net Debt) Ratio: (0.60) – a measure of whether obligations can be met beyond 1 year;
  • Working Capital Ratio (threshold: 0.80) – a measures of whether this months bills for service delivery can be paid.
Benchmarks

Benchmarks were developed for the following (please refer to the following links):

Low = 0

The organization is in a sound financial positioned as evidenced by it:

  • being able to meet its current obligations from current revenues;
  • having a revenue source to offset long term debts;
  • being subject to few recoveries at year-end due to compliance.
  • having financial certification with an association agreed to by the funding department / agency (i.e. FNFMB, ISO), verified current and in good standing.
Medium = 2

The organization is experiencing difficulty in maintaining a sound financial position, as evidenced by it:

  • being at the financial ratio threshold for default management (i.e. being able to meet its current obligations but facing increasing debt levels which threaten its continued ability to do so);
  • being subject to some year-end recoveries for non-compliance which can be offset by current revenues.
High

The organization is in a poor financial position as evidence by it:

  • being unable to present its financial position (e.g. denied or adverse opinion of financial statements);
  • not being able to meet its current obligations and service its long-term debt;
  • being dependent on emergency cheque issues and lines of credit;
  • being often subject to year-end recoveries for non-compliance that cannot be offset with current revenues.
Justification for Score
>Consideration Score (entered on Form A1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Risk Factor: 4. Planning and Project Complexity

Consideration:

Is a credible and comprehensive project/service delivery plan in place – relative to the risk to be managed?

Relevance to management of funding agreements:

The department/agency enters into agreements to support projects of varying levels of complexity. These may be large, innovative ventures involving many unknowns or very simple transactions. The plan should be appropriate to the level of complexity to be managed – and the plan itself should be no more complex than needed to get the work done in order to meet the Terms and Conditions of the funding agreement.

A variety of formal planning processes may be applied in accordance with program authorities; for example:

  • plans for major community initiatives;
  • business plans for business ventures;
  • proposals for academic research.

Where such plans are in place they inform the GA (i.e. there is no requirement to prepare additional planning documents)

Where the style of these plans is not prescribed, they should include:

  • a credible project plan, scaled to complexity, with a well defined and thorough description of the processes and methodologies through which project / service delivery will be achieved (includes considerations for human resources, physical assets, conditional contracts, etc.);
  • an exploratory risk analysis, detailing expected risks, risk tolerances and mitigation strategies;
  • clear milestones supporting the timely identification of variations from plan so they can be corrected.
Best practice:

Risk mitigation measures are used to reduce the potential for events with material negative outcomes to occur, and thus allow project/service delivery to proceed within risk tolerances. One may consider, is the project/service:

  • Simple vs. Complex
  • Routine vs. Innovative
  • Short Term vs. Long Term
  • Single vs. Multiple Service Providers
  • Low vs. High Time Sensitivity
  • Well Defined / Certain vs. Continuously Changing as Project Progresses
  • Low vs. High Publicly Sensitivity (health and safety, legal, political, environmental)
  • Single Source Funded vs. Multiple Stakeholders
  • Potential impact on other program / service obligations of importance to the department/agency or to the service population
Sources of Information / Evidence:

For applicants/recipients:

  • Detailed project, business plan or work plan
Benchmarks

Benchmarks were developed for the following (please refer to the following links):

Low = 0

The organization has provided a credible project/service delivery plan that includes concrete benchmarks and timelines and;

The organization has done exploratory risk analysis appropriate to the level of complexity typically associated with the type/scale of the project/service. Projected risks are measured, mitigated, and lie within the department/agency's risk tolerance;

The project is not large relative to the budget of the funding program or the funded organization, and its failure or potential cost overruns should be manageable by either party.

Medium = 2

The project/service delivery plan as provided by the organization has some gaps (e.g. benchmarks and timelines are rough; lacking conditional contracts) which may cause difficulty during implementation.

The organization has done some exploratory risk analysis for the project/service however gaps still exist within either its risk analysis or its mitigation strategies; or

The project is large relative to the budget of the funding program or the funded organization, such that its failure or the potential for cost overruns could:

  • require the funding agency and recipient to re-profile their current-year budgets and work plans; and
  • result in disruption, delays or gaps in to public services.
High

The project/service delivery plan as provided by the organization could not be implemented in its current form.

Benchmarks and timelines are ill-defined or non existent or;

The organization has not done exploratory risk analysis for the project/service – such that substantial unmitigated risks may exist and pose a threat to project/service delivery capacity; or

The project is very large relative to the budget of the funding program or the funded organization, such that its failure or the potential for cost overruns could:

  • have significant negative impacts on the planned activities of the funding program; or
  • result in:
    • an important goal or objective not being achieved;
    • the funded organization becoming insolvent;
  • or have significant negative impacts on other public services for which the organization is funded.
Justification for Score
Score (entered on Form B1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Risk Factor: 5. Other Considerations (if applicable)

Consideration:

Other relevant considerations may be brought into the analysis provided they are documented (Note: These should be predefined and may be stored within GCIMS and pulled down as required).

Relevance to management of funding agreements:

Other relevant considerations may be brought into the analysis provided they are documented.

For example, for economic development projects:

  • the cyclical nature of the economic sector upon which impacts the organization;
  • the level of competition in the market within which the organization operates / competes.
Sources of Information / Evidence:
  • Trade Associations Publications
  • Statistics Canada
Benchmarks

Benchmarks were developed for the following (please refer to the following links):

Low = 0

 

Medium = 2

 

High

 

Justification for Score
Score (entered on Form B1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Annex B – Part B

For use with Aboriginal Business Development Program Project Specific Agreements

Breakdown of Risk Factors and Considerations

Risk Factor 1: Governance

Consideration:

Is there a strong oversight function to ensure agreement requirements are met?

Relevance to Management of Funding Agreements:

The department/agency enters into agreements with many types of recipients, from large complex organizations with accountability relationships with the public or private shareholders, to small, simple organizations. For example, from large hierarchal organizations with Boards/Councils, (which may be governmental, non-governmental or for-profit entities); to sole proprietorships with no employees (owner/operator).

Depending on the organizational form, who is responsible to ensure agreement requirements are met will vary. In large complex organizations the Board/Council signs the agreement and ensures that the organization meets its obligations – but does not engage in operations. In contrast, in a small simple organization, the owner/operator may assume all these roles.

Best Practice:

Success of a project/service delivery is highly contingent on the management of the organization. Features contributing to success may be:

  • an experienced Board/Council (to oversee management of the agreement) and management team (to manage the project/services), or experienced owner/operator to perform all these functions; does recipient have the capacity to enter into and manage a federal government agreement
  • a solid track record with this type of agreement
  • the Board/Council or owner/operator having taken action to prevent any past deficiencies from recurring
Sources of Information / Evidence:
For New Applicants:
  • demonstration of capacity within application
  • reference checks based upon application
  • business plan, recipient interviews, consultations with other stakeholders
For Existing recipients for whom a current GA – Part A exists
  • apply GA – Part A score
For Existing recipients where no current GA – Part A exists
  • FNITP prior year's records or;
  • advice from other federal or provincial departments
  • business plan, recipient interviews, consultations with other stakeholders
Benchmarks
Low = 0
  • GA Part A, if done, rates the organization "Low"; or;
  • The Board/Council and Management Team or business owner/operator has two years experience in managing this type of project/service agreement (i.e. there are no significant changes to the programs being managed or the level of authority being exercised); and
  • The organization has met agreement requirements;

If a for-profit entity:

Direct experience with managing 4 or more funding arragements. No issues of compliance have occurred.

Medium Low = 1

If a for-profit entity:

Direct experience with managing 2 or 3 funding arrangments. No issues of compliance have occurred OR the recipient possesses substantive management skills necessary to manage a funding agreement.

Medium = 2
  • The Board/Council and Management Team or business owner/operator has prior successful experience with this type of project/service agreement; and
  • where larger organizations have had significant turnover over the past two years, they retain certain key members who provide for continuity and stability; or
  • The Board/Council and management team or owner/operator has prior experience with this type of project/service agreement, but has only complied with its requirements after follow-up activities by AANDC to avoid default; or
  • This organization has not received funding for this type of project service agreement but can provide evidence of its success in other like business lines.

If a for-profit entity:

Direct experirence with managing 1 funding arrangment OR some or a minor issue(s) of non-compliance has occurred OR the recipient possesses adequate skills necessary to manage a funding agreement.

Medium High = 3

If a for-profit entity:

No experience in managing a funding agreement and management skills maybe deficient OR a moderate issue of non-compliance has occurred.

High = 4
  • GA Part A, if done, rates the organization "High"; or
  • The Board/Council and Management Team, or business owner/operator has had significant turnover, during the past two years, and few members remain to provide for continuity and stability (i.e. the organization continues on in name only); or
  • The Board/Council and management team or business owner/operator has prior experience with this type of project/service agreement, but defaults have occurred; or
  • This is a new organization or an organization with no experience comparable to this project/service agreement.

If a for-profit entity:

No experience in managing a funding agreement and management skills are deficient OR several moderate to high issues of non-compliance have occurred.

Risk Factor 2: Performance History

Consideration:

Is a stable organization in place with a proven track record in delivering this type of project/service?

Relevance to Management of Funding Agreements:

Organizations over time build the management structures, policies and procedures, business processes, etc required to respond to client needs.

In a stable environment, the future success of an organization can be inferred from its past successes, or lack thereof. How success is defined varies between organizations, for example:

  • a government/not-for-profit organization can be measured against its success in meeting funding agreement requirements.
  • a for-profit organization can be measured against its return on investment, employment created, contribution to regional infrastructure, etc.
  • does management have the experience and drive to ensure successful operation of the business
Sources of Information / Evidence:
For New Applicants:
  • demonstration of capacity within application
  • reference checks based upon application
  • business plan, recipient interviews, consultations with other stakeholders
For Existing recipients:
  • annual reports
  • business plan, recipient interviews, consultations with other stakeholders
Benchmarks
Low = 0

If a not-for-profit organization:

Is known to have strong project service delivery capacity, as demonstrated by:

  • past perfromance; and
  • the scope and depth of service delivery capacity is in place to meet current requirements (technical capacity).

If a for-profit entity:

3-5 years of substantive management experience and unquestionable ability OR 3-5 years of positive earnings. 3-5 years of financial statements are on file.

Medium Low = 1

If a for-profit entity:

1-3 years of substantive management experience, good track record OR 1-3 years of positive earnings. 1-3 years of financial statements are on file.

Medium = 2

If a not-for-profit organization:

The quality of service delivery provided has varied and the organization is still seeking to establish the scope and breadth of capacity required to produce consistent results.

If a for-profit entity:

Management is considered adequate, may rely on outside professional advice to assist with business or technical decision making.

Medium High = 3

If a for-profit entity:

Management lacks proven business or technical experience/ability. Must rely on outside professional advice to assist with decision making. Deficiencies may cause business to struggle.

High = 4

If a not-for-profit organization:

The quality of service delivery provided by the organzation has been consistently poor or in decline. Clear gaps in capacity exist, and the organization has not taken measure to correct them.

If a for-profit entity:

No management experience, lack of technical and buisness decision making skills to succeed. Poor performance likley.

Risk Factor 3: Financial Stability

Consideration:

Is the organization in a stable financial position?

Relevance to Management of Funding Agreements:

The organization maintains a balance between revenues and expenditures such that it is well positioned to meet its financial obligations in the short and long terms.

AANDC considers three primary indicators when assessing financial position (reference AANDC draft Directive on Funding):

  • Liquidity Ratio (threshold: 0.90) – a measure of whether bills can be paid over the coming year
  • Sustainability (Net Debt) Ratio: (0.60) – a measure of whether obligations can be met beyond 1 year
  • Working Capital Ratio (threshold : 0.80) – a measures of whether this months bills for service delivery can be paid

If a for profit entity,

  • What is the recipient's credit rating?
  • Is the recipient's (business) equity over leveraged compared to its sector average?
  • Are the recipient's (business) current assets able to meet its current liabilities. Current ratio (including current portion of long term debt).
  • Ratio analysis should reflect the planned activities of the business (projected financial statements).
Sources of Information / Evidence:
  • Annual audited financial statement or other type of return as required by AANDC's Year-end Reporting Handbook
  • Result of AANDC's annual audit review process
  • Business Plan, Historical and Pro-forma Financial Statements
Benchmarks
Low = 0

The organization is in a sound financial positioned as evidenced by it:

  • being able to meet its current obligations from current revenues;
  • having a revenue source to offset long term debts
  • being subject to few recoveries at year-end due to compliance

If a for-profit entity:

Credit Rating
Excellent rating, no late payments OR Credit Score: 720  – 850, qualifies for best fiancing terms. (Equifax)

Debt/Equity Ratio
Low level of debt to equity ratio less than 1:1

Current Ratio
Current ratio greater than 3 to 1.

Medium Low = 1

If a for-profit entity:

Credit Rating
Good credit rating, few late payments OR Credit Score: 700 – 719, qualifies for favourabloe financing terms. (Equifax)

Debt/Equity Ratio
Level of debt lower than industry averages or between 1:1 and 1.5:1

Current Ratio
Current ratio between 2 and 3 to 1.

Medium = 2

The organization is experiencing difficulty in maintaining a sound financial position, as evidenced by it:

  • being at AANDC's financial ratio threshold for default management (i.e. being able to meet its current obligations but facing increasing debt levels which threaten its continued ability to do so)
  • being subject to some year-end recoveries for non-compliance which can be offset by current revenues

If a for-profit entity:

Credit Rating
Adequate credit rating, some late payments OR Credit Score: 675 – 699, will qualify for most loans. (Equifax)

Debt/Equity Ratio
Level of debt at industry averages or between 1:5 and 2:1

Current Ratio
Current ratio between 1 and 2 to 1.

Medium High = 3

If a for-profit entity:

Credit Rating
Poor credit rating, late payments common OR Credit Score: 620 – 674, may have trouble getting loan. (Equifax)

Debt/Equity Ratio
Debt is slightly above industry averages debt to equity ratio 2.5:1 and 3.5:1

Current Ratio
Current ratio between .75 and 1 to 1.

High = 4

The organization is in a poor financial position as evidence by it:

  • being unable to present its financial position (e.g. denied or adverse opinion of financial statements)
  • not being able to meet its current obligations and service its long-term debt;
  • being dependent on emergency cheque issues and lines of credit
  • being often subject to year-end recoveries for non-compliance that cannot be offset with current revenues

If a for-profit entity:

Credit Rating
Bad credit rating, numerous late payments, unresolved debts OR Credit Score: 619 or less, needs to improve rating. (Equifax)

Debt/Equity Ratio
Debt exceeds indutry standards for debt equity ratio of 3.5:1 OR no financial statements provided.

Current Ratio
Current ratio less than .75:1 OR no financial statements provided.

Risk Factor 4: Planning and Project Complexity

Consideration:

Is a credible and comprehensive project/service delivery plan in place – relative to the risk to be managed?

Relevance to Management of Funding Agreements:

AANDC enters into agreements to support projects of varying levels of complexity. These may be large, innovative ventures involving many unknowns or very simple transactions, such as the purchase of a piece of equipment through a retail outlet. The plan should be appropriate to the level of complexity to be managed – and the plan itself should be no more complex than needed to get the work done.

A variety of formal planning processes may be applied in accordance with program authorities; For example:

  • Plans for major community initiatives;
  • Business plans for business ventures;
  • Proposals for academic research;

Where such plans are in place they inform the GA (i.e. there is no requirement to prepare additional planning documents)

Where the style of these plans is not prescribed, they should include:

  • a credible project plan, scaled to complexity, with a well defined and thorough description of the processes and methodologies through which project / service delivery will be achieved (includes considerations for human resources, physical assets, conditional contracts, etc.);
  • an exploratory risk analysis, detailing expected risks, risk tolerances and mitigation strategies;
  • clear milestones supporting the timely identification of variations from plan so they can be corrected;
  • does the business manager/owner possess a business plan/proposal to effectively implement the project.
Best practice:

Risk mitigation measures are used to reduce the potential for events with material negative outcomes to occur, and thus allow project/service delivery to proceed within risk tolerances. One may consider, is the project/service:

  • Simple vs. Complex
  • Routine vs. Innovative
  • Short Term vs. Long Term
  • Single vs. Multiple Service Providers
  • Low vs. High Time Sensitivity
  • Well Defined / Certain vs. Continuously Changing as Project Progresses
  • Low vs. High Publicly Sensitivity (health and safety, legal, political, environmental)
  • Single Source Funded vs. Multiple Stakeholders
  • Potential impact on other program / service obligations of importance to AANDC or to the service population
Sources of Information / Evidence:

For new applicants and existing recipients detailed project or business plan, pro-forma financial statements.

Benchmarks
Low = 0
  • The organization has provided a credible project/service delivery plan that includes concrete benchmarks and timelines, and;
  • The organization has done exploratory risk analysis appropriate to the level of complexity typically associated with the type/ scale of the project/ service. Projected risks are measured, mitigated, and lie within AANDC's risk tolerance;
  • The project is not large relative to the budget of the funding program or the funded organization, and its failure or potential cost overruns should be manageable by either party.

If a for-profit entity:

Management has an excellent business plan to guide its implementation.

Medium Low = 1

If a for-profit entity:

Management has a good business plan to guide its implementation.

Medium = 2
  • The project/ service delivery plan as provided by the organization has some gaps (e.g. benchmarks and timelines are rough; lacking conditional contracts) which may cause difficulty during implementation
  • The organization has done some exploratory risk analysis for the project/service however gaps still exist within either its risk analysis or its mitigation strategies; or
  • The project is large relative to the budget of the funding program or the funded organization, such that its failure or the potential for cost overruns could:
    • require the funding agency and recipient to re-profile their current-year budgets and work plans; and
    • result in disruption, delays or gaps in to public services

If a for-profit entity:

Management has an adequate business plan to guide its implementation.

Medium High = 3

If a for-profit entity:

The business plan only provides minimal guidance for implementing the project.

High = 4
  • The project/service delivery plan as provided by the organization could not be implemented in its current form. Benchmarks and timelines are ill-defined or non existent or;
  • The organization has not done exploratory risk analysis for the project/service – such that substantial unmitigated risks may exist and pose a threat to project/service delivery capacity; or
  • The project is very large relative to the budget of the funding program or the funded organization, such that its failure or the potential for cost overruns could:
    • have significant negative impacts on the planned activities of the funding program or result in:
      • an important goal or objective not being achieved;
      • the funded organization becoming insolvent;
    • or have significant negative impacts on other public services for which the organization is funded

If a for-profit entity:

The business plan provides no guidance for implementing the project or no business plan exists.

Risk Factor 5: Other Considerations – Market Risk

Consideration:

Is the business or entity operating in a competitive market environment?

Relevance to Management of Funding Agreements:

Other relevant considerations may be brought into the analysis provided they are documented.

For example, for economic development projects:

  • the cyclical nature of the economic sector upon which impacts the organization
  • the level of competition in the market within which the organization operates / competes
Sources of Information / Evidence:
  • Trade Associations Publications
  • Statistics Canada
  • Business plan, financial statements, recipient interviews, consultations with other stakeholders
Benchmarks
Low = 0
  • No competition.
  • Diverse customer base.
  • Market stable or growing.
Medium Low = 1
  • Little competition.
  • Diverse customer base.
  • Market stable or growing.
Medium = 2
  • Competition exists; market analysis indicates that market share is available.
  • Market fairly stable but no signs of meaningful growth in next 5 years.
Medium High = 3
  • Numerous competitors exist within the community.
  • Market analysis indicates that the business will need to capture market share from competitors and/or rely on small number of customers.
High = 4
  • Strong competition exists within immediate community.
  • New business – market share unproven.
  • Over-Reliance on 1 to 2 key customers.
Rationale/Justification for Score
Score (entered on General Risk Assessment Scorecard):

 

Mitigation Strategies

Risk Mitigation Consideration Benchmarks
Low Score
= 000-080
Medium Low Score
= 081-160
Medium Score
= 161-240
Medium High Score
= 241-320
High Score
= 321-400
N.B. Risk Mitigation Strategies should take into consideration the judgment and discretion of the Developmental Officer who has knowledge of the recipient, the industry, the region and may be aware of other risk factors that should be taken into account in determining the level monitoring that maybe required.

Repayable contributions over $100,000 will be monitored to coincide with the duration of the control period and must be such as to correspond to the period of repayments that would normally be enacted after last payment is made to the recipient.
The extent to which a recipient (business) has an elevated overall risk score. General mitigation strategies and action plan for a recipient (business) to be identified and communicated to recipient in the legal agreement. Control Period (Business Planning, Support, Advocacy) 6 months 6 months 6 months n/a n/a
Control Period Minimum 3 years is required to ensure adequate performance data is captured to report on program outcomes. 3 years 3 years 5 years 5 years
Business Performance Review Mandatory – to capture required performance data to report on program outcomes. Mandatory Mandatory Mandatory Mandatory
Annual File and Compliance Review * Optional Optional Mandatory Mandatory Mandatory
  Audited or Un-Audited Financial Statements** (Development Officer’s knowledge and discretion will be taken into account to determine the financial statement required.) Capital projects over $150K = Mandatory Capital projects under $150K = Optional Capital projects over $150K = Mandatory Capital projects under $150K = Optional Capital projects over $100K = Mandatory Capital projects under $100K = Optional Capital projects over $75K = Mandatory Capital projects under $75K = Optional Capital projects over $75K = Mandatory Capital projects under $75K = Optional
  Advance Payments Up to 75% Up to 50% Up to 25% n/a n/a
  Site Visit Mandatory at least once during the control period Mandatory at least once during the control period Mandatory at least once during the control period Mandatory at least twice during the control period Mandatory at least twice during the control period
  Mitigation Strategies Optional – May recommend series of mitigation strategies: e.g. complete management training, adoption of records management and/or accounting system, engage a mentor, etc. Optional – May recommend series of mitigation strategies: e.g. complete management training, adoption of records management or accounting system, engage a mentor, etc. Optional – May recommend series of mitigation strategies: e.g. complete management training, adoption of records management and/or accounting system, engage a mentor, etc. Mandatory – Will recommend the appropraite series of mitigation strategies: e.g. complete management training, adoption of records management and/or accounting system, engage a mentor, etc. Mandatory – Will recommend the appropraite series of mitigation strategies: e.g. complete management training, adoption of records management and/or accounting system, engage a mentor, etc.

When a sample of invoices and proofs of payments are required, the following table should be used to determine the appropriate amounts.

Verification Requirements Table

Project Risk Under $100,000 Contribution $100,001 – $500,000 Contribution Over $500,000 Contribution
High Invoices – 50%
Receipts – 30%
Invoices – 60%
Receipts – 40%
Invoices – 75%
Receipts – 50%
Medium – High Invoices – 40%
Receipts – 25%
Invoices – 50%
Receipts – 35%
Invoices – 65%
Receipts – 45%
Medium Invoices – 30%
Receipts – 20%
Invoices – 50%
Receipts – 30%
Invoices – 60%
Receipts – 40%
Medium – Low Invoices – 25%
Receipts – 15%
Invoices – 40%
Receipts – 25%
Invoices – 55%
Receipts – 35%
Low Invoices – 20%
Receipts – 10%
Invoices – 30%
Receipts – 20%
Invoices – 50%
Receipts – 30%

General Business Risk Assessment Scorecard

Risk Scorecard

General Business Risk Low
0
Medium Low
1
Medium
2
Medium High
3
High
4
Weighting Score

Overall Score Legend:

  • 000 – 080 = Low
  • 081 – 160 = Medium – Low
  • 161 – 240 = Medium
  • 241 – 320 = Medium – High
  • 321 – 400 = High
  • Minimum Score = 000
  • Maximum Score = 400
1.0) Governance           10  
2.0) Performance           20  
3.0) Financial Stability              
Credit Rating           10  
Debt/Equity Ratio           10  
Current Ratio           10  
(Total weighting 30) Sub-Total  
4.0) Planning and Project Complexity           15  
5.0) Other Considerations – Market Risk           25  
For Advocacy, business plan projects see page 23. 100  
   
Score  

N.B. All business projects should be assessed by using the General Business workbook and scorecard, the risk to the department is to be assessed on the recipient's ability to operate and maintain a commercially viable business venture.

Business Planning & Support, Advocacy and Research Projects Risk Assessment Scorecard

Risk Scorecard

General Business Risk Low
0
Medium Low
1
Medium
2
Medium High
3
High
4
Weighting Score

Overall Score Legend:

  • 000 – 080 = Low
  • 081 – 160 = Medium – Low
  • 161 – 240 = Medium
  • 241 – 320 = Medium – High
  • 321 – 400 = High
  • Minimum Score = 000
  • Maximum Score = 400
1.0) Governance           20  
2.0) Performance History           20  
3.0) Financial Stability           30  
4.0) Planning and Project Stability           30  
5.0) Other Considerations           0  
 
  100  
Score  

N.B. Advocacy, business plans and research projects should be scored by utilizing general assessment definitions and not business specific definitions. This matrix evaluates the ability of an organization or entity to manage an AANDC funded project.

Annex C – Part B

For use with Aboriginal Financial Institutions and other Business Development Organizations

Breakdown of Risk Factors and Considerations

Risk Factor: 1. Governance

Consideration:

Is there a strong oversight function to ensure agreement requirements are met?

Relevance to Management of Funding Agreements:

AANDC enters into agreements with many types of recipients, from large complex organizations with accountability relationships with the public or shareholders, to small, simple organizations. For example, from large hierarchal organizations with Boards/Councils, (which may be governmental, non-governmental or for-profit entities); to sole proprietorships with no employees (owner/operator).

Depending on the organizational form, who is responsible to ensure agreement requirements are met, will vary. In large complex organizations the Board/Council signs the agreement and ensures that the organization meets its obligations – but does not engage in operations. In contrast, in a small simple organization, the owner/operator may assume all these roles.

Best Practice:

Success of a project/service delivery is highly contingent on the management of the organization. Features contributing to success may be:

  • an experienced Board/Council (to oversee management of the agreement) and management team (to manage the project/services), or experienced owner/operator to perform all these functions;
  • a solid track record with this type of agreement
  • the Board/Council or owner/operator having taken action to prevent any past deficiencies from recurring
  • The Board understands its role and responsibilities and exercises effective oversight over the management.
Aboriginal Financial Institutions and other Business Development Organizations:

In the context of Aboriginal Financial Institutions and other Business Development Organizations, the evaluation of this risk factor should be based on the following best practices.

  1. Management framework: the board of directors exerts appropriate control over the organization.
  2. Quality and experience of the Board: Board members have appropriate mix of experience and skill set required by the organization.
  3. The board takes appropriate interest by contributing board activities: The board appropriately oversees management performance by monitoring the performance of the management team.
  4. Political Interference: There is no inappropriate political influence at the board level overseeing the institution and conflict of interest policies are respected.
  5. Quality/background of management team: Management possess appropriate experience, skill set, and has a clear vision for the organization. Management has had a positive impact on the operations and performance of the organization.
  6. Quality of Administration: documented policies and procedures manuals/guidelines are being utilized and respected. In addition, management exercises proper due diligence and delegated authority for equity contribution, procurement, loan approvals and loan documentations are always respected.
Sources of Information / Evidence:

For New Applicants:

  • demonstration of capacity within application
  • reference checks based upon application

For Existing recipients for whom a current GA – Part A exists

  • apply GA – Part A score

For Existing recipients where no current GA – Part A exists

  • FNITP prior year's records or;
  • advice from other federal or provincial departments; or
  • the following specific source of information and consideration as identified by the program:
    • Management framework (Control Exerted by the Board):
      • Discussion with management and other stakeholders
      • Excessive costs relating to Director's meetings and administration
    • Quality and experience of the Board:
      • Reference to Board minutes to determine formality, quality and degree of information discussed at meetings.
      • Resumes & biographies
      • Policy & Procedures manual for the board outlining – appointments, conflict of interest, delegation of authority, skills & experiences, roles & responsibilities, etc.
    • Performance monitoring of management by the Board:
      • Reference to Board minutes
      • Organizational charts including reporting lines
      • Quality of strategic Planning, policy, and procedures development and Budgeting
      • Existence of a strategic plan and budgeting process
      • Is there a management performance plan and targets?
      • Quality of Policy and Procedures manual and evidence of timely updates
    • Political influence:
      • Discussion with management and staff
      • Review conflict of interest guidelines to determine if process followed
    • Quality/background of management team
      • Resume of GM
      • Track record of performance by reference to operational and financial data
      • Strategic and budget plans for the organization
      • Stability of Staff
    • Quality of administration :
      • Review of P&P manual and updates
      • Review of loan and project files to ensure proper procedures are followed
      • Review of external reports for evidence of any weaknesses
Benchmarks
Low = 0

The Board/Council and Management Team or business owner/operator has two years experience in managing this type of project/service agreement (i.e. there are no significant changes to the programs being managed or the level of authority being exercised); and the organization has met agreement requirements;

Additional and specific benchmarks for AFIs and other Business Development Organizations

No more than two of the specific factors are rated as medium and none of the factors are rated as high.

Medium = 2

GA Part A, if done, rates the organization "Medium"; or

The Board/Council and Management Team or business owner /operator has prior successful experience with this type of project/service agreement; and where larger organizations have had significant turnover over the past two years, they retain certain key members who provide for continuity and stability; or

The Board/Council and management team or owner/operator has prior experience with this type of project/service agreement, but has only complied with its requirements after follow-up activities by AANDC to avoid default; or This organization has not received funding for this type of project service agreement but can provide evidence of its success in other like business lines.

At least three of the specific factors are rated as medium or no more than one of the factors are rated as high.

High = 4

The Board/Council and Management Team, or business owner/operator has had significant turnover, during the past two years, and few members remain to provide for continuity and stability (i.e. the organization continues on in name only); or

The Board/Council and management team or business owner/operator has prior experience with this type of project/service agreement, but defaults have occurred; or This is a new organization or an organization with no experience comparable to this project/service agreement.

At least two of the specific factors are rated as high.

Evaluation guide for AFI specific benchmarks
Low
  1. There is minimal involvement by the board in the day to day operations and management. There is evidence the board regularly participates in the annual strategic planning, performance & budgeting exercise. The board regularly reviews and amends policies and procedures.
  2. There is evidence all or most board members participate and take an interest in board activities while understanding their roles and responsibilities. There is regional and Aboriginal heritage representation and a good cross section of professional representation on the board (legal, accounting, etc.)
  3. There is evidence that the board regularly reviews management and organizational performance and regularly receives and reviews management updates, financial statements, budgets, loan & performance reports, etc.
  4. There is no evidence of political influence at the board level. There is a regular review of the conflict of interest policy
  5. There is evidence of good management skills and relevant experience in finance, marketing, banking and/or business administration. There is strong evidence of a good vision and planning skills. Management has had a positive impact on operations and performance.
  6. There is evidence that documented policies and procedures for lending are being utilized and there is a well defined application process. Proper due diligence is always exercised, delegated authorities are respected and loan documentations are secure, organized, and complete.
Medium
  1. There is some degree of involvement by the board in day to day operations and management. There is some evidence the board regularly participates in the annual strategic planning, performance & budgeting exercise Sometimes reviews and amends policies and procedures.
  2. There is evidence some board members participate and take an interest in board activities while understanding their roles and responsibilities. There is some regional and Aboriginal heritage representation and a cross section of professional representation on the board (legal, accounting, etc.)
  3. There is some evidence the board reviews management and organizational performance and regularly receives and reviews management updates, financial statements, budgets, loan & performance reports, etc.
  4. There is evidence of some political influence at the board level.
  5. There is some evidence of good management skills and relevant experience in finance, marketing, banking and/or business administration. There is some evidence of a good vision and planning skills. Management sometimes has a positive impact on operations and performance.
  6. There is some evidence of documented policies and procedures for lending and they are being utilized and there is a defined application process. Proper due diligence is sometimes exercised, delegated authorities are often respected and loan documentations are secure, organized, and complete.
High:
  1. There is excessive involvement by the board in the day to day operations and management. There is no evidence that the board regularly participates in the annual strategic planning, performance & budgeting exercise. The board does not review and amend policies and procedures.
  2. There is evidence that most board members do not participate and take an interest in board activities and understanding of their roles and responsibilities is limited. There is little or no regional and Aboriginal heritage representation and little or no professional representation on the board (legal, accounting, etc.)
  3. There is evidence that the board does not regularly review management and organizational performance and does not regularly receive and review management updates, financial statements, budgets, loan & performance reports, etc.
  4. There is evidence of ongoing and excessive political influence at the board level. There is no regular review of the conflict of interest policy.
  5. There is evidence of poor management skills and lack of relevant experience in finance, marketing, banking and/or business administration. There is little or no evidence of a good vision and planning skills. Management has not had a positive impact on operations and performance.
  6. There is little or no evidence of documented policies and procedures for lending and they are being utilized. There is no defined application process. Proper due diligence is seldom exercised, delegated authorities are often not respected and loan documentation is not secure, organized, nor complete
Justification for Score
Score (entered on Form B1):

 

(Required for Medium / High Risk Ratings)

 

Risk Factor: 2. Performance History (non-Financial)

Consideration:

Is a stable organization in place with a proven track record in delivering this type of project/service?

Relevance to Management of Funding Agreements:

Organizations over time build the management structures, policies and procedures, business processes, etc required to respond to client needs.

In a stable environment, the future success of an organization can be inferred from its past successes, or lack thereof. How success is defined varies between organizations, for example:

  • a government/not-for-profit organization can be measured against its success in meeting funding agreement requirements.
  • a for-profit organization can be measured against its return on investment, employment created, contribution to regional infrastructure, etc.
Aboriginal Financial Institutions and other Business Development Organizations:

Future success of the organization is heavily dependent on the quality of the management, staff and past performance history of the organization.

In the context of Aboriginal Financial Institutions and other Business Development Organizations, the evaluation of this risk factor should be based on the following best practices. Note that all factors may not apply.

  1. Adequacy and skill Level of staff: The organization has adequate staff members that possess the necessary skills and training to perform their duties.
  2. Familiarity with agreement (past contribution agreement with AANDC): There are no compliance issues or problems regarding the management of past funding agreements with the organization.
  3. Compliance with policies and procedures: Organization (staff and management) respects and is in compliant in its own policies and procedures.
  4. Historical performance: The organization has or exceeded established performance targets and annual reviews are undertaken and action plans implemented.
  5. Cost per case (for Third-Party Delivery Performance – ASDs and XDO's only): Cost per case is reasonable. Average cost per case of $13,000 or less is considered to be good performance.
Sources of Information / Evidence:

For New Applicants:

  • demonstration of capacity within application
  • reference checks based upon application

For Existing recipients:

  • annual reports
  • the following specific source of information and consideration as identified by the program:
    • Adequacy and skill Level of staff
      • Stability of staff
      • Staff possesses the skills and experiences to complete their duties.
      • The volume of loan activity-equity contributions vs. size of staff
      • Are there any unnecessary positions?
    • Familiarity with agreement (past contribution agreement with AANDC):
      • Are there any outstanding issues of non-compliance within arrangements, compliance reviews, on-site monitoring visits, external third party reviews, etc?
      • Level of communication with the client
      • Is requested information provided in an open and timely fashion?
      • Overall fulfillment of existing and past agreements
    • Historical performance
      • Compare budgets to actual performance per audited financial statements
      • Quality of performance target and established system of performance review.
    • Compliance with policies and procedures
      • Is there an up to date policies and procedures manual?
      • Are loans and equity contributions made in compliance with P&P's manual?
      • Quality Assurance Review of loan and equity files.
      • Evidence of any self-dealings in loan files, financial statements incomplete, etc.
      • Board minutes would suggest non-compliance
    • Cost per case (for Third-Party Delivery Performance – ASDs and XDO's only)
      • Total Operating Costs/ [Total capital contracts + (0.5 x total stand-alone marketing contracts)]
      • Past AFI Evaluations and Cost-Effectiveness Reviews of Third Party Service Delivery.
Benchmarks
Low = 0

If a not-for-profit organization:
Is known to have strong project service delivery capacity, as demonstrated by:

  • past perfromance; and
  • the scope and depth of service delivery capacity is in place to meet current requirements (technical capacity).

If a for-profit organization:
The business has been:

  • in operation for more than 5-years; and
  • its average earnings have been excellent.

Additional and specific benchmarks for AFIs and other Business Development Organizations

No more than two of the specific factors are rated as medium and none of the factors are rated as high.

Medium = 2

If a not-for-profit organization:
The quality of service delivery provided has varied and the organization is still seeking to establish the scope and breadth of capacity required to produce consistent results.

If a for-profit organization:
Business has been:

  • in operation for 1-3 years and average earnings have been adequate. or;
  • non-substantive losses have occurred. or;
  • financial projections identify average earnings over the next 3-years.

At least three of the specific factors are rated as medium or no more than one of the factors are rated as high.

High = 4

If a not-for-profit organization:
The quality of service delivery provided by the organization has been consistently poor or in decline. Clear gaps in capacity exist, and the organization has not taken measure to correct them.

If a for-profit organization:
The organization has recently incurred, or is projected to incur significant financial losses.

At least two of the specific factors are rated as high.

Evaluation guide for AFI specific benchmarks
Low
  1. The organization has met or exceeded established performance targets, annual review undertaken and action plan implemented.
  2. There are no concerns about compliance with legal arrangement and accountability accord.
  3. All staff is diligent and possesses necessary skills to perform their duties. The staff complement (size) is appropriate for the operation.
  4. The organization and staff respect established policies and procedures.
  5. $13,000 or less. This is considered to be good performance
Medium
  1. The organization generally meets established performance targets and sometimes reviews are undertaken or action plans implemented.
  2. There are some issues in terms of compliance with legal arrangement and accountability accord.
  3. Most of the staff possesses necessary skills to perform their duties. The staff complement (size) is appropriate for the operation.
  4. The organization and staff sometime respect established policies and procedures.
  5. Between $13,001 and $18,001 This is considered to be fair performance
High
  1. The organization has not met established performance targets or review undertaken.
  2. There are serious issues concerning the compliance with legal arrangement and accountability accord.
  3. Most of the staff does not possess necessary skills to perform their duties. The staff complement (size) is not appropriate for the operation.
  4. The organization seldom respects established policies and procedures.
  5. $18,001 or greater. This is considered to be poor performance.
Justification for Score
Score:

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Risk Factor: 3. Financial Stability

Consideration:

Is the organization in a stable financial position? Does the organization have adequate financial controls and systems?

Relevance to Management of Funding Agreements:

The organization maintains a balance between revenues and expenditures such that it is well positioned to meet its financial obligations in the short and long terms.

AANDC considers three primary indicators when assessing financial position (reference AANDC draft Directive on Funding):

  • Liquidity Ratio (threshold: 0.90) – a measure of whether bills can be paid over the coming year
  • Sustainability (Net Debt) Ratio: (0.60) – a measure of whether obligations can be met beyond 1 year
  • Working Capital Ratio (threshold : 0.80) – a measures of whether this month's bills for service delivery can be paid
Aboriginal Financial Institutions and Other Business Development Organizations:

Future success of financial institutions is heavily dependent on the quality of accounting system, loan collection, and adequate revenue from loans and adequate loan loss allowances. Note all factors may not apply.

In the context of Aboriginal Financial Institutions and other Business Development Organizations, the evaluation of this risk factor should be based on the following best practices.

  1. Adequacy of accounting & Management Information Systems: The organization possesses appropriate accounting and management systems, hardware and software and staff are familiar with the use of the systems.
  2. Quality of loan collection process: The organization has a well defined loan collection process and no evidence of effort to mask delinquency problems.
  3. Profitability/Break-even/Loss: Organization is profitable or near breakeven and losses for loan portfolio are reasonable.
  4. Yield on loan portfolio: The yield on the loan portfolio is equal or higher than that of the AFI network and interest rate for loans is set at a reasonable rate for developmental lending and is comparable to other similar AFIs.
  5. Adequacy of allowance for loan losses: Loan losses are adequately covered by allowances.
Sources of Information / Evidence:
  • Annual audited financial statement or other type of return as required by AANDC's Year-end Reporting Handbook
  • Result of AANDC's annual audit review process
  • the following specific source of information and consideration as identified by the program:
    • Adequacy of accounting & Management Information Systems
      • Review management reports and other output from systems in place
      • Reconcile ledger amounts in financial statements
      • Is information current?
      • Can reports be produced on a timely basis?
      • Is the system adequate for the volume of business?
      • Operational and quarterly reports are received on time?
      • Are year-end audit costs excessive for the size of the organization?
    • Quality of loan collection process
      • Reviews of delinquent loans and the process for collection. Are they being pursued in an active and timely fashion?
    • Profitability/Break-even/Loss
      • Financial statement analysis
      • Look at 5 year averages as single year activity might represent exceptions
    • Yield on loan portfolio
      • Compare organizations yield with averages prepared by NACCA
      • Review interest rate policy and determine whether it is reasonable in the developmental lending environment
      • Is there evidence of concessionary rates being offered?
    • Adequacy of allowance for loan losses
      • Compare the level of delinquencies with the loan loss provision account
      • Check the Policy on write-offs and determine if it is being followed i.e. Are non-performing accounts being written off?
      • Are reviews conducted of delinquent accounts on a regular basis and action documented?
Benchmarks
Low = 0

The organization is in a sound financial positioned as evidenced by it:

  • being able to meet its current obligations from current revenues;
  • having a revenue source to offset long term debts
  • being subject to few recoveries at year-end due to compliance

Additional and specific benchmarks for AFIsFootnote 2

No more than two of the specific factors are rated as medium and none of the factors are rated as high or rises to level that could have serious negative impact on the performance of the organization.

Medium = 2

The organization is experiencing difficulty in maintaining a sound financial position, as evidenced by it:

  • being at AANDC's financial ratio threshold for default management (i.e. being able to meet its current obligations but facing increasing debt levels which threaten its continued ability to do so)
  • being subject to some year-end recoveries for non-compliance which can be offset by current revenues

At least three of the specific factors are rated as medium or no more than one of the factors are rated as high.

For organizations that do not provide loans, Adequacy of Accounting and Management Information System is rates medium.

High = 4

The organization is in a poor financial position as evidence by it:

  • being unable to present its financial position (e.g. denied or adverse opinion of financial statements)
  • not being able to meet its current obligations and service its long-term debt;
  • being dependent on emergency cheque issues and lines of credit
  • being often subject to year-end recoveries for non-compliance that cannot be offset with current revenues

At least two of the specific factors are rated as high.

For organizations that do not provide loans, Adequacy of Accounting and Management Information System is rates medium.

Evaluation guide for AFI specific benchmarks
Low
  1. There is an excellent accounting and management systems, hardware and software and staff are familiar with the systems. There is evidence of adequate security and management over files and documents.
  2. There is evidence of a well defined loan collection process and no evidence of refinancing to mask delinquency problems. The board supports an active collection process.
  3. The operations are profitable or near breakeven. Losses for loan portfolio are 5% or less.
  4. The yield on the loan portfolio is consistent or higher than the results of the AFI network. The interest rate for loans is set at a reasonable rate for developmental lending.
  5. The expected loan losses are adequately covered by the allowances. There is a strong and regular annual process of loan write-offs.
Medium
  1. There is an adequate accounting and management systems, hardware and software, and staff are familiar with the systems. There is some evidence of adequate security and management over files and documents.
  2. There is some evidence of a well defined loan collection process and no evidence of refinancing to mask delinquency problems. The board supports an active collection process.
  3. The operations are performing near break-even. Losses for loan portfolio are at 10 – 15%.
  4. The yield on the loan portfolio is consistent with the results of the AFI network. The interest rate for loans is set a level considered to be reasonable for developmental lending.
  5. The expected loan losses are adequately covered by the allowances. There is a marginally effective and regular annual process of loan write-offs.
High
  1. There is evidence of poor accounting and management systems, hardware and software, and staff are familiar with the systems. There is some evidence of adequate security and management over files and documents.
  2. There is no evidence of a well defined loan collection process and evidence of refinancing to mask delinquency problems. The board does not support an active collection process.
  3. The operations are operating at a loss. Losses for loan portfolio are greater than 15%.
  4. The yield on the loan portfolio is below the results of the AFI network. The interest rate for loans is set a level considered to be unreasonable for developmental lending.
  5. The expected loan losses are not adequately covered by the allowances. There is no effective and regular annual process of loan write-offs.
Justification for Score
Consideration Score (entered on Form A1):

 

Specific Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Risk Factor: 4. Planning and Project Complexity

Consideration:

Is a credible and comprehensive project/service delivery plan in place – relative to the risk to be managed?

Relevance to Management of Funding Agreements:

AANDC enters into agreements to support projects of varying levels of complexity. These may be large, innovative ventures involving many unknowns or very simple transactions, such as the purchase of a piece of equipment through a retail outlet. The plan should be appropriate to the level of complexity to be managed – and the plan itself should be no more complex than needed to get the work done.

A variety of formal planning processes may be applied in accordance with program authorities; For example:

  • Plans for major community initiatives;
  • Business plans for business ventures;
  • Proposals for academic research;

Where such plans are in place they inform the GA (i.e. there is no requirement to prepare additional planning documents)

Where the style of these plans is not prescribed, they should include:

  • a credible project plan, scaled to complexity, with a well defined and thorough description of the processes and methodologies through which project / service delivery will be achieved (includes considerations for human resources, physical assets, conditional contracts, etc.);
  • an exploratory risk analysis, detailing expected risks, risk tolerances and mitigation strategies;
  • clear milestones supporting the timely identification of variations from plan so they can be corrected;
Best practice:

Risk mitigation measures are used to reduce the potential for events with material negative outcomes to occur, and thus allow project/service delivery to proceed within risk tolerances. One may consider, is the project/service:

  • Simple vs. Complex
  • Routine vs. Innovative
  • Short Term vs. Long Term
  • Single vs. Multiple Service Providers
  • Low vs. High Time Sensitivity
  • Well Defined / Certain vs. Continuously Changing as Project Progresses
  • Low vs. High Publicly Sensitivity (health and safety, legal, political, environmental)
  • Single Source Funded vs. Multiple Stakeholders
  • Potential impact on other program / service obligations of importance to AANDC or to the service population
Sources of Information / Evidence:

For new applicants and existing recipients detailed project or business plan

Benchmarks
Low = 0

No more than one of the following factors are rated as medium and none of the factors are rated as high.

The organization has provided a credible project/service delivery plan that includes concrete benchmarks and timelines, or;

The organization has done exploratory risk analysis appropriate to the level of complexity typically associated with the type/scale of the project/ service. Projected risks are measured, mitigated, and lie within AANDC's risk tolerance.

The project is not large relative to the budget of the funding program or the funded organization, and its failure or potential cost overruns should be manageable by either party.

Medium = 2

At least two of the following factors are rated as medium or no more than one of the factors are rated as high.

The project/service delivery plan as provided by the organization has some gaps (e.g. benchmarks and timelines are rough; lacking conditional contracts) which may cause difficulty during implementation

The organization has done some exploratory risk analysis for the project/service however gaps still exist within either its risk analysis or its mitigation strategies; or

The project is large relative to the budget of the funding program or the funded organization, such that its failure or the potential for cost overruns could:

  • require the funding agency and recipient to re-profile their current-year budgets and work plans; and
  • result in disruption, delays or gaps in to public services
High = 4

At least two of the following factors are rated as medium or no more than one of the factors are rated as high.

The project/ service delivery plan as provided by the organization could not be implemented in its current form. Benchmarks and timelines are ill-defined or non existent or;

The organization has not done exploratory risk analysis for the project/service – such that substantial unmitigated risks may exist and pose a threat to project/service delivery capacity; or

The project is very large relative to the budget of the funding program or the funded organization, such that its failure or the potential for cost overruns could:

  • have significant negative impacts on the planned activities of the funding program or
  • result in:
    • an important goal or objective not being achieved;
    • the funded organization becoming insolvent;
    • or have significant negative impacts on other public services for which the organization is funded
Justification for Score
Score:

 

Specific Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Risk Factor: 5. Other Considerations: Materiality

Consideration:

Under what market conditions is the institution operating and what marketing activities are undertaken?

Relevance to Management of Funding Agreements:

Other relevant considerations may be brought into the analysis provided they are documented.

For example, for economic development projects:

  • the cyclical nature of the economic sector upon which impacts the organization
  • the level of competition in the market within which the organization operates / competes
Aboriginal Financial Institutions and Other Business Development Organizations:

For Aboriginal Financial Institutions lack of demand for the institutions services including loans present risk to the success of the organization.

In the context of Aboriginal Financial Institutions and other Business development Organizations, the evaluation of this risk factor should be should be based on the following best practices. Note that all factors may not apply.

  1. Promotional Activities: Institution undertakes adequate promotional activities to ensure steady demand for its services
  2. Market demand for loans/equity services: There is adequate, continuous and on-going demand for loans and other services.
  3. Coverage of Market Area: Institution actively solicits clients from all areas within its area/region of coverage.
Sources of Information / Evidence:
  • Trade Associations Publications
  • Statistics Canada
  • the following specific source of information and consideration as identified by the program:
    • Promotional Activities
      • Is there documented evidence of promotional activity – in all forms?
    • Market demand for loans/equity services
      • Reference to historical levels of loan and equity activity for the last 5 year period? What is the expectation for the future?
      • Has a market analysis been done to ensure targets are achievable?
      • Are there any direct competitors that could affect future growth?
    • Coverage of Market Area
      • Review the regional distribution of the organizations loan portfolio and financial services
      • Are all areas and Aboriginal heritage groups being adequately serviced?
      • Are there limitations to areas that can be serviced e.g. Rural/urban vs. remote?
Benchmarks
Low = 0

No more than one of the specific factors are rated as medium and none of the factors are rated as high.

Medium = 2

At least two of the specific factors are rated as medium or no more than one of the factors are rated as high.

High = 4

At least two of the specific factors are rated as high.

Evaluation guide for specific benchmarks
Low
  1. There is evidence the organization undertakes regular promotional and marketing activities.
  2. There is evidence of the continuous and on-going demand for loan and other services.
  3. There is evidence the organization is actively soliciting clients from all areas within its region.
Medium
  1. There is some evidence the organization undertakes regular promotional and marketing activities.
  2. There is some evidence of the continuous and on-going demand for loan and other services.
  3. There is some evidence the organization is actively soliciting clients from all areas within its region
High
  1. There is little or no evidence the organization undertakes regular promotional and marketing activities.
  2. There is little or no evidence of the continuous and on-going demand for loan and other services.
  3. There is no evidence the organization is actively soliciting clients from all areas within its region.
Justification for Score
Score:

 

Specific Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

General Risk Mitigation – Financial Institutions

Risk Mitigation Consideration Benchmarks
LowScore
= 000-135
MediumScore
= 136-265
HighScore
= 265-400
N.B. Risk Mitigation Strategies should take into consideration the judgment and discretion of the Officer who has knowledge of the recipient, the industry, the region and may be aware of other risk factors that should be taken into account in determining the level monitoring that maybe required.* Since the achievement of performance reporting or targets can be influenced by general economic conditions in a region, province or the nation. It is recommended that reporting be conducted quarterly to ensure the department and the recipient are able to make the appropriate adjustment of targets as needed.
The extent to which a recipient (business) has an elevated overall risk score. General mitigation strategies and action plan for a recipient (business) to be identified and communicated to recipient in the legal agreement. Control Period (Business Planning, Support, Advocacy) 6 months 6 months 6 months
Control Period Capital (top-up) project BSO arrangement and other operational projects 5 years Life of the arrangement/project (1-3 years) 5 years Life of the arrangement/project (1-3 years) 5 years Life of the arrangement/project (1-3 years)
Performance Reporting* Quarterly Quarterly Quarterly
Annual File and Compliance Review Optional Optional Mandatory
Audited or Un-Audited Financial Statements (Officer's knowledge and discretion will be taken into account to determine the fiinancial statement required.) Capital projects over $150K = Mandatory Capital projects under $150K = Optional Capital projects over $100K = Mandatory Capital projects under $100K = Optional Capital projects over $75K = Mandatory Capital projects under $75K = Optional
Site Visit Mandatory at least once during the control period Mandatory at least twice per year during the control period Mandatory at least 2–4 times per year during the control period
Mitigation Strategies Optional – May recommend series of mitigation strategies: e.g. complete management training, adoption of records management and/or accounting system, engage a professional advisor, etc. Optional – May recommend series of mitigation strategies: e.g. complete management training, adoption of records management and/or accounting system, engage a professional advisor, etc. Mandatory – Will recommend the appropriate series of mitigation strategies: e.g. complete management training, adoption of records management and/or accounting system, engage a professional advisor, etc.

When a sample of invoices and proofs of payments are required, the following table should be used to determine the appropriate amounts.

Verification Requirements Table

Project Risk Under $100,000 Contribution $100,001 – $500,000 Contribution Over $500,000 Contribution
High Invoices – 50%
Receipts – 30%
Invoices – 60%
Receipts – 40%
Invoices – 75%
Receipts – 50%
Medium Invoices – 30%
Receipts – 20%
Invoices – 50%
Receipts – 30%
Invoices – 60%
Receipts – 40%
Low Invoices – 20%
Receipts – 10%
Invoices – 30%
Receipts – 20%
Invoices – 50%
Receipts – 30%

Annex A – Institutions Risk Assessment Scorecard

General Institutions Risk Low
0
Medium
2
High
4
Weighting Score

Overall Score Legend:

  • 000 – 135 = Low
  • 136 – 265 = Medium
  • 266 – 400 = High
  • Minimum Score = 000
  • Maximum Score = 400
1.0) Governance 0 0 0 20 0
2.0) Performance 0 0 0 20 0
3.0) Financial Stability 0 0 0 30 0
4.0) Planning and Project Complexity 0 0 0 10 0
5.0) Other Considerations – Market Risk 0 0 0 20 0
100  
Score  

Annex D – Part B

For Inuit recipients

Breakdown of Risk Factors and Considerations

For Inuit recipients, equal weights are used by default. When funding is provided by a specific program, adjustments and other considerations may be applied as required by the program.

Risk Factor: 1. Governance

Consideration:

Is there a strong oversight function to ensure agreement requirements are met?

Relevance to Management of Funding Agreements:

AANDC enters into agreements with many types of recipients, from large complex organizations with accountability relationships with the public or shareholders, to small, simple organizations. For example, from large hierarchal organizations with Boards/Councils, (which may be governmental, non-governmental or for-profit entities); to sole proprietorships with no employees (owner/operator).

Depending on the organizational form, who is responsible to ensure agreement requirements are met will vary. In large complex organizations the Board/Council signs the agreement and ensures that the organization meets its obligations – but does not engage in operations. In contrast, in a small simple organization, the owner/operator may assume all these roles.

Best Practice:

Success of a project/service delivery is highly contingent on the management of the organization. Features contributing to success may be:

  • an experienced Board/Council (to oversee management of the agreement) and management team (to manage the project/services), or experienced owner/operator to perform all these functions;
  • a solid track record with this type of agreement
  • the Board/Council or owner/operator having taken action to prevent any past deficiencies from recurring
Inuit-specific considerations:

In the context of Inuit organizations, features contributing to success may be:

  • a Board of Directors structure created or recognized by a land claim agreement;
  • the Board of Directors represents its members: for example, members are elected from each area covered by the organization (such as each community of a region in Inuit Nunangat);
  • there are few vacancies on the Board of Directors;
  • there is transparency of Board of Directors decisions: for example, annual or audit report is available to members;
  • public meetings are held regularly, such as AGM;
  • it is possible to attend meetings by conference call or video, which is especially important for participants from remote areas;
  • there are by-laws that govern the operations of the organization;
Benchmarks
Low = 0

GA Part A, if done, rates the organization "Low" or;

The Board/Council and Management Team or business owner/operator has two years experience in managing this type of project/service agreement (i.e. there are no significant changes to the programs being managed or the level of authority being exercised); and The organization has met agreement requirements;

OR

5 or more Inuit-specific considerations are met;

Medium = 2

GA Part A, if done, rates the organization "Medium"; or

The Board/Council and Management Team or business owner/operator has prior successful experience with this type of project/service agreement; and where larger organizations have had significant turnover over the past two years, they retain certain key members who provide for continuity and stability; or

The Board/Council and management team or owner/operator has prior experience with this type of project/service agreement, but has only complied with its requirements after follow-up activities by AANDC to avoid default; or This organization has not received funding for this type of project service agreement but can provide evidence of its success in other like business lines.

OR

3 or 4 Inuit-specific considerations are met;

High = 4

GA Part A, if done, rates the organization "High"; or

The Board/Council and Management Team, or business owner/operator has had significant turnover, during the past two years, and few members remain to provide for continuity and stability (i.e. the organization continues on in name only); or

The Board/Council and management team or business owner/operator has prior experience with this type of project/service agreement, but defaults have occurred; or This is a new organization or an organization with no experience comparable to this project/service agreement.

OR

Less than 3 Inuit-specific considerations are met;

Justification for Score
Score (entered on Form B1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Risk Factor: 2. Performance History

Consideration:

Is a stable organization in place with a proven track record in delivering this type of project/service?

Relevance to Management of Funding Agreements:

Organizations over time build the management structures, policies and procedures, business processes, etc required to respond to client needs.

In a stable environment, the future success of an organization can be inferred from its past successes, or lack thereof. How success is defined varies between organizations, for example:

  • a government/not-for-profit organization can be measured against its success in meeting funding agreement requirements.
  • a for-profit organization can be measured against its return on investment, employment created, contribution to regional infrastructure, etc.
Inuit-specific considerations:

In the context of Inuit organizations, features contributing to success may be:

  • stability of the executive staff;
  • a track record of financial reporting is found; for example, in corporation tax filings, when the recipient is a registered charitable organization;
  • successful completion of similar projects in the past
Benchmarks
Low = 0

If a not-for-profit organization:
Is known to have strong project service delivery capacity, as demonstrated by:

  • past perfromance; and
  • the scope and depth of service delivery capacity is in place to meet current requirements (technical capacity).

If a for-profit organization:
The business has been:

  • in operation for more than 5-years; and
  • its average earnings have been excellent.

If an Inuit organization:
3 Inuit-specific considerations are met.

Medium = 2

If a not-for-profit organization:
The quality of service delivery provided has varied and the organization is still seeking to establish the scope and breadth of capacity required to produce consistent results.

If a for-profit organization:
Business has been:

  • in operation for 1-3 years and average earnings have been adequate. or;
  • non-substantive losses have occurred.or;
  • financial projections identify average earnings over the next 3-years.

If an Inuit organization:
2 Inuit-specific considerations are met.

High = 4

If a not-for-profit organization:
The quality of service delivery provided by the organzation has been consistently poor or in decline. Clear gaps in capacity exist, and the organization has not taken measure to correct them.

If a for-profit organization:
The organization has recently incurred, or is projected to incur significant financial losses.

If an Inuit organization:
Less than 2 Inuit-specific considerations are met.

Justification for Score
Score (entered on Form B1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Risk Factor: 3. Financial Stability

Consideration:

Is there a strong oversight function to ensure agreement requirements are met?

Relevance to Management of Funding Agreements:

The organization maintains a balance between revenues and expenditures such that it is well positioned to meet its financial obligations in the short and long terms.

AANDC considers three primary indicators when assessing financial position (reference AANDC draft Directive on Funding):

  • Liquidity Ratio (threshold: 0.90) – a measure of whether bills can be paid over the coming year
  • Sustainability (Net Debt) Ratio: (0.60) – a measure of whether obligations can be met beyond 1 year
  • Working Capital Ratio (threshold : 0.80) – a measures of whether this months bills for service delivery can be paid
Inuit-specific considerations:

In the context of Inuit organizations, additional factors may be considered. Features contributing to success may be:

  • a line of credit is provided to the recipient by a bank (to be used if the recipient wishes to share this information);
  • Canadian Generally Accepted Accounting Principles are observed in financial reporting;
  • liquidity ratio is above .90; this ratio is more relevant than other ratios, when the recipient does not deliver essential services;
  • there is a procurement process in place, or a framework or billing mechanism, for sub-contracting (when it is used);
  • the most recent Annual Audited statements are unqualified, and there are no potential risk included in the notes (e.g. pending lawsuits, judgments).
Benchmarks
Low = 0

The organization is in a sound financial positioned as evidenced by it:

  • being able to meet its current obligations from current revenues;
  • having a revenue source to offset long term debts
  • being subject to few recoveries at year-end due to compliance

If an Inuit organization:
4 or more Inuit-specific considerations are met.

Medium = 2

The organization is experiencing difficulty in maintaining a sound financial position, as evidenced by it:

  • being at AANDC's financial ratio threshold for default management (i.e. being able to meet its current obligations but facing increasing debt levels which threaten its continued ability to do so)
  • being subject to some year-end recoveries for non-compliance which can be offset by current revenues

If an Inuit organization:
2 or 3 Inuit-specific considerations are met.

High = 4

The organization is in a poor financial position as evidence by it:

  • being unable to present its financial position (e.g. denied or adverse opinion of financial statements)
  • not being able to meet its current obligations and service its long-term debt;
  • being dependent on emergency cheque issues and lines of credit
  • being often subject to year-end recoveries for non-compliance that cannot be offset with current revenues

If an Inuit organization:
Less than 2 Inuit-specific considerations are met.

Justification for Score
Consideration Score (entered on Form A1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Risk Factor: 4. Planning and Project Complexity

Consideration:

Is a credible and comprehensive project/service delivery plan in place – relative to the risk to be managed?

Relevance to Management of Funding Agreements:

AANDC enters into agreements to support projects of varying levels of complexity. These may be large, innovative ventures involving many unknowns or very simple transactions, such as the purchase of a piece of equipment through a retail outlet. The plan should be appropriate to the level of complexity to be managed – and the plan itself should be no more complex than needed to get the work done.

A variety of formal planning processes may be applied in accordance with program authorities; For example:

  • Plans for major community initiatives;
  • Business plans for business ventures;
  • Proposals for academic research;

Where such plans are in place they inform the GA (i.e. there is no requirement to prepare additional planning documents)

Where the style of these plans is not prescribed, they should include:

  • a credible project plan, scaled to complexity, with a well defined and thorough description of the processes and methodologies through which project / service delivery will be achieved (includes considerations for human resources, physical assets, conditional contracts, etc.);
  • an exploratory risk analysis, detailing expected risks, risk tolerances and mitigation strategies;
  • clear milestones supporting the timely identification of variations from plan so they can be corrected;
Best practice:

Risk mitigation measures are used to reduce the potential for events with material negative outcomes to occur, and thus allow project/service delivery to proceed within risk tolerances. One may consider, is the project/service:

  • Simple vs. Complex
  • Routine vs. Innovative
  • Short Term vs. Long Term
  • Single vs. Multiple Service Providers
  • Low vs. High Time Sensitivity
  • Well Defined / Certain vs. Continuously Changing as Project Progresses
  • Low vs. High Publicly Sensitivity (health and safety, legal, political, environmental)
  • Single Source Funded vs. Multiple Stakeholders
  • Potential impact on other program / service obligations of importance to AANDC or to the service population
Inuit-specific considerations:

In the context of Inuit organizations, features contributing to success may be:

  • A project plan is available: it may be provided in a standalone document; a project plan may be included in an annual operational plan; or may be included in a 3-5 year strategic plan; or the recipient may use a planning tool or other document already available for another purpose (such as CanNor's guide in project planning);
  • Clear milestones are identified in the project plan
  • the size of the organization (staff) is sufficient to undertake the project; Staff have the capacity to work on the project; or
  • the recipient maintains strong oversight, when sub-contracting is used to increase capacity for the project; for example, sub-contracting is only a portion of the project, when it is used (if terms of the contract are shared);
  • There is a clear project lead, especially when sub-contracting is used, and when several funders are involved;
  • the project lead (or a lead for another project with this recipient) communicated regularly with funding program officers in the past;
  • Project costs include issues relevant to the North: administrative costs, geographic distribution (i.e. travel or remote access to meetings) are considered in the plan
Benchmarks
Low = 0

The organization has provided a credible project/service delivery plan that includes concrete benchmarks and timelines and;

The organization has done exploratory risk analysis appropriate to the level of complexity typically associated with the type/scale of the project/service. Projected risks are measured, mitigated, and lie within AANDC's risk tolerance;

The project is not large relative to the budget of the funding program or the funded organization, and its failure or potential cost overruns should be manageable by either party.

If an Inuit organization:
5 or more Inuit-specific considerations are met.

Medium = 2

The project/service delivery plan as provided by the organization has some gaps (e.g. benchmarks and timelines are rough; lacking conditional contracts) which may cause difficulty during implementation

The organization has done some exploratory risk analysis for the project/service however gaps still exist within either its risk analysis or its mitigation strategies; or

The project is large relative to the budget of the funding program or the funded organization, such that its failure or the potential for cost overruns could:

  • require the funding agency and recipient to re-profile their current-year budgets and work plans; and
  • result in disruption, delays or gaps in to public services

If an Inuit organization:
3 or 4 Inuit-specific considerations are met

High = 4

The project/service delivery plan as provided by the organization could not be implemented in its current form. Benchmarks and timelines are ill-defined or non existent or;

The organization has not done exploratory risk analysis for the project/service – such that substantial unmitigated risks may exist and pose a threat to project/service delivery capacity; or

The project is very large relative to the budget of the funding program or the funded organization, such that its failure or the potential for cost overruns could:

  • have significant negative impacts on the planned activities of the funding program or
  • result in:
    • an important goal or objective not being achieved;
    • the funded organization becoming insolvent;
    • or have significant negative impacts on other public services for which the organization is funded

If an Inuit organization:
Less than 3 Inuit-specific considerations are met

Justification for Score
Score (entered on Form B1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Risk Factor: 5. Other Considerations: Materiality

Consideration:

Other relevant considerations may be brought into the analysis provided they are documented (Note: These should be predefined and may be stored within FNITP and pulled down as required)

Relevance to Management of Funding Agreements:

Other relevant considerations may be brought into the analysis provided they are documented.

For example, for economic development projects:

  • the cyclical nature of the economic sector upon which impacts the organization
  • the level of competition in the market within which the organization operates / competes
Inuit-specific considerations:

In the context of Inuit organizations, additional factors may be considered. During discussions with the Inuit Relations Secretariat, Inuit recipients often mentioned that the level of funding required for the project has a major impact on the risk associated with the funding agreement. A greater funding level implies a greater potential impact if problems arise with achievement of objectives and stewardship of funds. Furthermore, as the level of funding increases, the importance of other factors also increases. In this case, features contributing to success may be:

  • materiality: risk involved in a $15K project is smaller than $150K, since the scope of a low-cost project is smaller.
  • relative materiality: the project funds constitute a small portion of the recipient's overall income.
Benchmarks
Low = 0

The project is small relative to the budget of the funded organization, and the funding level is minimal.

If an Inuit organization:
The materiality is less than $100K and represent less than 20% of the recipient's overall income.

Medium = 2

The project is not large relative to the budget of the funded organization, and the funding level is significant.

If an Inuit organization:
The materiality is less than $500K and represent less than 50% of the recipient's overall income.

High = 4

The project is large relative to the budget of the funded organization, or the funding level is important.

If an Inuit organization:
The materiality is more than $500K or represent more than 50% of the recipient's overall income.

Justification for Score
Score (entered on Form B1):

 

Mitigation Strategies
(Required for Medium / High Risk Ratings)

 

Annex E – Part B

Strategic Policy Branch/Public Health Agency of Canada Benchmarking for Part B

Risk Factor Definitions Low Medium High
Governance Degree to which the applicant has (or plans to acquire) the proper quantity and type of employees, contractors, sponsors, etc. as applicant's project/service delivery team members in order to carry out activities under the funding agreement.
  • Sufficient number of qualified team members; with a low staff turnover; and clear roles and responsibilities
  • Some qualified team members; with moderate staff turnover; and some lack of clarity in relation to roles and responsibilities
  • Limited or no qualified team members; with high staff turnover; and unclear roles and responsibilities
Degree to which applicant demonstrates ability to provide appropriate management direction and oversight to the applicant's project/service delivery team; Degree to which applicant poses a risk from the perspective of management structure or governance/oversight
  • Sound governance structure; with well-defined, distinct management roles & responsibilities; and senior management has relevant qualifications and experience
For individual: Solid reference information
  • Some governance structure; with partially defined and/or distinct management roles & responsibilities; and senior management has some qualifications and experience
For individual: Some reference concerns
  • Informal or undefined governance structure; with undefined and/or unclear management roles & responsibilities; and senior management has little or no qualifications and experience
For individual: Significant reference concerns
Performance History If applicant/recipient has an existing funding agreement, or has received previous federal or provincial/territorial funding in the past 5 years:

Track record in terms of past issues or sensitivities;

Degree to which they met requirements of previous agreements;

Degree to which past spending aligned with approved budgets (including approved changes). Note: The assessment of this risk factor should include consideration of formal audits conducted by external auditors and results from an investigation and/or financial review, as well as formal audits conducted by the Health Portfolio.
  • Federal/provincial/territorial government reference check is very positive; no problems in past 5 years re: Audit, Finance, program/project delivery or other sensitivities; Frequent past funding; met all requirements in past agreements; past spending in line with budget (minimal unexplained and/or unapproved variance)
  • Federal/provincial/territorial government reference check is adequate; no problems in past 3 years re: Audit, Finance, program/project delivery or other sensitivities; Limited past funding; met most requirements in past agreements; past spending somewhat in line with budget (moderate unexplained and/or unapproved variances)
  • Federal/provincial/territorial government reference check is negative; some problems in past year re: Audit, Finance, program/project delivery or other sensitivities; met few or no requirements in past agreements; past spending not in line with budget (significant unexplained and/or unapproved variances, need for recovery, deficits, etc.)
Degree to which applicant has sufficient previous experience to carry out the activities identified in the submission
  • More than 3 years experience with similar activities
  • 1-2 years experience with similar activities
  • No previous experience with similar activities
Degree to which activities are on schedule and progressing toward achievement of program/project or Health Plan/work plan objectives (including approved amendments) in a steady, consistent, effective manner, including management of issues and challenges arising under the funding agreement
  • Results demonstrate clear support for achievement of objectives; progress is on track, based on approved work plan/Health plan; Recipient is experiencing no difficulty in managing challenges
  • Results demonstrate some support for achievement of objectives; progress with some issues, based on approved work plan/Health plan; Recipient is experiencing some difficulty in managing challenges
  • Results demonstrate little or no support for achievement of objectives; little or no progress, based on approved work plan/Health plan; Recipient is experiencing significant difficulty in managing challenges
Degree to which activity reports are submitted per timeline in funding agreement and amendments and are complete and informative
  • Always on time, complete and informative; consistently high quality reporting
  • Occasional timing, completeness and/or some issues related to quality of information
  • Seldom on time/complete and/or significant issues related to quality of information
Degree to which recipient fulfills all other requirements of funding agreement and amendments i.e., in addition to activity & financial reporting requirements (e.g. certificate of liability insurance, Intellectual Property, Official Language Requirements, dissemination of reports to community members, etc.)
  • Full compliance
  • Partial compliance
  • Non-compliant
Degree to which working relationship with recipient is effective, cooperative, and provides thorough and proactive information; information gained through site visits, financial reviews, phone calls, audits, or other contact with recipients about program/project delivery and use of funds.
  • No findings requiring corrective action; communications are effective; information is thorough and is provided proactively and/or on request
  • Some findings requiring corrective action; some communication issues exist; information is partially complete and/or is received with some delays or follow-up required
  • Many or major findings requiring corrective action; major communication issues exist; information is incomplete and/or is not provided when requested
Financial Stability Degree to which applicant/recipient demonstrates ability to provide appropriate financial management and administrative capacity, processes and systems to support recipient's project/service delivery team in carrying out their activities
  • Good financial capacity (e.g. good independent working cash-flow); sufficient number of qualified financial staff; formal financial management and operational policies, procedures & systems; formal personnel policies & procedures; strong internal capacity to recruit, train and retain appropriate personnel
For individual: Good financial capacity (e.g. good independent working cash-flow); Solid reference information
  • Some financial capacity (e.g. some independent working cash-flow); some qualified financial staff; semi-formal financial management and operational policies, procedures & systems; semi-formal personnel policies & procedures; some internal capacity to recruit, train and retain appropriate personnel
For individual: Some financial capacity (e.g. some independent working cash-flow); Some reference concerns
  • Limited or no financial capacity (e.g. limited or no independent working cash-flow); limited or no qualified financial staff; informal or no financial management and operational policies, procedures & systems; informal or no personnel policies & procedures; limited or no internal capacity to recruit, train and retain appropriate personnel
For individual: Limited or no financial capacity (e.g. limited or no independent working cash-flow); Significant reference concerns
Results of past formal audits conducted by the Health Portfolio (e.g. compliance, ministerial, other) or by a P/T on themselves and provided to the Health Portfolio.
  • Positive results in past audits; effective management response; all audit issues resolved
  • Minor findings in past audits; adequate management response; some audit issues resolved
  • Major findings in past audits; inadequate management response; few audit issues resolved
Degree to which submission includes support from other sources (e.g. other governments, commercial initiatives, partners, volunteers, etc.). This would include funding & other quantifiable resources (e.g. assets, space, salaried or volunteer time/support, letters of support, Ministerial direction, high-profile champion)
  • Combined funding from all sources is confirmed; combined funding from all sources is sufficient to support all activities of the work plan; strong support from parties with significant capacity, authority and/or relevant expertise; documented evidence of support
  • Some funding from other sources has been confirmed; combined funding from other sources is sufficient to support critical activities of the work plan; Moderate support from parties with capacity, authority and/or relevant expertise
  • Combined funding from other sources has not been confirmed; combined funding from other sources is not sufficient to support activities of the work plan; limited or no support from parties with capacity, authority and/or relevant expertise; little or no documented evidence of support.
Degree to which financial reports are submitted per timeline in funding agreement and amendments and are complete, accurate and informative; Degree to which activities and expenditures align with approved budget (including approved changes)
  • Always on time, complete and informative; Consistently high quality reporting; Minimal unexplained and/or unapproved variance between activities / expenditures and budget; Progress is well on track from financial perspective
  • Occasional timing, completeness and/or some issues related to quality of information; Moderate unexplained and/or unapproved variance between activities/expenditures and budget; Progressing with some issues from financial perspective
  • Seldom on time/complete and/or significant issues related to quality of information; Significant unexplained and/or unapproved variances between activities/expenditures and budget; No progress or significant issues from financial perspective
Planning and Project Complexity Dollar amount of funding agreement (including Amendments): For 1 year agreement: project budget

For multi-year agreement: average annual budget (total budget / # years)
  • Less than $100,000
  • $250,000 to $500,000
  • More than $750,000
Degree to which submission includes cultural/political issues, involves complex relationships (stakeholders), or has other issues that may pose a particular challenge in fulfilling the activities
  • Working with established partnerships; high quality relationships between partners; non-isolated; single community; proven concept; low cultural / political sensitivities; prevention programs
  • Balanced mix of level 0 and 4 criteria
  • Working with new partners; significant relationship issues between partners; isolated/remote; multiple communities; unproven concept; high cultural/political sensitivities; treatment programs
Degree to which proposed timelines, work plan and/or budget are appropriate to successfully complete the project, and/or level of effort required to ensure feasibility of submission
  • Proposed timelines, work plan and/or budget are appropriate and acceptable with minimal changes required; proposal is complete and demonstrates an approach that support successful completion of the project; minimal effort required to ensure feasibility
  • Some revisions to the proposed timelines, work plan and/or budget will be required; proposal is partially incomplete and/or demonstrates and approach that partially supports successful completion of the project; Moderate effort required to ensure feasibility
  • Major revisions to the proposed timelines, work plan and/or budget required; proposal is incomplete and/or doesn't demonstrate an approach that supports successful completion of the project; Significant effort required to ensure feasibility
Feasibility of Evaluation Plan OR degree to which submission identifies ability to develop suitable methods for collecting and analyzing information, or for developing an Evaluation Plan
  • Data, methods and/or processes for evaluation/analysis of results have been defined and will be easily available/accessible
  • Data, methods and/or processes for evaluation/analysis of results have been somewhat defined and may not be easily available/accessibles ou accessibles
  • Data, methods and/or processes for evaluation/analysis of results have not been defined and will not be easily available/accessible or will be difficult to refine
Degree to which project activities and timelines in submission address funding program's objectives or fits into funding or Health Plan/ work plan priorities
  • Clear alignment
  • Partial alignment
  • Minimal alignment
Likelihood of sustaining momentum of the project, partnerships and/or desired outcomes/outputs after period of Portfolio funding
  • Good working cash flow from non-government sources; strong ability to attract future funding from other sources; Solid business plan and/or sustainability plan
  • Some working cash flow from non-government sources; Some ability to attract future funding from other sources; Business plan and/or Sustainability Plan has both strengths and issues
  • Limited or no working cash flow from non-government sources; Limited or no ability to attract future funding from other sources; Significant issues with Business Plan and/or Sustainability Plan, or absence of a complete Business Plan and/or Sustainability Plan;
Degree to which aspects about the applicant or submission give rise to concerns (e.g. pending change of Band Chief / Board of Directors / government, new legislation, etc.); unforeseen or emerging factors related to the applicant or submission that may impact program or Health Plan/work plan programming
  • Few and/or minor pending changes or unknown circumstances
  • Several and/or moderate pending changes or unknown circumstances
  • Many and/or significant pending changes or unknown circumstances
Degree to which program, project and/or submission presents risks from a political, cultural, health, social, security or other perspective
  • Program / project / submission has little or no attention of media / Public / government; Project involves non-sensitive/routine issues
  • Program / project / submission has some attention of media / Public / government; Project involves some sensitive/non-routine issues
  • Program / project / submission has ongoing attention of media / Public / government; Project involves significant sensitive/hot issues
Date modified: