Archived - General Assessment (GA) Workbook

Aboriginal Affairs and Northern Development Canada (AANDC)
Based on Refinement Exercise 2011

PDF Version   (414 Kb, 58 Pages)

Table of Contents

• 1.  Introduction
• 2.  How it works
• 3.  Completing the GA
• 4.  When to Use Part A and B of Workbook
• 5.  Annual Review of Workbook
• 6.  Additional Information
• Part A: Ongoing Multi-Program Agreements
• Part B: Project and Specific Purpose Agreements

1. Introduction

2. How it Works

3. Completing the GA

4. When to Use Part A or B of Workbook

5. Annual Review of Workbook

6. Additional Information

In This Section

• 1.  When to Use the GA Workbook: Part A
• 2.  How to Use the GA Workbook: Part A
• 3.  Forms
• GA Workbook (Part A)

1. When to Use the GA Workbook: Part A

2. How to Use the GA Workbook: Part A

3. Forms

Annex A

Annex B

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 Council/Board to Transact Business

Is the Board/Council 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 Board/Council which is willing and able to legally bind the organization (e.g. follows the legal process required).

A stable, well functioning Board/Council supports a stable well functioning organization. It is able to respond in a timely manner to decisions required by AANDC in order to initiate or manage funding agreements. As well, there is a seamless transition between Boards/Councils such that the capacity to make decisions and deliver services is not disrupted.

In the absence of a well functioning Board/Council AANDC 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 AANDC data base

Benchmarks

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 Board/Council and management team have a sound understanding of the funding agreement?

Relevance to Management of Funding Agreements:

There is a need for the Board/Council 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 Board/Council and management team understand the terms and conditions of the funding agreement by meeting with AANDC and securing advice from their own sources (e.g. legal, financial, tribal advisors). Where there is a significant change in Board/Council 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 Board/Councils or in senior program staff.

Sources of Information / Evidence:

• Observations during field visits
• Overall fulfillment of existing agreements
• By-laws, constitution, AGA Resolution

Benchmarks

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 Board/Council 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 and avoids errors, fraud and politicization of service delivery. 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 Board/Council.

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 Board's/Council'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

Benchmarks

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 Board/Council 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 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 Board/Council and the community it serves.

Where such information is not readily accessible or the Board/Council does not hold itself to account, individuals may express concerns to AANDC 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:

Board/Council 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); and
• the use of the funds (e.g. the audited statements).

Sources of Information / Evidence:

AANDC may increase its oversight where complaints are received as to accountability issues. 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).

Benchmarks

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 in place?

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 Board's/Council's 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" 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 AANDC
• Reference made to plan during field trips / site visits or by the funded organization during presentations to the Department
• Recent Readiness Assessment/ Default Prevention and Management  Assessment Reports
• Plans posted on organization website

Benchmarks

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.

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 AANDC
• Reference made to plan during field trips or by funded organization during presentations to the Department
• Recent Readiness Assessment/ Default Prevention and Management  Assessment Reports
• Operational plans posted on website

Benchmarks

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 Board / Council 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

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 AANDC funded programs and services.

AANDC considers three primary indicators 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 months 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

Benchmarks

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 Board/Council for purposes of monitoring program delivery and the financial situation.

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 AANDC's 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

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 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. In 2006, CGA Canada announced that CAFMs would be granted a block transfer into Level 4 of the CGA Program of Professional Studies.

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

Benchmarks

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.

AANDC 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 or third party approach to preserve services
• Recent Readiness Assessment or Default Prevention and Management Assessment Reports
• Other analysis as required by program

Benchmarks

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

Benchmarks

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 are 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

Benchmarks

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 AANDC as required by the funding agreement to demonstrate service delivery and results.

Best Practice:

The Board/Council and AANDC 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. FNITP)
• Program Performance Reviews
• Program reports required by the terms and conditions of Funding Arrangements
• Other analysis as required by program

Benchmarks

Justification for Score

Consideration Score (entered on Form A1): ____

Mitigation Strategies (Required for Medium / High Risk Ratings)

In This Section

1. When to Use the GA Workbook: Part B
2. How to Use the GA Workbook: Part B
3. Standard Weights for Risk Factors
4. Forms
5. Variance from Standard GA Process

1. When to Use the GA Workbook: Part B

2. How to Use the GA Workbook: Part B

3. Standard Weights for Risk Factors

4. Forms

5. Variance from Standard GA Process – Transitional Approach

Annex A

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.

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

Benchmarks

Note: Please refer to specific program guidance for more detailed benchmarking, as required.

Justification for Score

Consideration 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:

For New Applicants:

• Demonstration of capacity within application
• Reference checks based upon application

For Existing Recipients:

• Annual reports

Benchmarks

Note: Please refer to specific program guidance for more detailed benchmarking, as required.

Justification for Score

Consideration 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.

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.

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

Benchmarks

Note: Please refer to specific program guidance for more detailed benchmarking, as required.

Justification for Score

Consideration Score (entered on Form B1): ____

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

Note: Please refer to specific program guidance for more detailed benchmarking, as required.

Justification for Score

Consideration Score (entered on Form B1): ____

Mitigation Strategies (Required for Medium / High Risk Ratings)

Risk Factor: 5. Other Considerations:

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

Sources of Information / Evidence:

• Trade Associations Publications
• Statistics Canada

Benchmarks

Justification for Score

Score (entered on Form B1): ____

Mitigation Strategies (Required for Medium / High Risk Ratings)