Transfer Payment Administration Modernization

In fall 2017, ONN and the nonprofits on our Joint Funding Reform Forum participated in a consultation hosted by Treasury Board Secretariat on a draft Operational Policy for ministries to accompany the 2017 Transfer Payment Accountability Directive.

ONN is pleased with the overall direction of the final Operational Policy (effective May 1, 2018). Many of the features were called for in the 2012 Open for Business report that marked the start of ONN’s funding reform work. The TPAM Principles that were co-designed with the sector are front and centre. The policy comes with a set of template agreements that provide some standardization across ministries and programs. Electronic forms and signatures can be used, and there is a streamlined renewal process for ongoing agreements when no changes (terms and conditions, funding levels) are required from one term to the next. The common registration system should prevent duplicate information requests if ministry staff can find what they need in the common system. And critically — for those organizations that are eligible for “proportional oversight” — there is greater budget flexibility (ten percent across budget lines, excluding administrative costs, within the same funding year/agreement) and their administrative burden will no doubt be reduced through mechanisms such as the elimination of first-quarter reports.

One critical gap in the Operational Policy is that it provides no guidance to ministries on minimum thresholds for indirect/administrative costs in funding agreements. The policy also offers ministries a great deal of latitude in determining which organizations will be eligible for a reduced reporting burden: There is, first of all, no standardized risk assessment process across ministries and secondly, access to proportional oversight (i.e., reduced reporting requirements, budget flexibility, and streamlined agreement renewal) is guaranteed only for organizations with low-risk status who are delivering low-risk programs. It is discretionary for all others, including low-risk organizations offering medium-risk programs, for instance.

ONN has expressed our concerns about the policy’s gaps and that so much is left to Ministry discretion. Treasury Board has assured us that this is a “first step” and that discussions will continue on elements of the policy that can be strengthened. We encourage all nonprofits that receive provincial funding (including through provincial agencies, Local Health Integration Networks, and the Ontario Trillium Foundation) to discuss the implementation of this policy with their funders if their practices are out of alignment.