Transfer Payments

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How to use this tool:

  • This tool is designed for IM specialists to use with relevant business areas when identifying information resources of business value (IRBV) and retention specifications.
  • The IRBV and retention specifications contained in this document are recommendations only and should be customized to apply in each institutional context. The complete document should be read before using any recommendations.
  • This Generic Valuation Tool does not provide Government of Canada institutions with the authority to dispose of information. Generic Valuation Tools (GVT) are not Records Disposition Authorities (RDA) and do not replace the Multi-Institutional Disposition Authorities (MIDA).

Validation: The business processes and IRBV of this GVT have undergone a comprehensive validation process with the relevant communities of practice across the Government of Canada. In October 2011, a facilitated session was held with the sitting members of the Business Design and Process Work Group and the Centre of Expertise on Grants and Contributions, as well as a representative from the disbanded working group that produced the draft Common Business Process Model for Manage Grants and Contributions in collaboration with the Office of the Comptroller General of Canada. The GVT was also validated with relevant policy centres at TBS including the Centre of Expertise on Grants and Contributions (December, 2011).

Defining the Activity

The Transfer Payment process is a common operational activity carried out by Government of Canada (GC) institutions through grants, contributions, and other transfer payments. It involves transferring money, goods, services, or assets to individuals, organizations or other levels of government based on established eligibility requirements, where funds may or may not be repayable under specific conditions.

Grants, contributions, and other transfer payments are defined as follows:

Grants: A transfer payment subject to pre-established eligibility and other entitlement criteria. A grant is not subject to being accounted for by a recipient nor normally subject to audit by the department. The recipient may be required to report on results achieved. Footnote1

Contributions: A transfer payment subject to performance conditions specified in a funding agreement. A contribution is to be accounted for and is subject to audit. Footnote2

Other Transfer Payments: A monetary payment, or a transfer of goods, services or assets made, on the basis of an appropriation, to a third party, including a Crown Corporation, that does not result in the acquisition by the Government of Canada of any goods, services or assets. Transfer payments are categorized as grants, contributions and other transfer payments. Transfer payments do not include investments, loans or loan guarantees. Footnote3

The management of transfer payments in done in accordance with the Policy on Transfer Payments and the Directive on Transfer Payments, while the accounting of transfer payments is done in accordance with the Accounting Standard 3.2.—Treasury Board—Transfer Payments (Grants and Contributions).

This GVT does not address the funding of capital plans and projects, including Crown projects. Capital plans and projects refer to circumstances where the federal government will be the owner of, prime user of, or entity responsible for the end product. In contrast, projects funded through grants, contributions, and transfer payments are to develop, create, or improve end products that are used, owned, or operated by entities other than the federal government.

This GVT should be used in conjunction with the GVT for Management and Oversight Services. It is important to examine the recommendations in Management and Oversight before proceeding with the analysis of the recommendations for the Transfer Payments activity. This approach is taken to ensure all overlapping processes are addressed correctly. For policy relating to transfer payment programs, the recommendations in the GVT for Management and Oversight should be used. Similarly, for information resources relating to evaluations, the recommendations from the GVT for Management and Oversight should be used.  Transfer payment programs are also subject to audits; however, the audit procedure is wholly contained in the Management and Oversight sub-sub-activity and does not appear in the business processes relating to transfer payments. For this reason, the GVT for Management and Oversight should be used for any information resources relating to operational audits. Operational program audits are not to be confused with recipient audits performed as part of the Transfer Payments business processes, which are included in the recommendations in this GVT. Used in conjunction, the two GVTs provide recommendations for all aspects of the Transfer Payments activities.

Relationship to Other GVT

Business processes and activities often overlap. When the IRBV from an activity is identified in another GVT , there is a note in the table of IRBV and retention recommendations (below) to direct the user to the proper tool.

Business Processes

The sub-activities and business processes are very well defined according to the Gs and Cs Process Reference Model (November 2011) developed by the Business Design and Process Work Group in collaboration with the Centre of Expertise on Grants and Contributions. The business processes relating to the financial aspects of Gs and Cs payments have been determined and documented by the Office of the Comptroller General as part of the Common Financial Management Business Process Initiative. The draft (September 2011) Common Business Process Model for Manage Grants and Contributions defines the common financial management business processes for grants and contributions payments.

The Transfer Payments activity has three sub-activities, with a number of associated business processes.

1. Program Development:

This sub-activity involves the identification of the needs for a program through policy initiatives, followed by the planning and development of the program particulars including eligibility, assessment criteria, parameters, and requirements. The business processes include:

  • designing/redesigning programs;
  • approving programs;
  • implementing programs;
  • marketing programs; and
  • conducting evaluation. Footnote4

2. Program/Project Administration:

This sub-activity involves all aspects of the application process and the management of case files. It encompasses the receipt, review and acceptance (or rejection) of applications; the preparation of funding agreements; funds dispersal; recipient monitoring arrangements; and file close out. The business processes include:

  • receiving funding opportunities;
  • assessing and recommending funding opportunities;
  • making final decisions;
  • communicating decisions;
  • developing Funding Agreements;
  • approving Funding Agreements;
  • monitoring, analyzing and reporting on progress;
  • managing grants and contributions (Gs and Cs) payments;
  • processing Agreement amendments;
  • auditing recipients; and
  • closing files.

3. Managing Grants and Contributions Payments:

This sub-activity involves all of the financial aspects of grants and contributions payments typically performed by a separate business area. The business processes include:

  • initiating expenditures and controlling commitments
  • managing issuance of payments

Retention

Recommended retention specifications in GVT are determined based on traditional or best practices, a review of government-wide legislation and policy, and validation with subject matter experts. Retention periods are suggestions only; departments must take into account their own legislative requirements and business needs.

Recommended retention specifications were identified by a thorough review of the Policy on Transfer Payments and the Accounting Standard 3.2.—Treasury Board—Transfer Payments (Grants and Contributions).

Business Value and Retention Recommendations

Note: Table includes correspondence documenting decisions or substantive opinions, and substantive drafts (i.e., drafts reflecting substantive content-based modifications rather than simple editorial alterations).

1. Program Development

Business Processes Recommendations: Information Resources of Business Value (IRBVs) Recommendations: Retention Period

Designing / redesigning program
Discussing policy direction, objectives and outcomes at Cabinet
Analyzing external and internal program needs
Conducting consultations
Identifying and assessing program ideas
Finalizing program outcomes and measures
Developing program scope
Determining source of funding

Approving program
Obtaining policy authority (Memorandum to Cabinet)
Preparing and approving program design elements (TB Submission)

Implementing program
Developing / operationalizing strategies, plans and program guidelines

Marketing program
Identifying audiences
Informing stakeholders of funding opportunities
Developing communications materials
Launching program

Program templates
Program forms
Program tools
Application templates
Application processes
Application tools

6 years after superseded, based on traditional retention practice applied to policy and procedure IRBV of the Comptrollership function

Needs analysis report
Records of consultation
Risk assessments
Risk profiles
Selected program outcomes
Draft Memorandum to Cabinet (for reference purposes only)
Draft TB Submission (for reference purposes only)
RMAF / Performance Measurement Strategy (PMS)
Terms and Conditions
Program guidelines
Strategy documents
Program plans / project plans
Briefing notes
Promotions strategies
Program announcements
Promotional materials

6 fiscal years after the end of the fiscal year in which the program closes, based on traditional practice applied to IRBV pertaining to financial transactions

Conducting Evaluation
Collecting and analyzing program evaluation data
Developing recommendations on program performance
Formulating management response to program recommendations
Following up on the implementation of the management action plan

Notes:
Evaluation appears at the beginning and end of the Funding process to assess outcomes and to inform program development.

Evaluation is an activity of Management and Oversight but is part of the process cycle of Transfer Payments (see enduring value recommendation).  Evaluation appears at the beginning and end of the Funding process to assess outcomes and to inform program development.

For IRBV please see Management and Oversight GVT

For retention please see Management and Oversight GVT

2. Program / Project Administration

Business Processes Recommendations: Information Resources of Business Value (IRBVs) Recommendations: Retention Period

Receiving Funding Opportunities
Supporting applicants with funding process
Receiving funding opportunities

Assessing and recommending funding opportunities
Conducting pre-assessment of funding opportunity
Conducting full assessment of funding opportunity
Conducting program management review for approval / sign-off

Making final decision
Assessing funding recommendation

Communicating decision
Developing recipient communications package

Developing Funding Agreement
Developing funding agreement details
Conducting internal review

Approving Funding Agreement
Obtaining departmental approval or central agency approval, where required for the Funding Agreement
Controlling commitments (FAA section 32)

Monitoring, Analyzing and Reporting on Progress
Providing Funding Agreement administration package to the recipient
Implementing Funding Agreement monitoring strategy
Collecting and validating progress data
Developing reports

Communications materials
Call for proposals
Correspondence relating to clarifications, recommendations
Correspondence (acknowledgements)
Completed application forms
Environmental Assessment Report
Lists of applicants and recipients
Assessment of applications
Approved funding recommendation
Rejection recommendation
Risk assessment analysis
Member of Parliament letter
Funding announcement
Communications (press release, event presentation, etc.)
Acceptance letter
Rejection letter
Signed final agreement
Proactive disclosure documentation
Agreement administration documentation
Assessment of project progress
Recommendation for termination / extension
Recipient reports
Program reports
Recommendation for termination

6 fiscal years after the end of the fiscal year in which the file closes, based on traditional practice applied to IRBV    pertaining to financial transactions

Monitoring Grants & Contributions payments
(see 3. Managing Grants & Contributions Payments for breakdown of related processes and recommended IRBV)

Processing Agreement amendments
Developing Agreement amendment details
Conducting internal review
Obtaining departmental approval and signatures

Auditing Recipient
Conducting recipient audit

Closing File
Closing the file
Archiving the file

Payment documentation
Signed amendment package
Supplement documentation
Notice of budget adjustment
Audit report
Program Management action plan
Recipient action plan
Close-out letter
Close-out report
Closed file

6 fiscal years after the end of the fiscal year in which the file closes, based on traditional practice applied to IRBV pertaining to financial transactions

3. Managing Grants & Contributions Payments

Business Processes Recommendations: Information Resources of Business Value (IRBVs) Recommendations: Retention Period

Initiating Expenditure and Controlling Commitments
(these business processes are typically performed concurrently) (FAA section 32)
Determining expenditure initiation authority
Obtaining and exercising signing authority
Determining funds availability (budget review, etc.)
Authorizing funds
Recording / updating commitments
Declining proposal / amendment

Managing Issuance and Recovery of Payments / Overpayments
Formalizing funding agreement / amendment
Certifying entitlement to payment
Authorizing payments
Issuance of payments by PWGSC
Processing recipient payment request
Performing financial verification and certification (FAA sections 33, 34)
Managing overpayments and receivables
Managing repayments for repayable contributions
Verifying accuracy of transactions
Confirming recipient eligibility / entitlement
Ensuring recipient information is accurate
Authorizing claims
Validating expenses and reconciling payments
Handling payment requisition
Processing return payment files
Recovering overpayments
Informing recipients of payment status
Issuing notifications and invoices
Terminating funding agreements

Please note that some of the following recommended IRBV may be produced through the Program Administration sub-activity and should be managed in the business area in which they are outputs.

Delegation of authorities instruments
Signed expenditure commitments
Description
Risk analysis
Funds availability justification
Financial coding
Specimen signature documents
Funding agreement application (signed)
Updated funding agreement / amendment
Financial amount
Funding agreement data & supporting documents / amendment data
Repayable installment amounts
Request for payment / Claims and claim data
Payment advance / installments documentation (request, approval)
Resolution of discrepancies documentation
Payment details
Recipient data (name, address, banking information, etc.)
Notifications or invoices

Note: when the above noted IRBV are entered into and/or managed in a financial management system, the system / database itself is the IRBV, not the individual documents.

6 fiscal years after the end of the fiscal year in which the file closes, based on traditional practice applied to IRBV pertaining to financial transactions

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