Government Transfers to Societies—Yukon
Audit at a GlanceGovernment Transfers to Societies—Yukon
What we examined (see Focus of the audit)
In Yukon, money or non-monetary assets—such as inventories or capital assets—can be transferred from the government to individuals, organizations, or other governments. The assets are intended to be used for activities that will help the Government of Yukon carry out its mandate and achieve the goals and objectives of its policies or programs. In these transactions, known as government transfers, the government does not receive goods or services directly in return. Many of these transfers provide funding to organizations called societies.
The Government of Yukon defines a society as a group of five or more people who incorporate for a recreational, cultural, scientific, community, social, or charitable purpose. According to the Societies Act, a society cannot exist for the purpose of carrying on a trade or business. The government funds societies because it considers them to be important community resources and viable delivery mechanisms for many public services, such as organizing recreational events, funding infrastructure, and promoting health and wellness.
Approximately 730 active societies are registered in Yukon. In the 2014–15 fiscal year, the Government of Yukon used government transfers to provide a total of about $40 million to approximately 300 societies.
This audit focused on whether selected departments adequately managed a sample of government transfers to societies according to key legislative, policy, and administrative requirements. The three departments we selected were the Department of Community Services; the Department of Economic Development; and the Department of Energy, Mines and Resources. Among the items we examined were whether the departments conducted risk assessments, whether they measured the results of government transfers, and whether they confirmed that societies were free of outstanding debts to the government and in compliance with legal reporting requirements. In addition, we looked at the monitoring and coordination roles, and related responsibilities, of the Department of Finance and the Executive Council Office.
We did not examine government transfers made to First Nations, municipalities, Government of Yukon organizations, organizations not subject to the Societies Act, or individuals.
Why we did this audit
This audit is important because the government uses transfers to societies to deliver a wide range of services and programs to the citizens of Yukon. These government transfers help fund operations and projects across diverse sectors, including health and social services, arts and culture, and sports and recreation. The activities funded by government transfers help individuals and organizations achieve goals that align with those of the Government of Yukon, such as investing in mental health services, supporting participation in sport for Yukon athletes, and improving community facilities for residents.
What we concluded
We concluded that the Department of Community Services and the Department of Energy, Mines and Resources did not adequately manage selected government transfers to societies in accordance with key legislative, policy, and administrative requirements. We also concluded that the Department of Economic Development adequately managed selected government transfers to societies in accordance with key legislative, policy, and administrative requirements.
We concluded that the Department of Finance conducted sufficient monitoring to identify and report on matters of non-compliance on selected departments, and that the Registrar, operating from within the Department of Community Services, provided sufficient monitoring and administrative support to these departments.
What we found
Delivering and monitoring government transfers
Overall, we found inconsistencies in the policies and practices related to government transfers. We found that the policies contained contradictions and undefined concepts, and that departments did not always document the risks associated with government transfers or verify that societies that received transfers complied with their legal reporting requirements. We also found that departments had not fully implemented a results-based approach.
These findings are important because the consistent application of policy helps departments be more accountable and promotes the equitable treatment of societies. By using systems and practices that support good management of government transfers, the government can better assist societies that provide programs and services to Yukon citizens.
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The policies for managing government transfers contained contradictions and undefined concepts
Recommendation. The Department of Finance and the Executive Council Office should work together—and consult with other departments, as necessary—to review the 1998 NGO Funding Policy in the General Administration Manual and the 2008 Government Transfers Policy in the Financial Administration Manual. They should resolve contradictions in the policies and define key policy concepts.
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Departments did not always comply with key policy requirements
Recommendation. The Department of Community Services and the Department of Energy, Mines and Resources should comply with policy requirements for government transfers, including verifying a society’s compliance with its legal reporting requirements, determining that a society does not have any outstanding debts to the government, and determining when to use a government transfer instead of a goods and services contract.
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Departments did not consistently use of a risk-based approach in managing government transfers
Recommendation. The Department of Community Services, the Department of Economic Development, and the Department of Energy, Mines and Resources should consistently use a risk-based approach in their assessments of all funding requests. The departments should adequately document both project and capacity risk for government transfers and include funding agreement provisions, monitoring requirements, and other elements that reflect the level of risk identified.
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Monitoring of societies and government transfers was sufficient
Recommendation. We made no recommendations in this area of examination.
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Departments did not fully implement a results-based approach
Recommendation. The Executive Council Office should create, in consultation with departments, an evaluation policy that will support a results-based approach to managing government transfers, so that departments can measure, account for, and report on expected results.
Recommendation. The Department of Community Services should put mechanisms in place to systematically review government transfers to determine and document whether their goals and objectives have been met.
Entity Responses to Recommendations
The audited entities agree with our recommendations, and have responded (see List of Recommendations).
Related Information
| Report of the | Auditor General of Canada |
|---|---|
| Type of product | Performance audit |
| Audited entities |
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| Completion date | 3 October 2016 |
| Tabling date | 6 March 2017 |
| Related audits | Reports to Yukon Legislative Assembly |
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