Recipient Guide to Health Canada - Contribution Agreements

May 2004

Prepared for: The Departmental Centre of Expertise on Grants and Contributions

By:
Don Parkinson
Parkinson Associates
Ottawa

Introduction

Welcome to the family of organizations working with Health Canada to maintain and improve the health of all Canadians. Health Canada administers over 30 programs involving approximately $1.4 billion to support initiatives that:

  • Deliver health services to First Nations and Inuit;
  • Address major national health priorities, such as HIV/AIDS, Breast Cancer, Alcohol and Drug Treatment, and Hepatitis C;
  • Conduct research to further the development of knowledge, policy or program delivery.

This information package contains:

  • An overview of what is involved in managing a contribution agreement;
  • Useful tips to help you get off to a good start and achieve results;
  • Information about roles, responsibilities and mutual obligations;
  • Links to specific program materials and other resources.

As a funding recipient, you will be working directly with one of six Health Canada program branches:

  • Health Policy and Communications Branch (HPCB)
  • Population and Public Health Branch (PPHB)
  • Health Products and Food Branch (HPFB)
  • Healthy Environments and Consumer Safety Branch (HECSB)
  • First Nations and Inuit Health Branch (FNIHB)
  • Information, Analysis and Connectivity Branch (IACB)

For additional information on specific programs, including applications for funding, or for detailed guidelines on reporting requirements and forms, please follow the links or contact a Health Canada representative.

What is a Contribution?

A contribution is a conditional transfer of funds to an individual, organization or other level of government to reimburse some portion of the costs incurred in carrying out a worthy project that the Government of Canada wishes to support:

  • The conditions of payment are specified in a Contribution Agreement;
  • The recipient must account for the use of funds and report on results attained from their use;
  • The contribution is subject to being accounted for and audited.

The terms grants and contributions are often used interchangeably, but they are, in fact, different since a grant is an unconditional transfer of funds. Most Health Canada funding for projects is in the form of contributions.

Under a grant or contribution program, Health Canada is not purchasing goods or services from a recipient; nevertheless, both Health Canada and recipients have responsibilities to ensure that funded projects are completed according to the agreement.

Entering into a Contribution Agreement

A Program Consultant will contact you when the Minister has approved funding for your project, discuss with you any conditions of funding, and prepare a Contribution Agreement for signature.

The Contribution Agreement consists of standard clauses that cannot be changed and appendices that relate to your specific project including:

  • A description of the project's objectives, measurable results, activities and timelines;
  • The project budget, including a cash flow forecast.

What is the role of the Health Canada Program Consultant?

The Program Consultant is your primary point of contact with Health Canada and is responsible for:

  • Negotiating the Contribution Agreement;
  • Ensuring that you receive copies of the signed agreement as well as the required guidelines and forms for reporting to Health Canada;
  • Providing information and guidance;
  • Monitoring the project to determine if the activities and expenditures are in line with the agreement and if objectives are being met.
    • Monitoring is conducted by phone contact, correspondence, file review, and project on-site visits. For more information about site visits, please refer to: Preparing for Site-Visits by Health Canada.

The Program Consultant also works closely with a Financial Officer who reviews your claims and prepares the payments and who may contact project staff directly for information and supporting documentation.

As a funding recipient, what do I minimally need to know about contribution programs?

  1. The Contribution Agreement is what counts
    Please read it carefully and seek clarification, where necessary:
    • It is the basis on which Health Canada will monitor your progress and assess your claims for payment;
    • It specifies the maximum federal contribution and what activities are eligible for funding;
    • It outlines the objectives of the project and how they will be measured and identifies the deliverables;
    • It tells you how often you must submit progress reports and claims;
    • It takes precedence over all other documents pertaining to the project when determining the obligations of either party to the agreement;
    • It takes effect only after both parties have signed;
    • You will not be reimbursed for project expenses that are incurred prior to Health Canada signing the agreement or for expenditures that are incurred after the termination date specified in the agreement.
  2. Amendments to the agreement
    • Amendments may be necessary to adjust the forecast of expenditures, increase or decrease the overall federal contribution, modify the timeframes for the completion of the project, modify the work plan or to otherwise address emerging situations;
    • Financial amendments may possible, subject to program criteria and the availability of funds;
    • Amendments cannot be made after the Contribution Agreement has expired;
    • Requests for amendments should be submitted in writing and no action should be taken with respect to changes involving expenditures until both parties have signed the amendment.
  3. Please contact your Program Consultant if you have questions about the agreement or about amendment policies and procedures.
  4. Keep in touch with Health Canada

    It is your responsibility to advise your Program Consultant of any changes to the project such as location, staffing, delays in schedule, budget or anything else that may affect the project.
  5. Know how and when you will be paid

    Each agreement specifies the terms of payment, including the intervals at which reports and claims should be submitted to Health Canada.
  6. When you receive a cheque depends on when you submit progress and financial reports

    Health Canada cannot issue a payment until you properly account for expenditures through a claim submission and progress report.

    For more information on financial reporting, please refer to Going With the Flow: Your Guide to Completing the Quarterly Cashflow Forecast and Record of Expenditures Form.
  7. Audit

    Health Canada may audit the project accounts to ensure compliance with the agreement. Alternatively, you may be asked to have an independent audit of the project completed. The cost of the audit would be an eligible expense.
  8. Evaluation

    Most projects are required to have an independent evaluation and to submit an evaluation report as part of the final reporting package. Engage an evaluator at the outset, clarify roles and responsibilities, and plan ahead for the collection of data.

    For assistance in planning your evaluation, please refer to: Splash and Ripple: Using Outcomes to Design and Guide Community Work.
  9. Responsibilities to project staff

    You are responsible for ensuring that all applicable labour, health and safety laws are respected, that employees are provided with proper working accommodations, and that conflict of interest terms outlined in the agreement are observed.
  10. Privacy/Confidentiality

    Both parties to the agreement are obliged to protect any confidential information according to applicable federal, provincial or territorial legislation and to protect confidential information from disclosure to third parties in accordance with the Access to Information Act and the Privacy Act. Your agreement may specify additional requirements for your project.
  11. Official Languages

    You are obliged to respect the spirit and intent of the Official Languages Act as it applies to the area in which the project activities are being implemented. Plan for the translation of documents, where applicable.
  12. Holdback of final payment/recovery of funds

    The agreement specifies a holdback amount that will not be released until Health Canada receives and reviews all the reports required by the agreement.

    Health Canada will take action to recover funds that have been advanced and for which there has not been an adequate accounting of expenditures.

Tips for ensuring that your project is well managed

Tip #1- Have a competent manager and bookkeeper

Subject matter experts may not have the time or be most suited to manage the project and compile the reports required by Health Canada:

  • Complex projects require a manager or coordinator with good general management skills;
  • Financial accountability requires strong bookkeeping and financial skills.

Tip #2- Establish strong internal management systems and procedures

You are required to keep separate and accurate financial records for the project, report on progress and ensure that the objectives outlined in the agreement are met within the negotiated time frames. A separate project bank account is recommended.

Good internal systems will ensure that you can:

  • Meet Health Canada's reporting requirements;
  • Properly manage your project;
  • Collect data for your project evaluation report.

Tip #3- Provide leadership and promote team work

Make sure everyone on the team understands the mission and objectives of the project and how he/she is expected to contribute. Keep the lines of communication open between working groups, management committees, staff, partners and your Health Canada Program Consultant.

Tip #4- Develop a strategy for managing change

When your project is likely to lead to changes in the culture or operations of an organization, such as when Telehealth is introduced into a health care delivery system, it is important to get buy-in and cooperation from the people who will be affected.

Tip #5- Establish a mechanism for resolving disputes

Conflicts may arise during the implementation of the project. Establish policies and procedures for dealing with disputes and communicate these to everyone involved.

Tip #6 Know where you stand with your partners

Partners bring to a project skills, expertise and often financial resources that help to ensure its success and contribute to sustainability after Health Canada funding ends:

  • Have written agreements with partners that outline under what conditions they will contribute during and after to the project.

Health Canada requires detailed reporting of cash and in-kind contributions from partners:

  • Have a system for tracking contributions to the project such as staff time, physical space, supplies and equipment.

Tip #7 Choose consultants carefully

Consultants can play an important role in providing skills that the project team requires, in providing expert advice, and in conducting an independent project evaluation:

  • Get more than one proposal and avoid possible conflicts of interest;
  • Have a written agreement stating the overall maximum that will be paid, the per diem rate, the deliverables and the timelines for completion of tasks.

Tip #8 Communicate about what you are doing

As Canadians are interested in hearing about what is being accomplished through federal funding programs, you are encouraged to hold a project launch and to publicize your activities throughout the project's life cycle. As well, Health Canada may profile your project on its Web site or reference the project in other forms of publicity.

Tip #9 Closing out the project

Health Canada must reconcile expenses against the contributions paid and verify the results achieved before a holdback of funds can be released. Funds not utilized must be returned to the Receiver General. The requirements and due date for your final report(s) will be specified in your agreement or in correspondence from Health Canada.

Minimally you should plan to submit:

  • A final financial statement of all expenditures incurred by the project, revenues from all sources, the application of revenues, and a final claim for payment with the supporting documentation required by the program;
  • A final progress report on activities, challenges and accomplishments;
  • A formal evaluation report;
  • A listing of assets, including serial numbers of equipment purchased under the agreement.

Please verify project closeout requirements with your Program Consultant.

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