Contribution Funds for Non-governmental Organizations - a Handbook

1.0 Introduction

The proper management of government funds is an important aspect of grant and contribution funding. Canadians want to know that public funds are being managed soundly. There are already several federal laws, policies, standards and rules that help define good management practices. These include the Financial Administration Act, the Treasury Board’s Policy on Transfer Payments and its Travel Directive, management and accountability frameworks, modern comptrollership function, the particular funding program’s terms and conditions, and each department’s own policies and procedures.

The Department of Justice Canada has several programs to provide funding to non-governmental organizations (NGOs), which in turn provide important services to the community. By definition, an NGO is an organization that is independent from any government. NGOs can be not-for-profit organizations, associations, and groups, or even for-profit organizations.

Some NGOs working with the Department of Justice Canada for the first time have little knowledge of the financial requirements associated with the programs and contribution agreements the Department uses. Furthermore, many NGOs do not have specialized resources in accounting or financial management, which can make it difficult for them to fully understand and comply with all the financial terms and conditions included in the agreements.

This booklet has been designed as a reference tool to help you better understand and comply with the financial requirements described in our contribution agreements. Please note, however, that it by no means replaces the terms and conditions included in the actual contribution agreements. In any case of apparent contradiction between the information in this booklet and the agreement itself, the contribution agreement always prevails.

It is always a good practice for an organization to set up its own internal policies with respect to the procedures outlined in this booklet. However, any discrepancies between your internal policies and the procedures described within this booklet should be discussed with Department of Justice Canada program officials during negotiation of the agreement.

This booklet has several objectives:

  • To help NGOs build their capacity to manage contribution agreements.
  • To help NGOs comply with the financial requirements of the agreements, including all reporting requirements.
  • To improve internal control systems and procedures in order to reduce financial risks.
  • To explain the audit process and help NGOs better prepare for project audits that might occur during the lifetime of the project or upon completion of the project.
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