As part of its review of departmental Grants and Contributions and in response to a request from Bureau management, the Internal Audit Division (SIV) of the Department of Foreign Affairs and International Trade (DFAIT) has undertaken an audit of the Arts and Cultural Industries Promotion Division (ACA). ACA delivers two programs, the Arts Promotion program and the Cultural Industries Promotion program. The audit focussed on the Arts Promotion program's grant award process and the Cultural Industries Promotion activities of ACA.
The Arts Promotion (AP) element of ACA is responsible for the management and administration of six program disciplines:
AP administers grant programs and provides other support to artists and organizations in these disciplines. A seventh program, Cultural Initiatives for War-Affected Children, is also administered by ACA. In addition to the grant budget, ACA's operating budget is between $300,000 - $400,000 per year. Half of this operating budget is transferred to priority Missions for discretionary funding for local cultural initiatives. Other expenditures include travel and consulting fees as AP has responsibilities beyond awarding grants.
The role of the Cultural Industries (CI) unit in the support of culture is essentially to assist Canadian cultural associations and institutions through the export promotion process by:
CI works in collaboration with geographic and trade bureaux, Missions, International Trade Centres, other federal and provincial government departments, cultural associations and arts and cultural industries. CI does not provide grants to Canadian artists. The CI unit consists of four FTEs.
The total ACA grant budget for fiscal year 1998/1999 was $4,694,000 and ACA awards 300 to 400 grants per year. Of this budget, $1,000,000 or 21% is allocated for Special Projects which include Cultural Initiatives for War-Affected Children. To confirm that the grant allocation process for the six ACA controlled disciplines, the audit team selected a random sample of 20 projects to review. However, the file documentation was too incomplete for most of the projects to confirm the process.
The length of time it takes to process applications is a problem in ACA. The same 20 sample projects discussed above were reviewed to assess the extent of this problem. For the sample reviewed, it took ACA 148 days on average to process the applications, calculated from the latter of the receipt and the due date, until their submission for approval. Approval took an average of 28 days, followed by another 40 days for ACA to get the Grant Agreement signed. While delays in signing Grant Agreements can sometimes be due to having to wait for available funds in the next fiscal year, this factor did not significantly affect the average for the sample reviewed. Altogether it took an average of 221 days or just over 7 months to process an application. Due to the problems obtaining documentation referred to above, these timeframes should be seen as estimates.
The key challenge for ACA is the time it takes to submit the recommendation memo for approval. Delays are particularly problematic for initiatives that have a brief turnaround time; for example, when artists are invited to an event on short notice. ACA cites resource constraints as the primary reason for this delay. In our view, however, significant improvements in timeliness are possible with better management and control of the process. Specific recommendations are included within.
The same 20 projects were assessed for compliance with Treasury Board criteria as set out in the December 19, 1980 Treasury Board Submission Class Grants in the Field of Academic and Cultural Relations and departmental criteria. Two exceptions were noted:
There are many areas of overlap in the mandates and operations of CI and Canadian Heritage's (PCH's) Trade and Investment Branch that have arisen since PCH has expanded into areas that were traditionally part of CI's mandate. While this duplication of roles has resulted in confusion among CI stakeholders, the situation should improve as collaborative efforts between CI and PCH are increasing and the respective roles are now being defined.
The audit identified three notable perceptions on the part of CI staff:
These perceptions relating to the attitudes of others in the Department may be pessimistic. Interviews with stakeholders including geographic and trade bureaux, DFAIT Team Canada representatives and Missions indicated that CI is highly successful in providing service to its clients. Without exception, they indicated that the role played by CI is important and this service should continue to be performed. ACA plays an important role with respect to the "Third Pillar" and its staff are seen as professionals who are experts in their field.
Of more concern is the consensus among Departmental stakeholders and ACA that many firms in the cultural area are not "export-ready". Helping these firms become export-ready is seen by ACA staff as the responsibility of PCH, consistent with the DFAIT's "Borders in, Borders out" approach. As CI and PCH work to define their respective roles, this responsibility should be more clearly focussed.