Summative Evaluation of the Class Grant Program for the Royal Canadian Naval Benevolent Fund (RCNBF)
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1 Reviewed by CRS in accordance with the Access to Information Act (AIA). Information UNCLASSIFIED. Summative Evaluation of the Class Grant Program for the Royal Canadian Naval Benevolent Fund (RCNBF) January (CRS) Chief Review Services i/ii
2 Table of Contents Acronyms and Abbreviations... i Results in Brief... ii Introduction... 1 Purpose and Scope... 1 Evaluation Context... 1 Methodology... 1 Program Profile... 3 Description of Program... 3 Activities and Expected Outcomes... 3 Findings and Recommendations... 5 A. Relevance... 5 B. Effectiveness... 8 C. Recommendation... 9 Chief Review Services
3 Acronyms and Abbreviations AGM CF CMS CPO CRS DND FY GoC PAA RCNBF RCAFBF RMAF TB VAC Annual General Meeting Canadian Forces Chief of the Maritime Staff Chief Petty Officer Chief Review Services Department of National Defence Fiscal Year Government of Canada Program Activity Architecture Royal Canadian Naval Benevolent Fund Royal Canadian Air Force Benevolent Fund Results-based Management and Accountability Framework Treasury Board Veterans Affairs Canada Chief Review Services i/ii
4 Results in Brief In accordance with the Treasury Board (TB) Policy on Transfer Payments, an evaluation of the Class Grant Program for the Royal Canadian Naval Benevolent Fund (RCNBF) is required... A plan to guide this evaluation was approved in the Results-based Management and Accountability Framework (RMAF) in January Overall Assessment The RCNBF continues to satisfy the needs of its client base. The Class Grant Program for the RCNBF continues to be relevant and effective. The purpose of this evaluation was primarily to determine if the Class Grant Program for the RCNBF remains relevant and effective. Key Findings Continued Relevance of the Program. The RCNBF remains relevant and important. Its mandate is consistent with government-wide priorities described in the Annual Report to Parliament. The assistance and support provided by the RCNBF is consistent with, and complementary to, Canadian Forces (CF) support to serving personnel and to retired personnel through Veterans Affairs Canada (VAC) programs. The RCNBF relieves distress and promotes the well-being of eligible applicants: men and women who are members or former members of the Naval Forces of Canada, and their dependants; and war veterans of the Merchant Navy, and their dependants. The Class Grant Program allows the RCNBF to focus its assets on the needs of its client base and not divert available funds to the operating expenses of rent and telecommunications. Success/Results Achieved. From the number of applications each year to the RCNBF, the high approval rate of the applications and low withdrawal rate, and the collection of positive client comments that are selected and posted in the RCNBF Annual Reviews, there are strong indications that the RCNBF is satisfying the needs of its client base. Recommendation It is recommended that the Grant be continued and that the Chief of the Maritime Staff (CMS) prepare the required documentation for the renewal of the Transfer Payment. Chief Review Services ii/ii
5 Purpose and Scope Introduction The main purpose of this evaluation was to determine if the Class Grant Program for the RCNBF remains relevant and effective, in accordance with the evaluation plan expressed in the approved RMAF (January 2005). Evaluation issues related to the relevance and effectiveness of the RCNBF were also examined. Evaluation Context The Class Grant Program calls for an annual payment to the RCNBF to offset the organization s rent and telecommunications expenses. In 2005, funding of the Class Grant Program to the RCNBF was approved for a five-year period, which expires on 31 March The requirement for a summative evaluation was approved in the RMAF (January 2005) which was prepared for the Class Grant Program in support of the RCNBF and the Royal Canadian Air Force Benevolent Fund (RCAFBF). The RCAFBF, formerly a member of the Class Grant Program, ceased to exist in June 2007 and is no longer a grant recipient. The RMAF considered the following questions: Program Relevance Is the Benevolent Fund Class Grant Program consistent with Department of National Defence (DND)/CF strategic objectives and government-wide priorities? Does the need still exist for the RCNBF grant? Is the RCNBF in compliance with the terms and conditions of the Class Grant Program? Effectiveness Is the Class Grant Program meeting its stated objectives? Is the Benevolent Fund providing satisfactory financial assistance to former members of the Naval Forces of Canada and their dependants? Does the office space conform to standard rental space guidelines? Methodology Key documents were reviewed and analyzed to gain a better understanding of the relevance and effectiveness of the Class Grant Program and the RCNBF. Quantitative data contained in the RCNBF Annual Reviews were analyzed and trended and interviews were conducted to provide complementary and explanatory information. Chief Review Services 1/9
6 Data collection methodologies combined both quantitative and qualitative techniques and analysis, including: Interviews with key stakeholders; Quantitative and qualitative analysis of historical data; and Limited financial analysis of audited financial statements. Some key documents reviewed included: Fiscal years (FY) 2005/06, 2006/07 and 2007/08 RCNBF Annual Reviews; RMAF for the Benevolent Fund Class Grant Program (January 2005); Risk-based Audit Framework for the Benevolent Fund Class Grant Program (January 2005); 2003 Lease Agreement; 2007 Lease Agreement; RCNBF Financial Statement (year ending 31 March 2006 and 31 March 2007); and Statistical reports and other documentation prepared by the RCNBF. As the Class Grant Program for the RCNBF represents a relatively low amount in terms of total dollars granted, this evaluation was largely restricted to an internal review process. It has been previously assessed to be low risk and low materiality. Due to considerations of cost effectiveness and time constraints, an independent analysis of client satisfaction was not conducted. The RCNBF submits Annual Reports to the CMS Program Manager summarizing the performance of the Fund. These reports as well as qualitative and quantitative annualized data prepared by the RCNBF were analyzed by CRS. Interviews with the CMS Project Manager and the Secretary-Treasurer of the RCNBF were conducted. Chief Review Services 2/9
7 Description of Program Program Profile The RCNBF is a charitable corporation supported by voluntary donations from serving and exservice personnel, civilian friends and naval organizations. It was created in 1942 to relieve distress and promote the well-being of individuals who have served in the Naval Forces of Canada, in addition to their dependants. The RCNBF was expanded in 1993 to include Canadian Merchant Navy War Veterans and their dependants. General distress, for the purposes of the RCNBF, is defined as existing when an applicant or dependants are suffering hardship due to the lack of the ordinary necessities of life. From the end of World War II through to 1959, the RCNBF occupied rent-free space in National Defence buildings in Ottawa. In 1959 they had to vacate their allocated space. To compensate for the move and to continue its rent-free philosophy with the RCNBF, DND obtained approval for a grant to offset the Benevolent Fund s rent expenses. In addition, DND provides telecommunication services to the RCNBF, on a cost-recoverable basis, in accordance with DND s policy on the provision of services. At present, the maximum amount payable to the RCNBF totals $133,585 (includes $10,285 for a missed grant payment in FY 1995/96) over five years. 1 Activities and Expected Outcomes Organization. The RCNBF Constitution provides for 75 voting members representing as many national geographic localities as possible, while meeting the requirements of Regional Committees. All members of committees and all voting members of the Fund are volunteers. At the Annual General Meeting (AGM), a Board of Directors of up to 18 members is elected. This Board appoints an Executive Committee to administer day-to-day operations between the AGMs. The Executive Committee appoints three Regional Committees which review and make decisions on applications for assistance. Each of these committees is comprised of at least three members, one being the Permanent Chairman and another being the Director of the Fund. The Committees are: The RCNBF Central Committee (Ottawa, Ontario); The RCNBF Eastern Committee (Halifax, Nova Scotia); and The RCNBF Western Committee (Victoria, British Columbia). Activities. The Committees provide assistance to relieve financial distress and/or promote the well-being of eligible applicants. The mandate of the RCNBF is achieved by the provision of assistance in the form of grants, non-interest bearing loans and by providing counseling to applicants on financial matters and advice in rearranging their personal affairs. The RCNBF also assists applicants in applying for aid to proper government agencies, other public agencies or private sources to which they may be entitled. Specific assistance to eligible applicants includes: 1 RMAF (January 2005). Chief Review Services 3/9
8 Grants and Loans. When financial assistance is considered necessary, a grant or loan is provided. The decision to make a grant or a loan is based on circumstances described in the application, supported by the investigator s report and recommendation. Loans are interest free and repayable at a rate that can be handled by the applicant without causing hardship. Education o The RCNBF has a Bursary program to assist needy applicants and dependants, limited to a maximum of $2,000 each, on a one-time basis; o The RCNBF administers the Chief Petty Officer (CPO) Andrew Jack McQueen Trust which provides bursaries, limited to $1,000 each; and o Scholarships to serving or former Sea Cadets, limited to $1,000 each. Other Funds. Minor Disbursement Funds, administered by VAC on the Fund s behalf, are available to provide grants of up to $250. Outcomes. An annual review of the relevance of the Benevolent Class Grant is conducted to confirm the continued requirement for the grant. The performance indicator for the grant is the continued provision of satisfactory financial assistance to eligible recipients. Chief Review Services 4/9
9 Findings and Recommendations The Federal Accountability Act requires that all Transfer Payment Programs be reviewed for relevance and effectiveness over a five-year period. A. Relevance DND/CF Mandate and Priorities DND/CF Strategic Objectives. Ongoing support to serving, injured and fallen CF personnel and their families, in addition to DND harmonization with VAC Programs is discussed in the National Defence Report on Plans and Priorities ( ). While the RCNBF is a corporation and not a government agency, the assistance and support provided by the RCNBF is consistent with, and complementary to, CF support to serving personnel and to retired personnel through VAC programs. The RCNBF contributes directly to one of the three programs identified in the Program Activity Architecture (PAA) 2 : Generate and Sustain Integrated Forces. More specifically, the RCNBF is relevant to the Fixed Support component of the Program Sub-activity to Generate and sustain forces capable of maritime effects. Government-wide Priorities. The Government of Canada (GoC) works on several economic fronts to heighten the quality of life for its citizens. 3 It aims to make incomes secure for the most vulnerable members of society by reducing taxes and improving the financial situation of seniors, students and families. Under the Economic Affairs section of the Annual Report to Parliament, the outcome Income Security and Employment for Canadians describes Human Resources and Skills Development Canada as the main federal department working towards social investment programs which deal, in part, with seniors and pensions. Under this same section, VAC is described as the second largest contributor providing benefits and services to veterans and their families. The assistance and support provided by the RCNBF is consistent with governmentwide priorities described in the Annual Report. 2 PAA is an inventory of an organization s programs and activities that are linked to its strategic outcomes. 3 Report of the President of the Treasury Board of Canada Canada s Performance Annual Report to Parliament 2006/07. Chief Review Services 5/9
10 Continued Need for RCNBF Grants/Loans By the end of FY 2007/08, the RCNBF had a total of 23,291 approved applications since its inception. As shown in Figure 1, since the mid-1960s there has been a consistent decline in the number of applications submitted to the RCNBF. This can be attributed to the decreasing number of serving members of Canada s Naval Forces and the aging and decreasing number of naval veterans over successive decades. NUMBER OF APPLICANTS BY DECADE APPLICANTS Applications (Approved) Applications (Not Approved) * DECADES Figure 1. Number of Applicants by Decade (* denotes only 3 years). Table 1 shows the number of approved and not approved applications in ten year periods (except ) for the years between 1945 to Applications (Approved) Applications (Not Approved) Table 1. Summary of Number of Applicants by Decade. Table 2 shows the number of Benevolent Fund Applications that were approved, not approved and withdrawn for the three most recent fiscal years for which data is available and the dollar value for the grants and loans awarded: Year Approved Not Approved Withdrawn Total Grants $ Loans $ Grand Total $ 2005/ ,571 50, , / ,271 17, , / ,735 39, ,540 Total , ,360 1,089,937 Table 2. Number RCN Benevolent Fund Applications. Chief Review Services 6/9
11 The number of approved applications is gradually decreasing. For the period of the Grant, data is only available for the first three FYs: 2005/06 through 2007/08. During this three-year interval, 493 applications for funding were approved. If extrapolated for the five-year time span of the current Grant period, approximately 821 will be approved. This represents a decrease of 11 percent from the previous five-year grant period (2000/01 to 2004/05) when 926 applications were approved. Nevertheless, there are still enough applications received on an annual basis to justify continuation of the Benevolent Fund. The aging of potential applicants has reduced the client base; however, there remains a strong application rate from dependants, particularly widows. Between FY 2005/06 to 2007/08, the number of veterans applications has been 46 to 60 percent less than the number of applications from spouses and dependants combined (Table 3). Fiscal Year Veterans Spouses Dependants 2005/ / / Table 3. Categories of Applicants. Of the approved applicants between FY 2005/06 to 2007/08, the top five categories of assistance provided and the number of applicants are shown Table 4: Fiscal Year Dental Education Bursaries Home Repair Wheelchairs/ Prosthesis Medical (Hearing/ Optical) 2005/ / / Table 4. Categories and Numbers of Applications. From FY 2005/06 to FY 2007/08, the following value of grants, loans and bursaries were approved (Table 5): Type of Assistance Description 2005/06 Amount ($) 2006/07 Amount ($) Other 2007/08 Amount ($) Grants $238,591 $396,271 $346,734 Loans $50,710 $17,845 $39,805 RCNBF Bursaries $0.0 $30,000 $30,000 Andrew Jack McQueen Bursaries $4,000 $8,000 $6,000 Bursaries Sea Cadet Bursaries $10,000 $10,000 $10,000 CPO Douglas Hooser Bursaries $0.0 $0.0 $5,000 Table 5. FY 2005/06 to 2007/08 Grants, Loans and Bursaries. Chief Review Services 7/9
12 Compliance with the Terms and Conditions of the Class Grant Program The TB Policy on Transfer Payments (October 2008) describes transfer payments as monetary payments, or transfers of goods, services or assets to third parties, including Crown corporations and include grants, contributions and other transfer payments. While transfer payments are one of the Government's key instruments in furthering its broad policy objectives and priorities, they do not result in the acquisition by the GoC of any goods, services or assets. As such, the RCNBF is in compliance with the GoC Policy on Transfer Payments. Further, the RCNBF is in compliance with the Terms and Conditions of the Grant Program including: eligible expenditures, stacking limits, maximum amount payable and reporting requirements. DND considers the Class Grant Program for the RCNBF to be of very low financial and operational risk. Based on past experience, established management controls and the predicable and continuous monitoring of the expenses, DND has a very high degree of confidence in the RCNBF s ability to self-regulate and comply with the terms and conditions of the program. B. Effectiveness Program Objectives The purpose of the RCNBF is to provide assistance to members and former members of the Royal Canadian Navy and their dependents with the objective of: Relieving their distress; and Promoting their well-being where financial distress is not necessarily a pre-requisite but, where the financial assistance will, in the opinion of the Benevolent Fund concerned, accomplish the objective and is within the spirit of the terms of the charter of the Benevolent Fund. There is a strong indication that the RCNBF is meeting its objectives due to the following indicators: A high approval rate of applications; Low withdrawal rate of applications; and Collection of positive comments compiled in the Annual Reviews. Client Satisfaction As the Class Grant Program for the RCNBF has been previously assessed to be low risk and low materiality, and due to considerations of cost effectiveness and time constraints, an independent analysis of client satisfaction was not conducted on behalf of the RCNBF. From the number of applications each year to the RCNBF, the high approval rate of the applications and low withdrawal rate, and the collection of positive client comments that are selected and posted in the RCNBF Annual Reviews, there are strong indications that the RCNBF is meeting its mandate and is satisfying the needs of its client base. Chief Review Services 8/9
13 Efficient Use of Rental Space The RCNBF rents approximately square meters of office space from Public Works and Government Services Canada, located at the Hope Chambers Building, 63 Sparks Street, Ottawa. The present five-year lease agreement commenced on 1 March The RMAF (January 2005) assessed that the location and level of accommodation is appropriate considering the types of services provided by the RCNBF and the needs of its clients. The objective of the Class Grant Program for the RCNBF is to maintain the long-established rent-free arrangement that the DND/CF has had with the RCNBF by offsetting their rent and telecommunications expenses. The provision of the grant allows the RCNBF to focus its assets on the needs of its client base and not divert available funds to the operating expenses of rent and telecommunications. Maintaining this relationship supports the Benevolent Fund s mandate, which indirectly benefits the DND/CF. C. Recommendation (OPI: CMS/MS Compt) Chief Review Services 9/9
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