Foundations

Once public money is transferred to a foundation, the government has limited leverage to influence the way the organization uses the funding, and must rely on the expertise and professionalism of the foundation’s directors and board members to perform their functions properly and achieve the foundation’s stated objectives. [...] Under the existing foundation governance model, the board of directors and the members of the corporation are expected to have subject- matter expertise, and the federal government can appoint only a minority of both directors and officers. [...] However, the Office of the Auditor General recently reviewed the provisions of the bill and indicated that it has some concerns about the proposed amendments to the external audit and evaluation regime. [...] As the legally binding contract between the federal government and the foundation, the document contains provisions that can be quite prescriptive, defining the purpose and aim of the federal funding, the expected results to be achieved, the organization’s transparency and accountability framework, codes of conduct, adherence to official language requirements, etc. [...] The Auditor General has argued that the economic substance of the transaction would be better represented in the government’s consolidated financial statements if the expenditures were recorded in the years when the foundations make the payments to the ultimate intended recipients or for the ultimate intended purposes.