Thank you, Mr. Speaker. The next section of the report deals with business development funding and grants to small businesses. The department of Resources, Wildlife and Economic Development administers both the business development fund, BDF, and the grants to small businesses, GSB, programs. Both programs provide funding to small businesses.
According to the department's website, the BDF is made up of nine program schedules that are roughly tied to the business development process. The BDF provides assistance up to a maximum of $30,000 per year with certain exceptions. The Minister of RWED may direct the department to provide up to $250,000 in BDF funding to any one client in any fiscal year. Contributions made within the program may be repayable. The government distributed $3,000,000 and $4,096,000 in BDF funding in 2000-2001 and 1999-2000, respectively.
The GSB program was developed to provide relatively small amounts of money to individuals who operate small businesses. These small businesses may include artists, craftspeople, renewable resource harvesters, trappers and home-based businesses. The program provides funding up to a maximum of $5,000 per individual over their lifetime. The government dispensed $229,000 and $316,000 in GSB funding in 2000-2001 and 1999-2000, respectively.
The Auditor General reviewed both business assistance programs and identified a number of deficiencies in eligibility criteria, program administration and performance measurement and evaluation. These concerns are addressed in greater detail in chapter three of the report.
The Auditor General tested a sample of 20 files from the 1999-2000 GSB program and 46 files from the 1999-2000 BDF program. Fifteen files or 33 percent of the BDF sample had no accounting in their files and a further five files or 10 percent had incomplete accounting, in that they did not provide enough receipts to demonstrate that they had spent all of the contribution on the project as agreed. The Auditor General also found in its sample of GSB files, that there were a number of approved projects where it was not clear if the eligibility criteria of the program was met. The department has taken steps to rectify the deficiencies identified in the Report.
Committee members pointed out that many projects were approved for GSB funding to pay for extraordinary costs. Although the GSB does allow funding for extraordinary costs, no parameters or guidelines were evident and the category is subject to wide interpretation. The committee suggested that "extraordinary costs" be clearly defined in order to ensure the fair and effective distribution of GSB funding.
The committee was especially concerned about the lack of eligibility and accounting for a significant number of BDF files reported by the Auditor General. The department advised that keeping track of all BDF and GSB files to a high level of accountability may incur a bureaucratic nightmare, as many of the distributed funds are small. Department officials reported that in some cases, the amounts are in the hundreds of dollars. The Office of the Auditor General agreed that the cost/benefit of any controls put in place must be considered against the need for consistent application of policies and procedures.
The Auditor General and the committee also pointed out that Schedule G of the BDF program is subject to wide interpretation and lax accounting. Schedule G or the community initiatives program provides funding to projects that support community-based strategies for the development of a stable economic base. Of the 15 files in the BDF sample, 6 or 40 percent did not have adequate accounting in them. In 1999-2000, contributions made under Schedule G were worth $2.2 million, while $1.9 million were awarded under all the other BDF schedules. The department reports that all accounting has now been provided.
The committee replied there needs to be some form of accountability to ensure Government programs and services are achieving their objectives. Both the Auditor General and the Committee stated that if policy makers lack meaningful information on program performance, they would not be able to decide if programs are working, or if they need to be changed. As a more practical solution, committee members suggested a sliding scale for accountability. In other words, for a greater amount of funding, there should be a higher level of accountability. Mr. Speaker, I seek consent to have the Member for North Slave continue with the report. Thank you, Mr. Speaker.