Budget Development Policy
Target audience: Employees
The Ontario Trillium Foundation (OTF) is accountable for the responsible disbursement of public funds. The goal is to be as prudent as possible, while at the same time enabling OTF to operate effectively and efficiently.
This policy outlines the principles behind the development of the OTF annual budgets, in keeping with OTF’s value of building trust through transparency and accountability.
The policy is supplemented by OTF’s Budget Calculation Guidelines.
OTF’s primary source of funding is from various ministries at the Province of Ontario.
Development of OTF’s annual budgets, including those for grant programs, operating and the Partnership Investments allocation, takes into consideration a number of factors and calculations.
All budgets are recommended by staff to the Finance & Audit Committee, based on the principles in this document. The Committee then makes recommendations to the Board. Final approval of the budgets rests with the Board. One of the Board’s performance measures for OTF is adherence to the ratio of actual operating expenses to all funding received.
3.1 Community Investments Granting Budget
The CI granting budget is the amount of money that will be used for Community Investments grants, based on funding received from the Ministry of Tourism, Culture and Sport. It must be allocated across the province in accordance with approved criteria (as adjusted in accordance with OTF’s Budget Calculation Guidelines).
The Board approves the overall OTF target ranges (i.e. percentage of Granting budget) for each stream, following which the Grant Review Teams (GRTs) set their catchment targets for each stream based on Board-approved target ranges.
3.2 Operating Budget
The Operating Budget amount is calculated based on a target ‘operating cost ratio’ – the percentage of total funding approved for spending on operating expenses.
The operating cost ratio may include an ‘escalator factor’ – or annual increase – based on 100% of the previous calendar year’s inflation rate (Statistics Canada: Ontario, all items).
Under some circumstances the Finance and Audit Committee and/or the Board may decide that the Operating Budget is not appropriate and requires adjustment:
- If in any year the allocation received from Government represents a significant increase or decrease over the previous year, the target operating cost ratio may be adjusted.
- If for any other reason the Operating Budget is deemed to be inappropriate, it may be adjusted. In a case where a lower amount is approved, the excess funds would normally go into the Granting Budget. If a higher amount is approved, the additional funds would normally come from OTF’s reserves.
3.3 Partnership Investments Budget
The annual budget for Partnership Investments is calculated based on percentage of estimated funds available, calculated in accordance with OTF’s Budget Calculation Guidelines. This target percentage is approved annually as part of the Business Plan, and normally will not exceed 4.5% of total expenditures.
3.4 Other Program Budgets
All other program budgets will be developed in accordance with the respective Agreements with the Funder.
3.5 Unspent Funds
Any Operating or Partnership Investments funds unspent during a fiscal year may be transferred to the current year Granting budget or carried over to the following year, depending on the circumstances. Unused Granting funds may also be carried over to the following year’s budget.
Operating Cost Ratio: OTF’s total expenditures (excluding depreciation) as a percentage of total funding received.