A Canadian Television Fund (CTF) commissioned report calls for stiffer conflict-of-interest rules for the distribution of their CA$200 million in funds. Two reports, one by consultants François Colbert and David Silcox for CTF and one by KPMG for the Heritage Ministry, pointed out several serious administrative problems in the way Canadian funds are handed out to production companies. Both reports recommend that Telefilm Canada, a second government agency that helps fund and produce Canadian productions, should get out of the funding business and concentrate on producing feature films. This move would eliminate the duplication and confusion that now exists in the Canadian Television Fund, which is partly administered by Telefilm. The pair of reports uncovered instances of administrative inefficiency, unclear lines of responsibility and weak conflict-of-interest rules at the Canadian Television Fund and Telefilm Canada. Colbert and Silcox state that the board of the Canadian Television Fund needs to keep its directors away from funding decisions that could affect their commercial interests. In addition, the adoption of a stricter conflict policy "is of utmost importance since the credibility of the CTF and the efficacy of the Fund are at stake," the report said. "Already, there is a degree if mistrust about the potential for self-dealing, expressed especially by those in the public service who are usually exposed more daily to the careful handling of public funds." However, both reports support the existence of government funding. The KPMG report, which was commissioned by Heritage Minister Sheila Copps, says, "It is only by providing funding for individual programs that speak to distinctively Canadian concerns, experiences and themes that companies will be interested in directing their efforts to such programs, given that production for the larger foreign markets can be much more lucrative." Both of the reports even call for the formation of a feature film fund. Questions have been brewing about the distribution of government funds ever since Montreal-based Cinar Corp. was accused of falsely using Canadian names on American written scripts to obtain tax credits. When asked about the Cinar case by GLOBE AND MAIL, CTF chairman Richard Stursberg said, "I don't think the Cinar issue has any relevance to the funding issue," he said. "Cinar is about fraud -- allegations of fraud. It is virtually impossible to make any system where government gives out money or any credit system foolproof to fraud."