The policy governing AANDC's Aboriginal Entrepreneurship Development Program recommends that an audit of their recipients be conducted every five years. The last audit, conducted in 2005-06, identified a number of compliance issues.
The objective of this current recipient audit was to provide assurance that funding provided to NACCA was spent for its intended purposes and was in compliance with the financial terms and conditions of the contribution agreements between NACCA and AANDC. This audit was conducted by Deloitte in the winter of 2013.
The recipient audit also assessed the quality and adequacy of the management practices the recipient has in place to support the delivery of the program or project and the management of the funding agreements throughout the period under audit.
Based on the work performed, the auditor concluded that NACCA has complied, in all material respects, with the financial terms and conditions of the funding arrangements with AANDC for the period from April 1, 2006 to March 31, 2012.
Quality of NACCA's management control framework
The audit did not identify any information gaps with regards to the Access to Capital Program or NACCA's management control framework. The auditors concluded that NACCA's management control framework is appropriate based on the size and complexity of its operations, and has the appropriate structures, systems and controls in place to support delivery of the Access to Capital Program.
Adequacy of internal management/board reporting
The audit found that NACCA'S Policy Governance Manual provides detailed guidance on administrative matters, such as frequency of meetings (at least quarterly), documentation of minutes, member composition, financial oversight, etc. It provides users with all relevant information to ensure the proper conduct of Board business.
The auditor concluded that NACCA has implemented appropriate procedures to ensure prudent governance and decision making.
Due diligence of expenditures of public funds
The auditor tested a total of 102 transactions. His audit work did not identify any concerns with regards to the management of funding received from AANDC; he concluded NACCA has implemented appropriate due diligence procedures regarding AANDC funding.
Adequacy of internal controls
No deficiencies were noted with respect to the design and implementation of key control activities related to the management of funds provided by AANDC for the period under audit.
Compliance of expenditures claimed
The auditor selected and tested a total of 25 payroll transactions, and 77 transactions of other expenditures and did not identify any discrepancies in the program and operating expenditures.
Integrity of financial information
The auditor examined each annual financial statement to determine the quality of the financial information produced by NACCA. The independent auditors concluded the financial statements were prepared in accordance with Canadian Generally Accepted Accounting Principles in all material respects, and no instances of non-compliance with these principles were identified.
Based on the work performed, the auditor concluded that the information included in the financial statements appears adequate, and the information reported to the Government of Canada appears to be complete.
Reasonableness of actual costs compared to budgeted costs
The auditor tested the design and implementation of the controls identified in NACCA's Access to Capital Program – Policy and Procedures Manual. He did not identify any deficiencies in the implementation of key control, or any monetary errors. Based on the work performed, he concluded that costs incurred in program delivery are reasonable, and incurred in accordance with pre-approved budgets.
Identification of unusual or extraordinary expenses
The auditor examined the general ledgers and did not identify any unusual or extraordinary expenses, based on the nature of and his understanding of NACCA's operations for the period under audit.
Project monitoring mechanisms
Based on the work performed, the auditor concluded that NACCA had appropriate project monitoring mechanisms and processes in place to enable appropriate follow-up.
Timeliness of program and financial monitoring
The auditor concluded that the program and financial reporting is undertaken in a timely manner, and systems are adequate to support monitoring and reporting of information under the financial terms and conditions of the funding arrangements with AANDC.