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Name: Fox Lake Cree Nation Location: Manitoba Population: 232 on reserve; 1,162 total registered Default status at time of audit: Not in default (2011-2012) Current default status: Recipient Managed (2013-14) Current Chief: Walter Spence Time period covered by audit: April 1, 2010 to March 31, 2011 Amount of AANDC funding audited: $2,717,474
Aboriginal Affairs and Northern Development Canada (AANDC) selected the Fox Lake Cree Nation for a recipient audit in 2012-2013 based on their level of risk received as part of the 2011-12 general assessment process, and other risk factors.
This recipient audit was undertaken to:
Ensure compliance with the Terms and Conditions of the AANDC Funding Agreement;
Ensure compliance with Treasury Board and AANDC policies and directives;
Evaluate efficiency and effectiveness of the financial management framework in place to manage the programs, as well as the recipient's organizational capacity; and
Assess the adequacy of the financial control measures and mechanisms in place to manage risks effectively.
This audit was selected as a joint audit with Health Canada and was conducted by Spearhead Management Canada Limited in January 2013.
The audit found that for the 2010-2011 fiscal year, the recipient complied with the non-financial Terms and Conditions of the Contribution Agreement except in respect to the reporting requirements. The auditor determined that the funds reviewed were expended for the purposes for which they secured. The audit identified an amount of $4,426 payable to the recipient for eligible expenditures.
The audit examined program administration policies and processes and found that adequate program administration controls were in place. Observations included:
The Band follows a custom election process where the Chief and Council stay in office until they are dismissed based on the wishes of Band Members. A motion for a new election may be made at the Band meeting which is held every three months. While Band meeting attendance is low, there is general satisfaction with the election process.
As part of the organizational structure, AANDC programs are delivered by Program Managers who report to the Director of Operations, who in turn, reports to the Chief and Council.
Work plans have been developed in accordance with the Agreement, approved by the Region and implemented. Performance expectations are clearly stated and the objectives set are clear.
Changes to the activities and/or programs were discussed with AANDC and approved in accordance with the terms of the Agreement.
The recipient has implemented an appropriate governance structure to support program delivery. The Program Managers develop their program plans based on the budget allocation received from AANDC. They meet with the other Coordinators and the Band Manager to integrate their plans, and the completed budget is forwarded to the Chief and Council for information.
The recipient has access to qualified resources with the expertise and capacity to deliver the Programs and services identified in the Agreement. The staff members are accredited in their own fields and receive ongoing training to maintain their level of expertise.
While the recipient has sound business practices and formal policies and procedures related to the AANDC programs have been implemented and support the program delivery, certain manuals to support personnel in their activities are out of date and should to be revised to match the current work environment.
The audit examined the recipient's financial controls to ensure cost-effective service delivery and effective operation, and found that adequate financial controls were in place. Observations included:
Program budgets have been developed and are monitored through monthly financial reports that are presented to Chief and Council. However, the general ledger and year end financial statements were not set up in accordance with the various programs listed in the AANDC Contribution Agreement, thereby making it difficult to generate reports and monitor budgets by program.
Expenditures were supported by acceptable invoices and by evidence of work performed or goods received, and payment was issued in accordance with the specific terms and conditions of the programs.
Monthly bank reconciliations were performed.
There is an appropriate segregation of duties to record and approve financial transactions.
While the recipient has implemented and follows an internal travel directive, accommodations claims unsupported by receipts are not in line with what is considered reasonable for AANDC funds. Travel claims have been adjusted accordingly.
Expenditures were properly accounted for on the general ledger, incurred within the timeframe of the Agreement, paid for, reasonable, supported by appropriate evidence, and related to the activities of the programs.
Documentation supporting the sample of transactions selected for examination as part of our audit was readily available and any additional information requested was submitted on a timely basis.
Management Reporting System
The audit examined the reporting systems that the recipient put in place to ensure the adequacy of the information used to support the decision-making process. Observations included:
The Recipient has developed procedures to support the preparation of reports using the financial system in place.
The information maintained and reported by the Fox Lake Cree Nation for the fiscal year 2010-2011 was adequate but failed to match the format identified in the Contribution Agreement. AANDC has acknowledged that the Programs supported by the Agreement have been delivered, notwithstanding the fact they have not been reported on properly.
External auditors did not provide a qualified or denial of opinion on the recipient's audited financial statements.
The auditor provided recommendations in the following areas:
The recipient should update the Code of Conduct Manual, the Financial Administration Manual and the Administrative Policy Manual and make them available to staff once they have been approved by the Chief and Council.
The recipient should set up the chart of accounts in line with the programs identified in the Agreement to facilitate the generation of reports and support a more efficient monitoring process.
The recipient should ensure that accommodation allowances paid to travelers are in line with the National Joint Council Travel Directive.
Management Reporting System
The recipient should report expenditures in accordance with the budget lines identified in the Contribution Agreement.
A copy of the final report has been sent to the recipient.
Following receipt of the final Recipient Audit report, a review of additional information revealed a subsequent payment of $7,500 made to the recipient. This reverses the amount owing to the recipient and results in a recoverable amount of $3,074 owing to Aboriginal Affairs and Northern Development Canada.