Frequently Asked Questions - Release of Recipient Audit Policy, Plan, and Summary Reports

Date: December 2014

Q.1 Why does AANDC post audits?

A.1. Canadians, including members of First Nation communities, want to know that their tax dollars are being used to improve community living conditions, and to create jobs and economic opportunities for First Nation communities.

Q.2 What is a recipient audit?

A.2. A recipient audit is an independent assessment, conducted by an independent auditor, to ensure that a recipient of federal funding is complying with the terms and conditions of their funding agreement with the federal government.

Audits ensure that funding is being used for its intended purposes, and that communities/organizations have in place the appropriate management and financial oversight mechanisms.

Audit findings and recommendations can be beneficial to funding recipients, as they may assist the organization in identifying areas for improvement in their current management practices and financial controls.

Q.3 Why do AANDC and Health Canada occasionally perform joint recipient audits?

A.3. Health Canada plays a significant role in providing services and funding to Aboriginal communities. With AANDC, these two departments provide about 90% of Government of Canada funding to First Nations.

Joint recipient audits are more cost-effective for both departments and reduce the administrative burden on First Nations as site visits and information collection by the independent auditor are conducted for both departments at the same time.

AANDC and Health Canada may work together on recipient audits to address any issues and concerns raised through joint recipient audits, where appropriate.

Q.4 How does AANDC select which recipients will undergo a recipient audit in any given year?

A.4. AANDC has a recipient audit plan where recipients are selected for an audit based on a risk evaluation, the value of the funding agreement and random selection.

Q.5 Why is the department only posting summary reports starting from the 2012-2013 fiscal year, what about previous years?

A.5. To support the Government's commitment to transparency and accountability, AANDC has recently decided to publicly post the summary reports of recipient audits. While the Department has been conducting recipient audits for the past three years, prior to the 2012-2013 fiscal year, recipients were not informed of the possibility the results would be made public.

Q.6 How were the independent audit firms selected to conduct the recipient audits?

A.6. The Department is continuing its efforts to modernize grants and contributions management for better results. To that effect, AANDC and Health Canada have entered into a joint supply arrangement to contract for recipient audit services from independent, accredited auditors. This joint process will maximize the use of taxpayer dollars and reduce the administrative burden on both departments.

The supply arrangement was put in place through Public Works and Government Services Canada's (PWGSC) Professional Audit Support Services (PASS) Stream 8 process. Stream 8 is reserved for Recipient/Contribution Agreement Audits. PASS is a mandatory supply arrangement that provides federal government departments and agencies with a list of suppliers qualified to perform recipient audits.

For more information on this type of supply arrangement please contact PWGSC at 819-956-2315.

Q.7 How many recipient audits were conducted in the 2012-2013 fiscal year?

A.7. In the 2012-2013 fiscal year, 25 recipient audits were initiated. All have been completed.

Q.8 When will all the results of the recipient audits from 2012-2013 be released?

A.8. The results of the 25 recipient audits will be released in the form of summary reports when the audits have been completed, reviewed, and the results communicated to the recipients. The recipients are also given the opportunity to submit a response which will be posted along with the summary report. Please see the Recipient Audit Policy for more information.

Q.9 When will all the results of recipient audits from 2013-14 be released?

A.9. The results of all audits completed in 2013-14 will be released in the form of summary reports when the full audit reports have been thoroughly reviewed and finalized, and the results communicated to the recipients. The recipients are also given the opportunity to submit a written response which will be posted along with the summary report. Please see the Recipient Audit Policy for more information.

Q.10 Why have some recipient audits been postponed from previous fiscal years or are still ongoing in this fiscal year?

A.10. Recipient audits require very rigorous and thorough examination phases in order to arrive at sound conclusions and comprehensive recommendations.

The speed at which audit work can be completed is dependent on the level of complexity of the work and the cooperation of those people who need to be consulted or interviewed to provide the auditors with the necessary information for the examination, as well as the availability of necessary documentation. Often, this work involves site visits to remote locations which can delay the process.