This website will change as a result of the dissolution of Indigenous and Northern Affairs Canada. Consult the new Crown-Indigenous Relations and Northern Affairs Canada home page or the new Indigenous Services Canada home page.
(These Notes are an integral part of this document)
A. Consolidation of Reporting Requirements of Indigenous and Northern Affairs Canada (INAC) and Health Canada - First Nations and Inuit Health (HC-FNIH).
B. The First Nations Financial Transparency Act
As some documents that First Nations must provide to INAC under this Reporting Guide are not covered by the Act, First Nations must separate documents covered by the Act from those not covered by the Act when providing them to INAC, in two separate files as follows.
Please note that the Schedule of Remuneration and Expenses of Chiefs and Councillors must not be part of the Audited Consolidated Financial Statements and must not include any information about individuals other than Chiefs and Councillors.
For details on the content of these documents, please see sections 6.0 and 7.0 below.
The departments of Indigenous and Northern Affairs Canada (INAC) (formerly Aboriginal Affairs and Northern Development Canada (AANDC)), and Health Canada (HC) (referred throughout the document as HC-FNIH – i.e. First Nations Inuit Health), receive and review financial information in conjunction with non-financial information and undertake compliance activities annually. These activities are undertaken to gather information on whether funds provided are expended for the purposes intended, the collected information depicts the Recipient's financial situation and allows INAC and/or HC-FNIH to assess whether the funding Recipient's financial situation is sufficiently stable to assure continued delivery of funded programs/services.
Reporting on the use of public funds to community members and to Canadians remains an essential element of the management control framework for transfer payments. All governing bodies are ultimately accountable to their stakeholders. As such, INAC and/or HC-FNIH must demonstrate to the Canadian public and Parliament, through their respective Ministers, that all funds, including those transferred to Aboriginal and other Recipients are spent in accordance with the terms of funding agreements.
This is a supporting document designed to help Recipients of INAC and/or HC-FNIH to comply with the terms and conditions of funding agreements pertaining to financial accountability, transparency and reporting. This document must be read in conjunction with the Recipient's funding agreement.
Other stakeholders may be part of the management of the funding agreement, for example the Recipient's auditor, accountants or agencies receiving part of the funding provided to a Recipient. Where this is the case, it is strongly recommended that Recipients provide this document to all those involved in managing the funding agreement. All involved must understand the Recipient's annual financial reporting requirements and that of their funded Agencies.
This document applies to all INAC and/or HC-FNIH Recipients who receive funding through a signed funding agreement with INAC and/or HC-FNIHas defined in their funding agreement's terms and conditions, and who have the financial reporting requirements set-out in this document.
Financial statements are essential elements of accountability. They depict a Recipient's financial health and provide information on how much funding was spent and for what purposes. Financial statements also assist in future decision making.
Financial statements are prepared by the Recipient and audited by an independent and qualified auditor. The auditor's function is to determine the completeness and fairness of the financial statements in all material respects; this means an adequate review is done to provide a written professional opinion on the statements.
Financial statements provide important information to Recipients. The information is also important to federal government departments which fund transfer payment programs, and the financial institutions that do business with these entities.
In most cases, as described below, audited financial statements are required to be submitted in accordance with the Public Sector Accounting Board (PSAB) Standards which is a consistent standard used by all governments in Canada.
Additionally, some special purpose detailed reporting may be required.
Produced by the Canadian Institute of Chartered Accountants (CPA Canada), the Public Sector Accounting Handbook (PSA Handbook) applies to all forms of governments in Canada, and First Nations are considered governments from an accounting perspective.
Tribal Councils and First Nations Political Organizations must adhere to the PSA Handbook accounting recommendations of the Common Government Reporting Model unless Canadian Accounting Standards definitions and recommendations deem them to be profit-oriented enterprises, or not-for-profit organizations, or government not-for-profit organizations, under the definitions in the CPA Canada Handbook. It is the Recipient's responsibility, with the help of their auditor, to determine which of the CPA Canada Standards recommendations are relevant to their organization.
Recipients other than First Nations, Tribal Councils and First Nations Political Organizations must adhere to the PSA Handbook accounting standards unless Canadian Accounting Standards definitions and recommendations deem them to be profit-oriented enterprises, or not-for-profit organizations, or government not-for-profit organizations (if applicable). It is the Recipient's responsibility, with the help of their auditor, to determine which of the CPA Canada Standards recommendations are relevant to their organization.
In some instances, INAC and/or HC-FNIH may provide transfer payments to a Recipient that in turn delegates some or all of its obligations and/or transfers a portion or all of these transfer payments to an agency for the delivery of programs and services funded under the terms and conditions of a funding agreement. The funding Recipient who signed the funding agreement with INAC and/or HC-FNIH remains accountable to INAC and/or HC-FNIH for the performance of its obligations as set out in the funding agreement.
Therefore, where the Recipient has transferred funding to an agency, the Recipient must require that agency to provide the terms of the transfer as well as its financial statements to the Recipient in addition to the Recipient providing its own financial statements. Also, upon written request from INAC and/or HC-FNIH to the Recipient, a copy of the agency's financial statements must be made available to INAC and/or HC-FNIH.
For the purposes of this document see Appendix A of the Treasury Board of Canada Secretariat – Directive on Transfer Payments.
This section details the components of the financial reports that Recipients must provide to INAC and/or HC-FNIH, as identified in the Recipient's funding agreements.
INAC and/or HC-FNIH Recipients must submit their financial reporting packages in the audited consolidated financial statements format available on INAC's Internet Site. In the case of audited financial statements, the recipient shall engage an independent auditor who is a member in good standing of a corporation, institute or association of accountants incorporated under an Act of the legislature of the Province or Territory in which the recipient has its administrative offices. Where the independent auditor is a member of a corporation, institute or association of accountants incorporated under an Act of the legislature of the Province of Manitoba, that auditor must be recognized in Manitoba with the designation of Chartered Professional Accountant. These are the minimum standards to be met.
6.1.1 F-0080 – Annual Audited Consolidated Financial Statements package, comprised of:
a) Financial Statements
b) Special Purpose Reporting
Please note that neither of the Schedules of Remuneration and Expenses are to be part of the Audited Consolidated Financial Statements.
As information about identifiable individuals (personal information) will appear in the Schedule of Remuneration and Expenses (Chiefs and Councillors) and may appear in consolidated financial statements, the First Nation should provide advance notice to those individuals these documents will be published and may be disclosed to its members. Only personal information that is reasonably necessary to complete the consolidated financial statements should be included in that document.
Where information about identifiable individuals will appear in the Schedule of Remuneration and Expenses (Unelected Senior Officials), the First Nation should inform those individuals of any potential disclosure of that document.
6.1.2 F-0081 – Annual Unaudited Schedule of Revenue and Expense package, comprised of (does not apply to First Nations):
6.2.1 F-0190 – Annual Audited Financial Statements package, comprised of:
a) Financial Statements
b) Special Purpose Reporting
6.2.2 F-0191 – Annual Audited Schedule of Revenue and Expenses package, comprised of:
6.2.3 F-0192 – Annual Unaudited Schedule of Revenue and Expenses , comprised of:
Requests for restatements of recipient audited financial statements are only to be considered when an exceptional event has occurred (for example a material inaccuracy from an accounting error, noncompliance with generally accepted accounting principles, etc). CPA Canada Standards are to be consulted when a restatement is to be requested from a recipient.
a) First Nations, Tribal Councils and First Nation Political Organizations
The Recipient shall provide Audited Consolidated Financial Statements (ACFS) in accordance with Canadian Accounting Standards, using the Common Government Reporting Model (signed by Authorized Recipient Official).
The Annual Audited Financial Statements must at least include the following:
b) Recipients using the General Reporting Model (other than First Nations)
The Recipient shall provide Consolidated Audited Financial Statements in accordance with Canadian Accounting Standards in the CPA Canada Handbook.
The Audited Financial Statement must at least include the following:
Important information: A separate Schedule of Revenue and Expenses must be provided for each Program/Service/Activity/Project for which funding is provided through a funding agreement. More specifically, the Program/Service/Activity/Project Revenues and Expenses Schedules must:
7.3.1 Auditor's Attestation
The schedules described in this section must each be accompanied by one of the following auditor's attestations to be prepared by the auditor of the Audited Consolidated Financial Statements: an auditor's report or a review engagement report.
7.3.2 Requirement for Schedules of Remuneration and Expenses
First Nations must provide the following schedules and must include the following information:
Please note that Schedules of Remuneration and Expenses are not to be part of the Audited Consolidated Financial Statements.
The CPA Canada Handbook recommends that the auditor must present to the audit committee or a similar governing body, any identified internal control shortcomings during the financial statement audit (Ref. 5220.07 – CPA Canada Handbook). This communication is either referred to as an "Auditor's Letter" or an "Internal Control Letter". These letters and the recommendations contained therein are valuable management tools to help build Recipient financial and administrative capacity.
This communication is either referred to as an "Auditor's Letter" or an "Internal Control Letter". These letters and the recommendations contained therein are valuable management tools to help build Recipient financial and administrative capacity.
The Handbook also requires that the auditor shall communicate in writing significant deficiencies in internal control identified during the audit to those charged with governance on a timely basis.
It is strongly recommended that the "Auditor's Letter" or "Internal Control Letter" be provided to INAC and/or HC in all instances. However, its submission becomes a mandatory reporting requirement in the following cases:
|201X Budget||201X Unaudited||201X
|Indigenous and Northern Affairs Canada|
|HC-FNIH (if required)|
|INAC and/or HC Trust Fund interest revenue|
|Prior year unexpended funding (where applicable)|
|Interest on long-term debt|
|Repairs and maintenance|
|Salaries and benefits|
|Tradition and culture|
|Surplus (deficit) before transfers|
|Transfers between programs|
|Transfer to Education (example)|
|Transfer from Casino (example)|
|Name of Individual||Position Title||Number of Months
|Name of Individual
|Position Title||Number of
|Actual Salary or
From / To
as part of Other Remuneration
Recipients of Transfer, Flexible and Flexible Transfer funding agreements dated prior to April 2012 and Block funding agreement shall also provide a Statement of Moveable Assets Reserve (MAR) for the Health Canada, First Nations and Inuit Health funding in accordance with the Health Canada, First Nations and Inuit Health Statement of Moveable Assets Reserve for Health Canada following this table.
|Balance at beginning of year||$ xxx||$ xxx|
|Amount provided in agreement for MAR||$ xxx||$ xxx|
|Total||$ xxx||$ xxx|
|Revenues generated||$ xxx||$ xxx|
|Expenses (acquisitions and replacements)||$ xxx||$ xxx|
|Balance at end of year||$ xxx||$ xxx|