Report on Recipient Audit of Mosakahiken Cree Nation

Program Administration

The Mosakahiken Cree Nation is governed by a Chief and Council who are the elected representatives of their members. The Council is made up of seven members and includes the Chief and six Councillors who are elected for a period of two years.

The Chief and Council hold meetings on an ad-hoc basis only and the topics of discussions are not identified in a formal agenda. Furthermore, minutes of these meetings are not prepared, leaving no tangible documentation as to what was discussed and what has been decided.

The audit determined that the recipient has not developed and implemented work plans that would provide details and explanations on program-related activities to be undertaken by staff on behalf of their community. It has also not developed and implemented policies and procedures to support the delivery of Programs and provide tools to staff to assist them in their daily tasks.

The recipient has experienced vacancies in key positions and as a result, has had issues managing the programs efficiently and exercising good controls over its finances. In order to improve its financial management capabilities, the recipient hired a full-time Director of Finance in April 2012 to oversee the financial operations of the Band. However, as of the audit date, a number of key positions remained vacant.

The recipient did not prepare budgets in support of its programs and exercised minimal on-going financial monitoring and reporting on the programs. The recipient relied on annual audited consolidated financial statements prepared by an external auditor to determine the status of expenditures incurred for the year as they did not have access to qualified accounting staff.

Financial Management

The auditor examined the financial systems and processes that the recipient put in place to support program delivery and to seek assurance of adequate and effective control.

The auditor found that the chart of accounts set up in the accounting system does not match the budget lines identified in the Agreements, which makes it difficult to reconcile information and monitor expenses efficiently, and monthly bank reconciliations have not been completed.

While revenues were properly accounted for in the accounting system and deposited into the general bank account, the auditor's review of expenditure transactions did not provide assurance that the funds were used for the purpose for which they were secured. The sample examined by the auditor found transactions that were not properly approved; could not be necessarily linked to activities; and were not supported by appropriate documentation.

The recipient has made a large number of advances to staff and Band members but has failed to account for these in the accounts receivable ledger. Consequently, the recipient is finding it difficult to keep track of the advances.

The recipient's filing system showed that financial records and supporting documentation are not adequately maintained. The information necessary to support the processing of financial transactions could not be obtained.

Management Reporting System

Discussions with AANDC representatives determined that the recipient had submitted the required activity reports; however, these reports did not meet the reporting schedule detailed in the Agreements.

Furthermore, as of the date of the audit, the recipient had not submitted final 2011-2012 audited consolidated financial statements to AANDC, as they were in draft form only at the time of audit. An external auditor review of these same statements provided a Disclaimer of Opinion, as the external auditors were unable to obtain sufficient appropriate evidence to provide a basis of opinion on the audit. The external auditor found that the systems of accounting and internal controls that were in place throughout the years were inadequate and, as a result, revenues and expenditures were not subject to satisfactory audit verification.

Program Administration

• The Chief and Council should schedule regular meetings to oversee the operations of the Band and formalize these meetings by preparing agendas and minutes that will confirm Council's positions on topics discussed at the meetings.
• The recipient should develop and implement work plans, policies and procedures, and annual budgets to support staff in the delivery of the Programs.
• The recipient should continue to work to fill the vacant positions and develop job descriptions that clearly define the roles and responsibilities of all employees.

Financial Management

• The Director of Finance should update the chart of accounts to match the budget lines identified in the Agreements to support the monitoring process and facilitate reporting.
• The recipient should provide formal training to staff on the software that is being used to process and record its financial transactions to enhance the overall capacity of the Finance Department.
• The recipient should ensure that bank reconciliations are prepared on a monthly basis and that these reconciliations are reviewed and approved by the Chief and Council.
• The recipient should improve its filing system to ensure that all documentation required for the processing of financial transactions is readily accessible and that it is retained for audit purposes.

Management Reporting System

• The recipient should comply with the reporting requirements of the Agreements.