Management Letter - Montreal Lake Band

Chief and Council
Montreal Lake Band
PO BOX 106
MONTREAL LAKE SK S0J 1Y0

Ref: 2012-13 Recipient Audit Results and Follow-Up

Dear Chief and Council:

Aboriginal Affairs and Northern Development Canada (AANDC) conducted a number of recipient audits in fiscal year 2012-13, including an audit of Montreal Lake Band. Attached please find a copy of the full audit report and a summary of the report. The summary will be published on the department's website in the coming weeks, along with this management letter. Should you wish to, you may provide a written response to the audit to me within 30 days. Your response will also be posted.

As a result of this recipient audit, a non-compliant amount of $156,756 has been identified and is subject to recovery unless additional evidence is provided within 30 days. A representative of AANDC will contact you shortly to follow up on recovery/repayment arrangements.

The audit report also included the following recommendations, which we advise you and your organization to address:

1. That Chief and Council improve the governance and oversight of the funding provided by AANDC by:
   • Documenting minutes for all Chief and Council meetings and providing minutes for review by Members, AANDC, auditors and other stakeholders as appropriate;
   • Establishing a finance committee as required by the Management Action Plan. The committee should regularly review financial information (quarterly at a minimum, monthly is optimal) to assess actual program and administration expenditures compared to the budgeted amounts;
   • Finalizing and approving the Financial Management Regulations, the Conflict of Interest Policy, the code of ethics for Chief and Council and the code of ethics for Program Directors and staff; and,
   • Presenting the annual budgets and audited financial statements to Members on a timely basis following their completion.
2. That Chief and Council finalize the strategic management plan and communicate the strategic objectives of the Band over the next one to three years.
3. That Band Management review the current operational plans for the significant programs managed and administered. Based on the current programs, significant programs may include: education, social, facilities O&M and housing, and Band support.
4. That the Band Manager improve the financial administration and management of funding provided by AANDC through:
   • Documenting financial policies including the requirements for cash receipts, cash disbursements, accounting and record keeping, and financial reporting. These policies should be communicated and implemented with appropriate training provided as needed;
   • Reviewing the bank reconciliations prepared by the Social Program Director;
   • Conducting a more thorough and documented review of monthly variance reporting; and,
   • Providing Chief and Council with financial information on a regular basis that includes budget and actual results with explanations for significant variances over and under budget.
5. That Band Management maintain up-to-date and accurate signing authorities for the bank to help ensure effective financial controls over expenditure authorization and support compliance with the objectives of the respective program and Funding Agreement. Band Council Resolutions must be prepared and approved to reflect the approved signing authorities.

Please contact your regional AANDC representative to discuss any questions or concerns you may have about this audit.

Sincerely,

Susan MacGowan, CMA
Chief Financial Officer

c.c. Anna Fontaine
Scott Stevenson
Brahim Achtoutal
KPMG LLP