Management Letter - Black Lake Band

Chief and Council
Black Lake Band
PO BOX 27
BLACK LAKE SK S0J 0H0

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 the Black 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 $403,651 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 through: Documentation of minutes for all Chief and Council meetings and provision of minutes for review by Members, AANDC, auditors and other stakeholders as appropriate; regular review of financial information (quarterly at a minimum, monthly is optimal) to assess actual program and administration expenditures compared to the budgeted amounts; clarification of the roles of Chief and Council in the Executive Act to include their responsibility to review and approve the annual budget, and to review the actual expenditures compared to the budgeted amounts on a monthly or quarterly basis; and presentation of annual budgets and audited financial statements to Members on a timely basis following their completion.
2. That Chief and Council prepare a strategic plan to communicate the strategic objectives of the Band over the next one to three years.
3. That Band Management prepare 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 Band funding provided by AANDC through: documenting and providing training on financial policies including the requirements for cash receipts, cash disbursements, accounting and record keeping, and financial reporting; reviewing the monthly 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 the Band Manager document the cash disbursement process to clearly outline the process, and related financial controls, to be followed for the procurement of goods and services and the payment of funds for programs. The key financial controls related to the disbursement of funds provided by AANDC should include, at a minimum, the following: original invoices and contracts must be provided or available to support all cheque requisitions; receipt of goods or services must be approved by Band Management; cheque requisitions must be approved by authorized individuals only; and a documented, communicated and updated list of individuals authorized to approve cheque requisitions, sign cheques, and issue bank transfers.
6. 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 should 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