Management Letter - Beaver First Nation

Chief and Council
Beaver First Nation
PO Box 270
HIGH LEVEL AB T0H 1Z0

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 Beaver First Nation. Please find attached, 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 me, pertaining to this audit within 30 days. Your response will also be posted.

As a result of this recipient audit, a non-compliant amount of $97,725 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. The Chief and Council should improve the governance and oversight of the funding provided by AANDC through:
   • Review, revision as needed, communication and adherence to the Beaver First Nation Council Procedural Policy;
   • 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) to assess actual program and administration expenditures compared to the budgeted amounts;
   • Clarification of the roles of Chief and Council (in the Beaver First Nation Council Procedural Policy) to include 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 budget and audited financial statements to Members on a timely basis following their completion.
2. The Chief and Council should prepare a plan to communicate the strategic objectives of the Band over the next one to three years.
   
3. The Band Management should prepare operational plans for the significant programs managed and administered. Significant programs may include: education, social, facilities of operation and maintenance and housing, and Band support.
   
4. The Band Manager should 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;
   • Completion and second review of the bank reconciliations;
   • 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. The Band Management should document the procurement-to-pay process and related financial controls. The key financial controls related to the disbursement of funds provided by AANDC should include, at a minimum, the following requirements: 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 list of individuals authorized to approve cheque requisitions, sign cheques, and issue bank transfers must be maintained.
6. The Chief and Council should annually review and approve salary and honoraria amounts to be paid. The approved salary and honoraria amounts should be documented in either Band Council Resolutions or Chief and Council minutes.
7. The Band Management should include a conflict of interest policy as part of the financial policies. This should address the approval of financial transactions where authorized individuals benefit directly or indirectly.

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

Sincerely,

Pamela d'Eon, B. COM, B. ED, MBA
Acting Chief Financial Officer

c.c.: Jim Sisson
Lynda Clairmont
Anne Scotton
KPMG LLP