Management Letter - Kinonjeoshtegon First Nation

Chief Traverse and Council
Kinonjeoshtegon First Nation
PO Box 210
DALLAS MB  R0C 0S0

Ref: 2013-14 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 2013-14, including an audit of Kinonjeoshtegon 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 letter. Should you wish to, you may provide a written response within 30 days. Your response will also be posted.

As a result of this recipient audit, a non-compliant amount has been identified and is subject to recovery unless additional evidence is provided within 30 days. A representative of INAC will contact you shortly to discuss the next steps related to repayment.

The audit report also included a number of recommendations to assist in improving management practices. We look forward to working together to develop a plan to address the management recommendations.

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

As a result of this recipient audit, a potentially recoverable amount of $124,682 has been identified and is subject to recovery unless additional evidence is provided within 30 days.

The audit report included the following recommendations:

1. It is recommended that the Chief and Council document the Council meetings through the preparation and approval of minutes and Band Resolutions that will be retained as official records of their meetings.
2. It is recommended that the Recipient review the finance function within the organization to ensure that it operates efficiently and introduces the controls that will support the delivery of the Programs.
3. It is recommended that the Recipient invest the resources necessary to implement the Management Action Plan as quickly as possible to improve the overall management framework and financial viability of the Band.
4. It is recommended that the Recipient continue with the development and implementation of work plans to support the delivery of Programs.
5. It is recommended that the Recipient develop and implement policies and procedures necessary to support the delivery of the Programs and that they be reviewed annually to ensure their relevance.
6. It is recommended that Program Managers participate in the budgeting process and be made accountable by monitoring the financial results of their Programs on a monthly basis.
7. It is recommended that the Recipient ensure that the chart of accounts in the accounting system is set up to match funding agreement to support the monitoring of budgets and identify surplus at year end.
8. It is recommended that the Recipient ensure that funds received are used to deliver the Programs that the funds were secured for to guarantee timely delivery of the Programs.
9. It is recommended that the Chief or one of the Councillors review and approve all bank reconciliations on a monthly basis.
10. It is recommended that Kinonjeoshtegon First Nation immediately cease the practice of borrowing money from the Controller and family members.
11. It is recommended that the Recipient develop a purchasing process supported by an appropriate level of approval authority.
12. It is recommended that the Controller ensure that proper documentation and approval support the demands for payment of supplier invoices.
13. It is recommended that the Recipient establish a formal basis to support the administration costs charged to the Programs.
14. It is recommended that the Recipient ensure that teachers' attendance register is retained for seven years as required by the Contribution Agreement.
15. It is recommended that the Recipient develop a central filing system that will ensure that support documentation for all transactions is retained and available on a timely basis.
16. It is recommended that the Recipient pursue its efforts to produce required reports on time and resolve long outstanding reports with AANDC.

Your regional AANDC representative will be in touch with you shortly to discuss the recoverable amount and to help you develop an action plan to address the recommendations in the recipient audit report. This action plan will also be posted. Please discuss any questions or concerns you may have about this audit with your regional AANDC representative.

Sincerely,

Paul J. Thoppil, CPA, CA
Chief Financial Officer

c.c.: John de Francesco
Scott Stevenson
Anne Scotton
Spearhead Canada Management Ltd.