Summary report on Recipient Audit performed on Prophet River First Nation
Name: Prophet River First Nation
Location: British Columbia
Population: 95 on reserve; 279 total registered
Default status at time of audit: Not in default
Current default status: Not in default
Current Chief: Lynette Tsakoza
Time period covered by audit: April 1, 2012 to March 31, 2014
Amount of AANDC funding audited: $2,384,966
Background
Indigenous Services Canada (ISC), formally Indigenous and Northern Affairs Canada (INAC), selected Prophet River First Nation for a recipient audit based on their 2011-2012 risk assessment score and other risk factors.
The objective of the recipient audit was to provide assurance that funding provided to the Recipient by Canada was spent for its intended purposes and is in compliance with the terms and conditions of the 2012-13 and 2013-14 Funding Agreement with ISC. The objective was achieved through:
- Examination of the effectiveness of the operations of the Financial Management Control Framework in place at Prophet River First Nation; and
- Conduct of audit procedures on the eligibility of the expenditures claimed under the terms and conditions of the Funding Agreement with ISC.
Samson & Associates, an independent audit firm, was commissioned to undertake the recipient audit. The audit procedures were performed from March 2, 2015 to March 6, 2015. The audit was completed and the auditors have examined sufficient evidence to support their conclusions.
Findings
The procedures performed identified certain control weaknesses within governance, program administration, expenditure oversight and financial management that, if well designed and operated effectively, would help ensure that funds were spent for the intended purposes and in compliance with the terms and conditions of the Agreements. The following are some key findings and key recommendations identified in the audit report.
Governance by Chief and Council
The audit procedures performed, identified best practices and areas where there are opportunities to improve governance and administration in support of programs funded by ISC. The Recipient's governance structure has been clearly established; lines of responsibilities have been established through an organizational chart and budgets are provided to managers when regular formal meetings are held. The audit identified certain weaknesses. The Recipient's Human Resources manual is in draft form. It is recommended that the Chief and Council ensure that the Human Resources manual is reviewed, approved and finalized. The manual should be updated regularly. There are no written procedures or guidelines to support the purchasing of goods or services. It is recommended that the Operations Manager develops a purchasing policy for the Chief and Council approval; employees and supervisors should understand and follow this policy's requirements. Policies should be reviewed and updated regularly.
Band Management
The audit procedures performed identified best practices and areas for improvement with respect to band financial management. Formal procedures exist at the Recipient organization, to involve members in the community decisions. Council had maintained an adequate system of accountability to its members. In addition, there were appropriate segregation of duties in the approval, payments and registering of expenditures and in the hiring and payroll function. The audit identified some weaknesses. In some cases, payments for expenses were processed without adequate supporting documents or the appropriate approval on the requisition. It is recommended that the Operations Manager implements controls to ensure that payments are supported by adequate documentation (receipts, invoices, etc.) and approvals. The Recipient's accounting of funds identified as "Set" is not segregated by program. It is recommended the Chief and Council ensure that the charts of account's structure be modified to ensure that "Set" funding is accounted for separately by program.
Current Status
A copy of the final report has been sent to the Recipient. ISC and the Recipient are working together to address the findings. In addition, the Recipient was provided with a verbal briefing on the results of the audit.
Disclaimer: This audit was prepared based on information contained in a Recipient Audit Report on Prophet River First Nation for ISC. The report produced for ISC is intended solely for the information and use of the Recipient and ISC Management. The audit summary only presents limited information on the general findings based on the audit procedures performed and does not provide information on the detailed procedures findings. Consequently, this summary may not be appropriate for the purpose and use of the reader.