Summary report on recipient audit performed on Anishinaabeg of Kabapikotawangag Resource Council Inc.
Name: Anishinaabeg of Kabapikotawangag Resource Council Inc.
Location: Ontario
Population: 1,501 on reserve; 3,314 total registered
Default status at time of audit: recipient-managed
Current default status: recipient-managed
Current Chief: board of directors
Time period covered by audit: April 1, 2014 – March 31, 2016
Amount of INAC funding audited: $1,998,296
Background
Indigenous Services Canada (ISC), formerly Indigenous and Northern Affairs Canada (INAC), selected the Anishinaabeg of Kabapikotawangag Resource Council Inc. for a recipient audit.
The objective of the recipient audit was to provide assurance that funding provided to the recipient by the Government of Canada was spent for its intended purposes and is compliant with the terms and conditions of the 2014-2015 and 2015-2016 funding agreements with ISC. The objective was achieved through:
- reviewing the recipient's program management and financial control practices in relation to the funding agreements
- conducting of audit procedures on the eligibility of the expenditures claimed under the terms and conditions of the funding agreements with ISC
Samson & Associates, an independent audit firm, was commissioned by ISC to undertake the recipient audit. The audit procedures were performed from January 11, 2017 to January 19, 2017. The audit was completed with success and the auditors have examined sufficient evidence to support their conclusions.
Findings
The procedures performed identified that internal financial control processes are in place, and well managed. However, a few procedures identified weaknesses within governance, program administration, and financial management. Addressing these internal controls with strengthen how the recipient manages and allocates its funds in accordance to the agreements. The following are some key findings and key recommendations identified by the auditor in the audit report.
Governance by board of directors
The audit procedures performed, identified best practices used by the Governing Board of AKRC. The lines of responsibilities in the organization have been established through the Recipient's organization chart. The audit revealed that formal procedures exist to involve members in community decisions and Council has maintained an adequate system of accountability. The audit also identified areas where there are opportunities to improve governance and administration. The audit revealed that certain expenditures claimed were not for the purpose of the INAC programs and in some cases, expenditures were processed and paid without adequate supporting documentation. The recipient should implement controls to ensure that all payments are supported by adequate documentation and all expenditures claimed, related to the ISC program.
Band management
The audit procedures performed identified the following best practices. The audit revealed that the recipient organization had appropriate segregation of duties. The audit also identified areas where there are opportunities to improve band financial management procedures. The recipient records expenditures for fixed and set funding under the same general ledger account for certain ISC programs. Unspent set funding must be reimbursed to ISC. To facilitate the reconciliation of expenditures with each source of funding, it is recommended that the structure of the chart of accounts be modified to ensure that "set" funding is accounted for separately. In addition, expenditures were processed and paid without the appropriate supporting documentation. The recipient should also implement controls to ensure that all payments are supported by adequate documentation.
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 summary was prepared based on information contained in a recipient audit report on Anishinaabeg of Kabapikotawangag Resource Council Inc. for ISC. The report produced by 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 of findings. Consequently, this summary may not be appropriate for the purpose and use of the reader.