Report on recipient audit performed on Sunchild First Nation
Name: Sunchild First Nation
Population: 904 on reserve; 1,352 total registered
Location: Alberta
Default status at time of audit: recipient-managed
Current default status: co-managed
Current Chief: Jonathan Frencheater
Time period covered by audit: April 1, 2010 to March 31, 2012
Amount of INAC funding audited: $15,726,348
Background
Indigenous Services Canada (ISC), formerly Indigenous and Northern Affairs Canada (INAC), selected the Sunchild First Nation in Alberta for a Recipient audit based on their 2012–2013 risk assessment score and other risk factors.
The objective of the recipient audit was to provide assurance that funding provided to the recipient by the Government of Canada was spent from its intended purposes and is in compliance with the terms and conditions of the 2010–2011 and 2011–2012 funding agreements with ISC. The objective was achieved through:
- examination of the operations of the financial management control framework in place at the Sunchild First Nation
- conduct 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 February 18, 2013 to February 28, 2013. The audit was completed with only limited success as the auditors did not have sufficient evidence to support their conclusions for all programs/activities and the recipient was unable to provide details to support the funded activity in some cases. There is a significant need to build capacity in the financial areas. If this capacity is not improved and if significant changes are not made to policies and procedures, the external auditor will continue to have problems in rendering an unqualified audit opinion.
Findings
The procedures performed identified that there is a significant need to build capacity in the financial areas, and that there is an absence of policies, procedures and documentation to provide adequate governance.
Based on the items sampled, a number of ineligible expenses were adjusted as these were not supported by adequate documentation and as a result compliance could not be assessed. The auditor did not extend testing procedures and was unable to complete the audit as sufficient and appropriate audit evident was not provided for a number of the samples selected for testing.
Governance by chief and council
The procedures performed identified that the recipient had very few governance documents in place. At the time of the audit, the recipient was engaged in a capacity-building project with an external professional services firm, which included the development of key policies to implement an effective governance framework.
Band management
The procedures performed also identified the following observations and areas of improvements with respect to Band financial management procedures: ensure the creation and approval of key governance documents, create a policy to detail the management of committees, prepare annual work plans with measurable milestones to evaluate performance for all programs and formalize the annual budget preparation and reporting process to guide financial planning and commitments each year and to ensure sound budget management for ISC funded activities.
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.
Disclaimer: This audit summary was prepared based on information contained in a recipient audit report on Sunchild First Nation by ISC and 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 or findings. Consequently, this summary may not be appropriate for the purposes and use of the reader.