Summary report for the recipient audit performed on Inuvik Native Band
Name: Inuvik Native Band
Location: Northwest Territories
Population: 4 on reserve; 631 total registered
Default status at time of audit: not in default
Current default status: not in default
Current A/Chief: Bernice Furlong
Time period covered by audit: April 1st, 2015 to March 31st, 2017
Amount of AANDC funding audited: $460,074
Background
Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC), formerly Indigenous and Northern Affairs Canada (INAC), selected the Inuvik Native Band 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 compliant with the terms and conditions of the 2015-16 and 2016-17 funding agreements. The objective was achieved through:
- reviewing recipient program management and financial control practices in relation to the funding agreements
- conducting audit procedures on the eligibility of the expenditures claimed under the terms and conditions of the funding agreements with CIRNAC
Deloitte LLP, an independent audit firm, was commissioned by CIRNAC to undertake the recipient audit. The audit procedures were performed from March 9th to March 23th, 2018. The auditors were unable to obtain appropriate supporting documentation for a number of transactions selected for the audit and thus, provided a disclaimer of opinion in the audit report.
Findings
The procedures performed identified that internal financial control processes are mostly in place, and well managed. However, a few procedures identified control weaknesses within program administration, and financial management. Addressing these internal controls will strengthen how the recipient manages and allocates its funds in accordance to the agreement. The following are some key findings and key recommendations identified in the audit report.
Program administration
Roles and lines of reporting are clearly established in the organizational chart. The band manager previously worked for INAC and has the knowledge and the experience to implement the funding appropriately, apply to funding programs and provide guidance to the newly elected Chief and Council. There is an Employee Code of Conduct and Financial & Personnel Policies. The band manager and the finance manager meet with the Chief and Council regularly to discuss and improve expenditures. The newly elected Chief and Council held formal meeting on a monthly basis for which minutes are made available and maintained. The audit also identified areas where there are opportunities to improve governance and administration. The audit noted there is no work plan in place. The recipient should implement work plan as stipulated in the agreement, comparing the actual results with the budgeted activities and note any deviations from the work plan.
Financial management
The recipient had appropriate segregation of duties and some accounting policies including capitalization thresholds and annual financial reporting procedures and criteria for recognition of disbursements in the general ledger. The audit also identified areas where there are opportunities to improve band financial management procedures. Several expenditures had insufficient supporting documentation. The recipient should ensure that all supporting documentation is maintained in an organized manner, with invoices and cheque copies attached. The journal entries are not reviewed before being posted in the accounting system. The recipient should ensure that all expenditures be reviewed prior to being recorded in the system and that journal entries be reviewed. All payroll disbursements are done by manual cheque. The recipient should review payroll withholdings, where applicable, for accuracy and reasonability, both at the individual level as well as the amount of overall remittances.
Current status
A copy of the final report has been sent to the recipient where CIRNAC 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 the Inuvik Native Band. The report produced for CIRNAC is intended solely for the information and use of the recipient and CIRNAC 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.