Summary report for the recipient audit performed on Acho Dene Koe First Nation
Name: Acho Dene Koe First Nation
Location: Northwest Territories
Population: 1 on reserve; 709 total registered
Default status at time of audit: not in default
Current default status: not in default
Current Chief: Chief Gene Hope
Time period covered by audit: April 1st, 2015 to March 31st, 2017
Amount of INAC funding audited: $1,374,959
Background
Indigenous and Northern Affairs Canada (INAC) currently operating as Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC) and Indigenous Services Canada (ISC), selected the Acho Dene Koe First Nation 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 2015-2016 and 2016-2017 funding agreements. The objective was achieved through:
- reviewing recipient program management and financial control practices in relation with 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, an independent audit firm, was commissioned by CIRNAC to undertake the recipient audit. The audit procedures were performed from July 16th to July 19th, 2018. The auditors were not able to obtain sufficient and appropriate evidence to support their conclusions and thus provided a disclaimer of opinion on the audit report.
Findings
The procedures performed identified that internal financial control processes are mostly in place, and well managed. There are, however, a few procedures that 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
For the audited period, there was no formal organizational chart to outline roles and responsibilities. Under the new management, meetings were held on a monthly basis, minutes were available starting May 2017 and a new organizational chart was created. There was no trace of formal meeting between the chief and council prior to May 2017. The audit revealed areas where there are opportunities to improve program administration. There was no formal finance or personnel policies. Under the new management, the band manager and finance advisor were working on finalizing the policies, which are currently under review by KPMG. The recipient should finalize and communicated the policies and procedures to staff. There was no work plan in place. The recipient should implement a work plan and a process to compare the actuals results with the budgeted activities and note any deviation from the work plan. No formal process was noted regarding the evaluation of neither the objectives of the programs nor the compliance of terms and conditions. The recipient should monitor programs on a regular basis and reports be prepared as a support of the financial and non-financial review. These reports should be presented and approved by the chief and council.
Financial management
Under the new management, the band manager and finance advisor used Sage 300 accounting software, including payroll module, to records transactions. Key controls related to payroll process included the review of timesheets, budget-to-actual data and dual signatures on cheques. The audit also identified areas where there are opportunities to improve band financial management procedures. There were numerous instances of claims with missing documentation. The recipient should ensure that all supporting documentation is maintained including cheque requisitions, purchase orders, invoices and cheque copies attached. Segregation of duties was not appropriate given the size of the recipient organization. The recipient should segregate the roles of preparer and reviewer. This could be achieved in leveraging the work of the finance advisor as well as the chief. The chief should review the invoices and monthly financial review.
Current status
A copy of the final report has been sent to the recipient. CIRNAC and the recipient are working together to address the findings. The recipient was given a verbal briefing of the audit results.
Disclaimer: This audit summary was prepared based on information contained in a recipient audit report on the Acho Dene Koe First Nation. 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.