Summary report for the recipient audit performed on Pehdzeh Ki First Nation
Name: Pehdzeh Ki First Nation
Location: Northwest Territories
Population: 0 on reserve; 350 total registered
Default status at time of audit: not in default
Current default status: not in default
Current Chief: Maurice Moses
Time period covered by audit: April 1, 2014 – March 31, 2016
Amount of AANDC funding audited: $521,735
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 Pehdzeh Ki First Nation in Northwest Territories for a recipient audit based on their 2014-2015 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 2014-2015 and 2015-2016 Funding Agreements with CIRNAC. The objective was achieved through:
- examination of the effectiveness of the operations of the financial management control framework in place at the Pehdzeh Ki First Nation
- conduct of audit procedures on the eligibility of the expenditures claimed under the terms and conditions of the funding agreements with CIRNAC
Samson & Associates, an independent audit firm, was commissioned by CIRNAC to undertake the recipient audit. The audit procedures were performed from March 27, 2017 to March 30, 2017. The audit was completed and the auditors had a disclaimer of opinion for the 2014-15 fiscal year and an unqualified opinion for the 2015-16 fiscal year.
Findings
The procedures performed identified certain controls weaknesses within governance, program administration, expenditure oversight and financial management that, if well designed and operating effectively, would help ensure that funds are spent for their intended purposes and in compliance with the terms and conditions of the Agreement. The following are some key findings and key recommendations identified in the audit report.
Governance by Chief and council
The audit procedures performed, identified areas where there are opportunities to improve governance and administration of programs funded by CIRNAC. Pehdzeh Ki First Nation has an organization chart, which the band manager was not able to provide to the auditors. The recipient should ensure that the management structure and lines of responsibilities are readily available and communicated to all employees. There was no evidence that strategic direction was provided to program managers and staff. The recipient should ensure that senior management provides adequate strategic direction to its program managers and staff. Due to poor filing, the recipient was not able to provide the auditor with documentation to support the expenditures selected in the audit sample for 2014-15. The recipient should invest a proper filing system to organize the current and previous records of the organization. The recipient did not have personnel, financial and administrative policies, procedures and a formal conflict of interest policy. The recipient should develop and implement personnel, financial and administrative policies, procedures and a formal conflict of interest policy. Policies should be updated regularly.
Band management
The audit procedures performed, identified the following areas where there are opportunities to improve band financial management procedures. Where information was made available by the recipient, the review of the internal financial controls revealed some deficiencies regarding segregation of duties, approvals, etc. The recipient should develop processes to ensure the above noted internal control deficiencies are addressed. The financial practices in place involved making payments to suppliers without the appropriate supporting documentation being on hand. The recipient should implement controls to ensure that costs reported are properly substantiated with adequate supporting documentation. The audit revealed that sixteen out of twenty-three observations noted under the fiscal year 2014-15 had not been addressed in 2015-16 and consequently, were reiterated in the management letter for 2015-16. The observations highlighted significant weakness in the financial practices of the recipient. The latter should ensure that all observations raised by the recipient’s auditors are addressed.
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. 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 Pehdzeh Ki First Nation for CIRNAC. 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.