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Report on the Audit of the Agreement between Saint Mary’s First Nation, New Brunswick, Canada and the City of Fredericton for the Fredericton Police Force

February 28, 2005
310-2154-01

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• Introduction
• Audit objectives
• Audit scope
• Audit approach
• Conclusion
• Auditors' report
• Schedule 1 Summary of reported and eligible amounts
• Schedule 2 Detail of audit adjustments
• Schedule 3 Supplementary information
  
  1. A. Comments
  2. B. Items of non-compliance - Roles and responsibilities of the City of Fredericton
  3. C. Item of non-compliance - Roles and responsibilities of the Saint Mary's First Nation

Introduction

On June 7, 2000 the Department of the Solicitor General of Canada (the Department), the Province of New Brunswick (the Province), the City of Fredericton (the City) and the Saint Mary’s First Nation at Fredericton (the First Nation) entered into a quadripartite agreement for the provision of policing services and protection, by the Fredericton Police Force, to that part of the First Nation territory within the boundaries of the City. The period covered by the Agreement is April 1, 2000 to March 31, 2005.

An audit relative to the Agreement was conducted on behalf of the Department. The period covered by the audit is January 1 to December 31, 2003. The audit was undertaken in October 2004.

The contribution to be paid under the terms of the agreement was set at a sum not to exceed $211,538 per fiscal year. The Department’s contribution was set at 52% or $110,000, while the provincial contribution was set at 48% or $101,538.

On December 12, 2003, the Prime Minister of Canada announced restructuring changes to government that resulted in the Department of the Solicitor General becoming part of the new Department of Public Safety and Emergency Preparedness.

Audit objectives

2.1 The general objectives of the audit were:

2.1.1 to ensure that recorded expenditures were incurred by the City and are in accordance with the Agreement, and departmental and central agency guidelines;

2.1.2 to verify and report on the costs incurred and indicate the concurrence, or otherwise, of the City with the audit findings; and

2.1.3 to bring to the attention of the Department, any matters considered to be of significance or requiring management action.

2.2 Specific objectives included:

2.2.1 determining whether the City has met both the financial and non-financial terms of the funding Agreement;

2.2.2 as they relate to the Agreement, determining whether:

• financial operations were conducted properly,
• financial statements were presented fairly, and
• financial reports contained accurate and reliable infor­mation;

2.2.3 determining whether the City had an adequate internal control system to account for and manage the funds received under this Agree­ment.

Audit scope

3.1 The audit scope was limited to the verification of the City’s financial records and supporting documentation for the submitted amounts for the period January 1 to December 31, 2003, and included:

• an examination and assessment of the quality, propriety and accuracy of the City’s financial records, accounting procedures and internal controls as they relate to the costs incurred under the terms of the Agreement; and
• an assessment of the reasonableness and eligibility of the expenditures incurred or charged in accordance with generally accepted accounting principles and with the terms of the Agreement.

3.2 The audit was conducted in accordance with Canadian generally accepted auditing standards and in accordance with the Office of the Comptroller General’s Guide on the Audit of Federal Contributions.

Audit approach

Our approach was focused on compliance with the terms and conditions of the Agreement, and to ensure that recorded expenditures were incurred, and that the City has met the financial and non-financial terms of the Agreement.

The audit was undertaken in three phases as follows:

• The planning phase included familiarization with the mandate, obtaining information and documentation from the Department, developing the detailed audit program and arranging the on-site visit.

• The field work and analysis consisted mainly of utilizing the audit program to gather evidence to support our audit opinion, findings and conclusions. Principal audit activities included interviews with the City’s representatives, an examination and evaluation of accounting system and internal controls, an analysis of the results of tests conducted on the records and supporting documentation as they relate to the contribution, and debriefing the City on the results of the audit.

• The reporting phase involved an analysis of our findings and the formulation of an opinion, on the information obtained, for inclusion in the audit report. In addition, we obtained the City’s response to the audit findings.

Conclusion

Our review indicated that the City of Fredericton has provided police services and protection through its Municipal Police Force to that part of the Saint Mary’s First Nation territory within the boundaries of the City. The City obtained a permit for entry to the First Nation territory for the purpose of providing the required policing services. The City used its equipment and departments for the purpose of providing the required policing services. During our review, and interviews, with representatives of the City and the First Nation, we did not identify any information which would suggest that the standard and level of service provided to the Saint Mary’s First Nation was any different than that enjoyed by other residents of the City of Fredericton. In all matters relating to the relationship between an employer and its employees, there was no evidence to suggest that the City did not remain solely responsible.

The City has established a separate group of accounts to allow for the accountability of activities relating to the provision of the required policing services. The City does prepare an annual audited financial statement. This statement under Schedule 2, Details of Certain Current Fund Expenditure includes line items which show the expenditures incurred in providing the policing services and the contributions received from the federal and provincial governments.

Our review has revealed that the City, with the exception of the items noted in Schedule 3, has met all the non-financial terms of the Agreement. The eligible expenditures, subject to the qualification presented in Schedule 3, were determined to be $261,713.

Further details of our findings are presented in the Auditors' Report and supporting Schedules 1 to 3.

Auditors’ report

Director General
Aboriginal Policing Directorate
Department of Public Safety and Emergency Preparedness Canada
(Solicitor General of Canada)

Agreement dated June 7, 2000 between Saint Mary’s First Nation, Fredericton, New Brunswick, Canada and the City of Fredericton for the Fredericton Police Force for the provision of policing services to the Saint Mary’s Reserve No. 24 and Devon Indian Reserve No. 30 as defined in the Indian Act

Period Audited: January 1 to December 31, 2003

We have audited the accounts and records of the City of Fredericton, (the Recipient) insofar as they pertain to the reported amounts for the above Agreement. The preparation of the financial information and compliance with the terms of the Agreement are the responsibility of the City of Fredericton’s management. Our responsibility is to express an opinion on the recorded amounts and on compliance based on our audit and terms of reference.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the recorded amounts are free of material misstatement and that the Recipient has adhered to the financial terms and conditions of the Agreement. An audit includes examining, on a test basis, evidence supporting the recorded amounts and compliance to the financial terms and conditions of the Agreement. An audit also includes assessing the accounting principles used and the reasonableness of significant estimates, if any, made by the Recipient.

In our opinion:

1. the eligible amount of $261,713 presents fairly, in all material respects, the Recipient’s costs in accordance with generally accepted accounting principles; $211,538 is the maximum budgeted amount allowable under the terms of the Agreement; and

2. the Recipient has complied, in all material respects, with the non-financial terms of the Agreement, except for those items of non-compliance noted in Schedule 3.

Supporting information and related comments are provided in Schedules 1 to 3 inclusive.

The Recipient agrees with the financial results of our audit. A letter subsequently received from the Recipient providing further comments has been forwarded to the Department.

Halifax, Nova Scotia

Schedule 1 - Summary of reported and eligible amounts

Schedule 2 - Detail of audit adjustments  

Schedule 3 - Supplementary information         

A. Comments

1. Audit period

The original audit period identified by the Aboriginal Policing Directorate (APD) was April 1, 2003 to March 31, 2004. Following discussions between APD and the City, it was decided that the audit period should coincide with the Recipient’s fiscal period which ends on December 31.

2. Accounts and records of the City

The City has established unique account codes to record the costs associated with the provision of policing services to the First Nation. The City records the actual cost of salary and benefits for the two police officers, dedicated to the First Nation Police Detachment, on a regular basis throughout the fiscal period. Salary and benefit costs for police enforcement activities and all other costs are recorded in the policing services accounts by means of a journal entry transfer at year end. These journal entry amounts were calculated either on the basis of statistical data maintained by the Fredericton Police Force, historical policing activity occurrence rates or, standard annual charge out rates.

3. Provision of policing services

During 2003 the Fredericton Police Force had two full-time community police officers assigned to the First Nation Police Detachment. One of these officers was native and the other non-native. The native officer has served approximately 19 years with the Fredericton Police Force. In addition to the time spent by the two full-time community police officers, the City provided statistical data which supports that the equivalent of a minimum additional one-half year of police services were provided in relation to police enforcement activities on the First Nation.

4. Police officer training

The City, in accordance with Article 7.10 of the Agreement, is required to ensure that officers providing services to the First Nation receive training which will allow them to meet the needs of this community. The City provided Consulting and Audit Canada with a statement indicating that during 2003, the community police officers assigned to the First Nation Police Detachment received training in the following areas:

• Youth Criminal Justice Act Training
• Public Safety Order Unit Training
• Applied Suicide Intervention Skills Training
• Critical Incident Stress Management

5. Calculation of reported costs

The Fredericton Police Force maintains data on the number of complaints, occurrences, follow-up actions, tickets issued and motor vehicle accidents. This information was used by the City of Fredericton in the calculation of its reported amounts shown under Schedule 1, Enforcement Activities, Administrative Salary Costs and Other Costs (for the categories Criminal Investigation Division and Community Resources).

a) Enforcement activities

Based upon computer time records, the City has calculated the average actual time taken to dispatch an emergency call and the subsequent investigation of the complaint. For occurrences, follow-up, tickets and motor vehicle accidents, the City has determined average times which would be required to complete these activities. These average times were determined based upon a survey of police officers. The actual or average time values were multiplied by the number of events to arrive at the number of hours spent by the Police Force in dealing with these activities. The City then calculated an average hourly rate of pay, which included both salary and benefits, and multiplied this rate by the number of hours to arrive at the reported costs.

In undertaking the calculation of reported costs for the calendar year 2003, which is the current audit period, the City used the data collected for the calendar year 2002. The eligible amounts shown under Schedule 1 reflect the costs for the City based upon 2003 data.

b) Administrative salary and other costs

In calculating the submitted amounts for administrative salary costs and other costs (for the categories Criminal Investigation Division and Community Resources) the City used a 3% occurrence rate based upon data collected for 1997. The eligible amounts shown under Schedule 1 reflect the costs for the City based upon the 2003 occurrence rate of 2.3%.

B. Items of non-compliance - Roles and responsibilities of the City of Fredericton

1. Submission of quarterly invoices

Article 7.5 of the Agreement states that the City shall send to Canada and the Province invoices for the quarterly payment of the eligible costs. In addition, copies of all invoices shall also be sent by the City to the First Nation.

During our audit visit both the City and the Chief of the First Nation confirmed that copies of the quarterly invoices sent to Canada and the Province have not been sent to the First Nation.

We recommend that the Department remind the City of the requirement to provide the First Nation with copies of the quarterly invoices as required under the terms of the Agreement and to take subsequent follow-up action to ensure that the City has complied.

2. Quarterly status reports

Article 7.9 (d) of the Agreement states that the City through its Police Force shall ensure that regular status reports detailing police services provided to the First Nation are supplied on a q uarterly basis to the Band Council and the Community Consultative Group.

During our audit visit, a representative of the Fredericton Police Force and the Chief of the First Nation confirmed that the required quarterly status reports have not been prepared and supplied to the Band Council.

We recommend that the Department remind the City of the requirement to provide the First Nation with quarterly status reports as required under the terms of the Agreement and to take subsequent follow-up action to ensure that the City has complied.

C. Item of Non-compliance - Roles and Responsibilities of the Saint Mary’s First Nation

Community consultative group

Article 8.1 of the Agreement states that the Band Council of the Saint Mary’s First Nation shall establish a Community Consultative Group and shall determine the terms of reference of this Group.

It is our understanding that the required Community Consultative Group was never established and the terms of reference for this Group were never developed. Therefore, the opportunity for Band members to actively participate in the identification of policing issues and concerns and to present these issues and concerns to the Chief of the Fredericton Police Force has not been present throughout the period of the present Agreement.

The failure of the Band Council to establish the Community Consultative Group has resulted in the loss of the medium through which First Nation’s members had a voice in policing issues and concerns. Failure to establish the Community Consultative Group has impacted the attainment of the objectives set forth in the First Nations Policing Policy. Because policing issues and concerns of First Nation’s members were not formally identified, the ability of the Fredericton Police Force to provide policing services which were responsive to the needs of the Saint Mary’s First Nation were diminished. The opportunity to establish a structure to assist the First Nation to become more self-sufficient and self-reliant has been lost for the period of the current Agreement. The promotion of a partnership, built on trust, mutual respect and participation in decision-making, between the First Nation’s people, the Fredericton Police Force and the greater Fredericton community has been hindered.

We recommend that the Department put in place a monitoring procedure in regard to this and other agreements for policing services where there exists the requirement to establish a Community Consultative Group. Follow-up action, in the form of a written request to the Chief of the First Nation for information regarding the establishment and activities of the Community Consultative Group, should be taken by the Department no later than six months following the start date of each new policing services agreement.