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Report on the Audit of the Federation of Saskatchewan Indian Nations Developmental Activities Related to First Nations Policing Agreement and Police Management Board Training Agreement

December 15, 2004
310-2168-01

• 1. Introduction
• 2. Audit objectives
• 3. Audit scope
• 4. Audit approach
• 5. Conclusion
• 6. Auditors' report
• Schedule 1 - Summary of Budgeted, Reported and Eligible Amounts - Developmental Activities and Police Management Board Training Agreement
• Schedule 2 - Summary of Budgeted, Reported and Eligible Amounts - Developmental Activities Agreement
• Schedule 3 - Summary of Audit Adjustments - Developmental Activities Agreement
• Schedule 4 - Summary of Budgeted, Reported and Eligible Amounts - Police Management Board Training Agreement
• Schedule 5 - Summary of Audit Adjustments - Police Management Board Training Agreement
• Schedule 6 - Audit Observations and Supplementary Information - Developmental Activities Agreement

1. Introduction

Developmental Activities Agreement

An audit of the Federation of Saskatchewan Indian Nations (FSIN) Developmental Activities Agreement effective January 29, 2004 (Agreement), between the Solicitor General of Canada (Canada), the Minister of Justice and Attorney General of Saskatchewan (Province) and the FSIN (Recipient), was conducted on behalf of the Department’s Aboriginal Policing Directorate.  The audit was undertaken in December 2004.

The period covered by this Agreement is April 1, 2003 to March 31, 2004. 

The subject of this audit is the contribution of $148,540 (Canada - $77,241 and Saskatchewan - $71,299), to proceed with developmental activities related to First Nations policing in Saskatchewan.  The contribution was to cover the salaries, benefits and professional development of the coordinators and administrative support salaries and benefits, travel and the administration and overhead costs pertaining to office operations of the Recipient.

The primary responsibilities of the FSIN, as outlined in Schedule A of the Agreement, is to provide a five-year strategic plan for First Nation policing in the Province of Saskatchewan, in consultation with the First Nation communities; develop a document that will encompass a strategic plan for Police Management Board training; coordinate and deliver Police Management Board training; provide hands-on training to Saskatchewan police management boards, law enforcement officers and government representatives; and provide a Police Management Board training report.

Police Management Board Training Agreement

An audit of the Federation of Saskatchewan Indian Nations (FSIN) Police Management Board Training Agreement effective November 14, 2003 (Agreement), between the Solicitor General of Canada (Canada) and the FSIN (Recipient), was conducted on behalf of the Department’s Aboriginal Policing Directorate.  The audit was undertaken in December 2004.

The period covered by this Agreement is December 1, 2003 to January 31, 2004. 

The subject of this audit is the contribution of $40,000 from Canada, to support the 2003-2004 Police Management Board (PMB) Training workshop held in January 2004.  The contribution was to cover the facility expenses, PMB travel and honorariums, FSIN coordination and travel, facilitators, Elders services and the operational costs of the training.

The primary responsibility of the Police Management Board Training, as set out in Schedule A of the Agreement, is to train Police Management Board (PMB) members from the 30 Royal Canadian Mounted Police (RCMP) First Nations Community Police Services (FNCPS) Community Tripartite Agreements (CTA) in Saskatchewan to function effectively as a police governance body and to coordinate and provide training to PMB members.

2. Audit objectives

2.1  The general objectives of the audit were:

2.1.1  to ensure that claimed expenditures have been incurred by the Recipient and are in accordance with the Agreements and departmental and central agency guidelines;

2.1.2  to verify and report on the costs incurred and claimed and indicate the concurrence, or otherwise, of the Recipient 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 determining that:

2.2.1  the Recipient met both the financial and non-financial terms of the Agreements;

2.2.2  as they relate to the Agreements:

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

2.2.3  the Recipient had an adequate internal control system to account for and manage the contributions received.

3. Audit scope

3.1  The audit scope was limited to the verification of the Recipient’s financial records, supporting documentation and reported amounts for the period April 1, 2003 to March 31, 2004, and included:

• an examination and assessment of the quality, propriety and accuracy of the Recipient’s financial records, accounting procedures and internal controls, as they related to the costs charged under the terms of the Agreements; 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 Agreements.

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.

4. Audit approach

The audit approach focused on compliance with the terms and conditions of the Contribution Agreements, in order to ensure that the reported expenditures were incurred and that the Recipient met the financial and non-financial terms of the Agreements.

The audit was undertaken in three phases:

• planning;
• field work and analysis; and
• reporting.

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

The field work and analysis consisted mainly of undertaking the detailed audit program to gather evidence to support our audit opinion, findings and conclusions.  The principal audit activities included interviews with the Recipient’s representatives, an examination and evaluation of accounting systems, controls, and the results of the tests conducted on the books and records and supporting documentation of the Recipient as they related to this contribution, and obtaining the Recipient’s response to the audit findings.

The reporting phase involved an analysis of the findings and the formulation of an opinion on the information obtained from the Recipient for inclusion in the audit report. In addition, the Chief Financial Officer, the Controller and the Director of Policing Services were debriefed on the results of the audit.

5. Conclusion

The audit indicated that the developmental activities related to First Nations policing and Police Management Board training in Saskatchewan appeared to be consistent with the stated objectives of the Agreements.

Based on the examination of the records of the Federation of Saskatchewan Indian Nations, expenditures were made in accordance with the Agreements.  The Recipient maintained adequate controls over those expenditures funded by contributions received from Canada and Saskatchewan.

The audit of the Developmental Activities Agreement revealed that the Recipient did not meet all of the non-financial terms as required under Schedule A and as presented in Schedule 4 of this report.

Details of the audit findings are presented in the Auditors' Report and supporting Schedules 1 to 4.

The audit of the Police Management Board Training Agreement revealed that the Recipient did meet all of the financial and non-financial terms of the Agreement.

Details of the audit findings are presented in the Auditors' Report and supporting Schedules 1 to 6.

6. Auditors’ report

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

Federation of Saskatchewan Indian Nations Developmental Activities Agreement
Effective January 29, 2004
Period Audited:  April 1, 2003, to March 31, 2004

Federation of Saskatchewan Indian Nations Police Management Board Training Agreement effective November 14, 2003
Period Audited:  December 1, 2003, to January 31, 2004

We have audited the revenues and expenditures of the Federation of Saskatchewan Indian Nations (Recipient) relative to the above Agreements. The revenues and expenditures as well as compliance with the terms of the Agreements, are the responsibility of the Recipient. Our responsibility is to express an opinion on the revenues and expenditures and compliance with the Agreements based on our audit.

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 amounts reported are free of material misstatement and whether the Recipient complied with the terms of the Agreements.  An audit includes examining, on a test basis, evidence supporting the reported amounts, disclosures and compliance with the Agreements.  An audit also includes assessing the accounting principles used and significant estimates made by the Recipient.

In our opinion, except for audit observations 1 and 2 on Schedule 6, Schedule 1 presents fairly, in all material respects, the eligible amounts under the terms of the Developmental Activities Agreement and the Police Management Board Training Agreement.  Supporting information and related comments are provided in Schedules 2 to 6. 

The Chief Financial Officer of the Federation of Saskatchewan Indian Nations, the Controller and the Director of Policing Services has been debriefed and concur with the audit findings.

WINNIPEG, MANITOBA

Schedule 1 - Summary of Budgeted, Reported and Eligible Amounts - Developmental Activities and Police Management Board Training Agreement

April 1, 2003 to March 31, 2004

Schedule 2 - Summary of Budgeted, Reported and Eligible Amounts - Developmental Activities Agreement

April 1, 2003 to March 31, 2004

Schedule 3 - Summary of Audit Adjustments - Developmental Activities Agreement

April 1, 2003 to March 31, 2004

EXPENDITURES

According to Section 1.1 of the Contribution Agreement, eligible costs are “as described in Schedule B”.  There are no budget line items for non-staff travel or for non-staff per diems.  The only eligible travel costs are those incurred by the coordinator(s) to implement the deliverables set out in Schedule A.  However, it should be noted that the costs incurred for ineligible, non-staff travel and per diems pertained to Schedule A’s 1st and 2nd deliverables.

Schedule 4 - Summary of Budgeted, Reported and Eligible Amounts - Police Management Board Training Agreement

December 1, 2003 to January 31, 2004

Schedule 5 - Summary of Audit Adjustments - Police Management Board Training Agreement

December 1, 2003 to January 31, 2004

Notes:

Meeting room expenses were for the Fort Qu’Appelle, Saskatchewan meeting which took place on January 12, 13 and 14, 2004. The expenditures were originally charged to the Policing Agreement.

Schedule 6 - Audit Observations and Supplementary Information – Developmental Activities Agreement

December 1, 2003 to January 31, 2004

A.  Audit Observations
 
1.  Deliverables Per Schedule A to the Agreement
 
At the time of our audit field visit, the Federation of Saskatchewan Indian Nations (FSIN) was still working towards the completion of deliverable 1 (which requires it to provide a five-year strategic plan) and deliverable 2 (which requires it to develop a document that would encompass a strategic plan for Police Management Board Training).  Both of these deliverables are currently in the draft stages.
 
F.S.I.N. did not fulfill deliverable 3 which required it to provide training (over and above the Police Management Board training already scheduled for January 2004) to 30 communities.
 
F.S.I.N. also did not fulfill deliverable 5 which required it to provide a Police Management Board report about training (excluding the Police Management Board training scheduled for January 2004).

The Developmental Activities Agreement was not signed until January 29, 2004 and therefore did not provide the Recipient sufficient time to fulfill the above deliverables as per Schedule A to the Agreement.

2.  Parties to the Agreement

Section 1.1 defines the Federation of Saskatchewan Indian Nations (FSIN) as one of the parties in the Agreement.  According to documentation made available to us (Auditor’s Report from Deloitte & Touche), the legal name of FSIN is now Federation of Saskatchewan Indian Incorporated.  This name change has not been recognized by a signed amendment to the Contribution Agreement.
   
B.  Supplementary Information

1.  Travel Expense / Per Diem Allowances
 
The Recipient’s per diem allowance rates fluctuate with the amount of travel funding provided to the Recipient – an amount that varies according to each contribution agreement’s approved budget.  This practice was noted in the minutes of an F.S.I.N. Treasury Board Meeting.  For this particular Contribution Agreement, the amount disbursed for travel per diems was not reduced since this Contribution Agreement’s approved, travel budget allowed it to make per diem allowance payments in accordance with F.S.I.N.’s documented travel policies.

2.  Indian Treaty Rights Protection Fund

The Recipient reduced its payments for per diem allowances paid to tribal representatives (including Chiefs) by 10%; these amounts of $1,596 from the Developmental Activities Agreement and $1,711 from the PMB Training Agreement were then transferred to its Indian Treaty Rights Protection Fund.  We were verbally advised by an F.S.I.N. representative that these deductions (authorized per the minutes of an F.S.I.N. Treasury Board Commission meeting) were in lieu of taxation.  Both these amounts were disallowed as they were not eligible costs incurred as per the Contribution Agreements.