1.0 INTRODUCTION

This document replaces the Year-end Reporting Handbook for First Nations, Tribal Councils and First Nation Political Organizations dated November 2002. It provides direction to Indian and Northern Affairs Canada (INAC) Recipients that are First Nations, Tribal Councils or First Nation Political Organizations and to their Agencies regarding their financial reporting requirements.

This handbook must be read in conjunction with the Recipient's funding agreement. Terms and conditions of the funding agreement specify that the Recipient must submit consolidated audited financial statements prepared in accordance with this handbook to INAC and to community members. INAC receives and reviews this financial information in order to: determine whether funds have been expended for the purposes intended; ensure terms and conditions of funding agreements have been met; and ensure that the recipient's financial situation is sufficiently stable in order to assure continued delivery of funded services.

Recipients' financial reporting of INAC funding shall be prepared in accordance with generally accepted accounting principles (GAAP). The financial statements shall be audited and shall consolidate the activities of the entire reporting entity as defined in GAAP.

This handbook does not detail GAAP requirements. It only details specific financial reporting requirements for purposes of accountability for federal Transfer Payments. The Recipient is responsible for ensuring that all financial reporting requirements are met. It is therefore recommended that Recipients provide this handbook to their auditors and to any Agencies to which they have transferred any Transfer Payments in order to assist them in comprehending the Recipient's and their funded Agencies' financial reporting requirements.

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