The Government of Canada is responsible for funding certain programs and services to First Nations communities. The most notable services are Elementary/Secondary Education and Social Assistance, but also included are Facilities Operations and Maintenance, Child and Family Services and Post-Secondary Education. It is Indian and Northern Affairs Canada's (INAC) belief that First Nations' governments, like other governments of similar size, are good governments. However, INAC is committed to strict program compliance rules in order to support the responsible use of public funds.

The main focus of program compliance is eligibility. Program compliance makes sure that only people who meet the qualifications for key socio-economic programs receive the services which they are entitled. From a First Nation's perspective, its program compliance function means that only eligible recipients get funds and benefits.

Compliance has always been a function of the department, but since specific regulations began in the mid 1990s, it has become a full-fledged national compliance function within the Corporate Services' Finance Branch and regional offices.

The guidelines to determine an individual's eligibility for funding are usually the department's policies, which are based on applicable provincial standards. In certain program areas (e.g. Social Assistance), the same eligibility standards used by a province are used by program compliance officers when examining a First Nation's level of funding. This means that a person living in a First Nations community applying for social assistance would have to meet criteria similar to a person receiving assistance from the province. As well, the amount the individual would receive would be comparable to the amount given to people getting provincial assistance.

The terms and conditions of the funding agreements describe the program delivery and reporting requirements for each program. Specifically, they ask for access to records for compliance reviews. Through the program compliance rules and reviews, the department makes sure programs and services are delivered according to the program policies. Program compliance officers are available in each region to further explain and clarify the processes and requirements.

Both on-site and in-office reviews are conducted for compliance. In-office reviews examine documentation submitted by a First Nation. Depending on the program involved, the specific information needed and the time frame may vary. In all cases, the First Nation must provide documentation which supports the level of funding it is requesting or that it has received.

Regularly scheduled on-site compliance reviews take place in every First Nation funded through a Comprehensive Funding Agreement (CFA). These reviews are completed by the regional program compliance officer and evaluate whether a First Nation's practices meet program and compliance regulations.

Program compliance ensures that First Nations operating under CFA receive reimbursement funding for only those social assistance and provincial tuition expenditures that meet program standards.

Block-funded First Nations (Canada/First Nations Funding Agreements) have a compliance review before funding is secured. This ensures that the level of funding provided is appropriate.

In addition, if a program compliance review finds funding irregularities, there are steps that allow the department to take action and, if necessary, recover any funds that were not spent appropriately.

Details on program compliance activities for the two major socio-economic programs (Social Assistance [SA] and Elementary/Secondary Education) follow.

Social Assistance

The goal of program compliance is to ensure that people who need SA get it and the amount they get is consistent with the department's policies and guidelines, which are based on applicable provincial standards.

SA compliance requires that people receiving social assistance must be living in First Nations communities. Individuals must apply to their band council for SA and fill out necessary forms, which include an Application Form and a Budget and Decision Sheet. As well, the applicant must provide receipts that support the request for assistance (for rent, fuel, utilities, etc.). The band is responsible for verifying the information provided by the applicant and must then use INAC guidelines to decide whether the individual qualifies for social assistance and for how much. The band will then issue SA payments based on the information provided.

The First Nation submits a claim for reimbursement to the regional INAC office. This claim is reviewed in-office and eligible expenditures are reimbursed to the First Nation. On-site reviews are conducted on a cyclical basis or more frequently when in-office reviews identify problems or higher-than-expected spending. A First Nation will be given the opportunity to correct or justify these payments, but when an over or under payment cannot be justified, the funding level for the First Nation is adjusted accordingly.

Education

The department provides funding for First Nations schools, the reimbursement of costs for students who live in First Nations communities and attend provincial schools, and (in a few remaining cases) INAC-operated federal schools.

The departmental Nominal Roll (NR) system is an information database that allows regions, districts and schools to do an annual census (student count) of First Nations students living in First Nations communities, and Inuit students whose education is directly or indirectly funded by INAC. The eligibility of students on the NR is verified both in-office (annually) and on-site (cyclically). The compliance criteria that determine whether students are eligible include age, grade, status, residency, program of study and student attendance, based on the National Compliance for the Elementary/Secondary Nominal Roll Review Guideline and the Nominal Roll User Guide.

To finalize the program compliance process, validation checks are done in the regional office to review any data changes made as a result of the in-office and on-site reviews. The First Nations are given an opportunity to address and resolve any areas of non-compliance identified. If these areas cannot be addressed, a series of steps are defined under the terms and conditions of the funding agreement to correct the problems.

July, 2001

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