Contribution Audits
Health Canada performs audits on funding that has been provided through
contribution agreements to ensure accountability to the terms and conditions
of the agreements.
The First Nations and Inuit Health Branch provides funding for health
services to First Nations and Inuit communities through contribution
and transfer agreements.
What's the difference between contribution and transfer agreements?
- A Contribution Agreement (now called the Consolidated Contribution
Agreement - General) does not allow communities to re-prioritize or
redirect health resources.
- Health Services Transfer Agreements (now called the Consolidated
Contribution Agreement for First Nations and Inuit Transferred Organizations/Communities)
offers more authority and control of health resources and thus requires
a different set of accountability measures.
Consolidated Contribution Agreement Audits
 Contribution
audits are part of the accountability
framework established between Health Canada and First Nations and
Inuit communities. These audits are in addition to ongoing monitoring
activities, provision of reports, and community-based evaluation.
Are all contribution agreements audited?
Every year, Health Canada identifies a small number of contribution
agreements for audit review. Contribution audits may be conducted to:
- Ensure that the approval and administration of contribution agreements
conform to applicable legislation, policies and procedures;
- Ensure that expenditures are accounted for under generally accepted
accounting principles;
- Examine the contribution agreements that are considered to be at
risk;
- Provide a framework for taking corrective and preventive measures;
and
- Be used as training tools to help communities change or improve financial
management methods.
Auditing Guidelines for Consolidated Contribution Agreements
Under a Consolidated Contribution Agreement-Integrated, a First Nation's
Council is accountable for the funds it receives from Health Canada.
The audit requirements for this type of funding agreement are outlined
in the First
Nations and Inuit Health Branch Audit Guidelines.
For more information on Health Canada's reporting and auditing requirements
for funding transfers, refer to Reporting
and Auditing Guidelines for Health Services Transfer Agreements.
Contribution Audit Summaries
Contribution audit summaries provide an overview of audits conducted
across Canada. Summaries for subsequent years will be posted as they
become available.
The yearly contribution audit summaries contain the following information:
- Date of audit report;
- Contribution amount audited;
- Amount paid;
- Amount supported by the audit;
- Amount unsupported by the audit;
- Why the amount was questioned;
- Follow-up action taken; and
- Current situation.
Contribution Audit Summaries
Responsibilities of Auditors
All audits are carried out by independent auditors who follow general
accounting and audit principles. In addition to ensuring that all expenditures
are properly accounted for and supported by evidence, the auditors are
asked to assess the compliance of these expenditures with the terms and
conditions of the contribution agreements.
Auditors will in some cases lack the in-depth knowledge of the health
programs and specific health approaches developed with First Nations
and Inuit communities. As a result, expenditures that auditors may perceive
as not in accordance with the terms of the agreement may be approved
by Health Canada later because of particular circumstances in the communities
delivering the health services, and in acknowledgement of the communities'
cultural approaches to health.
Recovering Unauthorized Expenditures
Once the audits are complete, the First Nations or Inuit communities
and Health Canada work together to take whatever follow-up action is
necessary. In many cases, communities can supply further information
that explains expenditures queried in an audit.
When required, unauthorized expenditures are recovered through a mutual
arrangement among the communities and Health Canada. Care is taken to
ensure that the audit process and its follow-up will not have an impact
on the delivery of health services in the communities.
For further information on contribution audits, contact
the Business Planning and Management Directorate.
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