2023-2024 Financial Reporting Requirements

3.1 First Nations

First Nations are expected to adhere to the Public Sector Accounting Standards. Published by the Public Sector Accounting Board (PSAB), the PSA Handbook applies to all forms of public sector entities in Canada, which includes First Nations from an accounting perspective.

3.2 Tribal councils and First Nations political organizations

Tribal councils and First Nations political organizations must adhere to the PSA Handbook accounting recommendations unless they are deemed to be profit-oriented enterprises, or not-for-profit organizations as per the definitions and recommendations in the CPA Canada Accounting Handbook’s Canadian Accounting Standards, in which case these apply.

Recipients are responsible for determining which of the accounting standards collections (CPA or PSAB) are relevant to their organization, and seek advice from their auditor as needed.

3.3 Recipients other than First Nations, tribal councils and First Nations political organizations

Recipients other than those listed in Sections 3.1 and 3.2 must adhere to the PSA Handbook accounting standards unless they are deemed to be profit-oriented enterprises or not-for-profit organizations as per the definitions and recommendations in the CPA Canada Accounting Handbook’s Canadian Accounting Standards.

Recipients are responsible for determining which of the accounting standards collections (CPA or PSAB) are relevant to their organization, and seek advice from their auditor as needed.

3.4 Agencies

In some instances, CIRNAC and/or ISC may provide transfer payment funding to a recipient who may in turn transfer a portion or all of this amount to an agency, as well as the related obligations i.e. delivery of programs and services, as outlined in its terms and conditions of the funding agreement. In such instances, the initial recipient remains accountable for the performance of its obligations as set out in the terms and conditions of the funding agreement.

The recipient and agency must have their own terms and conditions for transfer payment funding managed by the agency. The agency must provide to the recipient its financial statements. The departments may ask a copy of the agency’s financial statements upon written request to the recipient.

6.1 First Nations, tribal councils and First Nation political organizations

6.2 Recipients other than First Nations, tribal councils and First Nation political organizations

Recipients other than tribal councils and First Nation political organizations must refer to their funding agreement, or consult with their funding officer in the departments to determine which reporting package apply to their situation, either F-0190, F-0191 or F-0192.

7.1 Annual audited financial statements

Please note: Restatements of audited financial statements should only be considered if an event classified as exceptional occurs e.g. a material inaccuracy due to an accounting error, non-compliance with GAAP - Generally Accepted Accounting Principles, etc. CPA Canada Standards are to be applied when a restatement is requested by the recipient and reason for restatement documented in the restated financial statements’ notes.

7.2 Schedule of Revenue and Expenses (Annex A)

PLEASE NOTE: A separate schedule of revenue and expenses must be provided for each program/service/activity/project and broken down by set, fixed, flexible or block contribution funding types, as identified in the funding agreement for which the recipient has received funding.

The schedules of revenue and expenses must:

• Be presented on an accrual basis (revenues/funding received during the statement period less expenses incurred)
• Revenues are accounted for in the year in which the transactions or events occur giving rise to the revenues for monetary transactions
• Expenses are accounted for in the year in which the goods and services are acquired and a liability is incurred, or transfers are due for monetary transactions but do not include non-monetary transactions e.g. amortization expenses
• Disclose all revenues/funding received by source and expenses incurred by object for each program/service/activity specified in the funding agreement
• Include a revenue section that outlines funding/revenue from all sources including funds received from other government departments, private enterprises and other sources
• When there is more than 1 funding source for a program/service/activity/project, it would be beneficial for the recipient to provide additional detail on all funding sources as this information may be considered in the calculation of proportional reimbursements, where applicable.
• Present unexpended funds in other word prior year unexpended funding - where applicable
• Detail opening and closing balances of deferred/unexpended funding
• Disclose budget figures
• Include any additional information to the schedules/financial statements, if relevant
• Be approved by an authorized representative of the recipient through signature on the financial statement package submitted

7.3 Schedules of remuneration and expenses (Annexes B and C)

7.4 Schedule of Movable Asset Reserve (Annex D)

Recipients who received Health Program "block" funding (or a "transfer", "flexible" or "flexible transfer" funding through agreements dated prior to April 2012) shall also provide the schedule of movable asset reserve, accompanied by an auditor's report or a review engagement report.

7.5 Auditors’ recommendations letter to management (Auditor's Letter)

The CPA Handbook recommends auditors to present to the audit committee or a similar governing body, any shortcomings in internal controls identified as a result of the audit process. This communication is referred to as either an "auditor's letter" or an "internal control letter". These letters and the recommendations contained therein, are valuable management tools with may assist the recipient in building and improving financial and administrative capacity.

The handbook also requires auditors to communicate, in writing and on a timely basis, significant deficiencies in internal controls identified during the audit, to those charged with governance. It is strongly recommended that the "auditor's letter" or "internal control letter" be provided to the departments, its submission however becomes a mandatory reporting requirement in the following cases:

1. Where a recipient is already in default, as defined under default provisions of a funding agreement, this reporting requirement will be in addition to previously imposed requirements; and
2. When a recipient is in default of the terms and conditions of its funding agreement and the departments have notified the recipient that a default management action is required.

Annex B Notes

1. The number of months during the fiscal year that the individual was a Chief or Councillor.
   As per the First Nations Financial Transparency Act:
2. "Remuneration" means any salaries, wages, commissions, bonuses, fees, honoraria and dividends and any other monetary benefits — other than the reimbursement of expenses — and non-monetary benefits.
   Examples are provided in the supporting document which accompanies this document on the Internet sites of Crown-Indigenous Relations and Northern Affairs Canada and Indigenous Services Canada, in the section entitled: "Supplementary Information".
3. As per the First Nations Financial Transparency Act:
   "expenses" include the costs of transportation, accommodation, meals, hospitality and incidental expenses.

Annex C notes

1. The number of months during the fiscal year that the individual was on staff.
2. "Remuneration" means any salaries, wages, commissions, bonuses, fees, honoraria, dividends and reimbursement of expenses — including the costs of transportation, accommodation, meals, hospitality and incidental expenses — and any other monetary benefits and non-monetary benefits.
3. Expenses reimbursed as part of amount shown in Column 5.