Reporting to the First Nation on money paid to and money expensed by each Councillor is part of sound governance practices and reinforces Council’s accountability to its members. This report is to be completed yearly.
The FAL requires that Council create a policy on this that includes the steps for:
An external audit is the process of having someone independent review an organization’s financial statements and form a view as to whether or not they reflect the actual state of the money and property of the organization.
The independent reviewer (known as the auditor ) must follow certain standards known as auditing standards. The external audit provides reassurance to the First Nation and other readers of the financial statements that what they are reading reflects reality.
There are certain key tasks that need to get done in every First Nation. These involve managing the overall day-to-day operations of the First Nation that include specific tasks around finances and reporting.
The FAL requires that these be assigned to specific individuals to make sure that they get done.
Therefore Council must create a policy outlining the duties and roles of the First Nation’s officers which include the senior manager, the senior financial officer and the tax administrator (if the First Nation is collecting local revenues).
The Finance and Audit Committee reports to Council and has a financial and audit oversight role. These must be defined in the terms of reference for the Finance and Audit Committee that must include the financial and audit oversight responsibilities listed below.
The Finance and Audit Committee must review and recommend the following to Council:
A Finance & Audit Committee (FAC) is a committee that oversees the financial reporting and audit functions of a First Nation. It provides forward-thinking oversight of the investments of a First Nation and supports Council in making good financial decisions.
The Finance and Audit Committee reinforces Council’s accountability and transparency to its members. It is important to understand that it is a recommending committee only and has no decision-making authority.
A First Nation may choose to form a committee to perform a task more efficiently or with expertise in relation to a specific matter. Terms of reference allow for the smooth functioning of the committee and Council must create these for each committee.
The terms of reference for each committee must set out: