2019-2020 Supplementary Information
New PSAB Standards – Not Included in Model Financial Statements
Please note PSAB section PS 3260 – Liability for Contaminated Sites applies to fiscal years beginning on or after April 1, 2014. Additionally, sections PS 1201 - Financial Statement Presentation, PS 2601 - Foreign Currency Translation, PS 3041 – Portfolio Investments and PS 3450 - Financial Instruments apply to fiscal years beginning on or after April 1, 2015. Although early adoption for governments is permitted for the sections listed above, the Model Consistent Financial Statements do not yet incorporate these new sections. The Model Consistent Financial Statements are based on the government model in PSAB standards which apply to all First Nations, Tribal Councils and FNPOs reporting to Indigenous Services Canada (ISC) and Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC).
The First Nations Financial Transparency Act (FNFTA) and the Disclosure of Remuneration from Various Sources
Background
The FNFTA requires the public disclosure of a First Nation's audited consolidated financial statements and a schedule of remuneration and expenses paid to its chief and councillors.
"Remuneration" is defined in the Act as any salaries, wages, commissions, bonuses, fees, honoraria and dividends and any other monetary benefits — other than the reimbursement of expenses — and non-monetary benefits.
"Expenses" are defined in the Act as including costs of transportation, accommodation, meals, hospitality and incidental expenses.
Clause 6 of the FNFTA states:
6. (1) A First Nation must annually prepare a document entitled "Schedule of Remuneration and Expenses" that sets out, separately, the remuneration paid and the expenses reimbursed to its chief and each of its councillors — acting in their capacity as such and in any other capacity, including their personal capacity — by the First Nation and by any entity that, in accordance with generally accepted accounting principles, is required to be consolidated with the First Nation.
This provision ensures that all types of remuneration paid to a chief or councillor by the band or its entities, including remuneration received as a result of their role as an elected official and as a result of any other role they play for the First Nation and its entities, will be included in the schedule of remuneration and expenses. This document will then be subject to public disclosure.
The following table presents some examples of each type of remuneration:
| Remuneration | Example |
|---|---|
| Salaries | $45,000 in salary earned as a result of being a First Nation councillor, and/or $35,000 in additional salary paid by the First Nation earned for work done during flood relief |
| Wages | $25,000 in wages earned by a councillor as engineer of the First Nation's water treatment facility |
| Commissions | $5,000 in commission earned by a councillor who is also a real estate broker and paid by an entity consolidated with the First Nation as compensation for the sale of an asset held by the entity (e.g., a home in a sub-division on-reserve) |
| Bonuses | $5,000 bonus paid to a councillor by an entity consolidated with the First Nation for achieving organizational objectives (e.g., a "signing bonus" for settlement agreements) |
| Fees | $2,000 in consulting fees paid by the First Nation to a councillor who has a contract providing software consulting advice to the First Nation or one of the First Nation's entities |
| Honoraria | $30,000 in honoraria (e.g., a per diem and/or compensation for travel time) paid by the First Nation to a councillor for 30 days in the fiscal year at $1,000 a day |
| Dividends | $10,000 paid to a councillor by an entity consolidated with the First Nation by virtue of being part-owner of that entity (i.e., an investor or shareholder) |
| Non-monetary Benefits | $6,000 benefit equivalent to the value associated with the personal use by the Chief of a vehicle owned by an entity consolidated with the First Nation (e.g., the First Nation's Development Corporation) |
Clause 6 of the Act mentioned above does not require the public disclosure of remuneration (salaries or expenses) paid to the chief or councillor by any entity other than the First Nation or its entities. For example, a councillor who also works for a privately held company or an entity which is not consolidated with the First Nation (e.g., Telus, Canadian Tire, the RCMP, a private consulting firm) would not be required under the Act to disclose remuneration received from or expenses reimbursed in this capacity.
Similarly, the Act does not require the public disclosure of salary or reimbursement of expenses paid by the First Nation or any one of its entities to a corporation that is wholly-owned by a chief or councillor which has a contract with the band.
Loans and advances, and any associated forgiveness or write-off, given to the chief or councillor by the First Nation and by any entity that, in accordance with generally accepted accounting principles, is required to be consolidated with the First Nation, should be disclosed in the audited consolidated financial statements. The Notes of the audited consolidated financial statements should contain sufficient detail describing the recipient, amount, interest rate, monthly payment and term.
Example - Report (Narrative) on Unexpended Funding Plan
Name of Funding Recipient
Report on Unexpended Funding Plan
For the Year Ended March 31, 20XX
Program/Service/Activity X in the amount of $XXX
For each program, project and activity included in the Unexpended Funding Plan, provide narrative details on how funds were spent outlining achieved results, description of the activities undertaken and deliverables completed in the reporting period as compared with the submitted unexpended funding plan.
The information to be provided may include the following but is not limited to:
Objectives for the program/service/activity
- Briefly list and describe your objectives for the program/project/activity.
- What measures and indicators did you use to determine whether your objectives have been met?
- What were your targets and timelines?
Activities Undertaken and Results Achieved
- Provide a description of each activity/project undertaken for the funding period.
- Using established indicators, how did this/these program(s)/activity (ies)/project(s) meet your objectives?
- Describe the outcomes.
- Did you meet your targets?
- Provide a copy of any action plan or document/report, if one was developed during the funding period.
Report (Financial) on Unexpended Funding Plan
Name of Funding Recipient
Report on Unexpended Funding Plan
For the Year Ended March 31, 20XX
| 20(XX) $ |
20(XX-1) $ |
|
|---|---|---|
| Unexpended Funding | ||
| Land Management (Fixed – 20XX-20XX) |
||
| Family Violence Prevention (Fixed – 20XX-20XX) |
||
| Low Cost Special Education (Fixed – 20XX-20XX) |
||
| Block Funding – 20XX-20XX | ||
| Other (Fixed – 20XX-20XX) |
||
| Total Unexpended Funding | xxx | xxx |
| Expenditures (list programs, projects and activities as per the plan) | ||
| Summer Camp | ||
| School Breakfast Program | ||
| Textbook Program | ||
| Financial Training | ||
| Total Expenditures | xxx | xxx |
| Unexpended Funding Less Expenditures | xxx | xxx |
Example - Unexpended Funding Plan
Name of Funding Recipient
Unexpended Funding Plan
For the fiscal year 20(XX) to 20(XX)
Planned programs/services/activities
Summer Camp
- Three month summer camp teaching traditional ways and self-esteem to ages 12-18… (Provide description of each program/project/activity to be undertaken)
- Objectives are to enhance… (Briefly list and describe objectives for the program/ project/activity)
- Funding to pay for travel costs and teacher salaries… (Outline type of expenditures)
- Estimated budget: $50,000 over two summers (Provide estimated budget and timelines)
School Breakfast Program
- Investment for school breakfast program elementary …
- Objectives are to help provide …
- Funding to pay for food expenditures and staff costs to prepare …
- Estimated Budget: $50,000 over one year.
Textbook Program
- Purchase updated textbooks and supplies for high school…
- Objectives are to provide better tools for …
- Funding to pay for textbook and shipping cost …
- Estimated Budget: $30,000 over one year.
Financial Training
- Training for financial clerks and band manager on budgeting and variance …
- The objective is to enhance financial reporting and analysis capacity to …
- Funding to pay for a financial specialist to provide training and to cover cost …
- Estimated Budget: $70,000 during winter 20(XX).