An issue that band members often raise with the CTF involves the transparency of First Nation businesses.

While INAC's rules are clear about the mandatory disclosure of how federal funds are used by reserves, band members often have trouble finding out what's happening with band-owned enterprises.

The CTF recently posed four questions to the Department of Indian and Northern Affairs about the rules concerning disclosure of audit information for band enterprises...here is the department's response:

Q.1     Are First Nation councils required to provide INAC with audited financial statements for band-owned businesses?

Yes, in accordance with provisions in their funding agreements, First Nation councils must provide the Department with consolidated audited financial statements annually. The consolidated audited financial statements include all activities of the First Nation entity, including band-owned businesses.

First Nations are required to follow Public Sector Accounting Board (PSAB) rules, the organization that sets accounting standards in Canada that apply to all levels of government. (For further information on PSAB rules, please refer to the Canadian Institute of Chartered Accountants www.cica.ca)


Q.2     Are First Nation councils required to provide audited financial statements to members upon request?

Yes. In accordance with provisions in their funding agreements, First Nation councils must make the consolidated audited financial statements available to all members of the First Nations communities upon request.


Q.3     Are First Nation councils required to provide audited financial statements for band-owned businesses to band members upon request?

Under INAC funding agreements, there is no specific requirement for First Nations to provide separate audited financial statements for band-owned businesses to band members.


Q.4     If audited financial statements have been prepared for band owned businesses and are not provided to INAC, what steps must a band member take in order to view these documents if their Chief and Council refuses them access?

First Nations are required to provide annual audited consolidated financial statements to INAC and their community members as per the terms and conditions of the funding agreement.  As these financial statements are consolidated, the band owned businesses would be included in the financial statements.

If the band owned businesses have independent audited financial statements, and INAC has not provided any funding to the band owned businesses or to the First Nation for the band owned businesses, then the independent business owned audited financial statements would be internal to the First Nation.