2012
STEPS TO IMPLEMENTING FMB STANDARDS First Nations Financial Management Board This is a guide document intended to help First Nations navigate the FMB Standards and Certification processes.
First Nations Financial Management Board FEBRUARY 2012
Table of Contents About the FMB ............................................................................................................................... 2 Legislative Authority.................................................................................................................... 3 Financial Administration Law Services .......................................................................................... 4 What is a Financial Administration Law? .................................................................................... 5 Financial Administration Law (FAL) Approval Services ............................................................... 6 Steps for FAL Development and Approval .................................................................................. 6 Certification Services .................................................................................................................... 11 Certification Options on how to become a borrowing Member .............................................. 12 Certification Options – Table 1.................................................................................................. 13 Summary of the FSMA Borrowing Steps – Table 2 ................................................................... 14 Financial Performance Certification ............................................................................................ 15 Steps for Financial Performance Certification .......................................................................... 16 Financial Management Systems Certification ............................................................................. 19 Steps for Financial Management Systems Certification ........................................................... 19
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About the FMB The FMB is Canada’s only legislated body that develops and publishes First Nations Financial Management and Financial Performance Standards and upon request certifies First Nations compliance to those standards. The FMB is an Aboriginal institution that provides a suite of financial management tools and services to First Nations governments seeking to strengthen their fiscal stewardship and accountability regime and develop necessary capacity to meet their expanding fiscal and financial management requirements. The FMB is one of four national First Nation institutions created through the First Nations Fiscal and Statistical Management Act (FSMA) which is federal legislation designed primarily to provide participating First Nations with the tools and capacity needed to facilitate their participation in longterm pooled borrowing through the Capital Markets - on a similar basis as other governments in Canada - to support their social and economic development objectives. To support the FSMA’s primary initiative, the FMB has established the following standards and certification services:
Financial Administration Law Standards and Approval Financial Management System Standards and Certification Financial Performance Standards and Certification
All other First Nations in Canada can access the full range of FMB services to support their own financial management and accountability development. These services are completely optional and apply only to those First Nations who choose to make use of them.
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Legislative Authority The FSMA The First Nations Fiscal and Statistical Management Act (FSMA) is optional First Nations legislation that came into effect on April 1, 2006. The FSMA established 4 First Nation institutions to develop practical modern day tools already used by other levels of government in Canada and provides these tools to First Nations governments. The 4 FSMA institutions are:
First Nations Financial Management Board- establishes financial management standards that lead to the principles of sound and transparent practices;
First Nations Tax Commission – ensures the integrity of the First Nations tax system;
First Nations Finance Authority – enables First Nations to borrow against any secure source of revenue at lower rates than traditional financing;
First Nations Statistical Institute – provides a foundation of First Nations information collection and utilization.
The FSMA is intended to address barriers faced by First Nations attracting investments to their lands. These barriers include:
It is 2 to 3 times more expensive to finance infrastructure on First Nation lands;
It is 4 to 5 times more expensive to make investments on First Nation lands due to lack of investor confidence, legislative uncertainty, unavailable financial information and statistics etc.
The FSMA addresses these barriers by providing an institutional framework by which First Nations can access capital market financing for infrastructure purposes on a similar basis to other jurisdictions in Canada. In addition, the FSMA provides tools for First Nations to demonstrate accountability and transparency by improving investor confidence and improving the quality of statistics, financial information and reporting.
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Financial Administration Law (FAL) Services The decisions made by leadership of First Nations today can have a profound effect on the economic and financial health of First Nations in the future. Financial administration is linked to everyday activities of a First Nations and increasingly, the complexity of these activities and the overall pace of change have increased the volume and complexities of risks facing First Nations. The new reality is that First Nation leadership faces increased scrutiny from membership and other stakeholders on accountability and transparency but at the same time must make critical decisions which may involve taking some risk. The big challenge is how to effectively oversee the First Nation’s governance and decision- making in a way that balances managing these risks while adding value, accountability and transparency to the decision-making process. Having an effective financial administration system is fundamental to ensuring good governance and protection of the economic and financial health of a First Nation, by connecting the decision making to the acceptable level of risk. Prior to the FSMA, there were no standards or comprehensive guidance that addressed the complexity of financial administration for First Nations in Canada. The Indian Act does not specifically address financial administration and other fiscal initiatives have standards that deal with management of specific revenues and not an expansive approach to financial management. To assist First Nations in this new reality, the FMB was created with the legislative basis to provide a mechanism for First Nations to establish their own comprehensive Financial Administration Law (FAL) that is appropriate to their particular needs and meets applicable standards where required. Any First Nation in Canada can develop and adopt a FAL. First Nations that participate in the FSMA can establish their own FAL without approval of the Minister or the FMB. The only exception is where a First Nation wants to borrow money through the FSMA (i.e. borrow from the First Nations Finance Authority), in which case they must obtain a compliance approval from FMB stating their FAL meets the standards set by FMB. To see the FMB standards refer to A2 -FMB Financial Administration Law Standards and an A3-Sample Financial Administration Law .
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What is a Financial Administration Law? A Financial Administration Law (FAL) is a comprehensive set of interrelated rules that form the foundation of a First Nations internal control environment. The FAL is not a means to an end, rather it represents continuous processes and actions that will govern the decision making, management, monitoring and reporting of the financial administration of the First Nation. The FMB FAL Standards are comprised of 7 sections that form - “best practices” for the establishment and operation of a successful financial administration. The FMB Standards have been developed using existing models and internationally recognized standards dealing with aspects of organizational governance, internal control, enterprise risk management and financial reporting. The Standards are meant to satisfy stakeholder and financial market concerns over financial management and reporting. The sections of the FMB FAL Standards are: 1) Administration a. Responsibilities of Council b. Finance and Audit Committee c. Conflict of Interest 2) Financial Management a. Budgets and Financial plans b. Financial Reporting, Risk Management and Audits c. Records, Retention and Information 3) Tangible Capital Assets 4) Borrowing Member Requirements 5) Land Management 6) Oil and Gas Moneys Management 7) Miscellaneous
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Financial Administration Law (FAL) Approval Services Any First Nation seeking to improve on their existing operating environment and establish financial administration systems appropriate to their particular needs and circumstances can use the suite of FMB tools and services. First Nations wishing to enact a FAL under the authority of the FSMA must be scheduled to the Act. Additionally, First Nations that intend to borrow, that is become a borrowing member through the First Nations Finance Authority (FNFA), must obtain a compliance approval from FMB. This approval means the First Nations FAL meets the standards set by FMB.
Steps for FAL Development and Approval 1) Become Scheduled to the FSMA 2) FAL Orientation 3) Request financial assistance to support FAL development 4) Develop the FAL 5) Informal Review of a FAL 6) Formal Review of a FAL 7) FMB Review and Compliance Approval
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Become Scheduled to the FSMA -
First Nations wishing to participate in the FSMA borrowing program must request to be added to the schedule of the FSMA. This is accomplished by sending a Band Council Resolution (BCR) to the Minister of Aboriginal Affairs.
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See FMB Template 1 - Sample BCR requesting to be scheduled to FSMA .
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FAL Orientation -
The First Nation should understand their objectives for developing a FAL.
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The FMB website (www.fnfmb.com ) will be the key portal to information related to FAL development and related matters.
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Upon request, FMB can arrange a presentation to First Nation leadership to introduce the FAL standards and concepts.
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To establish administrative efficiency, it is recommended the First Nation identify a primary contact (internal champion) or a working group that FMB can coordinate with. Typically this has been the First Nations Controller, Director of Finance, or a consultant working with the First Nation on financial management matters.
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It is recommended that the First Nation leadership review the FAL Standards and consider legal advice to obtain a sound understanding of the FAL Standards. Again, FMB would be pleased to assist with any of the orientation or with questions regarding these matters. o
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For the standards refer to A2 Financial Administration Law Standards
Request financial assistance to support FAL development -
Cost to develop and implement a FAL will depend on several factors including the size and complexity of the First Nations activities and whether the First Nations chooses to use the sample FAL developed by FMB. See - A3 Sample Financial Administration Law (Gazette Ready).
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FMB has an annual capacity development funding program that provides funding to First Nations to defray all or some of the costs associated with developing a FAL. The funding is on a first come, first served basis and requires Chief and Council to agree by way of Band Council Resolution (BCR) to commit to the FAL development process under the FSMA.
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Eligible costs reimbursed under this program are generally limited to legal and consulting work associated with FAL development. This capacity funding is not intended to cover First Nation salaries or operational overhead.
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To request capacity funding from FMB, submit the completed documents o
FMB Template 2 Band Council Resolution (BCR) – FMB Funding Page 7 of 23
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Develop the Financial Administration Law -
Any First Nation can enact a FAL using standards established by FMB.
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The FMB A2 -Financial Administration Law Standards is meant to provide the rules that must be met if a First Nation is intending to become a borrowing member. It is recommended that the A3- Sample Financial Administration Law (Gazette Ready) version be used to the extent possible to ensure a timely and fluid approval of the Law.
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It is also recommended that a First Nation seek legal advice to review the FAL standards with Chief and Council to ensure understanding of the implication of provisions of the FAL and also to take instruction to draft or amend the law specifically if deviations from the sample FAL provisions are being contemplated. To provide further legal context to the sample FAL, the FMB has developed the A4- FAL Explanatory Notes.
Informal Review of a DRAFT FAL -
This is an optional step but is highly recommended.
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If any provisions of the First Nations Nation’s Financial Administration Law are deleted or modified from the template Sample FAL provided by FMB, then FMB will perform the Informal Review and provide feedback as to whether or not those deletions or modification meet the FMB FAL Standards.
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Prior to requesting an Informal Review the FMB must have received a duly signed Letter of Cooperation stating that the First Nation wishes to develop a financial administration law pursuant to section 9 of the First Nations Fiscal and Statistical Management Act. o
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Once the FAL has been drafted and before final sign off from Chief and Council, the following procedures can be followed: The First Nation’s legal counsel (or the First Nation) may simply send to FMB by email an electronic WORD version of the First Nation’s FAL, along with a completed Assessment Guide. o
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See FMB Template3 Letter of Cooperation
See A5 FAL Assessment Guide
Once the FAL is submitted using this process, FMB will:
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conduct an Informal Review of the FAL including an assessment of its compliance against FMB FAL Standards, and
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FMB will communicate the results of the Assessment to the First Nation’s legal counsel (and to the First Nation) and if instructed by the First Nation, will work collaboratively with their legal counsel (or First Nation’s representative) to work towards full compliance with FMB FAL Standards.
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Please note that there may be more than one (1) request made for an Informal Review until full compliance with FMB FAL Standards is reached.
Formal FAL Review -
Any First Nation is welcome to apply to FMB for Compliance Approval of its FAL.
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A First Nation must obtain FAL Compliance Approval from FMB if it is seeking to become a borrowing member of the First Nations Finance Authority (FNFA).
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The following documents must be submitted to FMB for the Formal Review:
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One (1) original duly signed copies of the following BCR’s (as the context requires) o
(Template 4a) – BCR FAL Compliance Approval – New FAL
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(Template 4b)- BCR FAL Compliance Approval – In force FAL
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(Template 4c) –BCR FAL Compliance Approval – FAL amendment(s)
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Three (3) original signed copies of the First Nation’s FAL
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One (1) letter from the First Nations legal counsel stating that he or she will send to FMB an electronic word version of the FAL (Template letter is attached to the BCR’s above)
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It is recommended that FAL is signed at the same Council meeting that the BCR requesting the Formal Review is signed.
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The procedures and submission requirements above can also be found in the Financial Administration Law Review Procedures. Click here to download (A1 – Financial Law Review Procedures
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FMB Review and Compliance Approval
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The FMB typically holds a meeting once per month to Formally Review the FAL’s submitted by First Nations. The FMB will review the First Nation’s FAL to ensure it complies with FMB FAL Standards.
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FMB will send a Letter of Notification to the First Nation informing them of the Board Compliance Approval or non-approval decision of the FAL.
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Approved Laws will be published in the First Nations Gazette.
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If a Law is not approved, FMB will report in the Letter of Notification, instances of noncompliance with the Standards and make appropriate recommendations that a First Nation can consider that if implemented would make the FAL compliant with the Law Standards.
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Certification Services FMB offers two Certification services that provide a mechanism for First Nations to demonstrate credibility to their own members, other governments, investors, and capital providers with respect to their financial management and financial performance. The Certifications are based on B2- Financial Management System Standards and C2-Financial Performance Standards developed and published by the FMB. These Certifications are primarily intended for the purpose of certifying First Nations under the FSMA that is to facilitate their borrowing membership in the First Nations Finance Authority (FNFA) and also to secure a specific loan from the FNFA. The FNFA provides a less expensive and longer term borrowing option for First Nations and is based on similar borrowing conditions as other governments in Canada. The FMB Certifications provide confidence to the financial markets and to other Borrowing Members that a member First Nation has achieved a required threshold with respect to Financial Management and Financial Performance. First Nations not seeking to become Borrowing Members under the FSMA may use FMB Certifications for their own purposes or as a means to demonstrate its financial management capacity to its stakeholders.
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Certification Options on how to become a borrowing Member All First Nations seeking to participate in the borrowing program through the FSMA - that is to become a borrowing member and then secure specific financing through the First Nations Finance Authority (FNFA), must achieve both of the FMB Certifications – Financial Performance Certification and Financial Management Systems Certification. However, there are two paths a First Nation can achieve these certifications, and the path chosen by a First Nation will depend primarily on the timing of their financial management requirements and their economic development agenda. Fast track entry: For this entry, First Nations can use an issued Financial Performance Certificate from FMB for two purposes under FSMA - becoming a borrowing member of the FNFA and as a certificate to gain access to a particular loan. This approach responds to First Nations seeking financing from the FNFA at the earliest possible date and is available to only those First Nations becoming borrowing members of the FNFA for the first time. This path facilitates First Nations with adequate revenue capacity and a history of good financial performance to borrow first and implement a financial management system that meets requisite standards over a period of time. In order to obtain this certificate the First Nation must have a compliance approval of their FAL from FMB. For the fast track entrants only a majority of FAL standards can be implemented over a period of time with certain core provisions needing to be in force immediately. The ongoing commitment is that the First Nation will obtain the Financial Management System Certification within 36 months. Full Certification entry: For this entry, the First Nation will use a Financial Management System Certification for purposes of becoming a borrowing member and then obtain a Financial Performance Certificate to gain access to a particular loan. In order to obtain the Financial Management Systems Certificate the First Nation must have a Compliance Approval for their FAL which is fully implemented and must meet the Financial Management System Standards established by FMB. This entry caters to First Nations that do not have a timetable for borrowing and wish to get their financial management and financial performance in order before seeking borrowing membership in the FNFA.
Maintaining Certifications Borrowing members in the FSMA are required to update their financial management systems certification every 36 months and their financial performance certification at the time of every new borrowing request (i.e. new borrowing law). Fast track entrants in the borrowing membership will be required to obtain their initial financial management systems certificate within 36 months of becoming a borrowing member of the FNFA.
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The table summarizes the path First Nations can choose in receiving FMB Certification for purposes of the FSMA.
Certification Options – Table 1 Steps Requirements 1 Compliance Approval of Financial Administration Law
Full Certification Entry An approved FAL that is fully implemented.
See Steps for FAL Development & Approval
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Financial Management System Certification
See Steps for Financial Management Certification
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Financial Performance Certification See Steps for Financial Performance Certification
Fast Track Entry An approved FAL that has core sections implemented (can defer implementation of the remaining provisions over 36 months). The Financial Performance Standards identify the sections of the FAL that need to be force immediately to qualify under this entry.
Certifies that a First Nation’s financial management system and procedures that support the FAL are fully implemented and meet FMB standards. Can be used to become a borrowing member of FNFA Certifies that a First Nations financial performance (assessment of 7 core financial ratios) meets FMB standards. To receive a new loan from the FNFA, a borrowing member must obtain a Financial Performance Certificate.
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Can defer this certification for up to 36 months. Must commit to a work plan to implement the financial management system with the 36 month period. First Nations seeking financing from the FNFA for the first time can use this one Certificate to become 1) a borrowing member and 2) to receive a loan from FNFA.
The table depicts the key requirements First Nations must execute in order to become a borrowing member and to receive a loan.
Summary of the FSMA Borrowing Steps – Table 2 First Nations Financial Management Board Step 1
Determine certification path
First Nations Finance Authority Band Council Resolution representing application to become a borrowing member
Fast Track Option 1 or Full certification Option 2 Step 2
Financial Administration Law - compliance approval Certification under option 1 or 2 to qualify as a borrowing member
Step 3
Borrowing Agreement Law Formalizes in Law the FNFA Borrowing Agreement – loan terms filled in later Borrowing Law First Nations Tax Commission – determines borrowing capacity for taxation revenues
Step 4
Financial Performance Certification under option 1 or 2
FNFA – determines borrowing capacity for Other Revenue Sources. Borrowing Request First Nation BCR to borrow authorized amount under borrowing Law First Nation Receive Loan Proceeds
Step 5
FNFA arranges debenture issuance and completes loan terms on step 2
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Financial Performance Certification Any First Nation seeking to demonstrate financial capacity or performance can request a Financial Performance Certificate from the FMB under FMB’s Certification licensing agreement. First Nations scheduled to the FSMA and intending to become a borrowing member of the FNFA and seeking long-term financing from them, must obtain a Financial Performance Certificate. In order to obtain this certificate, a First Nation must have a Financial Administration Law (FAL) that meets FMB standards The Financial Performance Certification is a point in time assessment of financial condition under the FSMA that is to be used by First Nations as a qualifying certificate to access a loan from the First Nations Finance Authority (FNFA) – the institution with the mandate to pool First Nation borrowing through the Capital Markets on a similar basis as other governments in Canada. It should be noted that the Financial Performance Certificate is but one criterion that FNFA will use in their determination to provide a loan to a First Nation. The Financial Performance Certificate is not intended to provide the basis for assessing credit worthiness for a particular loan. Rather, the assessment evaluates how well a First Nation is using its resources to run its government and provides a signal of overall financial health of a First Nation which can assist users in identifying trends and foreseeable risks that in aggregate, provides insight in the First Nations fiscal stewardship. The basis of the Financial Performance Certification is the C2 - Financial Performance Standards which are comprised of 7 comprehensive financial ratios that are calculated using information reported in the First Nations audited financial statements. To obtain adequate trend analysis, the most recent 5 years audited financial information will be used.
Summary of Financial Performance Ratios 1) Fiscal Growth Rate (FGR): measures revenue and expense growth rates. 2) Liquidity Test Rate (LTR): measures the ability to meet short-term operating obligations. 3) Core Surplus Rate (CSR): measures ability to generate sufficient annual cash flows to maintain operations. 4) Asset Maintenance Ratio (AMR): measures the ability to maintain a sustainable level of capital investment. 5) Net Debt Ratio (NDR): measures debt burden and overall insolvency 6) Budget Performance Rate (BPR): measures the ability to manage and execute budgets 7) Tax Collection Rate (TCR): measures the efficiency and stability in collecting on property taxes.
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Steps for Financial Performance Certification
Where a First Nation is requesting the FMB to issue the First Nation a Financial Performance Certificate for purposes of becoming a borrowing member, and or to secure a specific loan from the First Nations Finance Authority, the First Nation should ensure the steps below are completed. First Nations requesting FMB to issue a Financial Performance Certificate for purposes other than to access financing through the FSMA, can send an email request to
[email protected] and the FMB Certification team will advise on appropriate procedures.
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Become Scheduled to the FSMA -
First Nations wishing to participate in the FSMA borrowing program must request to be added to the FSMA. This is done by sending a Band Council Resolution (BCR) to the Minister of Indian Affairs.
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To become scheduled see Template 1 – sample BCR Requesting to be scheduled to FSMA.
Financial Performance Orientation -
The First Nation should understand their objectives for requesting a Financial Performance Certificate and obtain appropriate understanding of the Financial Performance Standards. See C2-Financial Performance Standards.
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Upon request, FMB can arrange a presentation to Leadership and appropriate First Nation personnel to introduce the Financial Performance standards and concepts.
Informal Review of Financial Performance -
To initiate an informal review the FMB must have received a signed Template 3 – Letter of Cooperation (only one Letter of Cooperation is needed to access all FMB services). The letter
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of Cooperation is non-binding and signifies Chief and Council’s support to move forward with the process and identifies key First Nation personnel in the process.
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An informal review request can be sent by email (
[email protected]) and should clearly state that the First Nation is requesting an informal Financial Performance Review and must identify the First Nation key personnel for the request and their contact information. o
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FMB will respond to the email to discuss the scope of the review, additional financial information needed to complete the review and the anticipated timeframe.
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A copy of each of the most recent 5 years audited financial statements must accompany the informal review request. It is preferred that these documents are attached to the email request, but if not possible the documents can be delivered by Canada Post or by fax (604925-6662).
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FMB will communicate the results of the Performance Review and if required, may request other financial information needed to support the financial performance calculations.
Formal Request for Financial Performance Review -
A First Nation must have a Compliance Approval of their Financial Administration Law (FAL) or Laws before a Financial Performance Certificate will be issued. The FAL development and Financial Performance Certification request can be done concurrently.
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A formal request is made by submitting the following documents:
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See FMB Template 5 (a) - Band Council Resolution – Requesting Financial Performance Review (Where FAL has received Compliance Approval)
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See FMB Template 5 (b) - Band Council Resolution – Requesting Financial Performance Review (Where FAL Compliance Approval has been requested)
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All documents in step #3 if no informal review was performed.
The procedures and submission requirements mentioned above can also be found in the following document. Page 17 of 23
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C1 – Financial Performance Certification Procedures
FMB Review and Certification
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FMB will conduct a Review of the submitted financial information against FMB Financial Performance standards.
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FMB will send a Letter of Notification to the First Nation informing them of the FMB decision.
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The letter of notification will be accompanied with a Review Report that will detail observations and findings in making the determination to issue or not issue a Certificate.
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First Nations that are in compliance with the Financial Performance Standards will be issued a Financial Performance Certificate.
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Financial Management Systems Certification Any First Nation seeking to demonstrate financial management capacity can request a Financial Management Systems Certificate from the FMB under FMB’s Certification licensing agreement. First Nations scheduled to the FSMA and intending to become a borrowing member of the FNFA must obtain a financial management Certificate. In order to obtain this certificate, a First Nation must have a Financial Administration Law (FAL) or Laws that meet FMB standards The Financial Management System Standards (FMS) are comprised of the essential processes and procedures that facilitate compliance with the Financial Administration Law and provide the requisite design and implementation requirements of sound financial practices for the operation, management, reporting and monitoring of financial management system of a First Nation government. The FMS deal with the same sections as the FAL but provides greater depth on how to implement process and procedures to meet the requisite standards. The FMB has supplemented the FMS with sample policies and procedures. The basis of the Financial Management System Certification is the B2- Financial Management Standards which include core standards required to implement the requirements of a FAL that meets FMB standards.
Steps for Financial Performance Certification
Steps for Financial Management Systems Certification
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Become Scheduled to the FSMA -
First Nations wishing to participate in the FSMA borrowing program must request to be added to the FSMA. This is done by sending a Band Council Resolution (BCR) to the Minister of Aboriginal Affairs.
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See Template 1 - Sample BCR requesting to be scheduled to FSMA. Page 19 of 23
Financial Management Systems Orientation
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The First Nation should understand their objectives of implementing the System Standards.
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The FMB website will be the key portal to information related to FMS implementation matters.
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Upon request, FMB can arrange a presentation to First Nation leadership to introduce the Financial Management System standards and concepts.
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To establish administrative efficiency, it is recommended the First Nation identify a primary contact (internal champion) or a working group that FMB can coordinate with. Typically this has been the First Nations Controller, Director of Finance, or a consultant working with the First Nation on financial management system implementation matters.
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It is recommended that the First Nation leadership review the Standards. If requested, FMB would be pleased to provide orientation or respond to questions regarding these matters. o o
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These standards can be found in B2 Financial Management System Standards Sample policies can be found in B3 Sample Policies and Procedures
Request financial assistance to support FAL development -
Cost to implement and maintain a Financial Management System will depend on several factors including the size and complexity of the First Nations activities and whether the First Nation chooses to use the samples and templates made available by FMB.
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FMB has an annual capacity development funding program that provides funding to First Nations to defray all or some of the costs associated with System implementation. The funding is on a first come, first served basis and requires Chief and Council to agree by way of Band Council Resolution (BCR) to commit to an implementation work plan established in collaboration with FMB.
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Eligible costs reimbursed under this program are generally limited to legal and consulting work associated with system implementation. This capacity funding is not intended to cover First Nation salaries or operational overhead.
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To request capacity funding from FMB, submit the completed documents o See Template 2 – BCR – FMB Funding
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Develop a Systems Implementation work plan o
It is recommended that a First Nation use a project schedule (e.g. Gantt chart) to detail the start and finish dates and to monitor progress of what policies and procedures need to be implemented to meet the FMS Standards.
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FMB has developed a self-assessment tool that can assist in identifying the gaps in existing policies and procedures. It is recommended that the self-assessment be completed first to assist in focusing the project schedule or work plan to only those financial management areas that need to be established or improved. See B4 – Financial Management System – Self Assessment.
Informal Review of Financial Management Systems -
To initiate an informal review the FMB must have received a duly signed Template 3 – Letter of Cooperation (only one Letter of Cooperation is required to access all FMB services). The letter of Cooperation is non-binding and signifies Chief and Council’s support to move forward with the process and identifies key First Nation personnel in the process.
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An informal review request can be sent by email (
[email protected]) and should clearly state that the First Nation is requesting an informal Financial Management Systems Review and must identify the First Nation key personnel for the request and their contact information. o
FMB will contact the First Nation to discuss the scope of the review and the anticipated time period.
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The informal review will usually be limited to a review of the First Nations completed work plan and self-assessment but may include a on site visit and review by FMB, if requested and agreed to by FMB.
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FMB will communicate the results of the informal Review including identification of areas not in compliance and make appropriate recommendations to bring the First Nations system standards into compliance.
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Formal Request for Financial Management System Review
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A First Nation must have a Compliance Approval of their Financial Administration Law or Laws before a Financial Management Certificate will be issued.
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A formal request is made by submitting the following documents: o
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See FMB Template 6 – Band Council Resolution (BCR) – Requesting a Financial Management Systems Review.
The procedures and submission requirements mentioned above can also be found in the following document. o B1 – Financial Management System Certification Procedures
FMB Review and Certification
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FMB will conduct an onsite operational review of the First Nations Financial Management System against FMB standards.
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FMB will send a Letter of Notification to the First Nation informing them of FMB decision to issue or not issue a Certificate.
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The letter of notification will be accompanied with a Review Report that will detail observations and findings in making the determination to issue or not issue a Certificate.
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First Nations that pass the Financial Management Standards will be issued a Financial Management Certificate.
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