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Hopefully these types of micro-management clauses are being added to all the contracts being issued by the military and every federal government department. This move will probably keep the acountants and the lawyers happy for years to come ...

INAC press release ... 

Indian and Northern Affairs Canada (INAC) Continues to Strengthen its Fiscal Management and Accountability

OTTAWA, ONTARIO--(Marketwire - March 31, 2008) - The Honourable Chuck Strahl, Minister of Indian Affairs and Northern Development and Federal Interlocutor for Metis and Non-Status Indians said his department continues to demonstrate leadership in strengthening its fiscal management and performance reporting.

"As Minister, I want to ensure that INAC's programs provide value for money and achieve real, tangible and measurable results," said Minister Strahl. "The department is implementing new audit clauses that will clearly show that our Government is committed to enhancing transparency and accountability on Aboriginal programs."

Promoting greater accountability, transparency and oversight in government operations is one of the Government of Canada's top priorities as outlined in the Federal Accountability Act of 2006. To achieve this priority commitment, INAC has taken a number of significant measures to enhance its financial oversight, audit and evaluation capability and reporting.

To further strengthen accountability measures, INAC recently notified funding recipients that it intends to amend 2008-2009 funding agreements to include an audit clause. The addition of this clause will ensure INAC's right to conduct audits of funding agreements to make certain that contributions are used for intended programs and services. Applied on a risk basis, these will complement the existing requirement that First Nations provide to both the department and their community members annual consolidated financial statements that have been audited by independent and accredited professionals.

"With these clauses, not only is the government able to be accountable to all Canadians, but First Nations and Tribal Councils will also demonstrate to their constituents that they too are accountable," added Minister Strahl.

Along with evaluations, the results from these audits will help guide new program and policy approaches, provide insight on improvements and support departmental accountability to Parliament and Canadians.

Click here to read the Backgrounder on this annoiuncement

For more information, please contact

Minister's Office
Office of the Honourable Chuck Strahl
Press Secretary
819-997-0002

or

Media Relations
Indian and Northern Affairs Canada
819-953-1160

Backgrounder - Introduction of Additional Clauses in INAC Funding Agreements

The federal government has made a commitment to improve results of programs and to enhance the federal government’s transparency and the accountability of its programs including its Aboriginal programs. To fulfil this commitment, Indian and Northern Affairs Canada (INAC) has notified recipients of its intent to amend funding agreements to include right to audit clauses in 2008.

Funding arrangements with First Nations recipients for 2008-2009 have a clause ensuring cooperation when INAC conducts evaluations on any or all of the programs and services funded under these agreements. To strengthen its ability to assess the effective use of funds transferred to recipients, INAC is adding clauses which will be incorporated as an amendment to the 2008-2009 funding agreements and will take effect July 1, 2008. These clauses will ensure the department’s right to conduct audits of recipients when necessary.

Furthermore, these clauses will enable INAC to conduct risk-based audits of funding agreements to ensure contributions are used for the provision of intended programs and services and that First Nations have appropriate management, financial, and administrative controls in place. Departments throughout the federal government have similar audit clauses included in their funding arrangements including Health Canada, Human Resources and Social Development Canada, Canadian Heritage and the RCMP. With these clauses not only is the government able to be accountable to all Canadians, but also First Nations and Tribal Councils will be able to show their members that they too are accountable for the funds they receive from the federal government.

Audits may be conducted under specific circumstances such as: requests by Chiefs and Councils for an audit; information contained in the audited financial statements of First Nations and Tribal Councils; evaluations, management practices reviews, and compliance reviews previously conducted by INAC. The results from these evaluations and audits will inform decisions about new program and policy approaches, provide guidance on necessary policy and program improvements and support departmental accountability to Parliament and Canadians.

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From the Globe and Mail

New Tory policy to audit reserves prompts outcry - Plan brought through back door, Liberal says

BILL CURRY - April 4, 2008

OTTAWA -- Canada's largest native organization is accusing Conservatives of spreading falsehoods about aboriginals as Ottawa steps up audits of reserves and vows to publicize its findings.

The Assembly of First Nations issued a terse statement yesterday criticizing a new Indian Affairs policy that begins July 1. Under the policy, all transfers to band and tribal councils will contain a clause allowing the department to audit the money later to determine whether it was well spent.

According to the AFN, the announcement from Indian Affairs Minister Chuck Strahl "plays on the false impression that has been spread about first nations and accountability. Those who believe the myths might like the idea that 'something is finally being done,' but they would be wrong again."

In the spirit of the Liberals' controversial First Nations Governance Act, which was abandoned in 2003 after fierce AFN opposition, the audits will also report on whether bands have appropriate management, financial and administrative controls.

The Conservatives, who praised the failed governance act during the last election campaign, attempted to pass a similar measure in 2006 as part of its Federal Accountability Act, but the opposition parties removed it.

The opposition now accuses Ottawa of sneaking the policy through the back door by adopting it without bringing legislation to the House.

"It's part of a pattern to bypass Parliament," Liberal MP Anita Neville said. "They are playing to their political base that believes aboriginal peoples are not accountable and it's contrary to everything we've heard from the Auditor-General."

The government says the audits will be more detailed and cover more areas than they do now. But the AFN says bands are already heavily audited and that Ottawa is ignoring more pressing needs on reserves such as education and housing.

Mr. Strahl said he believes native leaders understand that all parts of society are moving toward more transparency.

"What we're saying is if we're going to give money, we want to be able to do an audit on it to make sure that it's serving its purpose, that it's being spent on the programs that it was intended," he said. "We just want to make sure that - especially first nations - but all taxpayers know the money is being well spent."

Although it has been revised several times over the past 132 years, the 19th-century Indian Act that still governs most band councils remains virtually silent on financial management and accountability. Issues such as public disclosure of band finances are dealt with through policies of the department. In 2002, Auditor-General Sheila Fraser said Canada's reserves were overburdened by paperwork from Ottawa that few bureaucrats would read.

Patrick Brazeau, the national chief of the Congress of Aboriginal Peoples, said his recent cross-country tour to canvass the views of aboriginals found widespread frustration toward native leaders.

The congress, whose organization says it represents off-reserve aboriginals, has long argued that the Assembly of First Nations is an organization run by native chiefs who resist accountability. Mr. Brazeau said he hopes the government's latest move will be an improvement.