NATIONAL INDIAN BROTHERHOOD

Transcription

1 Consolidated Financial Statements of March 31, 2004

2 Deloitte & Touche LLP 100 Queen Street Suite 800 Ottawa, Ontario K1P 5T8 Auditors' Report Tel: (613) Fax: (613) To the Executive Council of National Indian Brotherhood We have audited the consolidated balance sheet of National Indian Brotherhood as at March 31, 2004 and the consolidated statements of revenue and expenses, changes in net assets and cash flows for the year then ended. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Corporation as at March 31, 2004 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. As required by the Canada Corporations Act, we report that in our opinion, these principles have been applied on a basis consistent with that of the preceding year. Chartered Accountants May 14, 2004

3 Consolidated Financial Statements March 31, 2004 PAGE Consolidated Statement of Revenue and Expenses 1 Consolidated Balance Sheet 2 Consolidated Statement of Changes in Net Assets 3 Consolidated Statement of Cash Flows 4 Notes to the Consolidated Financial Statements 5-10 Schedule 1 - Consolidated Statement of Revenue and Expenses - INAC 11 Schedule 2 - Consolidated Statement of Revenue and Expenses - Other Funding Agencies 12 Schedule 3 - Consolidated Statement of Revenue and Expenses - Trust Fund 13 Schedule 4 - Consolidated Statement of Revenue and Expenses - Messenger 14

4 Consolidated Statement of Revenue and Expenses Revenue Indian and Northern Affairs Canada (INAC) (Schedule 1) $ 11,097,946 $ 9,435,825 Health Canada (Schedule 2) 3,041,067 3,389,507 Canadian Heritage (Schedule 2) 3,281,790 3,690,000 Indian Residential Schools Resolution Canada (IRSRC) (Schedule 2) 468, ,821 Human Resources Development Canada (HRDC) (Schedule 2) 503, ,305 Veterans Affairs Canada (Schedule 2) 214, ,845 Fisheries and Oceans Canada (Schedule 2) 129, ,000 Natural Resources Canada (Schedule 2) 120,607 87,000 Other departments (Schedule 2) 274, ,550 Trust Fund (Schedule 3) 78, ,283 Messenger (Schedule 4) - 6,086 19,210,355 18,734,222 Expenses Advertising, promotion and publications 277,666 11,930 Audit 58,413 56,655 Amortization of capital assets 142, ,065 Insurance 23,323 22,322 Miscellaneous 50, ,371 Office expenses 907, ,490 Professional fees 2,290,446 1,892,273 Regional service delivery 3,481,018 3,754,223 Rent 570, ,107 Salaries and benefits 7,089,630 6,010,879 Travel and meetings 4,655,037 3,987,562 19,546,207 18,067,877 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENSES $ (335,852) $ 666,345 1

5 Consolidated Balance Sheet as at March 31, 2004 (Restated) (Note 3) CURRENT ASSETS Cash $ 594,001 $ 1,874,744 Investment in Sun Life Financial shares (market value of $368,411 ( $291,680)) 160, ,430 Contributions receivable (Note 4) 3,443,067 2,612,961 Other accounts receivable 142, ,321 GST recoverable 350, ,692 Prepaid expenses 72,756 98,428 4,762,675 5,274,576 CAPITAL ASSETS (Note 5) 377, ,818 CURRENT LIABILITIES $ 5,140,274 $ 5,476,394 Accounts payable and accrued liabilities $ 2,365,491 $ 2,479,663 Deferred revenue (Note 7) 102, ,623 Excess contributions (Note 8) 874, ,378 CONTINGENCY (Note 9) NET ASSETS 3,342,396 3,342,664 Invested in capital assets 377, ,818 Restricted funds (Note 10) 229, ,543 General operations 1,191,147 1,722,369 ON BEHALF OF THE EXECUTIVE COUNCIL Phil Fontaine, National Chief 1,797,878 2,133,730 $ 5,140,274 $ 5,476,394 Bill Erasmus, Vice Chief, Chairman Finance Committee 2

6 Consolidated Statement of Changes in Net Assets Total Invested in Restricted General Capital Assets Funds Operations (Restated) (Note 3) BALANCE, BEGINNING OF YEAR, as previously reported $ 201,818 $ 209,543 $ 1,561,939 $ 1,973,300 $ 1,306,955 Restatement of prior years (Note 3) , , ,430 BALANCE, BEGINNING OF YEAR, as restated 201, ,543 1,722,369 2,133,730 1,467,385 Excess (deficiency) of revenue over expenses - - (335,852) (335,852) 666,345 Capital assets acquisition 318,039 - (318,039) - - Amortization of capital assets (142,258) - 142, National Indian Brotherhood Trust Fund - 19,589 (19,589) - - BALANCE, END OF YEAR $ 377,599 $ 229,132 $ 1,191,147 $ 1,797,878 $ 2,133,730 3

7 Consolidated Statement of Cash Flows NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES: OPERATING Excess (deficiency) of revenue over expenses $ (335,852) $ 666,345 Item not affecting cash Amortization of capital assets 142, ,675 (193,594) 869,020 Changes in non-cash operating working capital items Contributions receivable (830,106) (221,707) Other accounts receivable 191, GST recoverable (156,340) (92,521) Prepaid expenses 25,672 (48,314) Accounts payable and accrued liabilities (114,172) 530,566 Deferred revenue (290,731) 317,138 Excess contributions 404, ,987 (962,704) 1,491,709 INVESTING Investment in AFN Insurance Brokers - 29,150 Purchase of capital assets (318,039) (160,474) (318,039) (131,324) NET CASH INFLOW (OUTFLOW) (1,280,743) 1,360,385 CASH, BEGINNING OF YEAR 1,874, ,359 CASH, END OF YEAR $ 594,001 $ 1,874,744 4

8 Notes to the Consolidated Financial Statements 1. DESCRIPTION OF BUSINESS The National Indian Brotherhood was incorporated under Part II of the Canada Corporations Act on September 29, 1970 with the following objectives: to assist and to work towards solutions for problems facing the Indian people; to operate as a national body to both represent the Indian people and to disseminate information to them; to study, in conjunction with Indian representatives across Canada, the problems confronting Indians and to make representations to the government and other organizations on their behalf; to assist in retaining the Indian culture and values; and to act as the national spokesperson for Indians throughout Canada. The Corporation acts as the secretariat to the Assembly of First Nations. The Corporation is a not-for-profit organization and, as such, is not subject to income taxes. 2. ACCOUNTING POLICIES The consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles and include the following significant accounting policies: Basis of consolidation The financial statements include the accounts of the Corporation and those of the National Indian Brotherhood Trust Fund and the First Nations Messenger Foundation, entities which are controlled by the Corporation. All significant inter-organization transactions and balances have been eliminated on consolidation. Capital assets Capital assets are recorded at cost. Amortization is provided on the straight-line basis over the estimated useful lives of the assets as follows: Computer equipment Other 3 years 3 years 5

9 Notes to the Consolidated Financial Statements 2. ACCOUNTING POLICIES (Continued) Excess contributions The excess of revenue over expenses of some programs may require repayment. When approval to do so has been received, the excess is recorded as revenue in a subsequent period. Revenue recognition Unrestricted contributions are recognized as revenue of the appropriate program when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. All restricted contributions are recognized as revenue of the appropriate program in the year in which the related expenses are incurred. 3. PRIOR PERIOD ADJUSTMENT The balance of investments reported on the March 31, 2003 financial statements was understated by $160,430. As a result of demutualization by Clarica in 1999, the Corporation received shares in Clarica, which were later exchanged for Sun Life shares upon the acquisition of Clarica by Sun Life Financial. These shares were not recorded in 1999, and the correction of this error had the effect of increasing investments and the general operations net assets by $160,430 as at March 31, This amount represents the market value of the shares when they were issued. 4. GRANTS/CONTRIBUTIONS RECEIVABLE Grants/contributions receivable are as follows: Indian Residential Schools Resolution Canada $ 45,000 $ 157,068 Indian and Northern Affairs Canada 1,591,672 1,544,635 Health Canada 96,493 96,049 Fisheries and Oceans Canada 16,500 20,000 Human Resources Development Canada 255, ,835 Canadian Heritage 1,117, ,396 Natural Resources Canada 130,000 - Veterans Affairs Canada 52,900 72,900 Other 137, ,078 6 $ 3,443,067 $ 2,612,961

10 Notes to the Consolidated Financial Statements 5. CAPITAL ASSETS Accumulated Net Book Net Book Cost Amortization Value Value Computer equipment $ 1,075,269 $ 746,966 $ 328,303 $ 179,330 Other 316, ,233 49,296 22,488 $ 1,391,798 $ 1,014,199 $ 377,599 $ 201, CREDIT FACILITY The Corporation has a banking agreement which establishes a demand credit facility for general business purposes up to a maximum of $1,000,000, bearing interest at prime plus 1% up to the credit limit and 12% thereafter. The loan is secured by a general security agreement representing a first charge over all of the Corporation's assets. The balance outstanding at year-end is $NIL ( $NIL). 7. DEFERRED REVENUE Deferred revenue is as follows: Conference Revenue $ - $ 44,609 Justice Canada - 2,751 Veterans Affairs Canada - 214,419 Canadian Heritage 9,684 - Other 93, ,844 $ 102,892 $ 393,623 7

11 Notes to the Consolidated Financial Statements 8. EXCESS CONTRIBUTIONS Excess contributions are as follows: Foreign Affairs and International Trade $ 21,175 $ 21,175 Indian and Northern Affairs Canada 3,883 33,883 Health Canada 337, ,930 Human Resources Development Canada 78,529 85,436 Canadian Heritage 408,210 14,786 Other 24,337 14,168 $ 874,013 $ 469,378 The Corporation recognized revenue of $37,140 from these excess contributions in fiscal 2004 ( $NIL). 9. CONTINGENCY The Corporation receives funding from various government agencies based on specific program needs and budgets and allocates certain expenses to the various programs. In many cases, the funding agent has the right to review the accounting records to ensure compliance with the terms and conditions of their programs. At this time, no estimate of the requirements, if any, to reimburse the agencies can be made. Management of the Corporation feels that their allocations of expenses are fair and appropriate in the circumstances. During the year, the Department of Canadian Heritage undertook a recipient audit of the National Indian Brotherhood s Aboriginal Language Initiative for the fiscal years ended March 31, 2002 and The report recommended that $1,729,136 be recovered from the Corporation. Management disagrees with the report s recommendations and the matter is under review. During the current fiscal year, management has recognized $380,868 as a current liability and a reduction of revenues of the Aboriginal Language Initiative program. Management is continuing to supply information to Canadian Heritage and will recognize any future obligations and expenses in the fiscal year they are resolved. 8

12 Notes to the Consolidated Financial Statements 10. CONTROLLED ENTITIES The consolidated financial statements include the accounts of the following controlled entities. A summary description of the entities is provided below. The National Indian Brotherhood Trust Fund The Corporation controls the National Indian Brotherhood Trust Fund. The Trust Fund was established as a registered charity under paragraph 149 (i)(f) of the Income Tax Act and is comprised of the Language and Literacy Fund, the Youth Healing Fund, the Research Sponsor Fund and the Heroes Award Fund. Restricted funds are comprised of the following and are to be used for the purposes described below: The Language and Literacy Fund was established to promote education of First Nations' citizens by way of scholarship awards and promotion research, seminars, conferences of an academic nature on First Nations rights, histories and cultures among First Nations' peoples as well as the Canadian public. The Youth Healing Fund was established to support efforts to improve the self-esteem and profile of First Nations' Youth in Canada by organizing events which may bring together First Nations' Youth with political leaders and elders for spiritual and leadership training and support in the Youth's representation of the Nations at conferences and gatherings in Canada and internationally. The Research Sponsor Fund was established in 2001 with the purpose to participate in research into the economic, social and scientific problems of Indian communities with a view to proposing solutions to problems. The Heroes Award Fund was established in 2001 with the purpose of giving recognition to those First Nations' citizens who demonstrate a proven record of intellectual and academic ability, integrity of character, interest and respect for fellow human beings, ability to lead, and the initiative to use their talents to the fullest. The Organization appoints the Executive Council of the Trust Fund and ensures that the Trust Fund operates in compliance with the Organization's Charter. The First Nations Messenger Foundation The First Nations Messenger Foundation is a not-for-profit organization incorporated without share capital under Part II of the Canada Corporations Act on July 15, 1999, to establish and operate an educational newspaper that addresses First Nations issues and to maintain and operate educational programs to increase knowledge respecting First Nations' issues. 9

13 Notes to the Consolidated Financial Statements 10. CONTROLLED ENTITIES (Continued) The First Nations Messenger Foundation (Continued) The National Indian Brotherhood obtains funding on behalf of the Foundation, directs the operations of the Foundation to ensure that the Foundation's objectives are met and is responsible for any operating deficiency. 11. COMMITMENTS The Corporation is committed to future minimum lease payments under operating leases for office space and equipment for each of the next two years as follows: 2005 $ 600, , EXECUTIVE SALARIES By virtue of an Annual General Assembly Resolution (62/98), the National Chief of the Assembly of First Nations (AFN) receives a salary which is adjusted annually in connection with the Consumer Price Index. Similarly, by virtue of a Confederacy of Nations resolution and an Executive Committee resolution, each Vice-Chief is allocated a Director's fee. Management and unelected officials are compensated within average industry remuneration levels for their positions. 13. RETIREMENT ASSISTANCE The Corporation contributes to employee s investment accounts (for Indian status employees), or RRSP s (for non-indian-status employees), by matching the employee s contributions. Contributions are up to 3% of an employee s salary. The employer s contributions for the year were $100, COMPARATIVE FIGURES Certain comparative figures of the previous year have been reclassified in order to conform with the presentation adopted for the current year. 10

14 Schedule 1 Statement of Revenue and Expenses Indian and Northern Affairs Canada (INAC) Other Core Core-Like AFN Social Funded Unfunded Operations Operations Education Renewal ICB Housing Development Activities Activities Total Total Revenue Contributions/Grants - INAC $ 2,070,000 $ 6,392,392 $ 500,000 $ 500,000 $ 80,000 $ 190,000 $ 570,000 $ 176,280 $ - $ 10,478,672 $ 8,940,000 Contributions/Grants - Other ,000 19,000 60,000 Sale of publications - 2, , Registration fees - 261, , , ,120 Miscellaneous 23, , ,705-15, , ,655 2,093,309 6,876, , ,000 80, , , ,313 34,000 11,097,946 9,435,825 Expenses Advertising, promotion and publications 14, , , ,590 1, , ,195 Allocation of administrative expenses - (752,146) (752,146) (639,333) Audit - 58, ,413 56,655 Amortization of capital assets 5,852 64,553 3,532 1,466 4,495-2,420 6,506 8,522 97, ,878 Insurance 1,456 12, ,401 17,118 13,557 Miscellaneous 1,786 (141,509) 97-1, (138,162) 320,330 Office expenses 86, ,657 39,576 23,294 5, ,383 10,083 19, , ,053 Professional fees 924, ,752 26, ,129 58,678 14,500 31,117 20,302 (190,411) 1,766, ,891 Regional service delivery ,858 20, , ,729 Rent 33, ,901 17,246 4,825 9,116 5,452 29,073 9,548 33, , ,462 Salaries and benefits 426,330 3,699, ,571 50,134 51,134 26, , , ,991 5,120,474 4,303,201 Travel and meetings 1,016,982 1,463, ,258 83,316 9,796 3, , ,060 94,389 3,047,859 2,108,466 2,512,284 6,115, , , ,575 51, , , ,599 10,553,760 8,688,084 Excess (deficiency) of revenue over expenses $ (418,975) $ 760,713 $ 135,051 $ 216,834 $ (60,575) $ 138,792 $ 106,001 $ (36,056) $ (297,599) $ 544,186 $ 747,741 11

15 Schedule 2 Statement of Revenue and Expenses Other Funding Agencies Fisheries Veterans and Natural Health Canadian Affairs Oceans Resources Other Canada Heritage IRSRC HRDC Canada Canada Canada Departments Total Total Revenue Contribution/Grant $ 2,980,067 $ 3,281,790 $ 450,000 $ 459,236 $ 214,419 $ 129,000 $ 120,607 $ 251,549 $ 7,886,668 $ 9,003,032 Registration fees ,735 14, ,294 - Miscellaneous 61, , , ,332 42,996 3,041,067 3,281, , , , , , ,831 8,034,294 9,046,028 Expenses Advertising, promotion and publications 58,111 1,444 2, ,770-4, ,864 20,665 Allocation of administrative expenses 481,715 36,900 67,500 68,885 32,163 12,900 19,500 32, , ,333 Amortization of capital assets 33,934 2,719 1,874 1, ,388 44,621 64,442 Insurance 4, ,001 6,205 8,765 Miscellaneous 17, ,250 1, , ,495 (1,748) Office expenses 175,724 6,375 14,322 25,653 2,042 3,692 7,060 (10,345) 224, ,209 Professional fees 286,643 65,402 57,575 24,326 8,750 8, , , ,382 Regional service delivery - 3,262, , ,341,973 3,327,494 Rent 132,336 15,215 13,841 22,463 1,628 5,924 14,064 28, , ,645 Salaries and benefits 1,089, , , ,434 16,160 75,124 59, ,442 1,969,156 1,707,825 Travel and meetings 771, , , , ,473 38,219 15,421 51,317 1,607,178 1,879,096 3,050,575 3,662, , , , , , ,104 8,927,328 9,245,108 Excess (deficiency) of revenue over expenses $ (9,508) $ (380,868) $ (309,822) $ 28,249 $ (31,784) $ (16,029) $ 1 $ (173,273) $ (893,034) $ (199,078) 12

16 Schedule 3 Statement of Revenue and Expenses Trust Fund Revenue Grant $ 16,652 $ 53,511 Miscellaneous 61, ,772 78, ,283 Expenses Advertising, promotion and publications 30,783 16,280 Miscellaneous 27, ,621 58, ,901 Excess (deficiency) of revenue over expenses $ 19,589 $ (7,618) 13

17 Schedule 4 Statement of Revenue and Expenses Messenger Revenue Miscellaneous $ - $ 6,086 Expenses Amortization of capital assets 291 1,745 Miscellaneous 6,602 9,168 Office expenses (300) 2,228 Salaries and benefits - (147) 6,593 12,994 Excess (deficiency) of revenue over expenses $ (6,593) $ (6,908) 14