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Canactl CONSULTING AND AUDIT CANADA CONSEILS ET VÉRIFICATION CANADA CAC AN AGENCY OF PUBLIC VVORKS AND GOVERNMENT SERVICES CANADA CVC - UNE AGENCE DE TRAVAUX PUBLICS ET SERVICES GOUVERNEMENTAUX CANADA SOLUTIONS THAT DELIVER RÉSULTATS JL 103.S62 C58ka 1999 PROBANTS ET EFFICACES
November 8, 1999 330 0860 01 1 Crown. i does not belong to the Copyright ot th s document?lope! autnonzation must be obtained from te author V 1 \ any \ntended use liappartennent Les &Oils d Bute du present document pas é Étal. Tee uttisaton du c,onteriu du présee document de être approuvée préatabternent par autetir. i sœ _ elkeda SEP 2 1 2000 LLICITFIR -etiwilez ezegkim 1 OTTAWA" 4.,'1Ei e'f5- i Department of the SoliKtor General of Canada Report on the Audit of the Tripartite Agreement Respecting Police Services in the Kahnawake Territœ
TABLE OF CONTENTS Page 1. INTRODUCTION 1 2. AUDIT OBJECTIVES 1 3. AUDIT SCOPE 2 4. AUDIT APPROACH 3 5. CONCLUSION 4 6. AUDITORS' REPORT 5 Schedule 1 Summary of Approved, Reported and Audited Amounts 1998/99 Schedule 2 Audit Adjustments, Observations and Supplementary Information Itj coxsuum cçeeis ET MAUDIT sueun Qeerm km,da
Page 1 1. INTRODUCTION A financial audit of the tripartite contribution agreement, dated September 5, 1995, and amended March 29, 1996, May 21, 1997 and June 30, 1998, between the Department of the Solicitor General of Canada (Department), the Québec Government (Quebec) and the Mohawks Council of Kahnawake (Kahnawake), was conducted on behalf of the Department's Aboriginal Policing Directorate. The audit was undertaken in August 1999. The subject of this audit is the contributions of $2,716,667 (Department $1,412,667; Quebec $1,304,000) provided to Kahnawake to operate policing services in the Kahnawake Territory, between April 1, 1998 and March 31, 1999. The Department's Contribution is being provided to Kahnawake via the Department of Indian and Northern Affairs Canada. Kahnawake has the full responsibility for supervising the Police Force, which is entrusted with the duty for maintaining peace, order and public security; for providing residents in the Kahnawake Ten-itory with a sense of security and safety from crime; for preventing crimes and other offences; and, for apprehending offenders and bringing them to justice. The period covered by the agreement is April 1, 1995 to March 31, 1999. 2. AUDIT OBJECTIVES 2.1 The general objectives of the audit were: 2.1.1 to ensure that claimed expenditures have been incurred by the recipient and are in accordance with the contribution agreement, and departmental and central agency guidelines; ItI COISULIIIG ClpSELS El MUTE r 4tRiFICOCA C.W.01 C. VZ,I DA
Page 2 2.1.2 to verify and report the costs incurred and claimed, and indicate the concurrence, or otherwise, of the recipient with the audit findings; and 2.1.3 to bring to the attention of the Department any matters considered to be of significance or requiring management action. 2.2 Specific objectives included determining that: 2.2.1 the recipient met both the financial and non-financial terms of the contribution agreement; 2.2.2 as they relate to the contribution: financial operations were conducted properly; financial statements were presented fairly; financial reports contained accurate and reliable inforniation; and 2.2.3 the recipient had an adequate internal control system to account for, and manage, the contribution received. 3. AUDIT SCOPE 3.1 The audit scope was limited to the auditing of the recipient's financial records, supporting documentation, and claims for the period April 1, 1998 to March 31, 1999, and included: - an examination and assessment of the quality, propriety and accuracy of the recipient's financial records, accounting procedures and internal controls, as they relate to the costs charged under the terms of the agreement; and KlISULTE/G MAUDif r.1**.k ike r CONSEIS El vèleitei kuda
Page 3 an assessment of the reasonableness and eligibility of the expenditures incurred or charged in accordance with generally accepted accounting principles, and with the terms of the agreement. 3.2 The audit was conducted in accordance with generally accepted auditing standards, and in accordance with the Office of the Comptroller General's guide on the audit of Federal Contributions. 4. AUDIT APPROACH Our approach was based on recognition of the need to focus on the key issue, which is the compliance by the recipient with the terms and conditions of the contribution agreement, and primatily to ensure that the claimed expenditures have been inctu-red, and the recipient is meeting the financial terms of the agreement. The audit was undertaken in three phases: - planning; - field work and analysis; and - reporting. The planning phase included an orientation/familiarization with the mandate, obtaining information and documentation from the Department, developing the detailed audit program, and arranging the on-site visit with the recipient. The field work and analysis consisted mainly of undertaking the detailed audit program to gather evidence to support our audit opinion, findings, and conclusions. The principal audit activities included interviews with the recipient's representatives, an examination and evaluation of accounting systems, controls, and the results of the tests conducted on 03`1S1IIM eseis ET eour SERECAra C.+MA F,. CLDA
Page 4 the books and records and supporting documentation of the recipient as they relate to this contribution, and obtaining the recipient's response to the audit findings. The reporting phase involved an analysis of our findings, and the formulation of an opinion on the information obtained from the recipient, for inclusion in the audit report. In addition, we have debriefed representatives from the Department's Aboriginal Policing Directorate and Management Review Division on the results of the audit. 5. CONCLUSION Our review indicated that the activities undertaken to operate the Kahnawake Police Force in the Kahnawake Territory appeared to be consistent with the stated objectives of the project. Based on our examination, and notwithstanding the audit adjustments made, we believe that the reported expenditures were made in accordance with the agreement. Generally, the recipient maintained adequate controls over expenditures fimded by the contributions received fi-om the Department and Quebec. Our review revealed that the Kahnawake Police Force in the Kahnawake Territory has generally met the financial and non-financial terms of the contribution agreement. Details of the audit findings are presented in the Auditors' Report, and supporting Schedules 1 and 2. eti CONSUU11.4! el SEkS ET MOM,r* VÉRIFICAU CaReDÀ 4%WA
Page 5 6. AUDITORS' REPORT November 8, 1999 Director General Aboriginal Policing Directorate Department of the Solicitor General of Canada Mohawk Council of Kahnawake Tripartite Agreement Respecting Police Services in the Kahnawake Territory Dated September 5, 1995 and amended March 29, 1996, May 21, 1997 and June 30, 1998 Peiiod Audited: April 1, 1998 to March 31, 1999 We have audited the accounts and records of the Mohawk Council of Kahnawake insofar as they pertain to the amounts claimed for the above project. The preparation of the claims and the compliance with the terms of reference are the responsibility of the claimant. Our responsibility is to express an opinion on the compliance with these terms of reference based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the amounts claimed are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the claims. An audit also includes assessing the accounting principles used, and significant estimates made by the recipient. In our opinion, the audited amounts of $2,504,890 for fiscal year 1998/99 present fairly, in all material respects, the costs allowable under the terms of the agreement. Supporting information and related comments are provided in Schedules 1 and 2. The audit results were discussed with the Director of Finance and Administration, Kahnawake Police Force who agreed with the results of the audit. 09-1/4tL2ti4L4r_ (2«41,L)e MONTREAL, QUEBEC CONSUIPEG moan MSELS El VéPeCAUCH Ct z0a
Mohawk Council of Kahnawake Police Service in the Kahnawake Territory Summary of Approved, Reported and Audited Amounts April 1, 1998 to March 31, 1999 Schedule 1 Page 1 of 2 Approved Reported Audit Audited Amounts Amounts (I) Adjustments (2) Amounts (3) Revenues Department $1,248,000 $1,248,000 - $1,248,000 Quebec 1,152,000 1,152,000-1,152,000 Contribution for improvement to police infrastructures (4) Department 164,667 164,667-164,667 Quebec 152,000 152,000-152,000 Interest revenue 9,000 9,029-9,029 Other Provincial contribution (5) 50,477 104,709-104,709 Other Revenues (6) - 3,260-3,260 Internal revenue (7) 1,756 1,756-1,756 Transfer to Salary (Emergency Planning committee co-ordinator) - (30,000) 30,000 - Transfer to Justice Committee - (25,000) 25,000 - Total revenues $2,777,900 $2,780,421 $55,000, $2,835,421 Expenditures Salaries and Fringe benefits Pension Vehicle Maintenance Administration-Internal Acquisitions-vehicles Acquisitions-other (8) Building expenses Fuel -internal Towing Equipment rental Office and general Heat and electricity Telephone Insurance Travel Uniforms Training program Legal fees Miscellaneous (9) Ammunition Film development Vehicle insurance and licenses Petty cash Prisoner meals User fees Liaison and Justice committees 1,745,660 1,760,186 250,816 242,534 32,000 53,474 25,000 28,585 70,000 76,158 20,000 16,256 11,515 11,172 25,000 18,051 4,000 2,140 44,000 43,889 15,000 10,292 6,000 7,190 15,000 17,268 34,628 40,243 10,000 8,193 30,000 25,376 10,000 5,398 20,000 21,436 6,000 9,629 15,000 3,164 2,000 2,363 33,555 ' 30,434 3,500 4,080 1,500 1,468 59 59 15,000 15,000 30,000 20,165 1,790,186 242,534 53,474 28,585 76,158 16,256 11,172 18,051 2,140 43,889 10,292 7,190 17,268 40,243 8,193 25,376 5,398 21,436 9,629 3,164 2,363 30,434 4,080 1,468 59 35,165 CeISULIEG!igei WES El AhDAUEVE verficara CODA `CeEDA
Mohawk Council of Kahnawake Police Service in the Kahnawake Territory Summary of Approved, Reported and Audited Amounts April 1, 1998 to March 31, 1999 Schedule 1 Page 2 of 2 Public relations Bad debt expense Police infrastructure Total expenditures Excess of revenues over expenditures-surplus Department's Portion of Surplus (52%) 2,000 687-687 5,000 - - - 316,667 - - $2,768,900 $2,454,725 $50,165 $2,504,890 $330,531 $171,876 (I) (2) (3) (4) (5) (6) (7) (8) (9) See Comment 4 of Schedule 2. See Schedule 2 for an explanation of audit adjustments. These costs are allowable under the terrns of the agreement. Contribution for improvement to police infrastructure over the next six fiscal years, starting in 1998/1999. Provincial subsidies for patrolling (highway code). Revenues of towing and storage of vehicles. Internal revenues to cover salary adjustments. Equipment such as cameras and security system. Miscellaneous such as motor oil and electronic parts. CONELITIt meguar Cwe ffleis El 4-5RL9CMI cevm
Mohawk Council of Kahnawake Police Service in the Kahnawake Territory Audit Adjustments, Observations and Supplementary Information April 1, 1998 to March 31, 1999 Schedule 2 Page 1 of 1 Audit Adiustments 1. The audit adjustments are explained as follows: Schedule 1: April 1, 1998 to March 31, 1999 a) Reclassification of salary of Emergency Planning Committee co-ordinator $30,000 (this transfer of funds is subject to the Department's approval) b) Reclassification of the expenditures for the Justice Committee $25,000 (this transfer of funds is subject to the Department's approval) c) Adjustment to the expenditures of the Liaison Committee to reflect amount really spent (4,835) 20,165 Total Audit Adjustments Schedule 1 $50,165 Audit Observations 2. Hiring Standards There was evidence that hiring standards per Section 10 of the agreement were complied with, for the fiscal year audited. 3. Insurance Section 28 of the agreement requires the recipient to ensure coverage for general fire and theft insurance as well as employer-employee liability insurance in an amount not less than $2,000,000 per incident and $5,000,000 maximum for all incidents, against bodily injury or material damage of any kind that may be caused to third parties by the Kalmawake Police Force. For the fiscal year audited, the recipient had insurance coverage in an amount of $1,000,000 per incident and $1,000,000 for all incidents. For the period from April 1, 1999 to March 31, 2000 the Police Liability has been increased to $4,000,000 per incident and $4,000,000 for all incidents. Supplementary Information 4. Reported Amounts The reported amounts on Schedule 1 of this report represent amounts which were shown in the externally audited financial statements. These amounts were reconciled to the general ledger of the Kahnawake Police Force. mum EONEERS ET ZOAUD[1. VERIFICAPC/1 cama Ç crynk '