Part II - Enacted First Nations Legislation

Decision Information

Decision Content

MISIPAWISTIK CREE NATION

FINANCIAL ADMINISTRATION LAW, 2021

[April 1, 2019 Standards]

TABLE OF CONTENTS PART I - Citation ......................................................................................................................... 1 PART II - Interpretation and Application .............................................................................. 1 PART Ill - Administration ......................................................................................................... 4 DIVISION 1 - Council. .................................................................................................................. 4 DIVISION 2 - Finance and Audit Committee ........................................................................... 6 DIVISION 3 - Officers and Employees ..................................................................................... 9 DIVISION 4 - Conduct Expectations ....................................................................................... 12 PART IV - Financial Management ........................................................................................ 14 DIVISION 1 - Financial Plans and Annual Budgets. ............................................................. 14 DIVISION 2 - Revenues and Expenditures ............................................................................ 17 DIVISION 3- Borrowing ............................................................................................................ 17 DIVISION 4 - Risk Management. ............................................................................................. 18 DIVISION 5 - Financial Reporting ........................................................................................... 21 DIVISION 6 - Information and Information Technology ....................................................... 26 PART V - Tangible Capital Assets ....................................................................................... 27 PART VI - Reporting Breaches ............................................................................................. 29 PART VII - Miscellaneous ....................................................................................................... 31

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WHEREAS: A. Pursuant to section 9 of the First Nations Fiscal Management Act, the Council of a first nation may make laws respecting the financial administration of the first nation; and

B. The Council of Misipawistik Cree Nation considers it to be in the best interests of the First Nation to make a law for such purposes;

NOW THEREFORE the Council of Misipawistik Cree Nation enacts as follows:

Citation 1. 2021.

PART I - Citation

This Law may be cited as the Misipawistik Cree Nation Financial Administration Law,

PART II - Interpretation and Application Definitions 2. (1) Unless the context indicates the contrary, in this Law, "Act" means the First Nations Fiscal Management Act; "annual financial statements" means the annual financial statements of the First Nation referred to in Division 5 of Part IV;

"auditor" means the auditor of the First Nation appointed under section 56; "borrowing member" means a first nation that is a borrowing member under the Act; "budget" means the annual budget of the First Nation that has been approved by the Council; "chief administrative officer" means the person appointed chief administrative officer under section 17;

"code" means a code adopted by the First Nation under the First Nations Oil and Gas and Moneys Management Act or a land code adopted by the First Nation under the First Nations Land Management Act;

"Council" means the Council of the First Nation and includes the Chief of the First Nation; "Council chair" means the person appointed or elected to act as the chair of the Council; "councillor" means a member of the Council of the First Nation and includes the Chief of the First Nation;

"director of finance" means the person appointed director of finance under section 18;

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"Finance and Audit Committee" means the Finance and Audit Committee established under section 11;

"financial administration" means the management, supervision, control and direction of all matters relating to the financial affairs of the First Nation;

"financial competency" means the ability to read and understand financial statements that present accounting issues reasonably expected to be raised by the First Nation's financial statements;

"financial institution" means the First Nations Finance Authority, a bank, credit union or caisse populaire;

"financial records" means all records respecting the financial administration of the First Nation, including the minutes of meetings of the Council and the Finance and Audit Committee;

"First Nation" means Misipawistik Cree Nation; "First Nations Finance Authority" means the First Nations Finance Authority established under the Act;

"First Nations Tax Commission standards" means the standards established from time to time by the Commission under the Act;

"First Nation's financial assets" means all money and other financial assets of the First Nation; "First Nation law'' means any law, including any by-law or code, of the First Nation made by the Council or the membership of the First Nation;

"First Nation's records" means all records of the First Nation respecting its governance, management, operations and financial administration;

"fiscal year'' means the fiscal year of the First Nation set out in section 24; "FMB" means the First Nations Financial Management Board established under the Act; "FMB standards" means the standards established from time to time by the FMB under the Act; "GMP" means generally accepted accounting principles of the Chartered Professional Accountants of Canada, as revised or replaced from time to time;

"local revenue account" means an account with a financial institution into which local revenues are deposited separately from other moneys of the First Nation;

"local revenue law" means a local revenue law made by the First Nation under the Act; "local revenues" means money raised under a local revenue law; "multi-year financial plan" means the plan referred to in section 26; "officer" means the chief administrative officer, director of finance, tax administrator and any other employee of the First Nation designated by the Council as an officer;

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"other revenues" means other revenues as defined in section 3 of the Financing Secured by Other Revenues Regulations made under the Act;

"record" means anything on which information is recorded or stored by any means whether graphic, electronic, mechanical or otherwise;

"special purpose report" means a report described in section 55; "standards" means the standards established from time to time under the Act; "strategic plan" means the plan referred to in section 25; and "tax administrator" means the person appointed tax administrator under section 19 or the First Nation's local revenue laws.

(2) Except as otherwise provided in this Law, words and expressions used in this Law have the same meanings as in the Act.

(3) Unless a word or expression is defined under subsection (1) or (2) or another provision of this Law, the definitions in the Interpretation Act apply.

(4) All references to named enactments in this Law are to enactments of the Government of Canada.

Interpretation 3.(1) In this Law, the following rules of interpretation apply: (a) words in the singular include the plural, and words in the plural include the singular; (b} words importing female persons include male persons and corporations and words importing male persons include female persons and corporations;

(c} if a word or expression is defined, other parts of speech and grammatical forms of the same word or expressions have corresponding meanings;

(d} the expression "must" is to be construed as imperative, and the expression "may" is to be construed as permissive;

(e) unless the context indicates otherwise, "including" means "including, but not limited to", and "includes" means "includes, but not limited to"; and

(f} a reference to an enactment includes any amendment or replacement of it and every regulation made under it.

(2) This Law must be considered as always speaking and where a matter or thing is expressed in the present tense, it must be applied to the circumstances as they arise, so that effect may be given to this Law according to its true spirit, intent and meaning.

(3) Words in this Law referring to an officer, by name of office or otherwise, also apply to any person designated by the Council to act in the officer's place or to any person assigned or delegated to act in the officer's place under this Law.

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Calculation of Time 4. In this Law, time must be calculated in accordance with the following rules: (a) where the time limited for taking an action ends or falls on a holiday, the action may be taken on the next day that is not a holiday;

(b) where there is a reference to a number of days, not expressed as "clear days", between two events, in calculating that number of days the day on which the first event happens is excluded and the day on which the second event happens is included;

(c) where a time is expressed to begin or end at, on or within a specified day, or to continue to or until a specified day, the time includes that day;

(d) where a time is expressed to begin after or to be from a specified day, the time does not include that day; and

(e) where anything is to be done within a time after, from, of or before a specified day, the time does not include that day.

Conflict of Laws 5.(1) Inhere is a conflict between this Law and another First Nation law, other than a code or a local revenue law, this Law prevails.

(2) If there is a conflict between this Law and the Act, the Act prevails. (3) If there is a conflict between this Law and a local revenue law, the local revenue law prevails.

Scope and Application 6. This Law applies to the financial administration of the First Nation.

PART Ill - Administration DIVISION l - Council Responsibilities of Council 7.(1) The Council is responsible for all matters relating to the financial administration of the First Nation whether or not they have been assigned or delegated to an officer, employee, committee, contractor or agent by or under this Law.

(2) Subject to paragraph 5(1 )(f) of the Act, this Law and any other applicable First Nation law, the Council may delegate to any of its officers, employees, committees, contractors or agents any of its functions under this Law except the following:

(a) the approval of Council policies;

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(b) the appointment of members, the chair and the vice-chair of the Finance and Audit Committee;

(c) the approval of budgets and financial statements of the First Nation; and (d) the approval of borrowing of the First Nation. Council Policies and Procedures 8.(1) Subject to subsection (2), the Council may establish policies and procedures respecting any matter relating to the financial administration of the First Nation.

(2) The Council must establish policies and procedures respecting the acquisition, management and safeguarding of First Nation assets.

(3) The Council must not establish any policies and procedures relating to the financial administration of the First Nation that are inconsistent with this Law, the Act, or GAAP - except as permitted in subsection 55(2) of this Law.

(4) The Council must ensure that all human resources policies and procedures are designed and implemented to facilitate effective internal financial administration controls.

(5) The Council must ensure that all procedures made under this Law are (a) consistent with, and made under the authority of, a policy approved by the Council, and (b) approved by the Council or the chief administrative officer. (6) The Council must document all First Nation policies and procedures referred to in this Law and make them available to any person who is required to act in accordance with them or who may be directly affected by them.

Reporting of Remuneration and Expenses 9.(1) In this section, "entity" means a corporation or a partnership, a joint venture or any other unincorporated association or organization, the financial transactions of which are consolidated in the annual financial statements of the First Nation in accordance with GAAP;

"expenses" includes the costs of transportation, accommodation, meals, hospitality and incidental expenses; and

"remuneration" means any salaries, wages, commissions, bonuses, fees, honoraria and dividends and any other monetary and non-monetary benefits.

(2) Annually the director of finance must prepare a report separately listing the remuneration paid and expenses reimbursed by the First Nation, and by any entity, to each councillor whether such amounts are paid to the councillor while acting in that capacity or in any other capacity.

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DIVISION 2 - Finance and Audit Committee Interpretation 10. In this Division, "Committee" means the Finance and Audit Committee. Committee Established 11.(1) The Committee of the First Nation is established to provide Council with advice and recommendations in order to support Council's decision-making process respecting the financial administration of the First Nation.

(2) The Council must appoint not less than three (3) members of the Committee, a majority of whom must have financial competency and all of whom must be independent.

(3) For purposes of this section, an individual is considered to be independent if the individual does not have a direct or indirect financial relationship with the First Nation government that could, in the opinion of Council, reasonably interfere with the exercise of independent judgment as a member of the Committee.

(4) The Council must establish policies and procedures (a} setting criteria to determine if an individual is eligible to be a member of the Committee and is independent,

(b} requiring confirmation, before appointment, that each potential member of the Committee is eligible to be a member and is independent, and

(c} requiring each member of the Committee annually to sign a statement confirming that the member continues to meet the criteria referred to in paragraph (a).

(5) If the Committee consists of (a} three (3) members, at least one (1) of the Committee members must be a councillor, and (b} four (4) or more members, at least two (2) of the Committee members must be councillors. (6) Subject to subsection (7), the Committee members must be appointed to hold office for staggered terms of not less than thirty six (36} consecutive months.

(7) A Committee member may be removed from office by the Council if (a) the member misses three (3) consecutively scheduled meetings of the Committee, or (b) the chair of the Committee recommends removal. (8) If a Committee member is removed from office, resigns or dies before the member's term of office expires, the Council must as soon as practicable appoint a new Committee member to hold office for the remainder of the first member's term of office.

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Chair and Vice-chair

12. (1) The Council must appoint a chair and a vice-chair of the Committee, one of whom must be a councillor.

(2) If Council appoints a non-councillor as chair of the Committee, (a) Council must send to the chair notices and agendas of all Council meetings, (b) on request of the chair, Council must provide the chair with any materials or information provided to Council respecting matters before it, and

(c) the chair may attend and speak at Council meetings. Committee Procedures

13.(1) The quorum of the Committee is fifty percent (50%) of the total number of Committee members, including at least one (1) councillor.

(2) Except where a Committee member is not permitted to participate in a decision because of a conflict of interest, every Committee member has one (1) vote in all Committee decisions.

(3) In the event of a tie vote in the Committee, the chair of the Committee may cast a second tiebreaking vote.

(4) Subject to subsection (5), the chief administrative officer and the director of finance must be notified of all Committee meetings and, subject to reasonable exceptions, must attend those meetings.

(5) The chief administrative officer or the director of finance may be excluded from all or any part of a Committee meeting by a recorded vote if

(a) the subject matter relates to a confidential personnel or performance issue respecting the chief administrative officer or the director of finance, or

(b} it is a meeting with the auditor. (6) The Committee must meet (a) at least once every quarter in each fiscal year as necessary to conduct the business of the Committee, and

(b) as soon as practicable after it receives the audited annual financial statements and report from the auditor.

(7) The Committee must provide minutes of its meetings to the Council and report to the Council on the substance of each Committee meeting as soon as practicable after each meeting.

(8) Subject to this Law and any directions given by the Council, the Committee may make rules for the conduct of its meetings.

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(9) After consultation with the chief administrative officer, the Committee may retain a consultant to assist in the performance of any of its responsibilities.

Financial Planning Responsibilities 14.(1) The Committee must carry out the following activities in respect of the financial administration of the First Nation:

{a) annually review and recommend to the Council for approval a strategic plan and a multi­year financial plan;

{b) review draft annual budgets and recommend them to the Council for approval; {c) on an ongoing basis, monitor the financial performance of the First Nation against the budget and report any significant variations to the Council;

{d) review the quarterly financial statements and recommend them to the Council for approval; {e) review and make recommendations to the Council on the audited annual financial statements, including the audited annual financial statements respecting the local revenue account and any special purpose reports;

{f) carry out any other activities specified by the Council that are not contrary to the Act or inconsistent with the Committee's duties specified in this Law; and

{g) perform any other duties of the Committee under this Law. (2) The Committee may make a report or recommendations to the Council on any matter respecting the financial administration of the First Nation that is not otherwise specified to be its responsibility under this Law.

Audit and Oversight Responsibilities

15. The Committee must carry out the following audit and oversight activities in respect of the financial administration of the First Nation:

(a) make recommendations to the Council on the selection, engagement and performance of an auditor;

{b) receive ·assurances on the independence of a proposed or appointed auditor; {c) review and make recommendations to the Council on the planning, conduct and results of audit activities;

{d) periodically review and make recommendations to the Council on policies and procedures on reimbursable expenses and perquisites of the councillors, officers and employees of the First Nation;

{e) monitor financial reporting risks and risk of fraud and the effectiveness of mitigating controls for those risks taking into consideration the cost of implementing those controls;

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(f) conduct a review of this Law under section 80 and, where appropriate, recommend amendments to the Council; and

(g) periodically review and make recommendations to the Council on the terms of reference of the Committee.

Council Assigned Responsibilities 16. Subject to paragraph 14(1)(e), the Council may assign to the Committee or another committee of the Council any other matter respecting the financial administration of the First Nation.

DIVISION 3 - Officers and Employees Chief Administrative Officer 17.(1) The Council must appoint a person as chief administrative officer of the First Nation and may set the terms and conditions of that appointment.

(2) Reporting to the Council, the chief administrative officer is responsible for leading the planning, organization, implementation and evaluation of the overall management of all the day-to-day operations of the First Nation, including the following duties:

(a) to prepare and recommend to the Council for approval, descriptions of the powers, duties and functions of all employees of the First Nation;

(b} to oversee, supervise and direct the activities of all officers and employees of the First Nation;

(c) to oversee and administer the contracts of the First Nation; (d} to identify, assess, monitor and report on financial reporting risks and risk of fraud; ( e) to monitor and report on the effectiveness of mitigating controls for the risks referred to in paragraph (d) taking into consideration the cost of implementing those controls;

(f) to perform any other duties of the chief administrative officer under this Law; and (g) to carry out any other activities specified by the Council that are not contrary to the Act or inconsistent with the chief administrative officer's duties specified in this Law.

(3) The chief administrative officer may assign the performance of any of the chief administrative officer's duties or functions (except the approval of procedures made under this Law)

(a) to an officer or employee of the First Nation, and (b) with the approval of the Council, to a contractor or agent of the First Nation. (4) Any assignment of duties or functions under subsection (3) does not relieve the chief administrative officer of the responsibility to ensure that these duties or functions are carried out properly.

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Director of Finance 18.(1) The Council must appoint a person as director of finance of the First Nation and may set the terms and conditions of that appointment.

(2) Reporting to the chief administrative officer, the director of finance is responsible for the day-to-day management of the systems of the financial administration of the First Nation, including the following duties:

(a) to ensure the financial administration systems, policies, procedures and internal controls are appropriately designed and operating effectively;

(b) to administer and maintain all charts of accounts of the First Nation; (c) to prepare the draft annual budgets and, with advice and input from the tax administrator, to prepare any draft amendments to the component of the budget respecting the First Nation's local revenues;

(d) to prepare the monthly financial information required in section 51, the quarterly financial statements required in section 52 and the draft annual financial statements required in sections 53 and 54;

(e) to prepare the financial components of reports to the Council and of the multi-year financial plan;

(f) to actively monitor compliance with any agreements and funding arrangements entered into by the First Nation;

(g) to administer and supervise the preparation and maintenance of financial records and the financial administration reporting systems;

(h) to actively monitor compliance with the Act, this Law, any other applicable First Nation law, applicable standards and any policies and procedures respecting the financial administration of the First Nation;

(i) to evaluate the financial administration systems of the First Nation and recommend improvements;

(j) to develop and recommend procedures for the safeguarding of assets and to ensure approved procedures are followed;

(k) to develop and recommend procedures to Council for identifying and mitigating financial reporting and risk of fraud and to ensure approved procedures are followed;

(I) to perform any other duties of the director of finance under this Law; and (m) to carry out any other activities specified by the chief administrative officer that are not contrary to the Act or inconsistent with the director of finance's duties under this Law.

(3) With the approval of the chief administrative officer, the director of finance may assign the performance of any of the duties or functions of the director of finance to any officer, employee,

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contractor or agent of the First Nation, but this assignment does not relieve the director of finance of the responsibility to ensure that these duties or functions are carried out properly.

Tax Administrator 19.(1) If the First Nation is collecting local revenues, the Council must appoint a person as tax administrator of the First Nation and may set the terms and conditions of that appointment.

(2) Reporting to the director of finance, the tax administrator is responsible for performing the tax administrator's duties or functions under the First Nation's local revenue laws, the Act and this Law.

(3) In addition to any duties or functions under the First Nation's local revenue laws and the Act, the tax administrator is responsible for the following:

(a} to manage local revenues and the local revenue account on a day-to-day basis; (b} to recommend to the director of finance the draft and amended budgets for the component of the budget respecting local revenues;

(c} to recommend to the director of finance the local revenues components of the multi-year financial plan;

(d} on request, to provide advice to the chief administrative officer, director of finance, Finance and Audit Committee and the Council respecting local revenues matters;

(e} to monitor compliance with the Act, the First Nation's local revenue laws and this Law in the administration of local revenues and the local revenue account; and

(f} to perform any other duties of the tax administrator under this Law. (4) With the approval of the chief administrative officer, the tax administrator may assign the performance of any of the duties or functions of the tax administrator to any officer, employee, contractor or agent of the First Nation, but this assignment does not relieve the tax administrator of the responsibility to ensure that these duties or functions are carried out properly.

Organizational Structure 20.(1) The Council must establish and maintain a current organization chart for the governance, management and administrative systems of the First Nation.

(2) The organization chart under subsection (1) must include the following information: (a) all governance, management and administrative systems of the First Nation; (b) the organization of the systems described in paragraph (a), including the linkages between them;

(c) the specific roles and responsibilities of each level of the organization of the systems described in paragraph (a); and

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(d) all governance, management and administrative positions at each level of the organization of the systems described in paragraph (a), including

(i) the membership on the Council, Finance and Audit Committee and all other committees of the Council and the First Nation,

(ii) the chief administrative officer, the director of finance, the tax administrator and other officers of the First Nation, and

(iii) the principal lines of authority and the responsibility between the Council, the committees referred to in subparagraph (i) and the officers referred to in subparagraph (ii).

(3) On request, the chief administrative officer must provide a copy of the organization chart under subsection (1) to a councillor, a member of a committee referred to in subparagraph (2)(d)(i), an officer, employee or contractor or agent of the First Nation and a member of the First Nation.

(4) In the course of discharging his or her responsibilities under this Law, the chief administrative officer must recommend to the Council for approval and implementation human resource policies and procedures that facilitate effective internal financial administration controls.

(5) The Council must take all reasonable steps to ensure that the First Nation hires or retains qualified and competent personnel to carry out the financial administration activities of the First Nation.

DIVISION 4 - Conduct Expectations Policy/Procedure for Conflicts of Interest 21.(1) The Council must establish policies and procedures for the avoidance, mitigation and disclosure of actual or potential conflicts of interest by councillors, officers, employees, committee members, contractors and agents.

(2) The policies and procedures referred to in subsection (1) must provide for the following: (a) defining private interests that could result in a conflict of interest; (b) keeping records of all disclosures and declarations made relating to actual or potential conflicts of interest;

(c) specifying restrictions on the acceptance of gifts and benefits that might reasonably be seen to have been offered in order to influence the making of a decision;

(d) prohibiting any person who has a conflict of interest from attempting to influence a decision or from participating in the making of a decision respecting the matter in which the person has a conflict of interest; and

(e) specifying how any undisclosed or any alleged but not admitted conflicts of interest of councillors are to be addressed.

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Conduct of Councillors

22.(1) When exercising a power, duty or responsibility relating to the financial administration of the First Nation, a councillor must

(a) comply with this Law, the Act, any other applicable First Nation law, policies, procedures and any applicable standards,

(b) act honestly, in good faith and in the best interests of the First Nation, (c) exercise the care, diligence and skill that a reasonably prudent individual would exercise in comparable circumstances, and

(d} avoid conflicts of interest and comply with the applicable policy and procedure made under section 21.

(2) Annually a councillor must file with the chief administrative officer a written disclosure of his or her private interests which could result in a conflict of interest.

(3) If a councillor believes he or she has a conflict of interest, the councillor must disclose the circumstances to the council in writing as soon as practicable.

(4) If it has been determined under this Law or by a court of competent jurisdiction that a councillor has contravened this section, the Council may take any or all of the following actions:

(a) remove the councillor from their assigned administrative responsibilities or portfolio; (b) withhold the councillor's compensation or honoraria for a period of time; (c) record the Council's displeasure in the Council minutes; (d) take any other appropriate action authorized under any other First Nation law, code or policy;

(e) use any legal means available to it to remedy the situation. Conduct of Officers, Employees, Contractors, etc. 23.(1) This section applies to (a) an officer, employee, contractor and agent of the First Nation, (b} a person acting under the delegated authority of the Council or the First Nation, and (c) a member of a committee of the Council or the First Nation who is not a councillor. (2) If a person is exercising a power, duty or responsibility relating to the financial administration of the First Nation, that person must

(a) comply with this Law, the Act, any other applicable First Nation law and any applicable standards,

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(b) comply with all policies and procedures of the First Nation, and (c) avoid conflicts of interest and comply with any the applicable policy and procedure made under section 21.

(3) If an officer, employee, committee member, contractor or agent believes he or she has a conflict of interest, that person must disclose the circumstances in writing as soon as practicable to the chief administrative officer or, in the case of the chief administrative officer, to the chair of the Finance and Audit Committee.

(4) The Council must incorporate the relevant provisions of this section into the following: (a) the terms of employment or appointment of every officer or employee of the First Nation; (b) the terms of every contract of a contractor of the First Nation; (c) the terms of appointment of every member of a committee who is not a councillor; and (d) the terms of appointment of every agent of the First Nation. (5) If a person contravenes a provision of this subsection, the following actions may be taken: (a) an officer or employee may be disciplined, including dismissal; (b) a contractor's contract may be terminated; (c) the appointment of a member of a committee may be revoked; (d) the appointment of an agent may be revoked; or (e) the council may use any legal means available to it to remedy the situation.

PART IV - Financial Management DIVISION 1 - Financial Plans and Annual Budgets Fiscal Year 24. The fiscal year of the First Nation is April 1 to March 31 of the following year. Strategic Plan 25.(1) The Council must (a) approve a strategic plan that sets out the long-term vision for the First Nation and its members; and

(b) review the strategic plan on a regular, periodic basis and revise it as necessary (2) The Council must take the strategic plan into account when making financial decisions which will impact members of the First Nation or the First Nation's financial assets.

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Multi-year Financial Plan 26.(1) The multi-year financial plan referred to in this section is to be used by the First Nation for the purpose of informing its financial decision-making in a manner that is consistent with and supports the vision of the strategic plan.

(2) The multi-year financial plan must comply with the following: (a) have a planning period of five (5) years comprised of the current fiscal year and the four (4) succeeding fiscal years;

(b) be based on the projections of revenues, expenditures and transfers between accounts; (c) set out projected revenues, segregated by significant category; (d) set out projected expenditures, segregated by significant category; and ( e) indicate whether in any of the five (5) years of the plan a deficit or surplus is expected from the projection of revenues and expenditures for that year.

(3) On or before January 31 of each year, the director of finance must prepare and submit to the Finance and Audit Committee for review a draft multi-year financial plan for the next fiscal year.

(4) On or before February 15 of each year, the Finance and Audit Committee must review the draft multi-year financial plan prepared by the director of finance and recommend a multi-year financial plan to the Council for approval.

(5) No later than March 31 of each year, the Council must approve a multi-year financial plan for the next fiscal year.

Annual Budget 27.(1) The annual budget must encompass all the operations for which the First Nation is responsible and must identify

(a) anticipated revenues, segregated by significant category, with estimates of the amount of revenue from each category;

(b) anticipated expenditures, segregated by significant category, with estimates of the amount of expenditure for each category; and

(c) any anticipated annual and accumulated surplus or annual and accumulated deficit and the application of year-end surplus.

(2) On or before January 31 of each year, the director of finance must prepare and submit to the Finance and Audit Committee for review a draft annual budget for the next fiscal year.

(3) On or before February 15 of each year, the Finance and Audit Committee must review the draft annual budget prepared by the director of finance and recommend an annual budget to the Council for approval.

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(4) On or before March 31 of each year, the Council must review and approve the budget for the next fiscal year.

(5) On or before June 15 of each year, the director of finance must prepare and submit to the Finance and Audit Committee for review a draft amendment of the component of the budget respecting the First Nation's local revenues.

(6) On or before June 30 of each year, the Finance and Audit Committee must review the draft amendment of the component of the budget respecting the First Nation's local revenues and recommend an amendment to the budget to the Council for approval.

(7) No later than July 15 of each year, the Council must approve the amendment of the component of the budget respecting the First Nation's local revenues.

Additional Requirements for Budget Deficits 28. If a draft annual budget contains a proposed deficit, the Council must ensure that {a) no portion of the proposed deficit originates in or relates to local revenues, {b) the multi-year financial plan demonstrates how and when the deficit will be addressed and how it will be seNiced, and

{c) the deficit does not have a negative impact on the credit worthiness of the First Nation. Amendments to Budgets 29.(1) The Council must approve any change to the budget. (2) Subject to subsection 27(7) and any emergency expenditure referred to in paragraph 35(c), unless there is a substantial and unforeseen change in the forecasted revenues or expenses of the First Nation or in the expenditure priorities of the Council, the Council must not approve a change to the annual budget of the First Nation.

Local Revenues Budget Requirements 30. Despite any other provisions of this Law, any part of a budget relating to local revenues must be prepared, approved and amended in accordance with applicable provisions of the Act and of the First Nations Tax Commission standards.

Policy for First Nation Information or Involvement 31. The Council must establish policies and procedures respecting the means by which members of the First Nation must be informed about or involved in consideration of

{a) the strategic plan; {b) the multi-year financial plan; {c) the proposed annual budget, including (i) any budget deficits, and

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(ii) any component of the annual budget respecting the First Nation's local revenues; and (d) extraordinary expenditures.

DIVISION 2 - Revenues and Expenditures Financial Institution Accounts 32.(1) The First Nation must establish a separate local revenue account in a financial institution for money from local revenues.

(2) The First Nation may establish any other accounts not referred to in subsection (1) as may be necessary and appropriate to manage the First Nation's financial assets.

Local Revenue Expenditures 33. Money in a local revenue account must not be used for any purpose other than that authorized in a local revenue law or as permitted under section 13.1 of the Act.

Budget Approved Expenditures 34. The First Nation may only expend First Nation funds if the expenditure has been approved in the budget in effect at the time of the expenditure.

Required Policies and Procedures 35. The Council must establish policies and procedures respecting the following matters: (a) effective management and control of all First Nation cash, funds and revenues, including internal controls for financial institution accounts and asset management;

(b) effective management of all First Nation expenditures, including internal controls for financial institution accounts and the procurement of goods and services;

(c) expenditures for an emergency purpose which was not anticipated in the budget but which is not expressly prohibited by or under this Law or another First Nation law;

(d) management of advances, holdbacks, deposits and refunds; (e) collection and charging of interest; (f) writing off and extinguishing debts; and (g) fiscal year-end surpluses. DIVISION 3 - Borrowing Policies/Procedures for Borrowing 36.(1) The Council must establish policies and procedures respecting the incurring of debt, granting security, debt management and use of borrowed funds by the First Nation.

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(2) The Council may approve the borrowing of money by the First Nation in accordance with the policies and procedures of the First Nation and this Law.

Borrowing Member Requirements 37.(1) This section applies if the First Nation is a borrowing member. (2) If the First Nation has obtained long-term financing secured by property taxes from the First Nations Finance Authority, the First Nation must not subsequently obtain long-term financing secured by property tax revenues from any other person.

(3) The First Nation may only obtain long-term financing from the First Nations Finance Authority as permitted under its local revenue law and the Act.

(4) Money borrowed under subsection (2) may only be used for the purposes permitted under the Act.

(5) Money borrowed by the First Nation from the First Nations Finance Authority that is secured by other revenues may only be used for the purposes set out in section 4 of the Financing Secured by Other Revenues Regulations made under the Act.

Borrowing for New Capital Projects 38. The Council must establish policies and procedures respecting the means by which members of the First Nation must be informed about or involved in consideration of borrowing for new capital projects described in Part V.

Execution of Security Documents 39.(1) Subject to subsection (2), a security granted by the First Nation must be signed by a councillor designated by the Council and by either the chief administrative officer or the director of finance.

(2) A security granted by the First Nation in respect of local revenues must be signed by a councillor designated by the Council and by the tax administrator.

DIVISION 4 - Risk Management Management of Business Activity 40.(1) If the First Nation intends to carry out for-profit activities, the Council must establish policies and procedures respecting the limitation or management of the risks associated with the First Nation carrying on those activities.

(2) The Council may approve the First Nation carrying on for-profit activities in accordance with the policies and procedures established by the Council.

Guarantees and Indemnities 41.(1) The First Nation must not give a guarantee unless the Council has considered the report of the director of finance under subsection (2).

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(2) Before the Council authorizes a guarantee under subsection (1 }, the director of finance must prepare a report for Council identifying any risks associated with giving the guarantee and assessing the ability of the First Nation to honour the guarantee should it be required to do so.

(3) The First Nation must not give an indemnity unless it is (a) authorized under section 76, (b) necessary and incidental to and included in another agreement to which the First Nation is a party, or

(c) in relation to a security granted by the First Nation that is authorized under this Law or another First Nation law.

(4) Subject to a resolution described in section 76, the Council must make policies and procedures respecting guarantees and indemnities as follows:

(a) specifying circumstances under which an indemnity may be given without Council approval;

(b) designating the persons who may give an indemnity on behalf of the First Nation and specifying the maximum amount of any indemnity which may be given by them;

(c) specifying any terms or conditions under which a guarantee or indemnity may be given; and

(d) specifying the records to be maintained of all guarantees and indemnities given by the First Nation.

Investments 42.(1) The First Nation may invest the First Nation's financial assets under the conditions set out in this Law or in another First Nation law.

(2) If the First Nation intends to invest the First Nation's financial assets, the Council must first approve an investment management strategy.

(3) The Council must establish policies and procedures respecting the development, approval and periodic review of an investment management strategy for the First Nation's financial assets.

(4) If the First Nation is authorized to invest the First Nation's financial assets, the Council may authorize the director of finance to invest the First Nation's financial assets

(a) as specifically approved by the Council, or (b) in accordance with the investment management strategy approved by the Council under subsection (2).

(5) Despite any other provision in this Law, the First Nation may only invest the following funds in investments specified in paragraph 82(3)(a), (b), (c) or (d) of the Act and in investments

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in securities issued by the First Nations Finance Authority or a municipal finance authority established by a province:

(a) government transfer funds; and (b) local revenues. (6) The Council must establish policies and procedures identifying the financial institutions or types of financial institutions in which the First Nation may invest its funds.

Loans 43.(1) The Council must establish policies and procedures respecting the First Nation lending First Nation's financial assets including actions to ensure effective management and collection of these loans.

(2) The Council may approve the lending of First Nation's financial assets in accordance with the policies and procedures of the First Nation.

Permitted Loans to First Nation Members 44.(1) The First Nation may make a loan to a member of the First Nation if (a) the loan is made from a program approved by the Council, and (b) the program provides for universal accessibility, has published terms and conditions, and is transparent.

(2) If the First Nation intends to make loans to members of the First Nation, the Council must make policies and procedures for the effective management and operation of the program referred to in this section.

(3) The Council may approve the making of loans to members of the First Nation in accordance with the policies and procedures referred to in subsection (2).

Risk Assessment and Management 45.(1) Annually, and more often if necessary, the chief administrative officer must identify and assess any significant risks to the First Nation's financial assets, the First Nation's tangible capital assets as defined in Part V and the operations of the First Nation.

(2) Annually, and more often if necessary, the chief administrative officer must report to the Finance and Audit Committee on proposed plans to mitigate the risks identified in subsection (1) or, where appropriate, to manage or transfer those risks by agreement with others or by purchasing insurance.

Insurance 46.(1) On recommendation of the Finance and Audit Committee, the Council must procure and maintain in force all insurance coverage that is appropriate and commensurate with the risks identified in section 45 and any other risks associated with any assets, property or resources under the care or control of the First Nation.

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(2) The Council may purchase and maintain insurance for the benefit of a councillor or an officer or their personal representatives against any liability arising from that person being or having been a councillor or an officer.

Risk of Fraud 47. The Council must establish policy and procedures for the identification and assessment of the risk of fraud in the First Nation.

Operational Controls 48. The Council must establish policies and procedures respecting the establishment and implementation of an effective system of internal controls that ensures the orderly and efficient conduct of the First Nation's operations.

DIVISION 5 - Financial Reporting

GAAP 49. All accounting practices of the First Nation must comply with GAAP. Separate Accounting

50.(1) The director of finance must account for local revenues of the First Nation separately from other moneys of the First Nation.

(2) If the First Nation has a loan from the First Nations Finance Authority that is secured by other revenues, the director of finance must

(a) account for all other revenues of the First Nation separately from other moneys of the First Nation, and

(b) provide the First Nations Finance Authority or the FMB, on its request, with accounting information respecting the other revenues.

Monthly Financial Information 51.(1) The director of finance must prepare monthly financial information respecting the financial affairs of the First Nation in the form and with the content approved by the Council on the recommendation of the Finance and Audit Committee.

(2) The director of finance must provide the financial information in subsection (1) to the chief administrative officer within a reasonable period of time following the end of the month for which the information was prepared.

Quarterly Financial Statements

52.(1) At the end of each quarter of the fiscal year, the director of finance must prepare financial statements for the First Nation for that quarter in the form and with the content approved by the Council on the recommendation of the Finance and Audit Committee.

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(2) The director of finance must provide the quarterly financial statements in subsection (1) to the Council and the Finance and Audit Committee not more than forty-five (45) days after the end of the quarter of the fiscal year for which they were prepared.

(3) The quarterly financial statements in subsection (1) must be (a) reviewed by the Finance and Audit Committee and recommended to Council for approval, and

(b) reviewed and approved by the Council. Annual Financial Statements 53.(1) This section does not apply to the annual financial statements respecting local revenues referred to in section 54.

(2) At the end of each fiscal year the director of finance must prepare the annual financial statements of the First Nation for that fiscal year in accordance with GAAP.

(3) The annual financial statements must be prepared in a form approved by the Council on the recommendation of the Finance and Audit Committee.

(4) The annual financial statements must include all the financial information of the First Nation for the fiscal year.

(5) The director of finance must provide draft annual financial statements to the Finance and Audit Committee for review within a reasonable period of time following the end of the fiscal year for which they were prepared.

(6) The Finance and Audit Committee must present draft annual financial statements to the Council for review within a reasonable period of time following the end of the fiscal year for which they were prepared.

(7) For purposes of this section, a reasonable period of time means a period of time which will allow the annual financial statements to be audited within the time required in subsection 58(1).

Local Revenues Annual Financial Statements 54.(1) The director offinance must prepare, at least once each calendar year, separate annual financial statements respecting the First Nation's local revenues in accordance with the FMB's Local Revenue Financial Reporting Standards.

(2) The council must establish policies and procedures respectin