Part II - Enacted First Nations Legislation

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KLAHOOSE FIRST NATION

FINANCIAL ADMINISTRATION LAW,

2022

[April 1, 2019 Standards] .

I CERTIFY THIS TO BE A TRUE COPY OF THE ORIGINAL DOCUMENT

Print Name Bt:A: l ~ Q v""' "'\ . .7 3"=" I ~ ·>~ Signed _____-_- tJ-w-----

Date

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TABLE OF CONTENTS PART I - Citation ..................................................................................................................... 1 PART II - Interpretation and Application ................................................................................. 1

PART 111-Administration ........................................................................................................ S DIVISION 1 - Council .................................................................................................................... 5 DIVISION 2 - Finance Committee ................................................................................................. 5 DIVISION 3 - Officers and Employees ........................................................................................ 10 DIVISION 4 - Conduct Expectations ........................................................................................... 12 PART IV - Financial Management ......................................................................................... 15 DIVISION 1 - Financial Plans and Annual Budgets ..................................................................... 15 DIVISION 2 - Revenues and Expenditures .................................................................................. 17 DIVISION 3 - Borrowing ............................................................................................................. 18 DIVISION 4 - Risk Management ................................................................................................. 18 DIVISION 5 - Financial Reporting ............................................................................................... 21 DIVISION 6 - Information and Information Technology ............................................................ 26

PART V -Tangible Capital Assets .......................................................................................... 26

PART VI - Reporting Breaches ............................................................................................... 28 PART VII - Miscellaneous ...................................................................................................... 30

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WHEREAS:

A. The Council of Klahoose First Nation made the Klahoose First Nation Financial Administration By-Law, 2018 ("the By-Law") under section 83 of the Indian Act, which was approved by the Minister on January 28, 2019;

B. 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;

C. Klahoose First Nation became a scheduled First Nation under the First Nations Fiscal Management Act ("the Act");

D. Under subsection 145.1(2) of the Act, the Klahoose First Nation Financial Administration By-Law, 2018 remains in force after Klahoose First Nation becomes scheduled to the Act until the By-Law is repealed or Klahoose First Nation makes a financial administration law under section 9 of the Act, which is approved by the First Nations Financial Management Board;

E. The Council of Klahoose First Nation considers it to be in the best interests of the First Nation to replace the By-Law with a financial administration law made and approved under section 9 of the Act; and

F. The Council of Klahoose First Nation wishes to repeal and replace the Klahoose First Nation Financial Administration By-Law, 2018

NOW THEREFORE the Council of Klahoose First Nation enacts as follows:

Citation

1.

PART I - Citation

This Law may be cited as the Klahoose First Nation Financial Administration Law, 2022.

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;

"Administrator" means the person appointed Administrator under section 17;

"annual general meeting" means an annual meeting referred to in section 8 whereby all the members of the First Nation are invited by notice given under this law;

"annual financial statements" means the annual financial statements of the First Nation referred to in Division 5 of Part IV;

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"auditor" means the auditor of the First Nation appointed under section 52;

"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;

"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;

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

"Finance Manager" means the person appointed Finance Manager under section 18;

"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 Committee;

"First Nation" means Klahoose First Nation, as scheduled to the Act;

"First Nations Finance Authority" means the First Nations Finance Authority established 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 23;

"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;

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"GAAP" means generally accepted accounting principles of the Chartered Professional Accountants of Canada, as revised or replaced from time to time;

"multi-year financial plan" means the plan referred to in section 25;

"officer" means the Administrator, Finance Manager and any other employee of the First Nation designated by the Council as an officer;

"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 51;

"standards" means the standards established from time to time under the Act; and

"strategic plan" means the plan referred to in section 24.

(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.

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(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.

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) If there is a conflict between this Law and another First Nation law, other than a code, this Law prevails.

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

Scope and Application

6.

This Law applies to the financial administration of the First Nation.

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Responsibilities of Council

PART Ill - Administration

DIVISION 1 - 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) The Council must hold an annual general meeting in September of each year on or before September 30, the notice for which must be posted by Council pursuant to section 4 of this law no later than April 30 of each year.

(3) 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;

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

(c) the approval of budgets and financial statements of the First Nation;

(d) the approval of borrowing of the First Nation; and

(e) any approvals of budgets or borrowing of related bodies that Council is required to exercise.

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 or 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 51(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

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(b) approved by the Council or the Administrator.

(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 Finance Manager 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 and any contracts between the First Nation and a councillor for the supply of goods or services, including a general description of the nature of the contracts.

(3) Subsection (2) does not require the reporting of remuneration, expenses of benefits received:

(a)

in common by all members of the First Nation; or

(b) under a program or service universally accessible to all members of the First Nation on publicly available terms and conditions.

DIVISION 2 - Finance Committee

Interpretation

10. In this Division, "Committee" means the Finance 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.

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(2) The Council must appoint not less than three (3) individuals to 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 ofthe 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.

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

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(c) the chair may attend and speak at Council meetings in their capacity as chair.

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 Administrator and the Finance Manager must be notified of all Committee meetings and, subject to reasonable exceptions, must attend those meetings.

(5) The Administrator or the Finance Manager 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 Administrator or the Finance Manager, 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 not more than 45 days after the previous quarter, 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.

(9) After consultation with the Administrator, the Committee may, with the approval of Council, 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 multi-year financial plan;

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(b) review draft annual budgets, all proposed amendment to annual budgets, and recommend them to the Council for approval;

(c) on a quarterly 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 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 and periodically review the same;

(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;

(f) conduct a review of this Law under section 75 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

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Administrator

DIVISION 3 - Officers and Employees

17.(1) The Council must appoint a person as Administrator of the First Nation and may set the terms and conditions of that appointment.

(2) Reporting to the Council, the Administrator 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 oversee, safeguard and administer the assets of the First Nation;

(e) to identify, assess, monitor and report on financial reporting risks and risk of fraud;

(f) 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;

(g) to perform any other duties of the Administrator under this Law; and

(h) to carry out any other activities specified by the Council that are not contrary to the Act or inconsistent with the Administrator's duties specified in this Law.

(3) The Administrator may assign the performance of any of the Administrator'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 Administrator of the responsibility to ensure that these duties or functions are carried out properly.

Finance Manager

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

(2) If an individual performs both administrator and finance manager roles, that individual must report to Council with respect to the reporting requirements set out in both section 17 and 18.

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(3) Reporting to the Administrator, the Finance Manager 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;

(d) to prepare the monthly financial information required in section 48, the quarterly financial statements required in section 49 and the draft annual financial statements required in section 50;