Friday, November 28, 2014

Piikani books scrutinized

Chris Davis

Under the federal First Nations Financial Transparency Act, which received Royal Assent in Parliament March 27, 2013, "First Nations have 120 days after the end of the financial year to publish the documents online."

Chartered accountants with KPMG LLP declined to express an opinion regarding the consolidated financial statements of Piikani Nation, citing accounting deficiencies in the Nation's bookkeeping for 2013.

In their Independent Auditors' Report of Piikani Nation, dated July 14, 2014, KPMG LLP state "There are serious deficiencies in the accounting records related to the lack of financial information for the Piikani Investment Corporation, and entity controlled by the Nation, and its subsidiary corporations.  Further, the Nation has not included the net assets and results of operations of the Settlement Fund in these consolidated financial statements."  KPMG LLP concludes "Because of the significance of the matter described... we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.  Accordingly, we do not express an opinion on the consolidated financial statements."

A KPMG LLP review (which is less forensic than an audit) of "honouraria and expenses paid to elected officials of the Piikani Nation for the year ended March 31, 2014" was gentler.  It concludes "Based on our review, nothing has come to our attention that causes us to believe that this schedule of honouraries and expenses paid to elected officials is not, in all material respects, in accordance with the First Nations Financial Transparency Act".  

Thirteen elected officials plus their travel expenses cost the Nation $751,398 for the fiscal year. Clayton Small Legs, acting Chief for a time,  was the most expensive member of council, to a total of $76,824 including travel expenses.  Now ousted Chief Gayle Strikes With A Gun received an honorarium of  $55, 473 but no travel expenses during the fiscal year.

According to Aboriginal Affairs and Northern Development Canada and other Government of Canada data :
  • The average total annual income per Piikani Nation person was $19,479 in 2011, with women slightly out-earning men.
  • Piikani Nation had a population of 1,215 in 2011 with a majority aged 20-64 and a median age of 30 years, living in 340 private households.
  • Piikani Nation has a registered population of 3,655 as of October 2014.
Some other highlights synopsized from the Piikani Nation Consolidated Financial Statement, year ending March 31, 2014:

  • Salaries, wages, and benefits have been declining since 2013, $9,372,411 in 2014, projected to drop to below $8 million in 2015.
  • Piikani Nation had an accumulated surplus of over $42,000 in both 2013 and 2014, and is expected to have a similar surplus at the end of fiscal 2015.
  • Amortization is by far the largest operating expense, costing approximately $2.6 million a year. Cash, end of fiscal 2014, was over $10 million. 
  • Deferred revenue, including Administration, was greatly increased in 2014 over 2013 due largely to a Piikani Public Works expenditure of $2,225,310 in 2014 compared to $5,311 the year before.
  • Chief Executive Officer - $80,000 + a year
  • CEO + CFO + other directors and managers + expenses = $1 million +
  • Elected official =  just under $50 thousand a year + expenses.
  • The outcome/possible cost of various ongoing legal actions in which the Piikani Nation is the defendant are not reflected in the financial statements because the Nation considers there to be "a strong offense against these claims".
  • Group Homes and Foster Homes cost more than $1 million in 2014.
  • The biggest revenues for Piikani Nation comes from two categories.  Approximately $16 million annually comes from Aboriginal Affairs and Northern Development Canada. "Other" accounted for more than $16.5 million in 2013, $19 million in 2014, projected to just over $30 million in 2015. Trust fund revenue is a distant third to those two categories.
  • Piikani's 25% stake in the Oldman River Hydro Joint Venture is a significant revenue producer.
  • Effective April 1, 2014 new standards have been established "on how to account for and report a liability associated with the remediation of contaminated sites".

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