TTN NEWS UPDATE
RE: FINANCIAL REPORT
Since the election of October 18, 2013 and the newly elected Chief and Council were surprised to be met with a number of challenges regarding Administration and Finances of the Band Office.
Financial overview of TTN
1. An inherited debt and the financial position of the Band office.
Our audit for the year ending March 31, 2013 was delayed because the data on or accounting records of nine months was deleted intentionally and had to be re-entered by our Accounting Firm in order to commence the audit. As of this date, we have a preliminary audit report with an estimated deficit for the year of ($448,165).
2. Total estimated deficit as of March 31, 2014 - ($1,600,000).
Chief and Council began to address many of the issues concerning management and finances by hiring a Co-Manager that was recommended by ROSS POPE & COMPANY. The Co-Manager conducted a review of the current year’s operations and reported to Chief and Council on January 7, 2014 with a Preliminary report on the finances and debt as of December 31, 2013 with projected costs. I am sad to report that many of the issues presented by members were confirmed and we are projecting a deficit at March 31, 2014 of approximately $1,600,000 bring an accumulated DEFICIT over the last two operating periods to Approximately $2,048,165 and the debt of $2,000,000 to vendors that have not been paid.
Chief & Council after reviewing and discussing the financial conditions and management issues determined that a mandatory restructuring had to take place in order to protect the interests of the members and the First Nation. Our cash resources including investments from resource agreements have been depleted and it will be a struggle to make it to year end without a loan of $2,000,000 from the bank to pay off debt to March 31, 2014.
The Audit for 2011/12 turned out to be and unqualified Audit. The 2013/14 audit has not been going through its process and we are hoping to have this audit complete by end of June 2014. It’s going to take longer due to the filing process of Payables and organizing in the finance office.
3. Management of the Band Office:
We are currently reviewing the structure of the Finance Office with the assistance of our Auditors Ross Pope & Company to have procedures, programs and policies in place to operate effectively and efficiently. One of our many challenges we encountered were the Reports were not completed as required by the funding sources such as; Health Canada, Aboriginal Affairs and Development Canada. Therefore, funding for the operation day to day has been withheld until reports and the Audit are complete. The Co-Manager is presently working very hard to complete the reports and complete the audit of 2013 in order to have any funding released for the Band office at this point and time. Therefore, we are operating on a very limited budget until all reports and the Audit are completed.
We are currently reviewing the following policy to reflect the Operation of our Band Office
- Personnel Policy with FORMS, JOB DESCRIPTION
- Finance PolicY
- Band Council Guidelines(New)
4. Restructuring of the Staffing to reflect band funding:
Upon recognizing the financial state of our Band Office we had to restructure according to the band operating funds that Aboriginal Affair provides on a yearly basis. Therefore, we (Chief and Council) had to make some serious staffing reduction to accommodate the funding.
Phase 1-The first phase of restructuring has led to reduction of staffing which meant we had to lay off staff. We were operating at a cost of $60,000 bi-weekly for pay roll; therefore, we could not afford to continue at this rate in payroll costs. Therefore, the Council members and the Co-Manager assumed the responsibility of operating the Band Office with an estimated annual savings of $653,000 after staff reduction.
Phase 2-The second phase will be the internal review with the staff to maintain costs within the established budgets as set out in our contracts with the following funding sources;
· Health CanadA
· Aboriginal Affairs and Development Canada
· Nishanawbe Aski Nation(NAN)
In short program staffing’s costs and program expenditures will be kept within allocations received.
Phase3 - will be the development, review and implementation of the Finance Policy Management protocols, Personnel Policies and Band Council Guidelines.
Phase 4 - the development of Annual operating Budgets and timely financial management reporting to Council and Program Manager.
Phase 5 – will be the immediate application to our Bank for a commercial loan of $2,000,000 for payment of our debt to vendors secured through the (Casino Rama) Ontario First Nation Limited Partnership proceeds. As of April 2, 2014 the Loan of $2million has been approved by the bank to pay off our vendors Accounts Payable. Repayment will require $35,000 a month from Casino Rama principal and interest payments over a four year term.
REQUESTS FOR REIMBURSEMENT OF VARIOUS MEMBER EXPENSES WILL BE RECEIVED AND REVIEWED FOR FULL, PARTIAL OR NO PAYMENT EVERY THREE MONTHS. (JUNE 30, SEPT 30, DECEMBER 20TH, AND MARCH 31) DEPENDING IF THERE IS EXCESS FUNDS IN CASINO RAMA.
It is unfortunate, but necessary in order for Council to protect the interests of all members and have a balanced budget.
Our priorities through all existing and potential resources agreements will be the Education of our Children and a continued focus on Economic Development, infrastructure on the reservation and support of our Elders.
On behalf of the Council, we will provide updates on our progress on a regular basis and use our TTN website for this purpose.
Chief & Council
Taykwa Tagamou Nation