1. FIRST NATIONS FINANCIAL MANAGEMENT BOARD “SUPPORTING FIRST NATIONS THROUGH CERTIFICATION” Presentation to CESO – North Shore Chapter July 21, 2015

2. Agenda  Who is the FMB?  What is the FMB’s mandate?  Overview of the FMB’s services  Benefits of working with the FMB  Certification explained  How can CESO can help  Tools to assist in the Certification process July 21, 20152

3. Who is the FMB? Independent organisation formed under the First Nations Fiscal Management Act Not an agent of the Crown Board of Directors appointed by Governor in Council and AFOA Canada July 21, 20153

4. What’s FMB’s mandate? Access to Affordable Capital Eligibility to borrow from the FNFA Instill Confidence in Financial Management Certification of a Financial Management System Develop Capacity Governance, Decision Making, Policies, Procedures Maintain Investor and Taxpayer Confidence Intervention authority July 21, 20154

5. How the FMB was created First Nations Fiscal Management Act (“FMA”) FMB FNFAFNTC First Nations Tax Commission First Nations Finance Authority Enacted in 2005 First Nations Financial Management Board https://www.youtube.com/watch?v=ZfcJiGrGeno July 21, 20155

6. THE ROLE OF THE FMB What we do and why we do it July 21, 20156

7. Develop and Maintain Standards Financial Administration Financial Management Systems Financial Performance July 21, 20157

8. Independent Certification Certification Financial Performance Financial Management Systems Financial Administration Law Compliance Approval July 21, 20158

9. Capacity Development Build organisational capacity necessary to implement a Financial Management System E.g. ‘gap’ assessments E.g. sample policies and procedures July 21, 20159

10. Intervention Authority to intervene in the event of: – Risk or actual default of debt service payments to the FNFA – Non-compliance with taxation laws Protects bond holders, rate payers Promotes stability of borrowing pool and integrity of property taxation regimes This intervention authority reduces risk Lower risk helps reduce borrowing costs July 21, 201510

11. BENEFITS OF BECOMING CERTIFIED July 21, 201511

12. Access to long-term, affordable capital FAL Financial Performance Certificate Eligible Borrowing Member of FNFA July 21, 201512

13. Supports Strong Governing Practices Personality basedor…Process driven July 21, 201513

14. OVERVIEW OF CERTIFICATION SERVICES July 21, 201514

15. Types of Certifications Financial Performance Certificate Financial ratios Risk assessment Financial Management System Certificate Design of system Implementation review Financial Administration Law July 21, 201515

16. Financial Administration Law Governance Financial Management Financial Administration July 21, 201516

17. Financial Performance Certification Consists of a ‘point in time’ evaluation of historical financial performance 7 financial ratios Required step to borrow from the FNFA  Fiscal growth ratio  Liquidity test ratio  Core surplus ratio  Asset maintenance ratio  Net debt ratio  Budget performance ratio  Property taxation collection ratio (if applicable) July 21, 201517

18. Financial Management System Certification Evaluates compliance with Financial Administration Law – “Are we doing what we say we are?” Operational review of the design and implementation of policies and procedures COSO based FAL Financial Management System Finance and Audit Committee Budgets and Forecasts Risk Management Financial Reporting Expenditure Policy July 21, 201518

19. HOW CESO CAN GET INVOLVED Partnering with First Nations

20. FMS ‘Gap’ Assessments Conduct ‘gap’ assessments to identify how existing policies compare to FMS Standards – Benchmark policies to FMS Standards – Incorporate any ‘gaps’ and remediation steps into a work plan July 21, 201520

21. Policy Development Development of policies designed to meet or exceed FMS Standards Tailored to meet requirements under a FAL Use of FMB’s Sample Policies and Procedures July 21, 201521

22. Change Management Project management of FMS Certification initiative Liaison between Chief and Council, Management and FMB Steering Committee Coordination of policy development and implementation Coordination of training July 21, 201522

23. TOOLS AND RESOURCES How we can help July 21, 201523

24. Our Standards Financial Administration Law: A1: FAL Review Procedures A2: FAL Standards A3: FAL Sample A4: FAL Explanatory Notes A5: FAL Implementation Guide A6: FAL Self Assessment Guide Financial Management System: B1: Financial Management System - Certification Procedures B2: Financial Management System - Standards Sample Policies and Procedures FMS Self Assessment Financial Performance: C1: Financial Performance - Certification Procedures C2: Financial Performance - Standards Local Revenue Account: D1: Local Revenue Account – Reporting Standards D2: Illustrative Financial Statements – Local Revenue Account CAPACITY DEVELOPMENT TOOLS & RESOURCES July 21, 201524

25. FMS ‘gap’ assessment Benchmark review of policies compared to FMS Standards Identification of any capacity gaps within a Financial Management System First step in developing work plans, training plans, policy development July 21, 201525

26. Sample Policies and Procedures SPP 01 - Delegated & Assigned Responsibilities SPP 11 – Employee Evaluation & Planning Policy SPP 21 – Investment Policy SPP 02 – Policies Procedures and Directions SPP 12 – Code of Conduct PolicySPP 22 – Insurance Policy SPP 03 – Reporting of Compensation, Benefits & Contracts SPP 13 – Annual Planning and Budgeting Policy SPP 23 – Emergencies Policy SPP 04 – Committee Establishment PolicySPP 14 – Cash Management and Banking Policy SPP 24 – Financial and Operational Reporting Policy SPP 05 – Finance and Audit CommitteeSPP 15 – Financial Institution Account Policy SPP 25 – Information Technology Policy SPP 06 – Appointment of First Nations Officer Policy SPP 16 – Expenditure PolicySPP 26 – External Audit Policy SPP 07 – Organizational Chart PolicySPP 17 – Debt PolicySPP 27 – Records Information Management Policy SPP 08 – HR Records Management PolicySPP 18 – Procurement PolicySPP 28 – Tangible Capital Assets Policy SPP 09 - Hiring PolicySPP 19 – Risk Management PolicySPP 29 – Financial Management System Improvement Policy SPP 10 – Disciplinary and Dismissal PolicySPP 20 – Loans, Guarantees and Indemnities Policy SPP 30 – Whistleblower Policy SPP 31 - Information Privacy Policy July 21, 201526

27. QUESTIONS? July 21, 201527

28. First Nations Financial Management Board Suite 905 – 100 Park Royal West Vancouver, BC V7T 1A2 Toll free: 877.925.6665 facebook.com/FNFMB @FNFMB YouTube.com/FNFMB Harold Calla, Executive Chair Harold_Calla@fnfmb.com Scott Munro, Director, Standards and Certification Scott_Munro@fnfmb.com Meghan Shannon, Capacity Initiatives and Development Officer Meghan_Shannon@fnfmb.com July 21, 201528

29. FMB CLIENTS July 21, 201529

30. ProvinceNumber BC40 Alberta1 Manitoba5 Saskatchewan2 Ontario4 Quebec2 Nova Scotia3 Total57 Financial Performance Certificates Financial Performance Certificates Issued Since March 2011, 57 FP Certificates have been issued to FNFMB clients. First Nations throughout Canada are working toward FP and FMS Certification. Varying reasons why communities want to be certified (economic development, capacity development, stronger internal controls, long- term planning). July 21, 201530

31. Testimonial July 21, 201531 St Theresa Point First Nation