Summary

SAI Canada audited the Indigenous Services Canada in relation to the implementation of a new budgetary program – New Fiscal Initiatives with First Nations. One of the commitments of the new fiscal initiatives was to create 10-year grants to provide predictable and flexible funding to First Nations so they can better plan for the long term and have more flexibility on how funds are allocated to improve outcomes for their citizens. The audit found that more than 6.5 billion Canadians dollars (USD 4.8 billion) in funding had been provided to First Nations and First Nations-led organizations through 10-year grants. However, Indigenous Services Canada did not consistently monitor whether grant recipients remained eligible to continue to receive funding. In addition, the department did not assess whether the 10-year grants were helping to address disparities between First Nations and other Canadians. Furthermore, the auditee did not deliver on two commitments under the New Fiscal Relationship initiatives – to focus on developing First Nations’ capacity to prevent financial default, and to establish a mutual accountability framework between First Nations, their citizens, and the federal government. SAI recommended that the agency should provide additional support to First Nations, including 10-year grant recipients, to increase their administrative and financial capacity to prepare financial statements, and leverage relevant data it collects from 10-year grant recipients to measure, assess, and annually report on the extent to which the grant contributes to closing the socio economic gaps between First Nations and other Canadians.