Contribution Audits

Health Canada performs audits on funding that has been provided through contribution agreements to ensure accountability to the terms and conditions of the agreements.

The First Nations and Inuit Health Branch provides funding for health services to First Nations and Inuit communities through contribution and transfer agreements.

What's the difference between contribution and transfer agreements?

• A Contribution Agreement (now called the Consolidated Contribution Agreement - General) does not allow communities to re-prioritize or redirect health resources.
  
  
• Health Services Transfer Agreements (now called the Consolidated Contribution Agreement for First Nations and Inuit Transferred Organizations/Communities) offers more authority and control of health resources and thus requires a different set of accountability measures.

Consolidated Contribution Agreement Audits

Contribution audits are part of the accountability framework established between Health Canada and First Nations and Inuit communities. These audits are in addition to ongoing monitoring activities, provision of reports, and community-based evaluation.

Are all contribution agreements audited?

Every year, Health Canada identifies a small number of contribution agreements for audit review. Contribution audits may be conducted to:

• Ensure that the approval and administration of contribution agreements conform to applicable legislation, policies and procedures;
• Ensure that expenditures are accounted for under generally accepted accounting principles;
• Examine the contribution agreements that are considered to be at risk;
• Provide a framework for taking corrective and preventive measures; and
• Be used as training tools to help communities change or improve financial management methods.

Auditing Guidelines for Consolidated Contribution Agreements

Under a Consolidated Contribution Agreement-Integrated, a First Nation's Council is accountable for the funds it receives from Health Canada. The audit requirements for this type of funding agreement are outlined in the First Nations and Inuit Health Branch Audit Guidelines.

For more information on Health Canada's reporting and auditing requirements for funding transfers, refer to Reporting and Auditing Guidelines for Health Services Transfer Agreements.

Contribution Audit Summaries

Contribution audit summaries provide an overview of audits conducted across Canada. Summaries for subsequent years will be posted as they become available.

The yearly contribution audit summaries contain the following information:

• Date of audit report;
• Contribution amount audited;
• Amount paid;
• Amount supported by the audit;
• Amount unsupported by the audit;
• Why the amount was questioned;
• Follow-up action taken; and
• Current situation.

Contribution Audit Summaries

• Year 2005
• Year 2004

Responsibilities of Auditors

All audits are carried out by independent auditors who follow general accounting and audit principles. In addition to ensuring that all expenditures are properly accounted for and supported by evidence, the auditors are asked to assess the compliance of these expenditures with the terms and conditions of the contribution agreements.

Auditors will in some cases lack the in-depth knowledge of the health programs and specific health approaches developed with First Nations and Inuit communities. As a result, expenditures that auditors may perceive as not in accordance with the terms of the agreement may be approved by Health Canada later because of particular circumstances in the communities delivering the health services, and in acknowledgement of the communities' cultural approaches to health.

Recovering Unauthorized Expenditures

Once the audits are complete, the First Nations or Inuit communities and Health Canada work together to take whatever follow-up action is necessary. In many cases, communities can supply further information that explains expenditures queried in an audit.

When required, unauthorized expenditures are recovered through a mutual arrangement among the communities and Health Canada. Care is taken to ensure that the audit process and its follow-up will not have an impact on the delivery of health services in the communities.

For further information on contribution audits, contact the Business Planning and Management Directorate.