How assurance builds trust and transparency in Indigenous communities
How assurance builds trust and transparency in Indigenous communities
Assurance isn’t just paperwork. It’s a way for Indigenous governments to build trust with funders and within the community.
This article explores how assurance works, why it matters, and how it can help your First Nation approach the future with confidence and clarity.
For some Indigenous governments, assurance can seem like another box that needs ticking. There are deadlines, funding requirements, and pressure to get audited statements complete. But beyond the paperwork, assurance is all about transparency, accountability, and trust.
Assurance helps show funders and community members what’s happening with your First Nation’s resources. It verifies your finances are in order and, perhaps more meaningfully, can share the story of how funding is being used to support people, projects, and the future of your Nation.
Let’s talk about it.
The purpose of assurance
The First Nations Financial Transparency Act requires Nations to prepare audited statements. But complying with this legislation is only one part of the bigger audit picture.
For funders, these audits demonstrate accountability for the dollars invested in programs, services, and infrastructure. But for the community itself, assurance plays a different role. It’s a way to share progress with your members in a transparent, accessible way.
Think of it like storytelling with numbers. An audit shows what was budgeted for versus what was spent, compares performance to previous years, and highlights your Nation’s priorities. For instance, members may see that $200,000 was earmarked for post-secondary education. For your members though, it’s more helpful to see the tangible impact: how many students graduated, how many pursued trades, graduate programs, other degrees, diplomas or certificates, and how the investment is helping their community succeed.
But financial statements don’t always translate easily into non-accountant speak. So, assurance professionals play an important role in translating statements into your story. This is why presentations, reports, and AGMs are essential. They help bridge the gap between financial data and real-life community impact.
What makes assurance unique for Indigenous communities
Audits for Indigenous governments look a little different from audits in other sectors. Your Nation must report on things like Chief and Council remuneration, and the numbers are publicly available online.
There are also differences in reporting requirements. Funders want to see dollars matched to specific projects. For example, a $1 million capital project needs to be fully spent on that project and reported on.
This means Nations are often navigating two different sets of rules for the same project, with a gap between the day-to-day operations of the Nation, which can be frustrating and time-consuming.
The risks of weak financial reporting
When reporting falls behind or accuracy suffers, the risks can start to grow. At the highest level, your Nation could see increased oversight from funders if requirements aren’t met.
But the risks extend beyond your relationship with funders. It could lead to:
- Overspending or underspending if reconciliations aren’t current, which leaves departments unaware of available dollars
- Project delays if up-to-date financial statements aren’t available to help get external funding
- Loss of trust if your Nation members aren’t receiving timely, transparent updates about how money is being used for programming, housing, or education
Even small gaps in reporting, like a few months of delayed reconciliations, can snowball into larger issues that can set your Nation back.
How to strengthen your financial practices
There are some practical ways for your First Nation to build stronger assurance and financial reporting practices. Here are some to consider:
Capacity building: Your Nation may want to invest in learning plans for key staff or community members who want to grow into finance roles. Perhaps you pair them with mentors who use the same real-life systems and can help them walk through scenarios they’ll encounter in their daily work.
Team approach: Auditors can work side-by-side with your finance clerks and managers to make the process smoother and more efficient, and to reduce adjustments in the future.
Financial literacy: Some Nations are starting to use social media or hold in-person sessions to share and explain financial information and updates. This helps give members the confidence to ask questions and engage more meaningfully in discussions.
Better systems: Moving to updated accounting systems can come with an upfront cost but can make reporting faster, more accurate, and easier to manage.
What to look for in an auditor
When looking for an external assurance provider, you should look for these three things:
- Trust: Someone with good intentions who prioritizes your Nation’s best interests.
- Experience: Someone with an understanding of Indigenous governance and funding requirements.
- Relationship driven: Someone who is more than an auditor, who takes the time to know the community and can be your first call when questions or opportunities arise.
At the end of the day, assurance is a balance between technical skills and being human. Auditors need to follow the same standards. It’s their humanness and your relationship with them that will set the right partner apart.
Cultural awareness is also essential. Your auditor should understand that while their work is important, it’s rarely the most urgent thing happening in a First Nation. Emergencies, ceremonies, or community events may take precedence, so flexibility is critical. A curiosity and respect for traditions are a key part of an effective partnership.
An eye on the future
Assurance is a tool for building a stronger Nation. It provides you with the transparency, accountability, and confidence you need to make decisions that move your community forward.
And when done well, assurance doesn’t just report on the past. It tells the story of progress today and how it can help your Nation for the generations to come.
With you each step of the way
If your First Nation is looking to strengthen its financial transparency, build up its finance team, or to make your assurance process a little smoother, our Indigenous Assurance and Accounting team are here to help.
To learn more about how MNP can support your Nation, reach out to Kali Friday, Partner, Indigenous Services, at [email protected] or Kam Sandhu, Partner, Indigenous Services, at [email protected].
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