Military Family Services Program
Compliance and Assurance Review
2015/2016 Fiscal Year
(NAME OF MFRC)
(Date of Compliance and Assurance)
(Name of MFRC) COMPLIANCE AND ASSURANCE REVIEW PROGRAM – Fiscal Year 2015-2016
Ref
Requirement
MOU
6.3.1
Method of verification
Military Family Resource
Centre (MFRC) is a
(federally/provincially/territor
ially) incorporated, not-forprofit organization in good
standing.
MOU
The MFRC will obtain
8.1
property, liability, errors and
omissions and directors’ and
officers’ liability insurance
coverage in accordance with
the minimum standards
established by MFS.
MOU 6.3.11 MFRC conducts Community
Needs Assessment (CNA)
at least every three years.
Official
MFRC provides services in
language
both official languages in
Act and
accordance with
MFSP
Department of National
Parameters Defence (DND) standards
for Practice, and the principles of family
Sect 3.
support.
Confirm with the province or territory
to ensure that MFRC is incorporated
and in good standing at the time of the
audit.
MOU 6.3.12 MFRC clearly identifies the
Military Family Services
Program (MFSP) logo on all
printed material, signs,
website, advertising and
promotional material
intended to promote the
programs and services that
Review of at least six promotional
pieces, to determine compliance with
the MFSP National Graphics
Standards Manual (Version June
2014)
2/12
Observation
Mode of
review
Onsite
Reviewer to ascertain what the
minimum standards established by
MFS are at the time of the visit.
Confirm with the insurance company
used by the MFRC that they have the
recommended level of insurance.
Onsite
Was the last Community Needs
Assessment completed within the last
36 months?
Review of at least six communications
pieces that reflect that services are
provided in both official languages.
Onsite
Onsite
.
(Name of MFRC) MFSP Compliance and Assurance Review Program: 2015/2016 Fiscal Year
Onsite
fall under the purview of the
MFSP.
MOU
6.3.3
MFS Letter
5390-4,
Screening of
MFRC Staff
07 Aug 2014
DMFS briefing
at
Professional
Development
Symposium
for MFRC EDs
and Board
Chairs Nov
2013/ED
Briefing 11
June 2014
Ottawa.
3/12
MFRC ensures that it
adheres to applicable labour
legislation, which forms the
basis for its employee
policy, standards and
guidelines.
Does the MFRC have a
policy and procedure in
place to ensure that all staff
who work with or come into
contact with children and/or
vulnerable individuals have
undergone a criminal
reference check and a
vulnerable sector
screening?
Does the MFRC have a
benefit plan in place for its
staff that meets the
minimum MFS
requirements?
In order for the reviewer to confirm
that the MFRC adheres to applicable
labour legislation they should be
provided with a letter of opinion. This
letter would verify adherence to labour
legislation and would be signed by an
appropriate authority. It would not be
appropriate for this letter to be signed
by a member of the Board.
Verify that policies and procedures
exist.
Onsite
Onsite
Random spot check HR files for
criminal reference check and
vulnerable sector screening
documentation.
Confirm with the Benefit providers that
the MFRC has benefit insurance in
place that meets the minimum MFS
requirements. (Alternatively, the
MFRC should have a copy of a signed
agreement/contract with the benefits
provider and could show monthly
remittances.)
Compare the MFRC’s benefit
summary with minimum MFS
requirements 1 Oct 2014.
(Name of MFRC) MFSP Compliance and Assurance Review Program: 2015/2016 Fiscal Year
Onsite
Review a sample of eligible employee
files to ensure that each is enrolled in
the plan.
MOU 6.3.13 MFRC ensures that
Verify that
Privacy
formalized procedures are in  Procedures to protect and manage
Code and
place to manage personal
personal information exist
Privacy
information as
 Procedures to manage complaints
recommended in the MFSP
and enquires about adherence to
Privacy Code and
the Code exist
Base/Wing regulations as
 Procedures to communicate and
applicable.
train the staff about privacy
Recommendations from the
principle and accompanying
Commissioner of Canada
procedures exist
are also reliable business
practices.
Onsite (physical
filing and
storing of
information)
MOU 6.3.10 MFRC coordinates a
minimum of four meetings
per year with the local
Commanding Officer, the
MFRC Board Chair and the
MFRC Executive Director.
Ask the ED, and note how many
meetings were held during the year
.
Onsite
MOU
6.3.2
MFRC complies with the
provisions of its own
organizational bylaws.
Review bylaws.
Randomly spot check that Board
practices parallel provisions of the
bylaws. Cross check with Annual
General Meeting (AGM) and Board
minutes to verify. Focus on bylaws
that are relevant to the Memorandum
of Understanding (MOU). (Note
observations in Appendix A of audit
report.)
Onsite
MOU
6.3.4
In addition, and subject to
the applicable
Ensure that Military Family Services
(MFS) requirements for Board
Onsite
4/12
(Name of MFRC) MFSP Compliance and Assurance Review Program: 2015/2016 Fiscal Year
(federal/provincial/territorial)
legislation under which it is
incorporated, ensure
appropriate representation
on its Board of Directors
consistent with:
1. Civilian family members
of serving full-time
Canadian Armed Forces
(CAF) personnel,
constituting at least 51%
of the voting
membership.
composition are met at the time of the
review. Requirements for minimum
numbers are stated in MFRC MOU.
2. A minimum of seven
voting members (or in
communities of less than
1000 CAF personnel,
five voting members is
acceptable).
MOU 6.3.4
Item 4
MOU
7.3.8
5/12
3. A Commanding Officer
or a senior member of
the command team sits
on the Board as a nonvoting representative.
MFRC must ensure
members of the local CAF
community have a formal
opportunity to nominate and
elect members to the MFRC
Board of Directors.
Review bylaws, Board minutes, AGM
report and AGM minutes to establish
that members of the local CAF
community had the formal opportunity
to nominate and elect members to the
MFRC Board.
Onsite
MFRC will obtain an annual
external and independent
financial audit conducted by
a designated Public
Review audit and note any emergent
issues.
Review management letter that
accompanies audit and note salient
Onsite
(Name of MFRC) MFSP Compliance and Assurance Review Program: 2015/2016 Fiscal Year
Accountant licensed in
his/her respective province.
MOU
7.3.3
Best Practices
6/12
Follow generally accepted
accounting principles and
practices, as well as the
Canadian Institute of
Chartered Accountants
guidelines for Not for Profit
accounting.
MFRC is
managing/investing any
surplus funds in a manner
observations.
Review notes to audited financial
statement.
Verify that credentials of auditor
indicate that he/she is licensed in the
province.
Verify that accountant has no
connections other than professional
with the MFRC. Ensure that he or she
is “independent”.
Enquire as to how many years the
current auditing company has
performed the audit at this MFRC.
Verify by reviewing annual financial
audit conducted by Public Accountant.
Verify by reviewing management letter
that accompanies financial audit.
The reviewer will meet with the
accountant in person or via phone and
discuss the annual audit process with
questions such as: did the auditor
meet with the ED, Board Chair and
Treasurer, who provided all of the
documents the auditor required, was
the audit done on the premises or
completely in the auditor’s own office?
Post audit, before the production of
final audited statements – did the
auditor debrief with the ED, Board
Chair and Treasurer? Did the auditor
present the financial statements at the
AGM? How many years did this
company audit the MFRC?
Review how surplus funds have been
invested during the past 24 months.
Given the MFRC’s risk tolerance
(Name of MFRC) MFSP Compliance and Assurance Review Program: 2015/2016 Fiscal Year
Onsite
Onsite
that minimizes risk to those
funds.
profile, surplus funds should only be
invested in GICs, term deposits,
money market funds or similar “cashequivalent” vehicles.
List all exceptions during the past 24
months (amount, date invested, type
of investment, who authorized, and
name of financial institution).
Best Practices
Does the MFRC do fund
development through other
funders, charitable
donations and/or special
events?
Is info available to enable
management’s evaluation of
whether they are working at
capacity in this area?
MOU 6.3.7,
6.3.20
7/12
MFRC develops and
submits its Request for
Funds, Service Delivery
Agreement, Quarterly
Financial, Service Level
Agreement, Supplemental
Agreement and
If the MFRC is managing/investing
any surplus funds, then a list of
eligible investments should be
incorporated into the by-laws. The bylaws should stipulate that all other
types of investments are specifically
prohibited.
Does the MFRC have a written
fundraising plan for the current fiscal
year?
Onsite
What is the MFRC’s fundraising goal,
in dollars, for the current fiscal year?
(ie other funders, charitable donations
and special events) ?
How many staff person-years are
dedicated to fundraising?
Review applicable documents within
the last 12 months
Note: The process for financial
reporting to MFS will be changing for
this coming year, starting with the
Request for Funding procedure which
will be part of this audit.
(Name of MFRC) MFSP Compliance and Assurance Review Program: 2015/2016 Fiscal Year
Onsite
Performance Reports, in the
manner prescribed by MFS.
MFSP
Parameters
for Practice,
Sect 5
MFRCs are expected to
report on the expenditure of
MFS provided funds;
therefore the MFRC chart of
accounts must segregate
these funds.
Review chart of accounts to ensure
that MFS funds are identified and
therefore possible to track.
Onsite
MOU
7.3.1
MFRC uses funds provided
by the DND through MFS
exclusively for MFSP
Mandated Services in
accordance with MFSP:
Parameters for Practice and
its approved Service
Delivery Agreement.
Onsite
MOU
7.3.4
The MFRC will provide to
MFS Quarterly Financial
and Performance Reports in
the format prescribed by
MFS, detailing the service
provided and funds
expended.
To confirm that MFS funds are being
appropriately expended:
 Verify that MFS funds are
segregated and therefore possible
to track.
 Review quarterly expenditure
reports and cross reference with
financial journal entries, financial
records and cancelled cheques.
 Inspect invoices and receipts.
 Verify that quarterly reports report
expenses in accordance with
identified budget items in the
Service Delivery Agreement.
 Monitor that these records clearly
indicate purpose for which funds
were expended.
Verify with MFS that submissions of
quarterly financial reports are up to
date at the time of the audit.
Review quarterly reports for
prescribed format.
Ensure that the Board is reviewing
these reports at their meetings.
For assurance of accuracy in
reporting, compare the fourth quarter
of most recent fiscal year to the
8/12
(Name of MFRC) MFSP Compliance and Assurance Review Program: 2015/2016 Fiscal Year
Onsite
MOU
7.3.5
MOU
7.3.1
9/12
Subject to approval from
MFS, the MFRC may retain
up to a maximum of 10
percent of unexpended

funds within a given fiscal
year. Funds retained must
be expended in such a way
that is “in keeping with” the
overall goals and objectives
of the MFSP. Expenditure
of and future reporting on
the use of the unexpended
funds will be in accordance
with MFS provisions.
Invoices, receipts and/or
other records that
demonstrate the purpose for
which the funds were
expended will be held on file
at the MFRC for a period of
six years, and made
available to MFS or its
representative on request.
figures reported in the audited
financial statement for that year. If
there are discrepancies, ask the
MFRC if it has submitted a revised
report to MFS.
If applicable:
 Confirm that approval from MFS
was obtained.
Track expenditure of funds by crossreferencing with financial journal
entries, financial records and
cancelled cheques.
 Monitor that these records clearly
indicate purpose for which funds
were expended.
Spot check records.
(Name of MFRC) MFSP Compliance and Assurance Review Program: 2015/2016 Fiscal Year
Onsite
Onsite
MOU
7.3.1
Ensure proper control of
accountability documents.
MOU
7.3.1
Proper internal control over
payroll
10/12
Verify through sample review that the
following acceptable practices are
being followed:
 Proper serially numbered
documents are used for
processing the following
transactions:
a. cash receipts from customers;
b. disbursement cheques; and
c. charitable donation receipts.
Ask to see sample of records for
each.
 Serial documents are recorded
in a master control log that is
maintained by someone
independent of the bookkeeper.
Ask to see log.
 Daily usage of serial numbered
forms is controlled by someone
other than the bookkeeper. Ask
to see control system.
 Cash receipts are reconciled to
the value of the deposit. Ask how
this is being done and ask to see
sample.
 Independent verification of serial
numbered forms is conducted
semi-annually by the Executive
Director (ED).
Verify that the following acceptable
practices are being followed:
 If an external payroll service
provider is used, time sheets and
pay rates must be approved by the
Executive Director. Ask to see
sample of completed timesheets.
(Name of MFRC) MFSP Compliance and Assurance Review Program: 2015/2016 Fiscal Year
Onsite
Onsite

MOU
7.3.3
11/12
If payroll is completed in house,
payroll cheques must be signed by
the Executive Director who must
review and initial the supporting
payroll records. Ask to see sample
of supporting payroll records.
Adequate segregation of
Verify that the following practices are
duties. Management should in place and the following duties are
follow acceptable guidelines segregated:
for segregation of duties to
 cheques must be signed by two
prevent and detect both
authorized signing officers;
intentional and unintentional  source documents must be
errors.
attached to or presented with
 separation of the custody
cheques at the time of signature,
of assets from
initialed by those signing the
accounting;
cheques and stamped “paid" to
prevent double payment;
 separation of the
authorization of
 bank reconciliations must be
transactions from the
completed by the Treasurer or
custody of related
third party and must be approved
assets;
by the ED;
 separation of duties
 ED should have read-only access
within the accounting
to online balance and transactions
function; and
on the bank account.
 separation of operational  all incoming cheques / mail are
responsibility from
received, opened and recorded in
record-keeping
a log by someone other than the
responsibility
bookkeeper;
 incoming cheques are immediately
stamped with a “For Deposit Only
to MRFC account #”; and
 bank deposit is taken to the bank
by someone other than the
individual who prepared it.
(Name of MFRC) MFSP Compliance and Assurance Review Program: 2015/2016 Fiscal Year
Onsite
APPENDIX A
The reviewer will examine Board bylaws & policies and randomly select five provisions to spot check. The bylaws to be cross
checked must be relevant to the provisions of the MOU (i.e. Board composition; AGM requirements; requirement for an annual
financial audit; and so on). Using the table below, the reviewer will note five policies or bylaws. The reviewer will then verify the
extent to which these are put into practice via analysis of Board and AGM minutes as well as interviews with Board members
where appropriate.
Board Policy
Observation
A.1
A.2
A.3
A.4
A.5
12/12
(Name of MFRC) MFSP Compliance and Assurance Review Program: 2015/2016 Fiscal Year
Mode of
review
Onsite
Onsite
Onsite
Onsite
Onsite