AFOA Canada National Conference
Calgary, AB
February 27, 2004
Session 6 –
Improving Financial
Management and
Accountability with the
Financial Management Toolbox
Points to Ponder #1
Ham and Eggs: Just a day’s work for a
chicken but a lifetime commitment for a
pig.
 Why do toasters always have a setting
that burns the toast to a horrible crisp,
which no decent human being would eat?
 Why is there a light in the fridge and not
in the freezer?

Presented by
ABORIGINAL FINANCIAL OFFICERS
ASSOCIATION OF BC
Welcome & Overview of Seminar
Facilitators
Clay Harmon, Director
Mike Mearns, General Manager
Moderator
Susan E. Wood, President – AFOA-BC
Welcome & Overview of Seminar
This seminar will overview the five toolbox
chapters:





First Nations Governance Concepts
Financial Management By-Law
Financial Management Manuals
Strategic Planning
Capacity Building
How did the Financial Code Project
begin?

In the development of the First Nations
Financial Code Toolbox, the Financial
Management and Accountability Project
committee members realized the
importance of “beginning at the
beginning”.
Who are the Committee Members?
AFOABC Board Members
Susan E. Wood, President
Chris Bolton, Vice-President
Clay Harmon, Director
Carol Kelly, Interim Vice-President
Lynn Anderson, Secretary-Treasurer
Mike Mearns, General Manager
AFOABC Members
Chad Mason, Gitwangak Band Council
Jay Norton, DeGruchy, Norton and Company
Margaret White, Nanaimo First Nation
Myrna Jacobson, Old Massett First Nation
Sharlene Wilson, Nil/Tu Child and Family Services
Trevor Morrison, Gitksan Watershed Authorities
How did the Financial Code Project
begin?
WHAT DOES EACH TOOL BOX CHAPTER
COMPRISE OF?
 The committees recommendations of
successful applications developed
throughout the country.
 Most have been developed by the
Aboriginal Financial Officers Association
of BC
 Others have been used by permission by
the authors.
What is the definition of “CODE”?
A systematic body of laws
 A set of rules or conventions (an
agreement between nations, a treaty;
established usage, social custom)

What is AFOABC’s interpretation of
a Financial Code?
WHAT IS A FINANCIAL CODE?

The first task of the committee was to
define what a Financial Code is and what
it means.

Through a brainstorming session the
committee agreed that the following
defined their thoughts of a First Nations
Financial Code.
What is AFOABC’s interpretation of
a Financial Code?
A FIRST NATION FINANCIAL CODES IS A
SET OF PRINCIPLES THAT:
Respects the culture, traditions and history of a
First Nation.
 Protects, maintains and increases the resources
of a First Nation through effective planning and
control.
 Defines and implements the “Best Practices” for
the preparation and communication of quality
reporting.
 Provides high standards and ethical leadership for
the equal and confidential treatment for all.

What is the First Nations
Governance Toolbox?
WHAT DOES A FINANCIAL CODE TOOLBOX
COMPRISE OF?
 The second task of the committee was to outline
the toolbox “chapters”.
 This step was important to the creation of the
toolbox since it would eventually lead a First
Nation into adapting a governance structure that
encompassed the First Nation Financial Code
principles.
 It was also important that an order of evolution
was outlined. This would guarantee the success
of the toolbox application for a First Nation.
What is the First Nations
Governance Toolbox?
The committee agreed the following
chapters would be:





First Nations Governance Concepts
Financial Management Bylaw
Financial and Human Resource Policy
and Procedures Manuals
Strategic Management and Planning
Capacity Building
COMMUNITY DIRECTION
 Vision
 Mission
 Values
CONSTITUTION
 Founding Provisions
 Rights and Freedoms
Government Structure
GOVERNANCE MODEL
INSTITUTIONS
 Government
Organization
 Core Branches
 Programs & Services
BYLAWS
 Financial Management
 Human Resources
 Administration
POLICIES &
PROCEDURES
 Financial
 Human Resources
 Operations
Chapter One: First Nation
Governance Concepts
A constitution is a solid foundation for First
Nation’s with a strong community vision to move
ahead in:
 Treaty
 Self-government
 Other Nation building initiatives.
First Nation Governance Concepts
Part 1 – First Nations Constitution
Development
This section includes information that relates to
importance of having a constitution that provides a
solid foundation for:

codes,

by-laws and

policies development.
First Nation Governance Concepts







Some of the standard components of a First
Nations constitution include the following:
Founding Provisions
Rights and Freedoms of Citizens
First Nation Government Structure
Government Officials Roles and Responsibilities
Financial Management and Accountability
Lands and Resources
General Provisions
First Nation Governance Concepts
The constitution would be specific for their
community needs and would serve the purpose of:
 who you are
 how you are governed
 how the membership has input into
governance
 key positions for governance
SAMPLE ORGANIZATIONAL CHART
COMMUNITY
MEMBERS
CHIEF AND
COUNCIL
BAND
ADMINISTRATOR
ADMINISTRATION
HUMAN
RESOURCES
SOCIAL
DEVELOPMENT
FINANCE
EDUCATION
SKILLS
TRAINING
K - 12
- 12
HOUSING
LANDS
RESOURCES
FISHERIES
FORESTRY
First Nation Governance Concepts
Part 2 – Government Organization





This section provides information about First
Nation government organizational structure that
supports the development of:
various laws
policies
procedures
administration
guidelines necessary for good government
First Nation Governance Concepts
Government organization in broad terms is a
constitution.
The structure is developed to create:
 structure
 departments
 committees
 reporting and accountability systems
First Nation Governance Concepts
Financial management systems are an integral
part of organization structure and are required
for:



budget planning
allocation
audit requirements
First Nation Governance Concepts
Some examples of government organization
components are:

Government Organization
 Council size, committee structure

Core Branches or Departments
 Administration, Finance and HR

Programs and Services
 Health, SA, Education, Resource Mngt
First Nation Governance Concepts
Financial Accountability Policy Sample

Is a solid basis for developing and adopting a
policy to your own First Nation.

The success of any policy is to give “life” to the
document by ensuring that all members, staff
and council is fully trained and understands the
basis of the policy.

As with all other policies that are adopted, it
becomes a living document that all abide by.
First Nation Governance Concepts
The policy provides sample wording for:
 Compliance with Policy
 Financial Decision-Making Process
 Conflict of Interest Guidelines
 Procedures for Financial Information
Disclosure
 Dispute Resolution.
First Nation Governance Concepts
Appendix A – Building a Community
Constitution
This Appendix is used by permission by the
Institute on Governance. The handbook was
developed in collaboration with the Samagok
Anishnawbek First Nation and Canadian Executive
Services Organization, Aboriginal Services in
January 2001.
First Nation Governance Concepts
The handbook was born out of the Samagok
workshop, and is meant as a guide for
others First Nations during their
constitution-building process.
The handbook summarizes both
international and Sagamok experiences, and
outlines the basic process of developing a
constitution.
First Nation Governance Concepts
It is organized around the four
questions that formed the basis of the
Sagamok workshop:
 What is a constitution?
 Why have a constitution?
 What should a constitution contain?
 How can a community develop its
constitution?
Points to Ponder #2

If the professor on Gilligan’s Island could make a
radio out of coconut, why can’t he fix a hole in a
boat?

Gargling is a good way to see if your throat leaks.

If a thing is worth doing, wouldn’t it have been
done already?

Failure is not an option. It’s bundled with your
software.

He who dies with the most toys is still dead.
Chapter Two:
Financial Management By-Law
WHAT IS A FINANCIAL MANAGEMENT
BYLAW?
A key component of the First Nations
Financial Code Toolbox is the ability for First
Nations to make laws and enforce them.
Financial Management By-Law

Section 83 of the Indian Act provides for the
development of laws in variety of areas.

Some First Nations have undertaken the
development of a financial management by-law,
in particular those that entering into the area of
taxation, claims management and economic
development.
Financial Management By-Law
Key components of the Financial
Management Bylaw includes:
1.




Council Responsibilities
planning and budgeting for service and capital
projects
hiring of competent financial management staff
council responsibilities in the areas of annual
budgeting, expenditures, information on
contracts and tenders, financial statements and
audit requirements is covered.
Financial Management By-Law
2. Conflict of Interest Guidelines
In the development of financial management bylaws conflict of interest guidelines are needed to
ensure transparency in financial management
procedures.
Financial Management By-Law
3.
Financial Information Disclosure
This relates to the need for accountability to
membership and access to financial information.
Disclosure also deals with Council member's
requirement to provide information about potential
financial benefits through Council decisions.
Financial Management By-Law
4. Dispute Resolution
This section of the by-law ensures there is a
process for redress where a band member feels
they would be adversely affected by a Council or
administrative decision. This area also includes a
process for mediation or arbitration.
Financial Management By-Law
This toolbox chapter includes sample
policies that your First Nation can adopt.
The policies are:
 Conflict of Interest
 Disclosure
 Contracts and Tenders
 Optional Committees and Boards
Financial Management By-Law
In conclusion, law making is an important part
of First Nations governance and will requires
sound judgment in their creation.
 Provided laws are based on a shared vision and
constitutional provisions that will meet the
needs of the community.
 This will in turn provide a solid base for health,
social and economic development.

Chapter Three:
Financial and Human Resource
Policy and Procedures Manual

The focus of this First Nations Financial Code
Toolbox chapter is on policy and procedure
development and its role in helping your First
Nation achieve its desired administrative goals.

Included are sample policies and procedures for
financial management and human resources
that your organization may use as a template in
the creation of your own.
Financial/HR Management Manual
WHAT ARE POLICIES?
Policies and procedures help ensure that
behaviours in the workplace conform to the
expectations of the organization and to legal
requirements.
 Different policies and procedures relate to
general governance, function, strategic decisions
or the administration of specific programs or
activities.

Financial/HR Management Manual
The development of your own effective policies
should support the vision, mission and values of
your organization. It is important to consider
these issues in your development:

input from all affected stakeholders

relevant, complete and understandable content

effective communication to all stakeholders
Financial/HR Management Manual

all policies documented in a consistent format

appropriate authorization and accountability for
administering the policy

a periodic review process to validate
appropriateness and completeness
Financial/HR Management Manual
Policies should contribute to the growth and
development of a high performance organization.
Key components of effective policies contain:
 purpose/objective
 scope
 authority
 policy content
They may also contain an effective date and
consequences of non-compliance/redress.
Financial/HR Management Manual
WHAT ARE PROCEDURES?
 is a step-by-step list of activities required to
conduct a certain task.

ensure that routine tasks are carried out in an
effective and efficient fashion, and in
accordance with policy.

should contain the following key components:
 the purpose of the procedure and the
policy to which it relates.
Financial/HR Management Manual
 step-by-step instruction on performing the
given task.
 illustrations of any form involved and
specific instructions regarding their use.
 any requirements related to review,
approvals and signatures.
 any requirement relates to the
communication of information.
 the position or person with primary
responsibility.
Financial/HR Management Manual

In conclusion, it is important to remember that
this process is irrelevant if all users do not
receive and apply your published policy and
procedures to their daily practice.

Your new manual will be well received by all
users if they are easy to understand, develops
effective solutions and if there is a
communication or training plan in place.
Financial/HR Management Manual
WHAT SAMPLES DOES THIS TOOLBOX
CONTAIN?
This toolbox chapter contains
 a sample Financial Procedures Manual
 a sample Human Resource Manual which
includes samples of Codes of Conduct.
Each sample includes samples of various forms,
terms of reference for auditors, performance
evaluation charts, grievance steps and oath of
confidentiality forms.
Financial Procedures Manual
SAMPLE FINANCIAL PROCEDURES MANUAL
This sample contains procedures for administration
staff and council on the correct and approved
methods of financial control from
 the recording receipts,
 depositing funds,
 disbursement procedures
 capital assets
 annual year-end audits.
Financial
Procedures
Manual
Good or Service
Invoiced to
First Nation
Is there a BCR
approving the
expenditure?
Ensure that
expense is
brought to
Chief and
Council for
approval
Release
Cheques
No
Yes
Attach a copy
of signed BCR
to invoice
No
Approval
Granted?
Yes
On scheduled cheque- run
days, process cheques for
invoices and forward for
bank account signatories
Data enter invoice
into computer
accounting program
Yes
No
Attach a
copy of
purchase
order to
invoice
Forward invoice
to department
head or
purchasing staff
for verification
and approval.
Yes
No
Are all the
cheques signed?
Does the
invoice
reference a
purchase order?
Yes
Notify vendor
that invoice is
not approved
for payment.
No
Sample
Accounts
Payable
Process
Is the good or service
amount exceeding
cost limits set by
Chief and Council?
Yes
Forward
invoice
to
accounts
payable
Yes
Accounts Payable
Attach all packing slips,
work orders, waybills,
purchase orders, etc to
invoice
Code expense to appropriate
department and forward to
department head for approval
Approval Granted?
Approval
Granted?
Invoices
returned to
accounts
payable for
proper
documentation
or coding
No
No
Notify
vendor that
invoice is
not
approved
for
payment.
Human Resource Manual
SAMPLE HUMAN RESOURCE MANUAL
This sample contains policies for managing
staff. It defines:
 the conditions of employment
 benefit entitlement
 reporting
 performance evaluations and redress
Human Resource Manual
It complies with the Canadian Labour Code and
would work in cooperation with an Operations
Manual.
 This is the single important document that
would provide your First Nation with a healthy
workplace.
 The First Nation that regularly reviews and
amends their Human Resource Manual seldom
has recruitment or retention problems.

Points to Ponder #3
If Wile E. Coyote had enough money to buy all
that ACME equipment, why didn’t he just buy
dinner?
 If corn oil is made from corn, and vegetable oil
is made from vegetables, then what is baby oil
made from?
 Did you ever notice that when you blow in a
dog’s face, he gets mad at you, but when you
take him on a car ride, he sticks his head out of
the window?

Chapter Four:
Strategic Management & Planning

The focus is strategic planning for First Nations

The information contained in this chapter was
written by Jim Pealow, MBA, CMA, CAFM and
being used by permission

It is also course content reading for AFM4 –
Strategy and Decision Making of the Certified
Aboriginal Financial Manager program of the
Aboriginal Financial Officers Association of
Canada
Strategic Management & Planning
This publication will inform those in First
Nations leadership positions about strategic
management and accountability

Highlight some practices that will assist in
improving the quality of First Nations’
activities in planning and accountability.

Strategic Management & Planning
Information is presented in five sections



First an introduction and addresses the
current situation.
The second is information on strategic
management.
The third looks at accountability and
related issues.
Strategic Management & Planning

The fourth is a section of examples and
best practices are presented to allow
the reader to measure against and
consider potential improvements.

The last section includes sources of
information to provide additional
knowledge for those wishing to
examine topics further.
Strategic Management & Planning
Learning Objectives
By using the information in this publication, you will
be able to:
 Gain a better understanding of
accountability and how it benefits an
organization.
 Develop an accountability program.
Strategic Management & Planning
Understand the relationship between
accountability and strategic management.
 Gain a better understanding of strategic
management and how it benefits an
organization.
 Assess strategic management activities in
an organization.

Strategic Management & Planning
What is Strategic Management?
Strategic management can be defined as the art
and science of formulating, implementing, and
evaluating cross-functional decisions that enable
an organization to achieve its objectives.
Strategic Management & Planning
Other definitions bring in different elements
integral to a strategic management process.
 This definition, however, clearly describes the
heart of strategic management.
 Strategic management focuses on integrating all
organizational activity for the purpose of
achieving organizational success.
 Strategic management can be viewed as a
formal planning process that allows a First
Nation to pursue proactive rather than reactive
strategies.

Strategic Management & Planning
Feedback
Internal
Audit
Establish
Vision,
Mission,
& Values
Establish
Goals &
Critical
Success
Factors
Generate &
Select
Strategies &
Performance
Measures
Establish
Policies,
Action &
Budgets
Allocate
Resources
& Do It!
Measure and
Evaluate
Performance
External
Audit
Strategy
Formulation
Strategy
Implementation
Strategy
Evaluation
Strategic Management & Planning
How Do You Implement Strategic
Management?
Strategy implementation requires:
 policy support for the selected strategies
 related tactics
 objectives
 the necessary resources.
Strategic Management & Planning

First Nations are able to formulate strategy but
run into implementation problems because of
financial capacity, lack of supportive policy or
employee/volunteer motivation problems.

Strategy implementation usually requires a
supportive culture, appropriate organizational
structure, and readjustment of current
activities.
Strategic Management & Planning

Strategy implementation is the action stage and
is sometimes referred to as “Where the rubber
hits the road.” Everyone needs to be committed
and understand the role they play in the success
of the organization.

Commitment will be achieved more easily if
everyone participates in developing and
understanding the strategy, what they must do
to implement the strategy and get the job done.
Strategic Management & Planning
Key elements in strategy implementation
are:





flexibility
training
continuous improvement, policy
decision making
problem solving
Strategic Management & Planning
The best way to support implementation of
strategy is to develop a business/work plan.
The business plan is:
 a consolidation of all programs and activities
 outline the strategies, related assumptions
and activities to support the strategies
 performance indicators
 financial information such as budgets
 indicates who will do what and when.
Strategic Management & Planning

If your process is easy to follow, and not overly
prescriptive, you can be flexible

It takes more time and effort to amend a 200page business plan than one with 24 pages.
Keeping it brief can be helpful. Size can impact
perception.

Some people would rather hold off on new
innovative tactics than go through the tedious
process of submitting a revision to a long
document.
Strategic Management & Planning
What is Strategy Evaluation?
 Strategy evaluation is the stage of the strategic
management process that is often neglected.

This stage provides the opportunity to assess
how well strategies are doing. and is important
in terms of supporting accountability.

Measuring performance to the goals that were
set beforehand allows the assessment of
progress.
Strategic Management & Planning

It also identifies areas where corrective
action is necessary.

Trends upon which the original strategies
were developed change and, therefore,
evaluations are required on a regular basis
to assess impacts.

There may be a need for abandonment,
adjustment or new strategies.
Strategic Management & Planning

First Nations need to undertake a formal process
to evaluate strategy.

Since strategic direction is usually long term, a
bad strategy can seriously influence a First
Nation’s health and can be difficult to change.

Therefore, timely and effective evaluations to
identify problems or potential problems are
critical.
Strategic Management & Planning
What is Accountability?
Put simply, accountability is the same thing as
responsibility – responsibility to a person or group
of people.
 Accountability is used to make sure people do
the things they should, and don’t do the things
they shouldn’t.

Strategic Management & Planning
Types of Accountability:
Political/Managerial
 Program or Administrative
 Fiscal
 Individual Stakeholder or Member

Strategic Management & Planning
Major Components of an Accountability
Program:
 Planning and Performance Reporting
 Policies and Procedures
 Roles and Responsibilities
Strategic Management & Planning
Link Between Accountability and Strategic
Management:
 To meet the accountability needs of an
organization strong planning knowledge and
skills are necessary
 The better conceived an organization’s strategy
and the more competently executed with
accountability and measurement, the more
likelihood of success
Strategic Management & Planning








What Tools, Examples and Best Practices
does the Toolbox Chapter contain?
Strategic Management Questionnaire
Strategic Management Policy Example
Strategic Plan Example – Ucluelet First Nation
Accountability Best Practices
Strategic Management Best Practices
Problem Solving and Decision Making Tool
Priority Setting Tool
Activity Plans
Chapter Five:
Capacity Building

Once the key elements of governance are in
place and function efficiently, attention to
maintaining high standards becomes important.

This chapter was designed specifically to assist
financial managers become aware of the need
for capacity building in their work with First
Nations
Capacity Building
What is capacity building?
 Simply put... it is building
competencies, relationships and
models.
Why do we need capacity building?
 To improve job performance and
efficiencies.
Capacity Building

The competencies capture the shift from the
financial manager being primarily a scorekeeper
to an expanded role of providing advice and
leadership on all financial activities.

This becomes important as financial
management of First Nations becomes more
complex due to self-government initiatives,
economic development and new partnerships.
Capacity Building
Provincial Level
AFOABC exists to provide support to its
membership in capacity building in a number of
ways:
1.
Training and Development Conferences
AFOABC hosts 3-4 training conferences or events
per year that serve to inform and train members in
matters related to administrative and financial
management. In conference planning, core
competencies are used as guide to develop
workshops and training sessions.
Capacity Building
2.
Aboriginal Financial Manager
Certificate Program
The Aboriginal Financial Management Certificate
Program is an innovative part-time 18-credit
program offered by Capilano College on behalf of
AFOABC. This program offers students working in
the finances offices of First Nations an opportunity
to improve their skills in financial management and
administration.
Capacity Building
Students are trained in basic and intermediate
accounting, computer applications, Aboriginal and
business law, strategic management and
leadership and communications. This program is
offered when student demand and sufficient funds
are available.
Capacity Building
National Level
At national level, AFO Canada is the professional
organization in Canada responsible for certification
of First Nations financial managers and setting
high standards for Aboriginal financial
management. Competency Standards for
Aboriginal financial management have been
established.
Capacity Building
These standards are the basis for development of
curriculum used in granting credits towards the
Aboriginal Financial Manager Program certificate,
diploma, and the professional designation. They
are also used in assessment of practical experience
and the professional CAFM exam.
Capacity Building
What is Competency Modeling?
 Competency modeling is the process of
identifying the key responsibilities in a specific
job function and the observable outcomes and
behaviours that can be expected at the learning,
full performance and superior performance
levels.
 Competency modeling enables practitioners,
peers, clients and supervisors to reach
consensus on skills, motives, attitudes or other
personal characteristic that differentiates
superior from average performers.
Capacity Building
The Need for Modeling
The development of a validated model would
add a much-needed visual dimension to the
current listing of Financial Manager
competencies.
 Most importantly, the process would enable
Aboriginal Financial Officers Association
members to reach consensus on the observable
outcomes and behaviours associated with
superior level performance by Financial
Managers.

Capacity Building
Consensus on this subject will be vital in
establishing a course of action to improve the
financial management capacity in every First
Nations community.
 The modeling process would also identify and
document ‘best practices’ in the role of the
Financial Manager that could then be shared
with all First Nations communities.

Capacity Building
Applications and Benefits
 A Financial Manager competency model would
provide a visual reference of the specific
attributes at three distinct levels of performance
and would be used in a variety of applications
including:
 Serving as a base for curriculum development.
 Identifying and measuring work experience
requirements.
 Developing continuing professional development
services.
Capacity Building





Conducting guided assessments to identify
professional development needs
Recruitment and selection.
Providing a source of best practices to support
governance initiatives and sound financial
management.
Conducting performance appraisals.
Compensation Analysis.
Capacity Building
The Core Competency Domains for a
Certified Aboriginal Financial Manager are:
Aboriginal History and Cultures
Management Information Systems
Communications & Personal Skills
Economics
Financial Accounting
Law
Management Accounting
Quantitative Methods
Computer Applications
Strategy and Decision Making
Financial Management
Aboriginal Human and Fiscal Issues
Capacity Building

This toolbox chapter includes the Financial
Officer Competency Model Workbook

The model was developed by Aboriginal
Financial Officers Association BC members

The model illustrates the different outcomes and
behaviours that can be observed at the learning
stage, full performance and superior
performance levels
Participant Feedback & Wrap-Up
Please take this time to ask questions and
provide feedback to the facilitators
regarding the Financial Code Toolbox
Participant Feedback & Wrap-Up
Please take a few moments to complete the
training session’s evaluation form.
Your comments and suggestions assist
AFOABC in planning future events
Participant Feedback & Wrap-Up
Thank-you for attending the Aboriginal
Financial Officers Association of BC’s
Improving Financial Management and
Accountability with the Financial
Management Toolbox Session and have
a safe trip home!