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Indigenous Relations

Aboriginal Relations

 

SUMMARY

DEPARTMENT

Matters from the current audit

We recommend the Department of Aboriginal Relations improve its financial reporting estimation processes.

FINDINGS AND RECOMMENDATIONS

DEPARTMENT

Matters from the current audit

Estimation processes

Background

In preparing the ministry’s financial reporting, department management must estimate the value of some balances for which complete information is not available at the time. Reasonable estimates require good judgment and strong estimation processes to gather, understand and analyze the best information available. Management must also retrospectively examine these estimates and adjust their value when better information becomes available. The process of reviewing and adjusting estimates should also help management identify ways to make more precise estimates in the future.

Historically, the department’s valuation estimates are simple, with the exception of potential liabilities related to legal claims. For these complex estimates, the department relies on analysis from the Ministry of Justice.

During the year, the department was responsible for managing the province’s recovery efforts on First Nations lands affected by the 2013 Alberta flooding. The department had to estimate expected total flood recovery costs related to First Nations and determine which costs were eligible for reimbursement from the Government of Canada under the Disaster Financial Assistance Arrangements (DFAA) guidelines or directly with Aboriginal Affairs and Northern Development Canada. The department’s estimates were based in large part on the Department of Municipal Affairs’ analysis of flood recovery costs elsewhere in the province.

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