Aboriginal Relations

We again recommend that the Department of Aboriginal Relations improve its financial reporting processes—see below

In 2014 we recommended that the department improve its financial reporting processes to ensure estimates are reasonable and reliably supported.

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 majority of the department’s valuation estimates are simple in nature. The department is responsible for managing the province’s recovery efforts on First Nations lands affected by the 2013 Alberta flooding. Department management based its original flood recovery cost estimates in large part on analysis by the departments of Municipal Affairs and Seniors of flood recovery costs elsewhere in the province.

In 2014 we found that the department did not have processes in place to assess the unique and complex nature of estimates such as those related to the 2013 Alberta flooding. The department did not have processes to ensure that management had gathered all information relevant to make a reasonable estimate to account for the 2013 Alberta flooding. The department estimated the total expense for flood recovery on First Nations land to be $193 million, of which $164 million is eligible for federal disaster assistance funding.

We repeat this recommendation because the department’s processes are still incomplete to make reasonable and properly supported estimates.