First Nations Financial Reporting: Moving to Outcomes

First Nations financial reporting has two jobs. It shows funders and auditors that money was spent as agreed, and it shows Chief and Council what that spending achieved. The first job is well defined. The second depends on how finance and community data are recorded in the first place.

This post covers what the federal 10-Year Grant asks First Nations to report, the financial ratios the First Nations Financial Management Board reviews, how to pair financial and community measures, and how to record data once so every report draws on the same numbers.

What the 10-Year Grant Asks For

The federal 10-Year Grant reporting page shows both jobs side by side. Recipients complete one annual Grant Results Report, due 120 days after the end of the fiscal year. Indigenous Services Canada (ISC) uses it to support its annual reporting to Parliament on the grant's outcomes.

To maintain grant eligibility, ISC also lists four documents: the annual audited financial statement, an annual report, a multi-year financial plan, and a strategic plan. The strategic plan and the multi-year financial plan may be prepared separately or in a single document. Reporting under other funding agreements, such as proposal-based programs and targeted funding, stays as those agreements set it.

That last point matters for a finance team. One results report does not replace the other reports a Nation owes, so the data behind them has to serve several audiences at once.

The Ratios Behind Financial Performance

The First Nations Financial Management Board (FMB) reviews six financial performance ratios, calculated from a First Nation's audited financial statements for the past five years: fiscal growth, operating margin, asset maintenance, net debt, interest expense, and local revenue collection.

A Financial Performance Certificate is required to apply for a low-cost loan from the First Nations Finance Authority. FMB also says certification can show citizens, lenders, and business partners that a Nation is in good financial health.

Audited statements arrive after year-end. A ledger that can produce the same figures during the year lets Council see where the Nation is heading, not only where it ended up.

Pairing Financial and Community Data

Outcomes are rarely financial alone. A financial figure becomes an outcome measure when it is divided by a community count, such as cost per program participant or spending per household served. Each Nation chooses the counts that matter to its own priorities.

These measures usually fail for a practical reason. The counts sit in a separate spreadsheet, kept by another department, and each report rebuilds the ratio by hand. The fix is to agree on one definition for each count and record it where the money is recorded.

In Sage Intacct, statistical accounts hold nonfinancial data and let you build calculations that compare it with financial figures. Sage's own example is revenue per employee. A First Nation can use the same mechanism for the community counts it chooses to report. We cover the board-reporting version of this approach in our post on nonprofit financial KPIs.

Community counts are information about people, so decisions about what to record and who sees it belong to the Nation. The First Nations Information Governance Centre's OCAP® principles of ownership, control, access, and possession say that First Nations own and control how their information is collected, stored, used, and shared. They also ask everyone who works with First Nations to understand and respect them.

Record Once, Tag by Program, Funder, and Entity

Reports for Council, ISC, and other funders differ in format, but they draw on the same transactions. If each transaction is recorded once, with tags for the program, the funder, and the entity it belongs to, each report becomes a filter on the same data instead of a rebuild.

In Sage Intacct, dimensions do this job. Users select the dimensions they want on a transaction entry page, and those dimensions carry through to the general ledger. Standard dimensions include department, location, and class, and you can create your own, such as a program or funder dimension. Almost all reports support dimensions.

On our First Nations solutions page, the Sage Intacct features we list include user-based dashboards, user-created reports, a Multiple Entry Package that supports up to 1,000 business entities, and Grants Tracking and Billing. Different people can each see what they need from the same data.

Manual rebuilds also tie reporting to the one or two people who know how to do them, a risk we cover in our post on the finance team labour shortage.

One Example From Outside Canada

Seattle Indian Health Board, a health clinic founded in 1970 that relies on grants from federal, state, county, and city agencies, moved off an outdated legacy accounting application to Sage Intacct. In Sage's case study, the organization estimates its financial data accuracy is up 100% and reports that finance team productivity is up 50%. The case study says the finance team now has more time for dashboards and data analysis, and that revenue grew 80%, to $25 million, over three years.

It is a United States organization, and these are results as Sage reports them. Treat them as one example, not a forecast for your Nation.

Plan Past the Fiscal Year

Because the grant asks for a multi-year financial plan, planning belongs alongside reporting. A plan written once for the file goes stale. The Sage Intacct Planning module supports rolling forecasts and scenario modelling, which we cover in our post on adaptive planning. Reporting and planning also share an input. Both work best from the live ledger, not a copy of it.

Where to Start

1. List the reports you owe. Include each funding agreement, the 10-Year Grant documents if they apply, and what Chief and Council receive.
2. Name the figures and counts behind them. Note where each one is kept today and who maintains it.
3. Agree on one definition for each count. Decide who owns it and who may see it.
4. Record each item once, with tags. Use program, funder, and entity at a minimum.
5. Build the reports from the ledger. Review them with Council on a fixed schedule.

Next Step

To go further, download our First Nations information guide using the button on our First Nations solutions page. You can also see how Sage Intacct, which we implement and support, handles dashboards and reports.