Compliance Assessment Management Letter: RAMP
4 Town Square & MacKenzie Dr
P.O. Box 327
NORMAN WELLS NWT X0E 0V0
a/s Peter Guther
Dear Mr. Guther:
Indigenous and Northern Affairs Canada (INAC) recently conducted a compliance assessment of your organization for the fiscal year 2014-2015. Attached, please find a copy of the compliance assessment report. The report will be published on the Department's website in the coming months, along with this management letter. Please provide a written response within 30 days of the date of this letter with a plan on how your organization has addressed or will be addressing the recommendations below:
- Subsidy: We recommend that the Recipient establish processes and procedures to ensure the subsidy is fully passed on to the end consumer, and that the profit margin is not eroding the subsidy.
- Program Visibility: We recommend that the Recipient continue its current practice of reflecting the subsidy as a discount to the end consumer to ensure that the subsidy is communicated in a transparent process to the end consumer. The Recipient should ensure that the consumer is aware that the ‘discount' relates to the NNC Program either through signage or a description on the receipt itself.
- Controls: We recommend that the Recipient improve its controls over the application of the subsidy in order to ensure the accuracy and validity of claimed subsidies. This would include implementing controls to ensure claims are filed on a timely basis and that there is an independent review process occurring prior to information being submitted to INAC, which will increase the quality of the claims being submitted.
- Ineligible Clients: We identified sales to ineligible businesses and establishments (mainly mining camps) for which the Recipient claimed a subsidy, although minimal subsidies on the end prices were provided to these organizations (with the exception of some in-store sales which could not be quantified but did not appear significant). We recommend that the items which are then resold to ineligible customers not be claimed as part of the subsidy, and noted that upon observing this practice during our on-site fieldwork, the General Manager acknowledged that this practice would not be continued going forward. Further, we recommend that INAC consider recovering the overpayment of $7,601, as approximated above, relating to the ineligible subsidy claims. Additionally, we recommend that the Recipient retain the detailed sales records for any transactions relating to the Program for the length of time specified in the Recipient's funding agreement with INAC in order to substantiate the financial and non-financial reports and facilitate future Program audits.
Please note that your response will also be posted to the Department's website.
Should you have any questions or concerns regarding this compliance assessment, please do not hesitate to contact your Nutrition North Canada (NNC) representative.
Acting Director, Nutrition North Canada