Compliance Assessment Summary Report: Labrador Investments Ltd.
For Funding Agreement No. 1516-HQ-000008 and 1617-HQ-000002 between Labrador Investments Ltd and Crown-Indigenous Relations and Northern Affairs Canada.
January 7, 2021
Name: Labrador Investments Ltd.
Location: Nain, Labrador
Time period covered by audit: April 1, 2015 to March 31, 2017
Amount of CIRNAC funding claimed during the period: $281,127
Crown-Indigenous Relations and Northern Affairs Canada ("CIRNAC") selected Labrador Investment Ltd. (the "Recipient") for an independent assessment for the funding period April 1, 2015 to March 31, 2017. CIRNAC contracted Ernst & Young LLP to provide an independent report examining certain aspects of the Recipient’s management of the funding received under the program. Specifically, the engagement was planned to consider and provide observations and recommendations on:
- Perform an audit of the subsidy claimed for reimbursement as it relates to the type and nature of eligible cost requirements of the program;
- Provide recommendations on program visibility requirements and transparency of the subsidy to consumers as it relates to the requirements of the agreement;
- Provide recommendations on the Recipient’s reporting and claiming systems and procedures which support compliance with the terms of the agreement;
- Provide recommendations on management’s processes related to supply chain practices; passing on the full value of the subsidy and related profit margin practices; and, sales to ineligible clients.
Ernst & Young LLP, an independent firm, was commissioned to undertake the engagement which took place at the offices of the Recipient.
The following recommendations were provided to the Recipient for consideration:
- Monitor deadlines and provide the required information to CIRNAC by the required deadlines.
- Develop a policy, process and procedure for assessing profit margins on a quarterly basis for subsidized and unsubsidized food items to verify and support that profit margins are not eroding the subsidy that is to be passed on to customers, in accordance with the NNC Program National Manual objectives.
- Consider implementing a review control, whereby someone other than the preparer of the claim, is inspecting the information to original supporting documentation and checking accuracy of the final claim form, prior to signing as approver to submit the claim form to CIRNAC. In addition, a control requiring coding information to be reviewed when entered into the system may also be beneficial.
The final report has been issued.
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