Compliance Assessment Summary Report: South Camp Enterprises
For Funding Agreements No. 1415-HQ-000247 and 1617-HQ-000007 between 953731 NWT Ltd. and Crown-Indigenous Relations and Northern Affairs Canada.
June 17, 2019
Name: 953731 NWT Ltd. (Operating as South Camp Enterprises)
Location: Resolute, Nunavut
Time period covered by audit: January 1, 2015 to December 31, 2016
Amount of CIRNAC funding claimed during the period: $1,353,027
Crown-Indigenous Relations and Northern Affairs Canada ("CIRNAC") selected 953731 NWT Ltd. ("South Camp Enterprises" or the "Recipient") for an independent assessment for the funding period January 1, 2015 to December 31, 2016. 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:
- Perform an audit of the subsidy claimed for reimbursement as it relates to the type and nature of eligible cost requirements of the program;
- Review compliance with the 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.
Based on the procedures performed by Ernst & Young LLP, the following recommendations were provided to the Recipient for consideration:
- Implement a process whereby there is an independent review of claims prior to submission to NNC for processing. This has the potential to reduce the number of errors in the claims.
- The Recipient should 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 regular 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.
- Approach suppliers to sign, if possible, a formal contract supply arrangement to support the Recipient in providing the best possible price to end consumers.
The final report has been issued.
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