STANDARD-SETTING GUIDELINES

STANDARD-SETTING

GUIDELINES

F IRST NATIONS F INANCIAL MANAGEMENT BOARD

www.fnfmb.com
EFFECTIVE: DECEMBER 14, 2015
APPROVED BY BOARD OF DIRECTORS: DECEMBER 14, 2015

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 STANDARD-SETTING GUIDELINES

FIRST NATIONS FINANCIAL MANAGEMENT BOARD

STANDARD-SETTING GUIDELINES

TABLE OF CONTENTS

OVERVIEW ......................................................................................................................................................................................................................... II

STANDARD-SETTING GUIDELINES ......................................................................................................................................................................... 1

1.0 GENERAL .................................................................................................................................................................................................... 1

2.0 DEFINITIONS ............................................................................................................................................................................................ 1

3.0 PRINCIPLES FOR STANDARDS .......................................................................................................................................................... 1

4.0 PRINCIPLES FOR STANDARD-SETTING ACTIVITIES .............................................................................................................. 2

5.0 TIMING OF STANDARD-SETTING ACTIVITIES ......................................................................................................................... 2

6.0 PROCEDURES .......................................................................................................................................................................................... 2

7.0 EDITORIAL CORRECTIONS ...............................................................................................................................................................11

8.0 TRANSLATION .......................................................................................................................................................................................11

9.0 INFORMATION ON THE FNFMB’S WEBSITE .............................................................................................................................11

APPENDIX A – ILLUSTRATIVE ANNUAL REVIEW TIMELINE AND STANDARD-SETTING PROCESS STEPS ........................... 12

APPENDIX B – ILLUSTRATIVE ANNUAL IMPROVEMENTS TIMELINE..................................................................................................... 13

APPENDIX C – ANNUAL IMPROVEMENTS ........................................................................................................................................................14

APPENDIX D – LIST OF CORE DOCUMENTS ....................................................................................................................................................15

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FIRST NATIONS FINANCIAL MANAGEMENT BOARD

STANDARD-SETTING GUIDELINES

Overview

This document sets out the guidelines that the First Nations Financial Management Board (“the FNFMB”) follows in
setting standards (“the Guidelines”). The FNFMB was given responsibility for setting standards within the legislative
framework provided by the First Nations Fiscal Management Act (“the FMA”). Under the FMA the FNFMB has the
responsibility for establishing financial administration law, financial performance, financial management system, local
revenue account financial reporting standards and procedures for First Nations. To that end, the FNFMB decides what
procedures are necessary in carrying out its standard-setting process and how those procedures should be carried out
in specific circumstances. For purposes of this document, the term “standard” includes all material included in the
FNFMB’s collection of standards and procedures (“Core Documents”). A list of Core Documents is included in
Appendix D for reference.

This document has been prepared to inform stakeholders about the way in which the FNFMB sets standards, including
how stakeholders can participate in the process. The process contained in these Guidelines is designed to serve the
FNFMB’s stakeholders by addressing the need for transparency in, and accessibility to, the development process,
including requests for stakeholder comment and responsiveness to input received. These procedures are critical in
maintaining the objectivity of the process and the quality of the output.

These guidelines were established (and will continue to be updated as necessary) through an ongoing process of
internal review and revision that has involved members of the FNFMB staff, the Board of Directors and technical
advisors, including lawyers and accountants experienced in First Nations advisory services.

References consulted in the development of these guidelines:

• Public Sector Accounting Board - PSAB’s Due Process Procedures

http://www.frascanada.ca/public-sector-accounting-board/what-we-do/due-process/item73374.pdf
• Accounting Standards Board - AcSB Due Process Handbook
http://www.frascanada.ca/accounting-standards-board/what-we-do/due-process/item67162.pdf
• IFRS Foundation - IASB and IFRS Interpretations Committee Due Process Handbook
http://www.ifrs.org/DPOC/Documents/2013/Due-Process-Handbook-February-2013.pdf
• International Accounting Standards Board – How we consult: Encouraging broad participation in the
development of IFRSs
http://www.ifrs.org/Documents/HOWWECONSULTFINALvb.PDF
• International Organization for Standardization – How does ISO develop standards?
http://www.iso.org/iso/home/standards_development.htm

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FIRST NATIONS FINANCIAL MANAGEMENT BOARD

STANDARD-SETTING GUIDELINES

1.0 GENERAL

1.1 Purpose – The purpose of these guidelines is to ensure that the FNFMB will conduct its standing-setting
activities in a responsive, transparent, fair, consistent and unbiased manner to achieve standards that are
recognized and accepted by stakeholders and for which compliance can be objectively measured.

1.2 Exceptions – The FNFMB may, under exceptional circumstances and at its discretion, add, remove, or
modify these guidelines if they believe that it is in the best interest of the broader system created by the
FMA.

2.0 DEFINITIONS

“Core Documents” means the standards and procedures established by FMFNB under section 55 of the First Nations
Fiscal Management Act including related explanatory notes, guidelines and administrative templates, but excluding
sample policies and procedures;

“COSO” means the most current internal control integrated framework as established by the Committee of
Sponsoring Organizations of the Treadway Commission;

“FMA” means the First Nations Fiscal Management Act;

“FNFA” means the First Nations Finance Authority;

“FNFMB” means the First Nations Financial Management Board;

“FNTC” means the First Nations Tax Commission;

“SAC Committee” means the Standards, Approvals and Certification Committee of the Board of Directors;

3.0 PRINCIPLES FOR STANDARDS

The FNFMB engages with stakeholders to establish standards that meet the following principles:

a. Relevant – To be relevant a standard must:

i. Remain consistent with the legislative framework in which it operates;

ii. Be appropriate for the financial management of First Nations governments;

iii. Support the services provided by the FNFA and the FNTC under the FMA;

iv. Have substantive and language consistency among the Core Documents; and

v. Be accurate.

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b. Neutral – To be neutral a standard must be designed to provide the best operation, management, reporting
and control of a First Nation’s financial management system without regard to how that standard may affect
economic, political or social behaviour.

c. Understandable – To be understandable a standard must have a meaning that can be easily accepted and
understood by First Nations communities and stakeholders.

d. Measureable – To be measurable a standard must be able to be assessed and objectively evaluated by First
Nations and the FNFMB.

e. Achievable – To be achievable a standard must reflect best practice and/or be COSO compliant and its
implementation must be feasible, useful, appropriate and likely to be effective.

4.0 PRINCIPLES FOR STANDARD-SETTING ACTIVITIES

The standard-setting process is built on the following principles:

a. transparency — the FNFMB conducts its standard-setting process in a transparent manner;

b. stakeholder input — the FNFMB considers the perspectives of those affected by its standards; and

c. accountability — the FNFMB analyzes the potential effects of its proposals on affected parties and explains
the rationale for why it made the decisions it reached in developing or changing a standard. The FNFMB is
also accountable for following the process as set out in these Guidelines.

5.0 TIMING OF STANDARD-SETTING ACTIVITIES

5.1 Annual review of standards - The FNFMB will conduct a review of existing standards and assess the
need for amendments to existing standards and/or new standards on an annual basis. An illustrative
timeline for the annual review of standards is included in Appendix A. This timeline is for illustrative
purposes only and will be amended as necessary.

5.2 Timing of Annual Improvements - Annual Improvements of the type described in section 6.3.5 and
in Appendix C of these Guidelines will be assessed on an annual basis in accordance with the illustrative
timeline set out in Appendix B. This timeline is for illustrative purposes only and will be amended as
necessary.

6.0 PROCEDURES

FNFMB’s standard-setting process normally comprises SEVEN steps:

a. Information gathering (section 6.1);

b. Agenda setting and project planning (section 6.2);
c. Development and publication of an exposure draft (section 6.3);
d. Stakeholder input (section 6.4);

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e. Development and publication of a final standard supported by a basis for conclusions document (section
6.5);
f. Communication (section 6.6); and
g. Procedures after a standard is issued (section 6.7).

6.1 Information gathering

6.1.1 Initiation – Proposals for new standards and/or amendments to existing standards are
initiated by:

• Stakeholders, through their feedback;

• FNFMB Directors, through their direction;
• FNFMB staff, through the process of continuous improvement; and
• Necessity resulting from changes in the public sector, legislative and regulatory environments.

6.1.2 Appointment of project team – At the start of each annual standings-setting review
cycle, the Director, Standards and Certification, will select a project team, generally from the FNFMB
staff, to undertake the evaluation of proposals and draft the standard-setting agenda.

6.1.3 Evaluation of proposals – New standards and amendments to existing standards

developed by the FNFMB should be designed to address problems identified with the existing
requirements. Sometimes an issue identified with current standards can be remedied with a
relatively minor amendment. In other cases, the problem might require a more significant change,
such as a major change to a standard or the development of a new standard. Consequently, the first
step in evaluating the proposals for new or amended standards is to assess and define the problem.
This analysis will help the FNFMB decide whether it should add the proposals to its standard-setting
agenda.

The FNFMB considers whether to add a proposal to the standard-setting agenda, taking into account
the following factors:

a) Changes in the external legislative and regulatory environment – whether the issue is broadly
relevant, and has emerged as a result of changes in the external legislative and regulatory
environment;
b) Pervasiveness – whether the issue is one that:
i. affects more than a few First Nations and arises across Canada;
ii. gives rise to problems that are frequent and material; and
iii. will persist if not resolved;
c) Urgency – whether the requests have been received from stakeholders, with adequate
reasonable justifications, that FNFMB should address the issue as a matter of priority;
d) Cost/benefit considerations - whether it is likely that the expected benefits to stakeholders of
the improved standards will exceed the costs of implementation;
e) Consequences – whether the absence of a standard might cause stakeholders to make
suboptimal decisions;
f) Feasibility – whether it is feasible to develop a sound solution within a reasonable time period;
g) Sufficiency of resources – whether there are sufficient resources to undertake a project taking
into account:

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i. amount of additional information required – whether there is sufficient information

about the topic to form a basis for beginning the project.
ii. availability of resources – whether there are adequate resources and expertise available
to FNFMB and its staff to complete the project and undertake the necessary activities.
iii. availability of expertise outside FNFMB – whether there is outside expertise that FNFMB
can employ to address the issue; or others have already committed resources to the
project or have undertaken research to address the issue.
h) Consistency – whether undertaking a proposal could increase consistency among existing
standards. Any decision to converge corresponding standards is made on the basis of whether
it would provide significant benefit to stakeholders.

6.1.4 Inclusion in the annual standard-setting agenda – On the basis of the factors described
above, the project team decides whether any specific proposals are to be added to the annual
standard-setting agenda.

6.2 Agenda setting and project planning

6.2.1 Standard-setting agenda – The annual standard-setting agenda is prepared by the project
team. The standard-setting agenda sets out the proposed standard-setting projects for the current
annual cycle. It is expected that some projects will be multi-year projects. The agenda will include
multi-year projects currently in process and projects that extend beyond the end of the annual
review cycle. The primary objective of the agenda is to help the FNFMB manage its resources
effectively and to help it to prioritize its work. The FNFMB distinguishes between major and narrow-
scope projects to clarify the scope of the work to be undertaken and to help reduce the risk of
committing resources to a project when other projects should have a higher priority.

6.2.2 Project plans – Each proposed new standard or amendment to an existing standard has its
own project plan. The individual project plans are prepared by the project team. The plans provide
an overview of the timetable, staffing, the documents that are expected to be produced and the
process to the followed. The project plan is divided into manageable components and project
milestones. Each milestone is assigned a target date of completion.

6.2.3 Communications plan – Included in each project plan is a stakeholder communications

and outreach plan. This might include such activities as newsletters, email blasts, webinars, face-to-
face meetings and fieldwork. The more significant the issue and proposed change, the more
comprehensive the related communications package and outreach should be.

6.2.4 Discussion paper – In some cases the project team may issue a discussion paper on a
particular project. The discussion paper is designed to help the Board of Directors decide whether
to add the proposal to the annual standard-setting agenda. A discussion paper typically includes a
comprehensive overview of the issue, possible approaches to addressing the issue including the
anticipated effects and any preliminary views of the project team. Issuing a discussion paper is not
mandatory. A discussion paper is not issued for narrow-scope issues or topics related to annual
improvements.

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6.2.5 Approval of agenda and project plans by Board of Directors – The annual standard-
setting agenda and individual project plans, and any related discussion papers, are presented to the
SAC Committee and Board of Directors for their consideration and approval.

6.3 Development and publication of exposure draft

The exposure draft is the FNFMB’s main vehicle for engaging with stakeholders. Publication of an exposure
draft is a mandatory step in the standard-setting process before a new standard can be issued or an existing
standard can be amended. An exposure draft highlights the main features of, and requests comments on, a
draft standard or draft amendment to a standard. The exposure draft is drafted by the project team. The
development of an exposure draft begins with consideration of the issues raised during the information
gathering phase, additional research performed by the project team, as well as comments received from the
FNFMB Board of Directors and stakeholders.

6.3.1 Elements of the exposure draft – An exposure draft includes the proposed standard as
well as the following elements:

a. a comprehensive overview of the proposal;

b. information explaining the FNFMB’s rationale for the proposal, including the effects
expected as a result of the proposal and other alternatives considered; and

c. an invitation to comment.

An exposure draft also includes consequential amendments to other standards to maintain internal
consistency of the complete set of Core Documents. Changes to cross-references, terminology and
other matters that are more administrative in nature may be omitted if not significant.

6.3.2 Effect analysis – The FNFMB weighs effect considerations as a part of its deliberation when
considering and drafting its analysis for the exposure draft. It should be noted that is rarely possible
to make a formal quantitative assessment of the effects of standards. In forming its judgment on
the evaluation of the effects of a proposed standard the FNFMB considers:

a. the potential costs incurred by First Nations to implement the standard; and

b. the potential benefits relating to accountability as a result of improved financial

management.

6.3.3 Approval of exposure draft by Board of Directors – The exposure draft is presented to
the SAC Committee and Board of Directors for consideration and approval.

6.3.4 Publication of exposure draft – When the exposure draft is complete and the Board of
Directors has approved it for publication, the exposure draft is published for stakeholder comment
in accordance with the communication plan developed as part of the project plan.

6.3.5 Exposing annual improvements – Some proposed amendments to standards that are
sufficiently minor or narrow in scope can be packaged together and exposed in one document even
though the amendments are unrelated. Such amendments are called “annual improvements”. Annual

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improvements follow the same process as other amendments to standards, except that annual
improvements consist of unrelated amendments that are issued for comment in a single exposure
draft, rather than separately. The justification for exposing unrelated improvements in one package
is that such amendments are limited to changes that either clarify the wording in a standard or
correct relatively minor unintended consequences, oversights or conflicts between existing
requirements of standards. Such amendments do not propose a new principle or a change to an
existing principle. Proposed annual improvements should be well defined and narrow in scope. The
FNFMB assesses proposed annual improvements against criteria consistent with the intent of annual
improvements before they are published in an exposure draft. These criteria can be found in
Appendix C.

6.4 Stakeholder input

The FNFMB gains insight into the effects of its proposed standards through stakeholder input, both in
publications (exposure drafts) and communications with interested parties (liaison activities, meetings, etc.).
The form of stakeholder engagement will differ for each proposal and is defined in the project plan.

6.4.1 Comment period – The FNFMB allows for an appropriate period for comment on an
exposure draft, relative to the subject matter. The FNFMB normally allows a period of no less than
45 days for comment on its exposure drafts.

6.4.2 Reduced comment period – In unusual circumstances, the FNFMB may reduce the period
for stakeholder comment on an exposure draft to below 45 days or decide not to issue an exposure
draft. If the comment period is less than 45 days the FNFMB must have a plan that enables it to
receive all necessary input during the shortened exposure period. If the FNFMB decides not to issue
an exposure draft it must be satisfied that the research completed is sufficient for the FNFMB to
make a final decision on issuing the new or amended standard. Circumstances where the FNFMB
may consider a comment period less than 45 days include:

a. the matter is exceptionally urgent (i.e. the delay resulting from issuing an exposure draft
with a 45 day comment period would have significant negative effects);

b. the exposure draft is short;

c. the FNFMB believes that there is likely to be broad consensus on the topic; or

d. in the case of annual improvements projects.

6.4.3 Review of comment letters – After the comment period has ended, the project team
reviews the comment letters received and the results of any other stakeholder engagement
activities. The project team prepares a summary of the comment letters, giving a general overview
of the comments received and the major points raised in the letters. The analysis helps the project
team to identify the areas on which they are most likely to need to focus their efforts during the
deliberations or whether the FNFMB should even proceed with the proposal. The summary of the
comments received and their disposition is included in the basis for conclusions document when
the project is completed.

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6.4.4 Publication of comment letters – Comment letters received are posted on the FNFMB’s
website (www.fnfmb.com) unless confidentiality is requested.

6.4.5 Standing standard-setting Focus Group – The FNFMB will convene a standing Standard-
setting Focus Group. The Focus Group is composed of FNFMB stakeholders and external consultants
with whom the FNFMB will confer upon significant standard-setting projects. The purpose of the
Focus Group is to provide information and advice based on the practical experience and expertise
of its members.

a. Composition – The Focus Group will include a limited number of representatives from the
FNFMB’s stakeholders and will also include external consultants. The composition of the
Focus Group will reflect the diversity and breadth of interest of the FNFMB’s stakeholders.

b. Selection of members – The FNFMB will advertise to its stakeholders for expressions of
interest in membership in the Focus Group. The Director, Standards and Certification, and
the project team, will select members of the Focus Group with a view to ensuring that
there is a satisfactory balance of perspectives.

c. Responsibilities of Focus Group – Focus Group members are expected to provide timely
feedback on the FNFMB’s exposure drafts. Recommendations and comments from the
Focus Group members are included in the material for discussion by the project team.

6.4.6 Input from technical advisors – The stakeholder input phase may also include discussions
with selected technical advisors including, lawyers and accountants experienced in First Nations
advisory services.

6.5 Development and publication of a final standard

The consideration of a new standard or amendment to an existing standard is carried out by the project team
after considering the comments received during the stakeholder input period. In deciding whether to change
the standard proposed in the exposure draft, the project team:

• Takes into account substantial issues that emerged during the comment period on the exposure
draft that it had not previously considered;
• Reviews input and advice from the Focus Group;
• Considers all of the evidence provided to it; and
• Evaluates whether it has sufficiently understood the issues and actively sought the views of
stakeholders.

It is inevitable that the final draft of a new or amended standard will include changes from the draft originally
proposed in the exposure draft. Changes from the exposure draft and the reasons for them are described in
the basis for conclusions document prepared when the project is completed.

6.5.1 Re-exposure – After resolving issues arising from the exposure draft, the project team
considers whether it will expose its revised proposal for stakeholder comment by publishing a re-
exposure draft. If the project team is satisfied that the revised draft responds to the feedback

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received and that it is unlikely that re-exposure will reveal any new concerns, it should proceed to
finalize the proposed standard. In considering re-exposure, the project team first decides whether,
in its judgment, the standard proposed in the exposure draft has been significantly changed as a
result of deliberation of the issues in light of comments received. The more extensive and
fundamental the changes from the exposure draft and current practice, the more likely the revised
draft should be re-exposed. Other considerations for re-exposure include:

a. whether the revised draft includes any fundamental changes on which respondents have
not had the opportunity to comment because they were not contemplated or discussed
in the exposure draft;

b. whether the FNFMB will learn anything new by re-exposing a revised draft;

c. weighing the cost of delaying improvements to standards against the relative urgency for
the need to change; and

d. what additional steps, if any, have been taken to seek stakeholder input since the exposure
draft was published. The use of the Focus Group or targeted discussions can give the
FNFMB information to support a decision to finalize a revised draft without the need for
re-exposure.

When the exposure draft proposal has been significantly changed, the project team will recommend
to the Board of Directors that the proposal be re-exposed. The Board of Directors may decide not
to re-expose. Those reasons would be described in the basis for conclusions document prepared
when the project is completed. If the FNFMB exposes revised proposals, the process to be followed
is the same as for the first exposure draft. However, because it is not the first exposure of the
proposed standard, it may be appropriate to have a shortened comment period, particularly if the
FNFMB is only seeking comments on specific aspects of the revised exposure draft.

6.5.2 Drafting of final standards – When the project team is satisfied that it has reached a
conclusion on the issues arising from the exposure draft, it will draft the standard or amendment to
a standard.

6.5.3 Accompaniments to final standards – Proposed new standards and improvements to

existing standards must be accompanied by:

a. a draft Core Document (for each Core Documented impacted by the proposed new
standard) that has been redlined from the previous version to enable changes to be
identified and the evolution of the standards to be understood;

b. a basis for conclusions document; and

c. the effective date and transition provisions.

6.5.4 Effective date and transition – A standard, or an amendment to a standard, has an

effective date and transition provisions. The mandatory effective date is set so that those applying
the standard have sufficient time to prepare for the new requirements. Effective dates are generally
six months to one year following the approval of the new standard or amendment to a standard by
the Board and will normally coincide with the start of a calendar or financial year. The length of the

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transition period and the effective date are determined based on the significance of the change
from current requirements. The transition period and effective date for major amendments or new
standards will be longer to give stakeholders more time to prepare for the new requirements. The
effective date and transition period for changes that address matters of a narrower scope will likely
be shorter.

6.5.5 Basis for conclusions document – The project team prepares a basis for conclusions
document. That document will include:

a. the reasons for undertaking the proposal;

b. alternatives considered and why the FNFMB made the decisions reflected in the final
standard;

c. an effects analysis taking into account all information obtained during the project;

d. feedback to those who submitted comments on the exposure draft, identifying the most
significant matters raised in the comment process and explaining how the FNFMB
responded to those matters;

e. a summary of the steps undertaken by the FNFMB in developing the standard; and

f. a report on any exceptions to the principles of neutrality, relevance, understandability,

measurability and achievability (refer to Section 3.0 Principles for standards).

6.5.6 Approval of final standard – To ensure the proper discharge of legislative duties, the Core
Documents and their revisions must be approved by the FNFMB’s Board of Directors.

a. Review and recommendation by Director, Standards and Certification – The Director,

Standards and Certification, will review and recommend the draft standard or amendment
to an existing standard, and accompanying documents, for presentation to the SAC
Committee.

b. Review and recommendation by SAC Committee – The draft standard or amendment

to an existing standard, and accompanying documents, will be presented to the SAC
Committee for review. The SAC Committee will review any proposed standards and
amendments to existing standards and ensure that they adhere to these guidelines and
may, for each proposed standard:

• recommend acceptance to the Board of Directors;

• not recommend the standard to the Board of Directors; or
• request additional work be performed by staff and return to the SAC Committee in
the future with a revised proposal.

c. Review and recommendation by Board of Directors – Upon recommendation by the

Chair, SAC Committee, the draft standard or amendment to a standard, and accompanying
documents, will be presented to the Board of Directors for consideration. For each
proposed standard the Board may:

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• Approve the standard;

• Not approve the standard;
• Request additional work be performed by staff and return to the SAC Committee in
the future with a revised proposal; or
• Approve the standard with a motion to instruct staff to implement a specific change,
so long as the changes comply with these guidelines.

6.5.7 Issuance of final standard and publication of basis for conclusions – After the standard-
setting process is completed, all outstanding issues are resolved, and the Board has approved the
proposed final standard, the standard or amendment is issued, followed by publication of the basis
for conclusions document. Redlined versions of the Core Documents impacted by the final standard
or amendments are prepared by the project team.

6.6 Communication – Once approved by the Board of Directors the project team ensures that the new
standard and/or amendment to existing standards is communicated to stakeholders in a timely manner.
Communication to stakeholders of the final standard is made using one or more of the following channels:

• electronic newsletter;
• the FNFMB website (www.fnfmb.com);
• social media;
• hard copy published newsletter; or
• publication in the First Nations Gazette (www.fng.ca).

Depending on the nature of the new requirements, the FNFMB staff might also develop, and make freely
available, a webcast and/or other communications materials. The more significant the changes to the
standards, the more comprehensive the related communications package is likely to be.

6.7 Procedures after a standard is issued

6.7.1 Ongoing communication with stakeholders – After a standard is issued, the FNFMB staff
continue to communicate with stakeholders through ongoing marketing activities, certification work and
capacity development projects, as well as face-to-face presentations, newsletters and other forums.
Through these communications and interactions is it expected that the FNFMB staff will receive feedback
from stakeholders on whether unexpected issues have arisen from the implementation of the standard.
If necessary, the FNFMB will consider amending the standard to clarify or otherwise address issues that
have arisen. The feedback received during ongoing communication may lead to new issues being added
to the FNFMB’s annual standard-setting agenda for the following year, with a view to providing an
amendment or clarification to the standard.

6.7.2 Post-implementation review – The FNFMB may choose to carry out a post-
implementation review of a new standard or major amendment to a standard. Such reviews consider
whether a new or amended standard has been implemented and achieved the intended objectives. The
reviews will also focus on important issues identified as contentious during the development of the

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standard and consideration of any unexpected costs or implementation problems encountered in

practice. A review may also be prompted by changes in the external legislative and regulatory
environment or comments made by the FNFMB staff, Focus Group members, or stakeholders. The post-
implementation review may lead to new issues being added to the FNFMB’s annual standard-setting
agenda for the following year, with a view to providing an amendment or clarification to the standard.

7.0 EDITORIAL CORRECTIONS

From time to time, there may be a need for an editorial correction such as correction of a spelling mistake, correction
of numbering or correction to a cross-reference. Such corrections do not alter the technical meaning of the standard.
Editorial corrections are made without exposure with the approval of the Director, Standards and Certification. All
editorial corrections will be reported to the SAC Committee and Board of Directors for their information via redlined
versions of the Core Documents.

8.0 TRANSLATION

The standards issued by the FNFMB are published in both of Canada’s official languages as a matter of standing practice
and have equal authority and effect. Key documents are translated into French to provide francophone stakeholders
an opportunity to participate in the development of standards. Input received from stakeholders in French is
translated into English for consideration by the FNFMB. Translation is undertaken by qualified translators.

9.0 INFORMATION ON THE FNFMB’S WEBSITE

Publications and information related to the FNFMB’s standard-setting activities and process that are freely available
on the organization's website are:

a. current news of standard-setting activities of the FNFMB and other developments relevant to standards and
standard-setting;

b. exposure drafts of standards and amendments to standards;

c. comment letters on exposure drafts;

d. basis for conclusion documents for completed standards and amendments; and

e. Core Documents.

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APPENDIX A – Illustrative annual review timeline and standard-setting process steps

Figure 1 – Illustrative annual review timeline

STEP TIMING KEY ACTIVITIES

INFORMATION GATHERING October - - Feedback received from clients and other stakeholders
May - Proposals for new or amendments to existing standards
received and considered

PROJECT PLAN Drafting May - Research performed by staff

- Assessment of the impact on other Core Documents
- Project plan drafted

Approval May (end) - Project plan approved by the SAC Committee

PROJECTS BEGIN June - Project completion timeline dependent on individual

project plan

Figure 2 – Sample standing-setting process steps

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 STANDARD-SETTING GUIDELINES

APPENDIX B – Illustrative Annual Improvements timeline

STEP TIMING KEY ACTIVITIES

INFORMATION GATHERING October -  Feedback received from clients and other stakeholders
May  Proposals for Annual Improvements received and
considered
 Research performed by staff

PROJECT PLAN Drafting May  Assessment of the impact on other Core Documents
 Project plan drafted

Approval May (end)  Project plan approved by the Board of Directors

EXPOSURE DRAFT Drafting June - July  Exposure draft drafted by the FNFMB staff

Approval July (end)  Exposure draft presented to Board of Directors for

approval
 Approved exposure draft released for stakeholder
comment

STAKEHOLDER INPUT July -  Comments and feedback sought from stakeholders

September

FINAL Drafting September -  Results of comment period considered

STANDARDS October  Final standards drafted
 Basis for conclusions drafted

Approval October  Results of stakeholder input presented to Board of

(end) Directors
 Proposed final standards presented to Board of
Directors for approval, including basis for conclusions
document
COMMUNICATION October  Final standards and basis for conclusions document
(end) released to stakeholders
 Documents are translated into French and
communicated accordingly

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APPENDIX C – Annual Improvements

Annual Improvements Criteria

To be addressed as an annual improvement, an issue must be:

• a correction of an error; or
• clarification of existing guidance.

Corrections of errors consist of:

• resolving conflicts between existing requirements in the standards;

• addressing oversights in creation of the standards; or
• addressing unintended consequences of the existing requirements.

Clarifications of existing guidance generally address:

• unclear wording in the standards; or

• an absence of guidance in the standards.

Issues that are not corrections of errors or clarifications of existing guidance generally will not be addressed in the
annual improvements process. Issues determined not to meet the criteria for inclusion in the annual improvements
may be addressed outside that process.

Guidelines for Clarifications

The following guidelines are used to determine whether a clarification should be addressed as part of the annual
improvements. These guidelines are not intended to act as definitive rules; accordingly, there may be cases in which
issues that do not meet all of these guidelines are addressed. Other factors may also be considered in evaluating a
particular issue. These include:

• Clarifications should be narrow in scope. Major changes are not included in the annual improvements
process. For example, a suggestion to change a fundamental or pervasive part of a standard would generally
be a major improvement and, accordingly, not an annual improvement.
• An issue should be widespread in practice. Unique, or very rare, situations are generally not addressed.
While issues that are relevant to one particular group of First Nations may be appropriate topics, those that
affect very few entities overall will generally not result in an annual improvement.
• Timeliness is important. When an issue relates to a standard that is expected to be modified as part of a
current major improvements project, there must be a need to make the improvement sooner than the
completion of the major project in order for it to be addressed. Such circumstances are expected to be rare.

Annual Improvements Process

The FNFMB uses the criteria above to assess whether a specific issue should be addressed as part of the annual
improvements process. Ensuring that an issue meets these criteria promotes efficient discussion of the issue. Issues
are considered during the year and then bundled together for purposes of exposure and issuance as amendments to
the Core Documents. This “bundling” reduces the number of times changes to the standards are proposed and issued
and makes it easier for stakeholders to keep current with changes to the standards.

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APPENDIX D – List of Core Documents

FINANCIAL ADMINISTRATION LAW DESCRIPTION

FINANCIAL ADMINISTRATION LAW – Procedures to apply when requesting a compliance approval of

A1 REVIEW P ROCEDURES the First Nation’s Financial Administration Law.
FINANCIAL ADMINISTRATION LAW – Standards that support sound financial administration practices
A2 STANDARDS for a First Nation government in Canada.
SAMPLE FINANCIAL ADMINISTRATION Example of a law which meets the requirements of the A2
A3 LAW Financial Administration Law – Standards.
FINANCIAL ADMINISTRATION LAW – Provides assistance on the development of a Financial
A4 EXPLANATORY NOTES Administration Law by discussing the structure and substantive
content of the A3 Sample Financial Administration Law.
FINANCIAL ADMINISTRATION LAW – Tool that can be utilized to compare existing or proposed
A5 SELF-ASSESSMENT Financial Administration Law(s) of the First Nation to the A2
Financial Administration Law – Standards.

FINANCIAL MANAGEMENT SYSTEM

FINANCIAL MANAGEMENT SYSTEM – Procedures to apply when requesting a review of the First
B1 CERTIFICATION P ROCEDURES Nation’s financial management system.
FINANCIAL MANAGEMENT SYSTEM – Standards that support sound financial practices for the
B2 STANDARDS operation, management, reporting and control of the financial
management system of a First Nation.
FINANCIAL MANAGEMENT SYSTEM – Tool that can be utilized to compare the existing financial
B3 SELF-ASSESSMENT management system of the First Nation to the B2 Financial
Management System – Standards.

FINANCIAL PERFORMANCE
FINANCIAL PERFORMANCE – Procedures to apply when requesting a review of the First
C1 CERTIFICATION P ROCEDURES Nation’s financial performance.
FINANCIAL PERFORMANCE – Standards that assess the historical financial performance of a
C2 STANDARDS First Nation over a five year period using up to seven financial
ratios.
LOCAL REVENUE ACCOUNT
LOCAL REVENUE FINANCIAL REPORTING – Standards that establish the financial reporting requirements
D1 STANDARDS for the separate annual financial statements of a First Nation’s
local revenues and expenditures.
LOCAL REVENUE FINANCIAL REPORTING – Illustrative annual financial statements for a First Nation’s local
D2 ILLUSTRATIVE FINANCIAL STATEMENTS revenues and expenditures designed to comply with the D1
Local Revenue Financial Reporting – Standards.
LOCAL REVENUE FINANCIAL REPORTING – Illustrative segment note disclosure for inclusion in the annual
D3 ILLUSTRATIVE SEGMENT NOTE financial statements of a First Nation designed to comply with
DISCLOSURE the D1 Local Revenue Financial Reporting – Standards.
LOCAL REVENUE FINANCIAL REPORTING – Explanatory notes to accompany D1 Local Revenue Financial
D4 EXPLANATORY NOTES Reporting – Standards.

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STANDARD-SETTING GUIDELINES

FIRST NATIONS FINANCIAL MANAGEMENT BOARD

SUITE 905 – 100 PARK ROYAL
WEST VANCOUVER BC V7T 1A2

TEL 604.925.6665 ▪ TOLL FREE 1-877.925.6665 ▪ FAX 604.925.6662

WEBSITE: WWW.FNFMB.COM

16 DECEMBER 14, 2015 | FIRST NATIONS FINANCIAL MANAGEMENT BOARD