The Budgetary Cycle - Emergency Expenditures

Description:
Inevitably there will Emergency Expenditures that must be accommodated in the Budgetary Cycle even though they have not been planned for in the Fiscal Plan. These expenditures must be included by making the necessary adjustments for Appropriations and Program Work Plans.

Emergency Expenditures should be undertaken following the process determined in the Band's Emergency Preparedness Plan (See Emergency Planning).

Purpose:
Unforeseen expenditures related to emergency situations do occur and must be accommodated for in the Budgetary Cycle. Emergencies Expenditures are unplanned and unbudgeted expenditures which the Band Council and staff have no option but to make. This would include fire, forest fire, flood, emergency renovations, health epidemic, and other uncontrollable events. Depending on the size of the Emergency Expenditure, immediate corrections will need to be made to components of the Budgetary Cycle.

Process:
The first course of action will be to implement the financial actions of the Emergency Preparedness Plan (if prepared). If this hasn't been put in place in the community, the following outlines the recommended process:

  1. The Band Manager, in consultation with Chief and Council, authorizes the Emergency Expenditure. The Financial Controller and his/her staff will implement the necessary actions to complete the expenditure. At this stage, it is imperative to contact regional officials from DIAND if reimbursement for emergency expenditures is to be sought.

  2. The Band Manager and Financial Controller track all expenses and personnel time used to react to the emergency situation.

  3. The Band Manager and Chief make application to DIAND for reimbursement of funds used in response to the emergency.

  4. On a budgetary level, the following activities will take place:

    1. Taking into account the funds redirected to the Band from DIAND, the Band Manager and Financial Controller then assess the impact of outstanding expenditures on the Appropriations and Cash Management activities of the Band.

    2. If the impact is deemed significant, then an Expenditure and Variance Report which includes the emergency expenditure should be prepared immediately.

    3. Recommendations should be made for adjustments to the budget (including Appropriations and Program Work Plans) to accommodate the Emergency Expenditure. These may include:
      • Application for additional revenue (see Funding Agreements, Emergency)
      • Adjustments to Appropriations (use of holdback if applicable)
      • Cash Management Actions

Timing:
Adjustments to the Budgetary Cycle as a result of Emergency Expenditures should be made as soon as possible in order to reflect the accurate financial position of the First Nation.