Having rules and procedures in place for how spending can get approved and for what is an important part of a First Nation’s ability to operate smoothly. Under the FAL, Council must create a policy for the management of all the First Nation’s spending.
This policy must include that:
- all documents related to getting goods or services (e.g. requisitions, purchase order, requests for proposals, or tender calls) are clear about the details of the goods or services being asked for
- all cheques and other forms of payment must have two signatures or two approvals
- limits are in place for how much can be spent on goods or services are set up and clearly documented
- the same person who approves the spending of money may not also approve a payment
- the spending of money is only done if allowed by the budget of the First Nation (subject to any reasonable exceptions to deal with unexpected events that are mentioned in the FAL or in Council policy as laid out in the FAL)
- controls are used to keep track of spending and show any spending overruns
This policy must include the steps to follow for the repayment of expenses from those who are acting on behalf of the First Nation, including the following:
- the kinds of activities which are done on behalf of the First Nation
- the kinds of expenses that are approved for repayment, including the categories and limits for these expenses
- the receipts and other documents needed to support an expense claim
- the person who has the authority to approve repayment on expenses for different categories of claims