Financial Performance Certification

Malahat First Nation

The Financial Performance (FP) Certificate is an independent stamp of approval of a First Nation’s good finance health. An FP Certificate also allows you to apply to the First Nations Finance Authority (FNFA) for a loan at low cost.

First Nations that have borrowed from the FNFA before, or that want to borrow several times, should also consider Financial Management System (FMS) Certification.

Who can get certified?

Financial Performance Certification is open to all First Nations that:

Why get certified?

The FP Certificate says that your First Nation meets certain standards of financial performance. Getting certified lets you:

  • get an independent review of the your First Nation’s finances.
  • see where you might need to improve the way your First Nation manages its finances to help you achieve Financial Management System Certification.
  • show to community members, lenders, business partners, and others that your First Nation is in good finance health.
  • improve your access to money because Financial Performance Certification is needed to be eligible to access a loan from the FNFA.

Financial Performance Ratios

The FMB will look at six ratios during its financial performance review of a First Nation. These ratios are calculated using information from the audited financial statements for the past five years.

  1. Fiscal Growth Ratio (FGR):

    The FGR measures a First Nation’s ability to sustain and grow its revenues.

    Fiscal Growth Ratio (FGR)

    Thresholds - The First Nation demonstrates that its average FGR for the period under review is not lower than -5.0%.

  2. Operating Margin Ratio (OMR):

    The OMR measures a First Nation’s ability to balance its revenues and expenses to maintain operations.

    Operating Margin Ratio (OMR)

    Thresholds - The First Nation demonstrates that its OMR for the period under review is not lower than -5.0%.

  3. Asset Maintenance Ratio (AMR):

    The AMR assesses if a First Nation is investing enough to maintain its capital assets, and add new assets.

    Asset Maintenance Ratio (AMR)

    Thresholds - The First Nation demonstrates that its AMR for the period under review is not lower than 100.0%.

  4. Net Debt Ratio (NDR):

    The NDR measures a First Nation’s ability to manage its overall level of debt .

    Net Debt Ratio (NDR)

    Thresholds - The First Nation demonstrates that its weighted average NDR for the period under review does not exceed 50.0% or that its NDR for the most recent year of the period under review does not exceed 50.0%.

  5. Interest Expense Ratio (IER):

    The IER measures a First Nation’s ability to manage the interest payments on its debt.

    Interest Expense Ratio (IER)

    Thresholds - The First Nation demonstrates that its IER for the period under review does not exceed 5.0%.

  6. Local Revenue Collection Ratio (LRCR):

    The LRCR measures how efficient a First Nation is at collecting local revenues .

    Local Revenue Collection Ratio (LRCR)

    Thresholds - The First Nation demonstrates that its LRCR for the most recent yearof the period under review is not lower than 95.0%

Refer to the Financial Performance Standards (PDF) for further details

How it works

We can support your First Nation to work toward a FP Certificate while developing your FAL. You will receive a Financial Performance Certificate only when the FMB has approved your FAL.

See what’s involved