Financial Performance Certification

Your Nation’s Financial Heath

The Financial Performance (FP) Certificate is an stamp of approval of a First Nation’s good financial 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?

FP Certification is open to all First Nations that:

  • have developed a Financial Administration Law (FAL)
  • intend to borrow money through the FNFA.

Why Get Certified?

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

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

Getting Your FP Certification

The FP Certification process can take anywhere from a few weeks to a few months, depending on your timetable and the information that is made available.

  • Step 1

    Review the FAL process

    In order to work with us to get certified, your First Nation must either have a FAL or be developing one. Learn more about developing your FAL.

    You will only receive a Financial Performance Certificate when the FMB has first approved your FAL. Often, these occur close to, or at the same time.

  • Step 2

    Be clear about what’s involved

    The FMB will look at your First Nation’s audited over the last few years and calculate certain Financial Performance Ratios.

    If asked, the FMB can present to your First Nation’s Council about what’s involved with this certification.

  • Step 3

    Financial Performance Review

    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.

    Fiscal Growth Ratio (FGR)

    • The FGR measures a First Nation’s ability to sustain and grow its revenues.
    • Thresholds – The First Nation demonstrates that its average FGR for the period under review is not lower than -5.0%.

    Operating Margin Ratio (OMR)

    • The OMR measures a First Nation’s ability to balance its revenues and expenses to maintain operations.
    • Thresholds – The First Nation demonstrates that its OMR for the period under review is not lower than -5.0%.

    Asset Maintenance Ratio (AMR)

    • The AMR assesses if a First Nation is investing enough to maintain its existing s and add new assets as they are required.
    • Thresholds – The First Nation demonstrates that its AMR for the period under review is not lower than 100.0%.

    Net Debt Ratio (NDR)

    • The NDR measures a First Nation’s ability to manage its overall level of .
    • Thresholds – The First Nation demonstrates that its weighted average NDR for the period under review does not exceed 60.0% or that its NDR for the most recent year of the period under review does not exceed 60.0%.

    Interest Expense Ratio (IER)

    • The IER measures a First Nation’s ability to manage the interest payments on its debt.
    • Thresholds – The First Nation demonstrates that its IER for the period under review does not exceed 5.0%.

    Local Revenue Collection Ratio (LRCR)

    • The LRCR measures how efficient a First Nation is at collecting .
    • Thresholds – The First Nation demonstrates that its LRCR for the most recent years of the period under review is not lower than 95.0%.
    • Refer to the Financial Performance Standards  for further details.

  • Step 4

    Award of Financial Performance Certificate

    The FMB will issue a Financial Performance Certificate to First Nations that have an up-to-date FAL and meet the minimum Financial Performance Standards.

    If these standards are not met, we cannot issue a certificate. We encourage any First Nation to bring its FAL to life and to work toward FMS Certification.

What Happens Next?

An FP Certificate allows you to apply to borrow from the FNFA. Your First Nation would work with the FNFA in its borrowing process.

Your certificate is a snapshot of your First Nation’s financial health at that particular time. If your First Nation chooses to become an FNFA and wants to borrow in the future, FMS Certification can help you do that.

If you have any questions about FP Certification, please contact us.