QIA should improve accounting practices, firm says

SEAN McKIBBON
Nunatsiaq News

IQALUIT—The Qikiqtani Inuit Association and its subsidiaries need to improve their financial and accounting practices, says a report by an Iqaluit accounting firm.

While an audit of the QIA by MacKay Landau reported no irregularities, the accounting firm’s management report said the beneficiary organization and its subsidiaries need to do more tax planning, file tax forms on time,and have its subsidiaries file monthly financial statements with QIA.

Late tax-filing cost the QIA money in penalties and sloppy tracking of debts between QIA subsidiaries is causing headaches when it comes time to issue financial statements, the report said.

A GST audit this year hit the organization with a penalty and a charge for GST. The organization has not filed a GST return since April 1, 1995.

Lynn Kilabuk, QIA’s trainee finance officer, said the penalty came about because Revenue Canada based its assessment on QIA’s 1995 tax return.

“There isn’t that much QIA collects GST on except for the rental on the Dome,” said Kilabuk. She said that from now on QIA will file GST returns every year.

The management report also said QIA had “incurred significant penalties” because of the late filing of T4 slips. The report also said that tardy remittance of taxes deducted from employee’s pay cheques was leaving the QIA open to even more penalties.

Because QIA has a large workforce and payroll, Revenue Canada expects tax deductions to be sent in immediately. But getting the taxes in on time is difficult in Nunavut with bad weather and a slow postal system to contend with, Kilabuk said.

“I’m really looking forward to Revenue Canada opening an office here in Iqaluit,” she said. Having a Revenue Canada office in Iqaluit would make it easier for QIA
to submit tax remittances on time, she said.
The auditors also found about $35,000 in cheques that hadn’t been cashed. “The majority of the stale-dated cheques appear to be cheques that were never issued for board honoraria,” the report said.

Peter Ma, QIA’s executive director, said cheques are not issued to board members if they don’t file a monthly report with the QIA president outlining their activities in the community as a board member.

“It’s an accountability thing,” Ma said. He said greater efforts would be taken in the future to ensure that board members file their reports and get their honoraria.

The report also suggested that QIA subsidiary companies such as Qikiqtaaluk Corp. and Kakivak Development Corp. file monthly financial statements with their parent organization.

The report said that amounts owed between the subsidiaries did not agree with company records. The report said monthly statements and efforts to reconcile the statements would make filing income tax easier and quicker for the companies.

“As subsidiaries become more successful, tax planning will become a more important issue,” the report said.

The recommendations were tabled during QIA’s annual general meeting held this week in Iqaluit. The report’s purpose was to detail points of interest to management that might not be highlighted in a general audit.