Dzawada’enuxw’ First Nation Audited Financial Statements March 31, 2013

Table of Contents Summarizes the audit statements: 1.Page one – Management Report 2.Page two – Auditor Report 3.Page three – Statement of Financial Position 4.Page four – Statement of Revenue & Expenditure 5.Followed by notes and Schedules of departments

Management report, page one Reports that management is responsible for statements. MUST be signed off by Band Administrator and one Councillor.

Auditor Report, page two Reports that the auditor found our statements accurate (clean opinion).

Statement of Financial Position, page three Shows where DFN is at, as at March 31, Shows what DFN owns (ASSETS) and what DFN owes (LIABILITIES) AANDC looks at two things on this statement: Liquidity Ratio and Sustainability Ratio.

Liquidity Ratio Ratio shows how much of our short term debt we can pay with our financial assets. Audit review showed 0.60, 2012 was 0.63, and AANDC recommended minimum is 0.90 Unfavourable ratio as per last year, why DFN has Management Action Plan (MAP) in place.

Sustainability Ratio Ratio shows how much of all our debt we can pay with our assets. Audit review showed 0.45, 2012 was 0.43, AANDC recommended minimum is Slight improvement here, but still unfavourable as below minimum.

Statement of Revenue and Expenditure, page 4 Shows revenue (money in) and expenditures (money out) Small surplus this year versus deficit last year Mainly due to adherence to budgets and use of deferred revenue (revenue carried forward) as set out in MAP targets AANDC evaluates Working Capital to Revenue ratio on this statement

Working Capital to Revenue Looks at cash available after paying short term debt to total revenue Negative 0.13 this year as per last year, recommended is 0

Accumulated Surplus, note 11, page 13 Shows DFN has $700,000 accumulated deficit from operations Offset by $4 million investment in assets

Main cause of Deficits: Hydro, page 45 Housing

Hydro Operations Deficit for year of $46,477 Over $1.7 million dollar accumulated deficit Diesel costs exorbitant: 2013$450, $514, $436, $354,000

2013 Diesel costs $37,500 per month on average Based on 30 households: $1,250 per month

Other departments Health and Education have been ending in surpluses which have offset the deficits in Hydro and Housing Administration has minimized costs

Summary Hydro department has created such significant deficits has resulted in unfavorable ratios therefore DFN has a MAP which focuses mainly on hydro Hydro issue NEEDS an operational solution otherwise will be funded by Forest and Range Agreement dollars and/or AANDC will implement an outside manager