S-5, r. 3 - Regulation respecting the financial management of institutions and regional councils

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chapter S-5, r. 3
Regulation respecting the financial management of institutions and regional councils
HEALTH SERVICES AND SOCIAL SERVICES FOR CREE NATIVE PERSONS — FINANCIAL MANAGEMENT
Act respecting health services and social services for Cree Native persons
(chapter S-5, ss. 72, 140, 141, 173, 175, 176, 177 and 178).
S-5
September 1 2012
DIVISION I
PRELIMINARY
1. Application: This Regulation applies to any regional council, public institution and private institution covered by sections 176 and 177 of the Act respecting health services and social services for Cree Native persons (chapter S-5).
With the exception of section 11, this Regulation does not apply to a private institution not covered by sections 176 and 177 of the Act.
O.C. 1127-84, s. 1.
2. Interpretation: Where the expression “board of directors” is used in this Regulation in relation to an institution not constituted as a legal person, it means “owner”.
O.C. 1127-84, s. 2.
DIVISION II
FINANCIAL MANAGEMENT
3. Fiscal year: The fiscal year of an institution ends on 31 March of each year.
O.C. 1127-84, s. 3.
4. Audit of financial statements: The board of directors of an institution or a regional council shall appoint an auditor of its financial statements for the current fiscal year before 30 June of each year.
O.C. 1127-84, s. 4.
5. Audit report: The audit report on the financial statements of the institution or regional council as at the end of the fiscal year must comply with Schedule I and indicate any irregularity, deficiency or omission found in the financial transactions of the institution or regional council or in its bookkeeping or internal control systems, and any qualification or recommendation that follows from the audit.
O.C. 1127-84, s. 5.
6. Acceptance or rejection: On submission of the audit report, the board of directors shall by resolution accept or reject it.
The board of directors shall consider each of the auditor’s recommendation or qualifications and take any necessary corrective measures.
Where the board of directors rejects the audit report, its resolution must indicate the grounds for rejection.
O.C. 1127-84, s. 6.
7. Transmission to the Minister: On 30 June at the latest each year, the board of directors of an institution or a regional council shall forward to the Minister of Health and Social Services:
(1)  its financial statements in the form prescribed by the Minister and audited by the auditor of the institution or regional council;
(2)  the complete audit report under section 5; and
(3)  the resolution of the board of directors under section 6.
The board of directors shall also inform the Minister, on 30 September at the latest each year, of the corrective measures it proposes to take regarding the recommendations or qualifications expressed in the audit report.
O.C. 1127-84, s. 7.
8. Audit committee: The board of directors of a public institution shall form an audit committee comprising 3 of its members selected from those who are neither staff members nor professionals practising in the institution or regional council.
The quorum of the committee is 2. Meetings shall be held in private but the committee may summon to its meetings any person who is in a position to assist it or provide information, including staff members of the institution and professionals who practise there.
O.C. 1127-84, s. 8.
9. Functions of the committee: The audit committee shall perform the following functions:
(1)  advise the board of directors with regard to the choice of an auditor for appointment under section 4;
(2)  examine the scope of the auditor’s work and, where necessary, of the work of those responsible for internal audit;
(3)  examine the results of the external and internal audits and ensure that any recommendations are acted upon;
(4)  make recommendations to the board of directors regarding the financial statements and the auditor’s report and, where necessary, the accounting procedures and any other audit report;
(5)  be at the disposal of the auditor and those responsible for internal audit and assist them during their operations; and
(6)  give its opinion to the board of directors respecting internal checks in the institution and, where necessary, the external and internal audit.
O.C. 1127-84, s. 9.
DIVISION III
ACCOUNTING AND REPORTS
10. Accounting system: Institutions and regional councils shall use an accounting system that complies with the standards set forth in the Manuel de gestion financière published by the Minister.
O.C. 1127-84, s. 10.
11. Annual report of activities: As an annual report of activities, the board of directors of a public institution or regional council shall provide the Minister with a complete report on the information it presents to the public at the information meeting held under sections 23 and 126 of the Act.
The board of directors of every other institution, including any private institution not covered by sections 176 and 177 of the Act, shall provide the Minister with an annual report of its activities, containing the following information:
(1)  a description of the role or purpose of the institution, indicating any new direction adopted during the past year; and
(2)  a statement on the operation of the institution, setting out the objectives laid down at the beginning of the year and the results obtained, together with changes made in services or activities, staff structure and improvement of facilities and equipment.
O.C. 1127-84, s. 11.
12. Annual statistical report: The board of directors of a public institution, a private institution covered by section 177 of the Act or a regional council shall provide the Minister, on 30 June at the latest each year and in the form he prescribes, with an annual statistical report regarding the resources and services of the institution or regional council for the past fiscal year.
O.C. 1127-84, s. 12.
13. Interim reports: The board of directors of a public institution, a private institution covered by section 177 of the Act or a regional council shall provide the Minister periodically, at the times and in the form he prescribes, with interim financial statements and statistical reports on the implementation of its budget and the operation of the institution or regional council.
O.C. 1127-84, s. 13.
DIVISION IV
ENDOWMENT FUNDS, FUNDS FOR SPECIAL USES AND GIFTS SUBJECT TO A CONDITION
14. Endowment fund or fund for special uses: A public institution desiring to show separately in its financial statements an endowment fund or a fund for special uses or to transfer the administration, wholly or in part, of such a fund to an autonomous foundation set up under section 134 of the Act shall so notify the Minister for his authorization.
O.C. 1127-84, s. 14.
15. Detailed statement: An application for authorization must be accompanied by a detailed statement of the source of the assets involved appearing in the financial statements at the end of the most recent fiscal year as well as any other assets that may since have been added.
The statement must include a brief description of the gift, legacy or other contribution received and be accompanied by a copy or extract of the document establishing the original intention of the donor or testator and an exact reference to the notarial minutes and registration in the case of notarial deeds or deeds affecting immovable property.
The institution shall also attach a statement of the continuity of the assets up to the date of its application for authorization.
O.C. 1127-84, s. 15.
16. Authorization: The Minister issues a certificate to the institution when contributions, gifts or legacies are originally intended for particular purposes.
The certificate authorizes either the separation in the institution’s financial statements of a sum representing the agreed value of the assets in the endowment fund or fund for special uses, distinguishing, where applicable, between the endowment fund and the special purpose fund, or the transfer of the administration of such a fund to a foundation described in section 14.
O.C. 1127-84, s. 16.
17. Acceptance of a gift subject to a condition: A gift subject to a condition respecting its use may be accepted by the board of directors of a public institution or regional council only after the regional council has been consulted in the first case, and in either case the written authorization of the Minister obtained as to its use wherever the condition entails an expenditure or a commitment for which no authorization is required. Any gift of equipment valued at more than $30,000 shall be considered to be a condition for which authorization is required.
The gift of an immovable is subject in all cases to section 72 of the Act.
O.C. 1127-84, s. 17.
DIVISION V
BUDGETS, ADMISSIBLE EXPENDITURES AND USE OF REVENUES
18. Master budget: The master budget prescribed by section 178 of the Act represents a budgetary endowment granted to an institution or a regional council for a fiscal year, that is, a framework binding the institution or regional council and within which it decides for itself the estimates necessary for its management.
Subject to the provisions of this Regulation, the budget allows a regional council or an institution to distribute the master budget among various budgetary programs, items and entries in terms of the requirements of its own organization plan and, if necessary, during the fiscal year, to make the budgetary transfers required for the efficiency of its activities and the adequate performance of the services it is called upon to provide.
O.C. 1127-84, s. 18.
19. Content of the master budget: Subject to section 177 of the Act, the master budget transmitted by the Minister deals with the total gross expenditures admissible for financing by the Minister and the deductible revenues described in section 30.
O.C. 1127-84, s. 19.
20. Protected budget: A master budget may also include specific budgets for certain activities to ensure a response to priority needs of the public served or to new resource allocation policies accepted by the Minister. The specific budgetary items indicated in the master budget are protected budgets, in that the sums allocated to such items may not be the subject of budgetary transfers.
O.C. 1127-84, s. 20.
21. Internal operating budget: With a view to developing a detailed budget and any budget balancing plan under section 178 of the Act, the regional council or institution shall, upon receiving the master budget transmitted by the Minister, finalize its estimates and draw up in accordance with the forms locally in use its operating budget for the current fiscal year.
O.C. 1127-84, s. 21.
22. Detailed budget: The detailed budget that the regional council or institution must prepare under the second paragraph of section 178 of the Act concerns the distribution of the master budget received between financial periods which are at least as numerous as the interim reports required under section 13, indicating, on the basis of its internal forecasts of the change in the cost of its activities for each period, the following points:
(1)  the total amount allocated to accounts covering salaries and fringe benefits;
(2)  the total amount allocated to accounts covering the cost of material and other expenditures;
(3)  the total number of hours remunerated; and
(4)  the total estimated revenues under section 30.
O.C. 1127-84, s. 22.
23. Budget balancing plan: In its detailed budget, the regional council or institution shall, where applicable, prepare a budget balancing plan, including all measures of economy to be applied to comply with the master budget transmitted by the Minister and showing separately:
(1)  measures that do not affect direct services to the public served; and
(2)  those that are likely to affect such services.
O.C. 1127-84, s. 23.
24. Transmission and approval: The detailed budget and the budget balancing plan shall be sent together by the board of directors to the Minister and, in the case of an institution, to the regional council concerned within 30 days of receiving the master budget. Where a plan to balance the budget is required, the prescribed time is 60 days.
A copy of the internal operating budget prescribed in section 21 must be sent as information by the board of directors to the Minister upon request; in the case of an institution, a copy must be sent to the regional council concerned at the same time.
The part of the detailed budget that concerns the part of the budget balancing plan described in paragraph 2 of section 23 has no effect and may not be implemented before the Minister, upon the recommendation of the regional council, has approved it.
O.C. 1127-84, s. 24.
25. Instalments: The budget described in section 19 is the basis on which instalments are paid by the Minister, after deduction of a sum equal to the estimated revenues described in section 30 which are deductible from the gross expenditures approved under this Regulation. Instalments are paid for the period to which they apply but at least once a month for current operating expenses.
O.C. 1127-84, s. 25.
26. Eligible expenditures: Current gross expenditures before deduction of any revenue are eligible in the operating budget of an institution or regional council for financing by the Minister provided that the following conditions are met:
(1)  they must be made for the provision of the services that the institution or regional council is bound to provide, but subject to the budget transmitted by the Minister or renewed, and in so far as they do not involve a larger budget for subsequent fiscal years;
(2)  in the case of expenditures described in classes c and d of subparagraph 3 but made by an institution within the framework of an investment project, they must result in an economy of current operating expenditures which, over a maximum 5-year period, is equal to the cost of the capital invested and its financing and the annual charges required in the operating budget for transfer to capital expenditure must never be greater than the savings realized by the project during the year;
(3)  they must not belong to the following classes:
(a)  charges reflecting the depreciation of buildings, furnishings and equipment;
(b)  sums exceeding the standards and scales adopted by the Government under section 154 of the Act for the remuneration and other conditions of employment of general managers, senior and intermediate officers and other staff members;
(c)  payments by an institution for the purchase or rental with option to buy of depreciable furnishings or equipment;
(d)  payments made for the purchase or construction of immovables, or major repairs, renovations and improvements to immovables occupied by an institution, in order to increase the interior space of buildings or complete any part left unfinished during the original construction.
Notwithstanding the foregoing, in the case of a public institution, the Minister may, in addition to the budget transmitted, reimburse the institution for the expenditures in classes c and d of subparagraph 3 of the first paragraph.
In the case of a private institution covered by section 177 of the Act, the Minister may grant reimbursements of expenditures in class a of subparagraph 3 of the first paragraph under the terms of the agreement made between the Minister and the institution.
O.C. 1127-84, s. 26.
27. Expenditures related to ancillary activities: A public institution, a private institution covered by section 177 of the Act or a regional council may, within the limit of its powers, carry out ancillary activities and provide services other than those described in subparagraph 1 of the first paragraph of section 26, provided that the following conditions are met:
(1)  that the expenditure related to each of the services or activities is identified;
(2)  that a part of the overhead proportional to the size of the premises used, staff requirements and support services provided by the institution or regional council for such purposes is charged to the services and activities in question, except in the case of indirect expenditure for research purposes;
(3)  that sufficient revenues are estimated by the institution or regional council to finance not only such services and activities but also all other ineligible expenditures listed in section 26, with the exception of charges reflecting the depreciation of buildings, furnishings and equipment; and
(4)  that the interim reports and financial statements provided by the institution or regional council to the Minister include, specifically respecting such services, activities and other ineligible expenditures, data analogous to that required with respect to the services that the institution or the regional council is called upon to provide.
O.C. 1127-84, s. 27.
28. Ancillary activities: Without restricting the generality of sections 26 and 27, the following activities must, in all cases, be considered ancillary activities:
(1)  the operation of any activity of a commercial nature, with the exception of those described in paragraph 2 of section 30; and
(2)  the accommodation of persons who do not belong to the classes of beneficiaries who, because of their physical, mental or social condition, are entitled to the accommodation services that an institution is called upon to provide.
O.C. 1127-84, s. 28.
29. Collection of revenues: The board of directors of an institution or a regional council shall take the necessary measures to collect all revenues to which they are entitled, including revenues due from beneficiaries, in accordance with the rates prescribed under section 159 of the Act.
O.C. 1127-84, s. 29.
30. Amounts deducted: In determining the instalments the Minister shall pay to a public institution, a private institution covered by section 177 of the Act or a regional council, the following amounts must be deducted from the total approved eligible gross expenditures:
(1)  revenues derived from supplements for private or semi-private rooms in an institution and revenues derived from contributions imposed on beneficiaries who are Québec residents, non-resident beneficiaries and third parties responsible for payment for services provided to a beneficiary under a statute of Québec, Canada or any other government;
(2)  revenues derived from the leasing of premises or the sale of a service to another institution, a regional council or a non-profit organization;
(3)  (paragraph revoked);
(4)  other revenues set out in the Manuel de gestion financière referred to in section 10.
O.C. 1127-84, s. 30; O.C. 546-86, s. 1.
31. (Revoked).
O.C. 1127-84, s. 31; O.C. 546-86, s. 2.
32. Own revenue: The revenue of a public institution or regional council that is derived from a source other than funds voted by the Legislature or revenues listed in sections 30 and 33, including gifts, shall be its own revenue. A public institution’s or regional council’s own revenue also includes the proceeds of financial incentives earned in implementing the budget as well as interest on investments and other deposits of its own revenues.
The board of directors of a public institution or regional council shall use its own revenues:
(1)  for non-recurrent expenditures only;
(2)  in a manner that does not generate additional operating costs; and
(3)  in a manner that provides personal benefits only for the beneficiaries of the institution.
The board of directors shall respect the following order of priority:
(1)  in the case of gifts, it shall allocate such revenues for the specific purposes for which the gifts were made; and
(2)  it shall apply all other revenues to projects that increase the productivity of the institution or the regional council.
O.C. 1127-84, s. 32; O.C. 546-86, s. 3.
33. Proceeds from the sale of an immovable: The board of directors of a public institution or a regional council shall identify in a specific accounting item for capital the net proceeds resulting from the alienation of an immovable; this sum and its revenues may be used for any purpose consistent with the use of capital and prescribed by the Minister.
O.C. 1127-84, s. 33.
DIVISION VI
REMUNERATION UNDER SECTION 176 OF THE ACT
34. (Revoked).
O.C. 1127-84, s. 34; O.C. 1427-84, s. 1; O.C. 2049-84, s. 1; O.C. 2810-84, s. 1; O.C. 546-86, s. 4.
DIVISION VII
COSTS OF GOODS OR SERVICES AND RECOURSE TO OTHER LABORATORIES FOR DIAGNOSTIC TESTS
35. Interest payments to suppliers: An institition or a regional council shall, upon the specific request of a supplier, pay him interest on any overdue payment in the manner, at the rate and under the other conditions, with the necessary modifications, specified in the Regulation respecting payment of interest to government suppliers (chapter C-65.1, r. 8).
O.C. 1127-84, s. 35.
36. Authorization of the regional council: An institution shall obtain the written authorization of the regional council concerned to make any contract that involves paying for goods and services for one of the following purposes:
(1)  the purchase or leasing of human or material resources in the area of computers or office automation, except where it is carried out under a computer or office automation resources plan previously introduced by the institution to the regional council concerned and duly approved by the latter, a plan which provides, in particular, for installations, software, human and financial resources, the method of financing and the relations of the institution with other institution and the regional council with respect to that area;
(2)  the purchase or leasing of laundry or cafeteria equipment or services;
(3)  subject to the authorization of the Minister as required for creating new services in the sectors of activity determined by regulation under section 70.1 of the Act, the purchase or leasing of medical equipment related to the following sectors of activity:
(a)  visualisation diagnostic techniques;
(b)  radioisotopes and laboratory automation;
(c)  electronic monitoring equipment for beneficiaries;
(d)  radiotherapy;
(e)  anaesthesia and reanimation;
(f)  hemodialysis; and
(g)  the implantation of cardiac stimulators.
O.C. 1127-84, s. 36.
37. Diagnostic tests: A public institution that is unable to carry out diagnostic tests in its own facilities shall entrust such tests to a Québec hospital centre or one of the following laboratories: the Service de virologie de l’Université Laval, the Department of Microbiology and Immunology of McGill University, the Laboratoire d’endocrinologie de l’Université du Québec à Trois-Rivières, the Laboratoire de santé publique du Québec (Hôpital St-Luc), the Institut Armand-Frappier, the Laboratories Bio-Endo Inc., the Institut de Diagnostic et de Recherches Cliniques de Montréal and the Montréal and Québec Canadian Red Cross centres.
Where an institution is unable to obtain diagnostic tests from any agency described in the first paragraph, it shall provide the regional council concerned with a list of such tests, their number and their cost, and obtain the authorization of the regional council to apply to another laboratory.
O.C. 1127-84, s. 37.
DIVISION VIII
CONSTRUCTION PROJECTS DESCRIBED IN THE SECOND PARAGRAPH OF SECTION 72 OF THE ACT
O.C. 1127-84, Div. VIII; O.C. 60-2003, s. 2.
38. Authorization of the regional council: The written authorization of the regional council concerned shall suffice, under the second paragraph of section 72 of the Act, for construction, alteration or demolition projects where the estimated cost of work payable by the institution is less than the following amount:
(1)  $1,000,000 in the case of a hospital centre; or
(2)  $500,000 in the case of an institution of another class.
O.C. 1127-84, s. 38; O.C. 115-91, s. 1; O.C. 60-2003, s. 2.
DIVISION IX
FINAL
39. (Omitted).
O.C. 1127-84, s. 39.
40. (Omitted).
O.C. 1127-84, s. 40.
AUDIT PROGRAM THAT MUST BE INCORPORATED INTO THE ENGAGEMENT ENTRUSTED BY AN INSTITUTION OR A REGIONAL COUNCIL TO ITS EXTERNAL AUDITOR
1. Object of the audit program: This Schedule describes the basic program to be followed when auditing the annual financial statements of institutions or regional councils. The program limits neither a board of directors which may add to it the consideration of any specific matter on which the program is silent, nor the auditor himself.
2. Scope of the audit program: The purpose of the audit program is to assist the Minister to discharge the responsibilities which the Act vests in him in respect of institutions and regional councils and, in particular, his responsibility to ensure that the sums he has put at their disposal have been used for the purposes for which they are intended and that the services and activities within their competence have been rendered or performed.
In aid of this objective, the auditor shall express an opinion on the following matters:
(1) the institution or regional council’s compliance with the Act respecting health services and social services for Cree Native persons (chapter S-5) and with the regulations made under the Act regarding any matter having an effect on its expenditures or revenues or on the volume of services or activities performed;
(2) compliance, in the preparation of financial statements of the institution or regional council, with the form published in that regard by the Minister as well as the accompanying definitions and explanations;
(3) the compliance of the accounting practices of the institution or regional council with the standards and definitions in the Manuel de gestion financière published yearly by the Minister;
(4) the accuracy of the quantitative data respecting the transactions and operation of the institution or regional council in the light of an examination of the method of gathering and recording such data and the possibilities of verification. The auditor shall examine the operational data compiled for the centres of activity and note any difference between a definition in the Manuel de gestion financière and that in use. The auditor shall indicate the cases where the number of units of measure was determined from an estimate rather than from regularly accumulated data and, in each case, the basis of such estimation;
(5) the comprehensive and exhaustive nature of the financial statements and the operational data. In particular, no account of expenditure may be reduced before it is recorded by an item of revenue. On the other hand, the breakdown of the volume of activity must not omit any unit of measure for any centre of activity; and
(6) the value of the internal control procedures followed by the institution or regional council and the evaluation of their possible contribution to resolving the difficulties noted during the audit.
3. Auditor’s report: No audit engagement shall be interpreted as requiring a judgment by the auditor on the expediency or soundness of any decision of a board of directors or of the directors. But he shall ensure that the administrative decisions comply with the official written authorization of the Ministère de la Santé et des Services sociaux or with the administration rules and practices approved by the Minister.
It is neither the responsibility nor the duty of the auditor to judge the changes in the cost or volume of services. His work shall bear upon determining the accuracy of amounts (in dollars) and of quantitative statistics. He shall refrain from commenting on the reasons that have warranted any expansion, thereby respecting the jurisdiction of the authorities of the institution or regional council.
If the auditor is of the opinion that it would be useful to make recommendation concerning an improvement in the control and procedure of accounting and of statistics, he may do so. The Ministère de la Santé et des Services sociaux encourages the offer of such recommendations for discussion with institution or regional council authorities.
O.C. 1127-84, Sch. I.
REFERENCES
O.C. 1127-84, 1984 G.O. 2, 1925
O.C. 1427-84, 1984 G.O. 2, 2256
O.C. 2049-84, 1984 G.O. 2, 3468
O.C. 2810-84, 1984 G.O. 2, 4192
O.C. 546-86, 1986 G.O. 2, 693
O.C. 115-91, 1991 G.O. 2, 987
O.C. 692-92, 1992 G.O. 2, 2704
S.Q. 1992, c. 21, s. 375
O.C. 60-2003, 2003 G.O. 2, 629