Attawapiskat First Nation must repay $1.8 million, government says

Editor’s Note: This story was published in 2014. For the latest news about Attawapiskat First Nation, click here. 

OTTAWA – The federal government is demanding the Attawapiskat First Nation pay back $1.8 million after an audit determined the band could not account for the money that was supposed to be spent on housing.

The audit was completed in April of this year, and was recently posted on a government website

It was a follow-up to a comprehensive audit that was ordered after Attawapiskat declared a state of emergency in November 2011, saying there was a housing crisis on the reserve.

At the time, Prime Minister Stephen Harper questioned why there was a crisis when government money has been flowing to the reserve.

“This government has spent some $90 million since coming to office just on Attawapiskat,” he told the House of Commons on Nov. 29, 2011. “That’s over $50,000 for every man, woman and child in the community.

“Obviously we’re not very happy that the results do not seem to have been achieved for that.”

The follow-up audit found that 54 per cent of the transactions under examination had either incomplete or no supporting documentation.

And Ottawa wants some of that money back.

The office of Aboriginal Affairs Minister Bernard Valcourt told Global News, “the department has determined that $1.8 million in unaccounted housing transactions from the First Nation must be repaid over the next five years.”

READ MORE: First Nation takes federal government to court over transparency law

In its reply to the auditor, Attawapiskat First Nation says: “We have significant concerns with the…amount of $1,842,260.

“The majority of the funds comprising this amount relate to two major contracts, each of which was completed and the full funds disbursed. While the documentation related to these transactions may be incomplete, no findings, documents or evidence suggests that the funds were not disbursed as stated.”

Global News contacted Attawapiskat band manager Wayne Turner, but he said he didn’t want to speak about the audit on Friday.

NDP aboriginal affairs critic Jean Crowder says the audit results are “deeply troubling”, but she wonders how the First Nation will repay the $1.8 million.

“Clearly you can’t continue to have funds not accounted for. But I’m not sure you can already take a band that’s probably, I would suggest, a number of their members are living below the poverty line and remove funding from them,” she said.

The audit also notes that Attawapiskat has been under co-management for more than a decade.  This requires the band to hire an outside expert to help improve its financial systems.

But Crowder says the audit shows the co-management system clearly isn’t having the desired effect in Attawapiskat.

“The co-manager is supposed to work with the band to build capacity and to make sure systems are in place so that you don’t have these kinds of problems. And so this points to a real failure of the co-management system”.

The follow-up audit was ordered in February 2013. But the auditors note that “commencement of the follow-up work was delayed until the summer of 2013.”

Chief Theresa Spence told the auditors “she required an ‘official letter’ to be sent by the department before cooperating with Deloitte’s request.”

In a later e-mail, Chief Spence “also noted that the First Nation would not be available until July to participate in the follow-up work.”

The first time auditors made it onto the reserve was Jan. 16, 2014, almost a year after the audit was ordered.

The audit makes four recommendations. Among them, it says aboriginal affairs should “conduct a financial review for 2012-2013 and 2013-2014 focused on the highest risk funding, with a related detailed review of the financial statements.”

Attawapiskat’s response?

It says “we are unclear what is meant by the term ‘financial review’, nor how (aboriginal affairs) envisions this review unfolding. We look forward to clarifying this with you.”