OTTAWA – A newly released independent audit of Attawapiskat First Nation showing the band council has not properly kept track of millions of federal dollars – including money earmarked for housing – overshadowed the demands of its protesting chief on Monday.
Chief Theresa Spence thrust her Northern Ontario First Nation into the public spotlight in the fall of 2011 by declaring a state of emergency due to the shoddy housing conditions in the community.
But an audit commissioned by Aboriginal Affairs Minister John Duncan in the wake of the crisis, and released Monday, reports there is little or no documentation for the $104 million dollars spent by Attawapiskat and intended for services such as housing, sewage and education.
Deloitte and Touche LLP detail the findings of their audit in a letter dated Aug. 28, 2012, written to Spence, the Department of Aboriginal Affairs and Health Canada.
“There is no evidence of due diligence in the use of public funds, including the use of funds for housing,” the auditors wrote.
Deloitte’s study shows 81 per cent of the 505 financial transactions reviewed lacked proper documentation. Sixty per cent had no documentation for the reason for payment, the auditors noted.
The study spans a time period between April 2005 and November 2011. Spence was elected chief in 2010 but had served as deputy chief since 2007.
Deloitte was not able to determine whether the expenditures were in accordance with ’s agreements with the federal government.
“We were unable to determine if the funds were spent for their intended purpose,” the auditors wrote.
The timing of the release comes as Spence continues her liquid diet on Victoria Island, near Parliament Hill in Ottawa, in protest of the Crown’s relationship with First Nations people.
Spence said she would only eat solid foods after she meets with Prime Minister Stephen Harper, which she and other First Nations leaders are scheduled to do on Friday.
Spence’s spokesman Danny Metatawabin responded to the months-old audit in a press release, saying it was “no more than a distraction” and an attempt to discredit Spence who is willing to die for her cause.
“I remain steadfast on my journey and will not allow any distractions at this time to waiver the goal set forth,” Spence said in the statement. She also reiterated her demands which include the implementation of treaty obligations, resource sharing and the repeal of controversial environmental legislation.
Spence’s partner and the co-manager of Attawapiskat Clayton Kennedy said he hasn’t yet read the audit but conceded it likely has some good advice on how to improve.
“There is a series of recommendations to improve management and there’s no allegations of misappropriation or anything like that,” he said, adding that documentation could be found with more time.
Attawapiskat has had a rocky financial past. It was placed under co-management by Aboriginal Affairs a decade ago as a measure to improve the community’s financial situation. The department also forced a third-party manager on Attawapiskat in the wake of the 2011 housing crisis. Aboriginal Affairs removed the manager in April 2012, citing improvements.
Other issues noted by Deloitte included insufficient oversight of cheques and payroll, poor record-keeping, lack of budgets and bookkeeping, uncollected rent and overspending.
The report also said Attawapiskat did not adequately fund a housing-replacement account – a requirement set out by Canada Mortgage and Housing Corp. Still, CMHC continued to provide loans and subsidies to the First Nation.
CMHC did not require a declaration from an independent profession that the homes that were built met the national building code, according to Deloitte.
Deloitte also made recommendations for the government, suggesting they do more to enforce the terms of agreements, confirm housing meets building codes, double-check inspection records, disallow debt to be repaid from core capital budgets, require partners to have a separate housing authority and develop housing performance indicators.
Duncan’s office responded to the audit with a brief statement.
“The independent audit from Deloitte and Touche LLP speaks for itself, and we accept its conclusions and recommendations,” said Duncan’s spokesman Jan O’Driscoll.
Aboriginal Affairs and Northern Development Canada said it accepts the audit’s findings and will work with its federal partners to address the recommendations on improved oversight.
Some observers suggest the audit could shape the meeting between the prime minister and First Nations leaders scheduled for later this week.
“If we’re going to properly discuss the state of First Nations in the country and the relationships with the government, then it can’t just be a one-sided critique of the federal government and their failings. I think First Nations themselves have to be open to scrutiny and talking about the internal challenges that they have,” said Tim Powers, an Ottawa lobbyist with Conservative ties.
Liberal aboriginal affairs critic Carolyn Bennett said the Conservatives shouldn’t let the audit distract them from improving the living conditions of Canada’s First Nations.
“Obviously, the government’s approach is to try to change the channel,” she said. “This is not a bookkeeping problem. This is severe conditions that need a real approach.”
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