Chief counters release of audit with explicit demands from feds for change

by Bruce Cheadle and Stephanie Levitz, The Canadian Press

OTTAWA – The battle over the plight of Canada’s First Nations escalated Monday amid accusations of a cynical public relations ploy by the Harper government and new demands by a hunger-striking chief.

Chief Theresa Spence, who has been on a liquid diet since Dec. 11, said she now wants elements of the Conservatives’ latest omnibus budget bill repealed as soon as MPs return to Ottawa at the end of the month.

Spence had previously been seeking only a meeting between Prime Minister Stephen Harper and the Governor General and First Nations leaders to discuss outstanding treaty matters.

“We are asking that the legislation related to (native) lands encoded in Bill C-45 must be rescinded as soon as Parliament resumes,” Spence said in a release.

The new demand comes as Ottawa releases a scathing audit of tens of millions of dollars in spending on Spence’s Attawapiskat reserve, a troubled community on the shores of James Bay in northern Ontario.

The audit details an absence of basic accounting by the band council and ongoing indifference by federal government departments.

Spence’s release called the leaked audit “no more than a distraction of the true issue … to discredit Chief Spence who is willing to lay down her life for a larger cause.”

Her spokesman, Danny Metatawabin, had earlier accused the Harper Conservatives of “trying to undermine the process here, the movement of the people.”

The Deloitte audit — released publicly Monday by Aboriginal Affairs and Northern Development after being leaked to select media outlets on the weekend — catalogues more than $109 million in spending over almost seven years, much of it poorly documented, undocumented, or questionable.

The timing is explosive.

Prime Minister Stephen Harper agreed last Friday to meet with aboriginal leaders on Jan. 11. And while Harper was careful not to link the meeting to Spence’s hunger protest, his decision was widely seen as a concession.

The damning audit was similarly interpreted as the Prime Minister’s Office pushing back in the war for public opinion.

While the government was required to release the audit by the middle of the month, the way it came to light is questionable, said NDP MP Paul Dewar, who described the report’s release as a political choice, not one driven by policy.

“They prefer not to deal with problems; instead, they turn it into one of their political equations,” Dewar said.

“It’s brass-knuckle politics.”

Repeated reports from the federal auditor general have highlighted financial reporting issues for First Nations since at a least 2002.

Carolyn Bennett, the Liberal critic for aboriginal affairs, said if the department was doing its job and became dissatisfied with spending documentation, “then the government can ask for (documentation) before it sends any more money.”

The Attawapiskat audit was commissioned by Ottawa in December 2011 after Spence, with winter approaching, declared a state of emergency over concerns about unsafe housing conditions in her remote community of about 1,800 residents.

The Conservatives questioned why the problem existed, given the millions provided to Attawapiskat over the years, and Ottawa briefly imposed an external manager on the band.

The Deloitte audit is the only comprehensive analysis of a band’s finances that the government has posted on its website. It is unclear whether other First Nations have ever come under the same level of independent scrutiny, although three smaller reviews were undertaken last year of different bands after allegations of misspending.

Spence was first apprised of the audit’s findings last Aug. 28 in a letter in which the Deloitte auditor wrote that “there is no evidence of due diligence in the use of public funds, including funds for housing.”

“In our opinion, having over 80 per cent of selected transactions lacking any or proper supporting documentation is inappropriate for any recipient of public funds.”

According to Aboriginal Affairs, only 46 of Attawapiskat’s 316 housing units are considered adequate, while another 146 need major work and 122 are placement.

The audit is not likely to burnish Spence’s credentials as a high-profile native advocate.

Last February she wrote a public letter to the Queen, complaining that the federal government “has taken the position that the First Nation mishandled its funding.”

“This is simply not true,” Spence asserted.

Among the sample 505 transactions a Deloitte auditor examined from April 2005 through November 2011, fewer than 20 per cent could be fully tracked and documented — and 61 per cent had no documentation at all explaining the reason for payment.

The sample of transactions includes $2.2 million spent on consultants, with two thirds of the 26 payments improperly documented.

“The independent audit … speaks for itself, and we accept its conclusions and recommendations,” said Jan O’Driscoll, a spokesperson for Aboriginal Affairs Minister John Duncan.

Those conclusions include some questions for federal officials as well as band management.

The Canada Mortgage and Housing Corporation, a Crown agency, must conduct a physical inspection of housing units every five years and found “abnormal and accelerated deterioration of housing units” at Attawapiskat. CMHC also found housing management issues in a separate 2010 audit.

None of these findings were reported to Aboriginal Affairs, says the audit, because CMHC only passed along such reports “if CMHC deemed there were significant issues or concerns.”

The audit dryly adds that “despite the nature of the findings noted by CMHC,” no reports were kicked up the chain to the Aboriginal Affairs department.

The audit also found that only $3.6 million of Attawapiskat’s $6.85 million in core capital housing funding was actually spent on house renovations and maintenance, with the rest being used for debt repayments. The practice, it found, is common among First Nations and Aboriginal Affairs is well aware of it.

The audit recommends the federal department no longer allow housing maintenance funds to be used for debt servicing.

That the audit pointed out the federal government also has a responsibility for oversight shouldn’t be overlooked, Dewar said.

“At the end of the day, that means political accountability.”




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Chief counters release of audit with explicit demands from feds for change

  1. Really bizarre that an audit carried out by a respected National Audting firm is being trashed by the NDP and some LIberals as political. If any company in Canada said that the shareholders would revolt and request RCMP involvement. But for reserves its all political and taxpayers money is long gone and its “acceptable”. A damn disgrace for Canada. Would never occur in USA as American Indians are under very different agreements.
    Millions vanish and its OK. Aint Canada wonderful??

    • It’s the timing,and the fact the report was leaked before it was released…that’s what makes it political.

      • Spence made the spending on her ‘first nation’ into a political matter, she can’t complain now if real politicians accept her choice.

        • I don’t dispute she should be challenged…if she’s a crook she should go…that’s not the same as trying to prove her a crook if the govt knows it isn’t true – she’s merely incompetent for instance. But most likely she’s just out of her depth. How is making her some kind of political scapegoat going to fix any of the long term problems on reserve.
          By the way, if i were to accept your point completely [it is all just political...all fair in love and war] then i presume you wont mind if FNs step up the political pressure through more confrontational protest tactics…thought not!

        • ps…actually Harper started the political mudslinging.

  2. I hope they charge her with criminal fraud and extortion. They make quebecers look like amateurs when it comes to criminal behaviour.

  3. If Harper thinks that using Spence as a wedge to pry support away from the chiefs for her hunger strike, or even peel support away from # idlenomore is going to work, then he has made a very big error imo. FNs aren’t opposition political parties to be bullied and divided – not this time anyway. If he pushes this any further he[ and the rest of Canada] may not like where this goes. That he would choose division over other ways to solve this crisis says a lot about Harper – not that it should be news to anyone who is paying attention.

  4. Conservatives and audits….where does one start.

  5. The Government has called Deloitte an “independent auditor”.
    Really? Deloitte is independent of Conservative ideology? Or is
    independent of the Conservative Party of Canada?

    Not very likely:

    First, Deloitte is the auditor for the Conservative Party of Canada and
    their fundraising arm:

    https://www.onlineparty.ca/show.php?SID=1113

    Second, Harper appointed retired Deloitte auditor C. Joynt to the board of
    the Royal Canadian Mint & awarded a government post to the
    former chief CEO of Deloitte, which has been the auditor for the
    Conservative party since 1974.

    http://www.canada.com/story_print.html?id=85a1021b-3483-499c-9810-185f60586a77&sponsor=

    Third, the Harper government is paying Deloitte $90,000 a day for advice on
    how to save money.

    http://www.theglobeandmail.com/news/politics/tories-hire-90000-a-day-consultant-to-help-cut-federal-spending/article4256641/

    Fourth, Deloitte had to withdraw their false audit opinion about Conservative
    party returns issued on May 18, 2006, in the midst of an Elections
    Canada investigation into $1.2 million of radio and TV ads that 67
    Tory candidates claimed as expenses via quick “in and out”
    cash transfers.rs.

    http://www.canada.com/ottawacitizen/news/story.html?id=480db686-5527-460a-91da-80bc34cb3deb

    Fifth, Mitt Romney received just over $248,000 from Deloitte accountants and
    others affiliated with the firm.

    http://www.accountingtoday.com/ato_issues/26_10/Accountings-PACs-back-Romney-64121-1.html

    Finally, Deloitte also bankrolled the Conservatives in the UK and then was
    handed contracts worth £773.5million.

    http://www.mirror.co.uk/news/uk-news/city-fat-cats-deloitte-awarded-159398

    http://www.guardian.co.uk/politics/2010/aug/29/tory-donors-audit-commission

    Given all that, Canadians are entitled to know much, the directors, CEOs and
    managers of Deloitte have donated to Harper’s Conservative Party.

  6. I hope she drops dead. What a hag!

  7. I live in Toronto, where hundreds of natives are panhandling on every corner. Can Ottawa help them or send them home?

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