NEWS RELEASE · 27th February 2012
Aboriginal Affairs officials have turned over to RCMP a review of spending by a former B.C. First Nations chief that found hundreds of thousands of dollars in questionable spending, but books so bad that further investigation was not possible.
The review of the Tl'etinqox-t'in First Nation's spending highlights a major issue facing First Nations and federal bureaucrats as the Conservative government moves toward greater financial transparency for bands: financial literacy.
The review of spending by the previous chief of the small band located in the B.C. Interior, formerly called the Anaham First Nation, was completed in January by Deloitte and Touche, covering the period from April 2004 to the end of March 2009. The current leadership of the band requested the review, and provided auditors with financial information.
Auditors found that over those five fiscal years, the former chief received $284,000 in wages and bonuses, contract fees and truck rental fees with no evidence of approval from council. He collected another $111,000 in reimbursements for expenses, travel claims and advances that were not approved by council and some without any supporting documentation. Another $28,000 was paid to two entities related to the former chief, seemingly without the approval of council.
Among the findings, more than $21,000 in band funds were used to purchase personal vehicles for the chief and a band councillor who later charged more than $10,000 in rental fees for the use of those vehicles.
Auditors also found almost $250,000 was paid by the band on behalf of Klatassine Resources Ltd., which is owned by the Tl'etinqox-t'in government and operates as part of a Forest and Range Opportunity Agreement between the Tl'etinqox-tin and the B.C. government.
That money that was written off by the band as non-recoverable in March 2009, but the mixing of Aboriginal Affairs funding and the general operating account meant auditors could not determine the line between federal funding and Klatassine funds, and no further review was conducted.
Deloitte and Touche auditors made several recommendations, including that staff members be trained on proper accounting practices.
"We recommend that in the future, appropriate accounting and reporting processes be put in place in order to meet (Aboriginal Affairs) contribution agreement requirements, to maintain accounting documentation regarding all government funding in a manner that will allow for audit," says a letter to the chief and council from the agency's Assessment and Investigation Services Branch.
Financial literacy is a major issue for Aboriginal Affairs and First Nations, said Anne Scotton, chief audit and evaluation executive for the federal department.
Having records available for audit is a condition of the federal funding agreement with aboriginal organizations, she said, but there is a wide range of training and financial literacy among those responsible for keeping the books for First Nations.
"The department is increasingly expecting First Nations to be accountable to themselves and their members," Scotton said.
"We're not responsible for every act of every First Nation, nor would that be reasonable. We are instead trying to move to an accountability to First Nations members themselves," she added, as is the case with municipal government.
Of the many reviews the department undertakes, in only about 10 to 15 per cent of cases is there a need for a forensic audit, the most detailed and intense form of scrutiny.
"We find a certain number which we do turn over to authorities," said Scotton.
"We find quite a large number where there are improvements that could be made and we draw them to the attention of chief and council; and we find a smaller number where there are really issues of impropriety or wrongdoing that we will be following up ourselves that is not criminal but is not minor."
The First Nations Financial Transparency Act was tabled last November and will force bands to make their consolidated financial statements public, including the salaries of chiefs and councillors. Repeated non-compliance could see federal funds withheld.
"We do have a responsibility, as a federal department, to be reporting on the use of public funds," Scotton said.
The national Assembly of First Nations has not opposed the legislation, saying the organization supports transparency and accountability to First Nations citizens.
Terry Goodtrack, president of the Aboriginal Financial Officers Association of Canada, said his organization's members are fine with the Transparency Act.
"We're all for that," he said. "We believe in accountability."
The Ottawa-based organization holds workshops to improve financial capabilities and has a certification program that puts participants well on their way to a professional accounting designation. Since its inception in 1999, the association has 1,500 members and has 136 aboriginal Certified Financial Managers. A conference last week in Saskatchewan drew 900 delegates from businesses, agencies and band councils.
"There was just a need to increase the financial literacy in aboriginal communities across the country," Goodtrack said.
But Joe Alphonse, chief of the Tletinqox-t'in and the tribal chairman of the Tsilhqot'in National Government which invited the review of Anaham's spending, said it took years of demanding action from federal officials before the audit was done.
Alphonse said all the necessary rules are in place for financial oversight, but they are not being put to use.
"They knew this was happening and they allowed it to continue," Alphonse said. "There's plenty of rules, there's just no enforcement."
The auditors suggested the band could try to recover the monies paid for the former chief and band councillor's vehicles, but the main theme of their recommendations was improved financial practices.
"We're not going to get that money back," Alphonse said.
Sgt. James Anderson, of the Alexis Creek RCMP, said the force received a copy of the audit from Indian and Northern Affairs last week.
"(Chief Alphonse) has asked the RCMP for a criminal investigation into possible misuse of band funds," Anderson said.
"As a result of receiving that information, the investigation will be starting fairly quickly but it will take several months before any charges can be considered."
Janice has no comment on this matter, today..
Comment by Janice Robinson on 28th February 2012
My Mother, Pearl Campbell, was a magnificent woman. She genuinely loved and cared for the Tsimshian Nation, and never hesitated to put herself out there to make an honest stand for the people. During her days of extraordinary advocacy for "off-reserve" First Nations people (housing, healthcare, womens'/students' rights), Mom was accustomed to "paying a price" for her work. Mom was also a founding member of the Kermode Centre and Muskomul Housing Societies (among others). These facts are well-known.
Facts: Pearl D. Campbell, and other Elders, were unceremoniously ousted from the Kermode Centre Society. Their coffers were stolen, and placed in an unnamed account. Their portraits were taken off the walls, and placed in a shed out back. Why?!
- Pearl was a full-on Tsimshian Chief Matriarch (Sigdm hanna'a Sim Maguul), yet was unrecognized by the treaty office because she could not fathom signing a treaty. No genuine Simoighet can!
- at every turn, her life was made difficult by the ruling family of this reserve (through administrative manipulations).
- when Pearl was widowed, old, and most in need of support, she was abandoned by the Kitsumkalum band council. How and when?
During Christmas, 2008, Pearl came to my Terrace home to spend the holidays in town. While there, she tripped on the carpet, badly sprained her ankle, and was confined to a wheelchair. The doctor told her to stay with us until her ankle healed. This took longer than a week, and Kitsumkalum denied her all supportive homecare services and support. They treated her like she did not exist. When I informed her, she sobbed and I wept. Then she had a stroke. Then, they had the nerve to demand the lift she had on her house as "she no longer had need of it." When she died, they called to say they were going to exchange her deluxe hot water heater for a smaller, cheaper one...because I did not need it. Why, and who was going to receive these things?
- they plow 200 metre-long driveways of dead people and drunks, yet leave some Elders snow-bound. Why?
- I could go on, but you get my drift. She was made to pay a very high price for her advocacies and opinions. To the end!
- Recently, I have been informed, by email, of the substance of a community meeting held on Feb. 13, 2012. (I am never notified/invited to these things). The community members were told not to criticize or negatively comment on the affairs of Kitsumkalum administration... or legal action will be engaged. They/we will be sued!
- I am already engaged, by/with this same administration, in a very difficult process relating to my own life. So, I will not comment on this matter today.
Would I rather my (reserve) life be at the mercy of bureaucrats, just like you non-Natives.. instead of these entities called "chiefs and councils?" Maybe to be equal, we need to consider ridding ourselves of these things. And, keep the bureaucracy currently called Indian and Northern Affairs Canada (D.I.A.) Today's bureaucracies are manned by young, educated, astute Canadians of all colours and ethnic backgrounds. Maybe I have a better chance with them.
Comment by James Ippel on 27th February 2012
Do you really believe that there will be accountability for the misuse of funds? Look at the Attawapiskat misuse of funds. What has happened here? The Gov't has appointed some one to oversee future spending, but what about the misuse of previous millions of dollars that allegedly went to the Chief and selected family? Is there going to be retribution? Methinks not. Do you honestly think it will be different for any other Band until we can get the Bleeding Heart NDP and LIBERALS to admit to immoral practices by those in authority on Reserves? Those in authority look after their own first, and it happens in Terrace as well Native Reserves.
Comment by Louisa on 27th February 2012
Financial transparency and accoutability? How about the funding party (taxpayers of Canada via Indian Affairs) instruct and pay the auditing accounting outfit who prepare the Financial Statements for the receiving Band instead of the Band retaining their own? It must be understood that, as non-natives, we are not hell-bent on scrutinising every dollar spent on natives to alleviate and end their low economic situation (poverty, illiteracy, housing, health etc), but that it benefits no-one, except the very few at the top of the Band and their cronies, to hand out $000's to fix things and later find that nothing has been done. The bottom line is, with the current state of affairs, where there is aboriginal funding, there are a magnitude of false, corrupt entities purely in existence to help Band members launder taxpayers money and the people who need help continue to live in poverty. Accountability is key and this means questioning. I, personally, would like nothing more than to stand next to my native neighbour and for us both to be equal and proud to be who we are, with our own identity.
Comment by cliffordd c.w. morgan on 27th February 2012
Such misuse of authority, and band funds. Before the Indian Affairs and any other sponsors give money to any bands, they must first make sure that there is a auditor in place and a financial person, and by-laws that govern the bands finances, and sales, and there must be transparency and accountabiity practices. Also, the elected chiefs must have fair knowledge of all these, with learning of accounting, and management, with a degree. All band councillors should have the same. They must submit a resume to the Auditor General before a election for his or her review.
Ring of Mordor
Comment by Ernie on 27th February 2012
this is good there's too many folks out there that hold the figurative "Ring of Mordor" & just holding that power of office seems to go to their heads sometimes then they abuse what the people voted them to manage as though it was all theirs. but sometimes they get caught with their hands in the cookie jar redhanded & realize how dangerous that "Ring of Mordor" can be in the wrong hands as they're frogmarched in chains to see the man.