Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Joe Alphonse, chief of the Tletinqox-t'in and the tribal chairman of the Tsilhqot'in National Government which invited the review of the former Anaham First Nation's spending. (Adrian Lam for The Globe and Mail/Adrian Lam for The Globe and Mail)
Joe Alphonse, chief of the Tletinqox-t'in and the tribal chairman of the Tsilhqot'in National Government which invited the review of the former Anaham First Nation's spending. (Adrian Lam for The Globe and Mail/Adrian Lam for The Globe and Mail)

Spending review of B.C. First Nations band highlights need for better financial literacy Add to ...

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.

More related to this story

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,” Ms. 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 Ms. 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,” Ms. 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,” Mr. 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.

Mr. 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,” Mr. 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,” Mr. 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.

“(Mr. 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.”

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories