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A Métis flag. The federal government took a close look at the group that represents Métis people across Canada after questions arose over its expenses, newly released documents show.

DAVID BLOOM/THE CANADIAN PRESS

The federal government took a close look at the group that represents Métis people across Canada after questions arose over its expenses, newly released documents show.

The findings of that examination, which until now have not been made public, offer a glimpse of what was happening behind the scenes before new measures were unveiled to help make the Métis National Council more transparent and accountable.

For its part, the council says most of the issues raised by Aboriginal Affairs and Northern Development, whose probe covered the period from 2008 to 2011, have been addressed.

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Council president Clément Chartier says a draft report that first raised red flags was biased and deeply flawed. But Aboriginal Affairs evidently took the draft report seriously enough to launch its own audit of the council's management practices and financial controls.

The council received a lengthy summary of the department's findings in a December, 2012, letter, which The Canadian Press obtained under the Access to Information Act.

"In our view, following a detailed review of the auditor's findings, there are control weaknesses and differences of interpretation that hinder the effective administration of MNC funding agreements with Aboriginal Affairs and Northern Development Canada," wrote the department.

"Until these weaknesses and misinterpretations are adequately addressed, the MNC will continue to face ongoing financial challenges."

The letter goes on to say the council claimed costs that were not included in a work plan that it gave to the department in order to receive funding.

Some of those expenses included staffing costs for jobs not in the work plan, salaries and benefits that were higher than the "prescribed percentage," the council's interventions to the Supreme Court and donations and sponsorships to other organizations.

The council told the department it used its own money from "administrative recoveries" to pay for activities it felt were important but not funded.

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The audit also flagged the council's procurement practices, and made a vague observation about lobbying.

"Individuals on contract with MNC who are communicating or arranging meetings on its behalf with 'public office holders' should be registered as lobbyists on behalf of the MNC."

There were also questions around conflicts of interest.

In one case, a company owned by the vice-president's wife was paid for "liaison services" between her husband and Chartier's office. Chartier says the department knew about that situation.

"This relationship was known in advance and she was deemed to be the most effective person to provide these services," he told The Canadian Press.

In another instance, the acting chief administrative officer approved the purchase of copies of his own book. A senior manager, meanwhile, signed off when the council bought copies of a book written by Chartier.

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In a two-page written response to detailed questions about the audit, Chartier said the council has since dealt with most of the audit's findings.

"These issues are not new to the MNC. Our board of governors and the Métis National Council General Assembly have reviewed all of these issues and have approved the MNC audits for 2008-2012 and have given us direction on moving forward," he wrote.

"The MNC and the government of Canada have acted responsibly and addressed all of these issues and built a new financing platform going forward. We practice democratic responsibility and accountability and we will not hesitate to protect our interests in this matter."

Chartier says the first draft report "ignored the actual facts and in some cases relied on innuendo and complete failure to understand the financing system."

That prompted a curt reply from the consultant who wrote it.

"I carried out my work following the applicable standards and have substantiation for the observations made in my report," said Elizabeth Buckingham of Hallux Consulting.

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There was no mention of any of these issues when the federal government and the council renewed the Métis Nation Protocol last April and signed a new governance and financial accountability accord.

Under the new accord, the council must post financial information on its website, develop and make public its annual operational plans, and provide core and project funding within 60 days of it being approved.

Aboriginal Affairs Minister Bernard Valcourt's office says it acted swiftly to address the department's findings.

"Our government is committed to ensuring that all organizations use taxpayer funds for their intended purpose," spokeswoman Erica Meekes wrote in an e-mail, "which is why we were concerned with the financial weaknesses identified within the Métis National Council and why we took these concerns seriously."

Indeed, briefing material prepared for Valcourt underscores just how seriously his office took the matter.

"Métis organization audits" is listed as one of the big "challenges" facing the minister's office, according to a section of the minister's briefing book obtained by The Canadian Press.

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Other challenges listed included the Idle No More protest movement, the Northern Gateway pipeline and the government's plan for First Nations education.

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