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Aboriginal Affairs Minister John Duncan announces assistance for the troubled Attiwapiskat reserve in the foyer of the House of Commons on Dec. 9, 2011.Adrian Wyld

The federal government has bought 15 modular homes for the remote first-nations community of Attawapiskat, but Aboriginal Affairs Minister John Duncan is holding out the possibility that the impoverished reserve may ultimately pay the bill.

Mr. Duncan told reporters on Friday that the homes would be delivered as soon as the surrounding lakes freeze and the annual ice roads become open. But he would not specify where the $1.2-million required to pay for the new structures will come from.

"The homes and the costs associated is not our immediate concern," he said. "This is an emergency-management response. We will worry about who's paying for this afterwards."

Theresa Spence, chief of the beleaguered first nation, told Mr. Duncan in a letter on Friday that the community actually needs 22 new housing units. She also requested that Ottawa rescind the third-party management it recently imposed on Attiwapiskat, which the band must pay for out of its administrative budgets. She said leaders would agree to a full audit going back five years.

"My community will not consider third-party managers nor pay for them out of our already depressed band support funding budget," Ms. Spence wrote in capital letters.

That manager, Jacques Marion of BDO Canada LLP, will receive $1,300 per day to a maximum of $180,000 between now and the end of June.

Mr. Duncan has also asked for a comprehensive audit of Attawapiskat's finances. The Conservative government questions why people live in such deplorable conditions when Ottawa has sent $90-million to the band since 2006, and Prime Minister Stephen Harper has gone so far as to suggest there has been mismanagement.

Ms. Spence maintains her council has provided a full accounting of where the money has been spent. More than half of it went to education while other amounts have paid for such things as health care, social services, infrastructure and economic development.

In response to the charge of mismanagement, she wrote that that the band's finances are audited regularly, and the audits are posted publicly.

"Our audits have been filed with your department for these years and on average the per capita funding level ranges from $9,000 to $12,000 over this time frame and is not the $50,000 as reported by the Prime Minister," the letter said.

A spokeswoman for Mr. Duncan told Canadian Press the minister is reviewing the response and is hopeful they will all find a way to work together.

Attawapiskat declared an emergency more than a month ago because families on the reserve of just under 2,000 people are living in tents and plywood shacks.

Charlie Angus, the New Democrat MP whose riding encompasses the reserve, said the question of who will pay for the homes is crucial.

"Are they going to punish the community years down the road for moving some trailers in," Mr. Angus said. "This is saying, 'because you spoke up, we're coming in and you're going to pay [in excess of ]$300,000.' … That will cripple this band."