Thanks to a new federal law, Canadians have been given their first real glimpse into the opaque world of First Nations' finances. The picture emerging from the financial audits of 11 communities is not altogether pretty, but it represents a welcome step toward greater transparency that will ultimately make band councils more accountable – to their own voters.
Under the new First Nations Financial Transparency Act, around two dozen randomly chosen band councils from across the country are each year required submit to an independent audit to ensure dollars are being spent for their intended purpose. In the fraught relationship between Ottawa and First Nations, some have dismissed making the audits public as a provocation. Some band councils have resisted the scrutiny as outside interference. But financial accountability isn't a punishment.
It's not just that millions of dollars are at stake. It's not just that a high level of financial accountability is the norm for public institutions. It's about the well-being of some of this country's most vulnerable communities. People in these communities should know how their money is being spent. All too often, cases of fiscal misconduct don't surface until a community reaches a crisis point from which it is difficult to climb out. Band councils that manage their funds well should be lauded for their efforts. Those that don't should be exposed and offered assistance.
Of the first 11 audit reports, seven identified areas where money had been misspent. (Thirteen more audits will be posted in the coming weeks.) Saskatchewan's Black Lake Band, for instance, was found by auditors to have spent $403,651 – half of its audited spending – in a manner that was "not in compliance" with the rules for federal transfers. When auditors searched for records on council meetings and decision-making, they couldn't find them. Saskatchewan's Montreal Lake Band mispent $156,756. Auditors weren't even able to complete their audit on Manitoba's Mosakahiken Cree Nation. They couldn't find enough information to do one.
Band councils are ultimately accountable to those who elect them. Armed with information from the audits, First Nations communities will be able to make more informed decisions on whether their leaders deserve to be returned to office. For too long, First Nations finances have operated in a grey zone. In some cases, that's led to mismanagement and misspending. The bright light isn't there to punish. It's about illumination.