Saskatchewan chiefs split over irregularities discovered in audit of provincial leadership organization

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First Nations leaders in Saskatchewan are calling for accountability within the political organization representing them following a scathing audit that found more than $28-million in unsupported and ineligible federal funding expenditures.

The Federation of Sovereign Indigenous Nations (FSIN) has to pay that money back, says Indigenous Services Canada (ISC), which ordered the audit covering a five-year span from 2019 to 2024 of mostly emergency COVID-19 funding.

In a March 14th letter to the FSIN, ISC says the audit determined the FSIN failed to properly document $23,217,408.93 in COVID-19 related expenditures. It also found an additional $4,805,760.58 in non-COVID related spending was ineligible and unsupported, including $350,000 paid to a former employee as a consultant for duplicate work, contravening the FSIN’s Human Resource Management Regulations, says ISC.

Those missing records include required shipping invoices, bills of lading, packing slips, customs declarations and proof of delivery, ISC said in the letter.

The audit also revealed that more than $3-million of intended administrative fees were spent on ineligible capital investments, including $1.9-million in construction of a new office building and much of a $1.2-million fleet of vehicles.

“During the course of ISC’s review of the audit findings, FSIN communicated its position that administration fees in their accounting records reflected their own source revenue and not ISC funding. This is inconsistent with FSIN’s funding agreements which limit the use of funding to expenses directly related to carrying out its responsibilities under its agreements,” the letter said.

FSIN Chief Bobby Cameron said in a media release that the audit was “not a matter of misuse of funds, but a fundamental disagreement in interpretation, one that has been applied retroactively and without full and proper consideration of the facts.”

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Mr. Cameron, in a subsequent media release, said that instead of engaging in public debate that is “selective, misleading and incomplete” about the fallout from the audit, he is engaging “directly with Chiefs and leadership through the proper forums” as per FSIN governance protocol.

Several FSIN chiefs defended the organization and its COVID spending at a news conference last month.

“[Personal protective equipment] is how we protect our people, we’re being told by health professionals. And our question was where do we find it?” said Chief Clarence Bellegarde of Little Black Bear’s Band of Cree and Assiniboine of the urgency felt during the pandemic.

“It’s a good thing the Federation was on top of that,” he said, adding that those efforts to get PPE and other front-line supplies saved lives.

“And now they’re being questioned by the government on how they spend some money,” Mr. Bellegarde said. “I know in my community, we got those deliveries.”

But Chief Kirby Constant of James Smith Cree Nation said in a statement posted to social media that he hasn’t been able to determine if the FSIN properly reported his nation’s $6.5-million funding agreement for PPE with ISC.

In the statement, he said the contribution agreement was made prior to his election in 2024 and he’s asked the FSIN for a copy, along with other documents to verify ISC’s findings and his own concerns since becoming chief.

Mr. Constant said he was advised that the nation paid $240,000 in storage fees for expired PPE, which didn’t come from the $6.5-million COVID funds. He also said that $5.5-million was wired to a business for PPE and that the FSIN kept $1-million in administrative fees.

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Mr. Constant said he wants to know why his nation didn’t receive any of the administrative fees and questions what the FSIN did with the money. He also wonders what other PPE-related costs his nation ended up paying with its own source revenue.

Chief Melissa Tavita of Muscowpetung Saulteaux Nation said in a social-media post that the FSIN’s response was lacking. She said the FSIN executive has an obligation to follow the same financial reporting expectations as other governing nations.

“Transparency cannot be demanded only of others. It must also be practised at the highest levels of the organization itself,” she said.

“This is not about attacking our own institutions. It is about expecting them to meet the same standards of accountability, governance and transparency that we are expected to uphold in our own Nations.

“Our people deserve that. Our leadership deserves that. And the credibility of any organization that speaks on behalf of First Nations depends on it.”

Rob Louie, president of the Band Members Advocacy and Alliance Association of Canada, wants the matter investigated by police.

“The forensic audit appears to show a reclassification of cheques and other suspicious financial transactions that would suggest fraud under Section 266(1) of the Criminal Code of Canada,” says a letter from Mr. Louie to Mr. Cameron dated March 25.

“There is still time for you to make things right. The federal government is not the problem; the accounting firm that carried out the forensic audit is not the problem, and white people are not the problem. The problem is that somewhere along the way, a culture of entitlement was created that needs to be rooted out of FSIN immediately.”

Mr. Louie has demanded the resignation of the FSIN executive and a public apology among other things.