THUNDER BAY – Aboriginal Affairs and Northern Development Canada (AANDC) today released the results of the comprehensive and independent audit relating to the Attawapiskat First Nation’s Management Control Framework which was carried out by Deloitte and Touche LLP. The federal government audit appears to support the findings of a previous audit management letter posted online by Attawapiskat First Nation.
The auditor in a letter to Chief Spence dated August 28 2012 state, “Our examination was conducted primarily to enable us to express an opinion on the consolidated statement of expenditures and was not designed to discover weaknesses or inefficiencies which may be present in the accounting systems. Our audit did, however, reveal areas for improvement, which we bring to your attention with this management letter. The observations and recommendations provided will need to be acted on in order for Attawapiskat First Nation to establish management control practices and a sound accounting system which allows for normal auditing activities.”
The federal government in a media statement says, “In November 2011, Deloitte and Touche LLP were asked by the Minister of Aboriginal Affairs and Northern Development to complete a comprehensive audit. The audit was requested due to concerns with the housing situation in the Attawapiskat First Nation community, which had received approximately $90 million in federal funding over the previous five years. Attawapiskat First Nation’s on-reserve population is approximately 1,828, according to departmental records”.
“Deloitte and Touche LLP’s comprehensive and independent audit covers the fiscal years 2005-2006 to 2011-2012. It consists of an audit of the Attawapiskat First Nation and AANDC to ensure that funding provided to the First Nation was spent for its intended purposes”.
[sws_pullquote_right] The federal government audit appears to confirm that there were problems which were already made aware to both the Attawapiskat First Nation, and to the federal government – Attawapiskat First Nation was operating under co-management for the entire period of the audit released today by the federal government. [/sws_pullquote_right]
Sources tell NetNewsledger.com that the First Nation community was well aware of areas of concern and problems and were working on fixing those issues.
The federal government audit appears to confirm that there were problems which were already made aware to both the Attawapiskat First Nation, and to the federal government – Attawapiskat First Nation was operating under co-management for the entire period of the audit released today by the federal government.
Those reports are backed up by the 2011 Management letter to Attawapiskat. That 2011 report from the accounting firm of Ross, Pope and Company states, “During our audit, we noted that not all unpaid invoices which related to the fiscal 2011 year-end were recorded as accounts payable at the year-end date. We recommend that all year-end accounts payable balances be set up and adjusted in the accounts payable module so that payments made subsequent to year-end can be applied to reduce appropriate vendor balances payable. In addition, we recommend that all payments be applied to the vendor accounts payable to ensure accurate financial reporting of accounts payable, and that invoices be entered into the accounts payable module as they are received, in the period the invoice relates to, in order to ensure completeness of accounts payable. We would be happy to provide any assistance required in this area for the upcoming fiscal year.
“It was further noted during our confirmation of accounts payable balances that many of the accounts confirmed were not correct. This problem arose because not all payments were applied to the accounts payable subledger and invoices were not recorded properly. It is recommended that all payments made to suppliers be traced to original invoices in the accounts payable subledger and cleared appropriately.
“During our audit, we noted that many of the balances in your accounts receivable subledger did not agree to the determined amounts. This discrepancy was due to payments received not being recorded to the proper accounts in the subledger or being re-posted to revenue accounts. It is our recommendation that all payments received be traced to invoiced amounts in the subledger and cleared appropriately.”
A spokesperson for Chief Spence has stated that the timing of the release of the federal audit is suspect, and likely due to discredit Chief Spence as the federal Minister and Prime Minister head into meetings next week.
The independent auditing firm Deloitte & Touche LLP demonstrate that over 80 percent of the analyzed financial transactions of the Attawapiskat First Nation lacked any or proper supporting documentation, and found no evidence of due diligence on the part of Attawapiskat First Nation in their use of public funds, including for housing. As a result, Deloitte and Touche LLP was unable to determine if the funds were spent for their intended purpose.
The audit’s finding that AANDC’s oversight measures for Attawapiskat First Nation could be improved has been accepted by AANDC. AANDC will work with federal partners to address recommendations to improve oversight measures.
On September 7, 2012, AANDC sent a management letter and the recipient portion of the audit to Chief and Council. The findings and recommendations from the audit work were discussed in a teleconference with Chief and Council on September 20, 2012.
Timmins James Bay MP Charlie Angus tells NNL, “The audit stems from 2005 when there was numerous issues which is why the co-manager was brought in. Seems to me mostly about problems with records on the rental plan and payments which is reflective of the fact that the houses were in such poor conditions that people were refusing to pay rent or to assess the housing stock. As well, they were using some capital funding to pay down debt. This doesn’t speak to wrong doing but a desire to get out of being in co-management”.
