Late audits, funds frozen

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The discretionary funding for approximately one-third of the band council governments across the country is in danger of being frozen.

Of 912 audits required by the federal government, 346 have not arrived within the required 90 days after the end of the fiscal year - in most cases the deadline was June 30.

A recent decision by Robert Nault, the minister of Indian and Northern Affairs, requires that all federally funded political organizations (band councils, tribal councils and other similar groups) must disclose the salaries, honoraria and expenses of grand chiefs, chiefs, council members and senior officials. Previously, the department had not insisted on receiving this information from organizations that were operating within department deficit limits. Department staff said Nault changed the requirements so that band members can turn to the department for this information if band officials refuse to disclose it to them. Department officials say the information will not be made available to the general public.

Twelve audits in Alberta are late.

Indian Affairs' director of transfer payments, Cal Hegge, said all First Nations and other political organizations funded by the federal government will see their discretionary funding withheld until the audits are received. Discretionary funding, which makes up between 10 and 20 per cent of most First Nation budgets, is usually used to pay chief and council honoraria and is used for administrative band support.

Hegge said the number of audits that are late this year is about the same as in the past, but the department will take action against those not in compliance on a month-to-month basis. He emphasized that crucial funding for health care, welfare and education will not be affected.

On Aug. 11, both the National Post and the Globe and Mail published stories about the number of audits that are late, prompting Native leaders to accuse Nault of playing to the mainstream's bias about the competence of First Nation governments. Hegge admitted to Sweetgrass that the response numbers are, if anything, slightly better than in the past, but he noted that mainstream Canadians are now more interested in government accountability issues as a result of the Human Resources Development Canada scandal.