Audit controversy at Alexander First Nation

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$2.2 million in unexplained payments noted

A controversial forensic audit report shows almost $2.2 million in unexplained payments to eight employees of the Alexander First Nation.

According to the internal document obtained by the Gazette, more than half of the unexplained payments were made to former chief Herbert Arcand and current tribal administrator Alphonse Arcand between 2013 and 2015.

Alphonse Arcand called the report “incomplete, reckless and out of context,” stating that not all relevant documents were submitted to the auditor for review.

“I invite the authors of the report to review the matter, report the facts in their entirety and issue an addendum to their report,” he wrote in an emailed statement.

Herbert Arcand did not respond to the Gazette’s requests for comment, but told CBC last week that the report was one-sided and a “personal attack on certain individuals.” He dismissed the report in its entirety.

An investigation into the band’s finances was initiated by former interim chief financial officer, Loretta Burnstick. She is the sister of current chief Kurt Burnstick.

Burnstick said she was employed in December 2015 after chief and council became concerned over incomplete accounting and finance processes, as well as a number of bounced cheques made out by First Nation.

She said she brought a number of irregularities in payments to staff to the attention of chief and council. In March a quorum of five passed a band council resolution appointing Meyers Norris Penny (MNP) “to provide comprehensive investigation services into the employment activities of the past and present elected officials and staff of the Alexander First Nation.”

The document, which examined 36,178 pages of documents and 22.8 gigabytes of electronic data, identifies over $405,000 in unexplained payments to former chief Herbert Arcand.

Among the chief’s questionable transactions is a gross salary amount of $9,200 in 2015 – when he was no longer chief – and $113,653 worth of cash advances on his band credit card.

Herbert Arcand has not responded to requests for interviews.

Another $638,0000 of unexplained payments were made out to current tribal administrator Alphonse Arcand.

The report found that $16,462 of payments for extra duties and another $11,500 in salary advances – which have not been repaid – were authorized by only himself. The report also identifies $349,878.94 in payments made directly to Alphonse Arcand’s credit card.

Alphonse Arcand said that his personal credit card was regularly used by the finance department to purchase goods and services for the First Nation.

“These amounts were not for my personal benefit,” he said. “The MNP report showing the payments to myself without specifically reporting my credit card being used for Nation business was incomplete, reckless and out of context and has caused significant distress to myself and the community.”

The remaining $1.1 million in unexplained payments identified by the report were split among six employees. The employees in question no longer work for the band.

Coun. Armand Arcand, who originally agreed with the need for a forensic audit, said he never would have signed the resolution if he had known only eight individuals would be investigated.

“It’s like (MNP) were told who to (investigate). That’s not really an audit,” he said in an interview Sept. 16.

MNP states in its report that it “received instruction to examine financial transactions and payments in respect to” eight specific individuals and cautions that it “relied upon the information provided to us by AFN.”

Armand Arcand believes the individuals named in the report were unfairly targeted. He also states that chief and council never reviewed the file before it was presented to community members in an Aug. 4 presentation.

“Their names are all over the community right now,” he said.

Burnstick encourages current chief and council to pursue the investigation into the remaining current and former staff and elected officials. She said the investigation initially focused on “crucial positions within the administration,” but was never meant to stop there.

On Friday, it was reported that a computer server was removed from the band office. Burnstick said the server was removed under the direction of her brother Chief Kurt Burnstick and is being held for safekeeping, as some of the band’s leadership, including the chief, pursues the completion of the forensic audit.

Chief Burnstick did not respond to repeated requests for comment.

Coun. Allen Paul said the removal was not authorized by a quorum of council.

Troubled by the missing server, as well as several other issues in the community, Paul said he is requesting an emergency meeting with the department of Indigenous and Northern Affairs Canada.

The forensic audit presentation has been presented to the RCMP by a group of concerned community members for possible investigation.

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Michelle Ferguson