Categories: Local News

INAC finds $5 million in suspect payments at Alexander

To read a copy of the letter summarizing the financial review, click here

Alexander First Nation officials may have used band and federal dollars to pay for groceries, Netflix and cash advances at casinos, suggests a federal financial review – one that found more than $5 million in improperly documented expenses.

The Gazette obtained a copy of a letter this week that describes a recent review of the band’s finances by Indigenous and Northern Affairs Canada (INAC).

The letter, dated July 27, 2017, is from Jean-Marc Lafrenière of INAC’s Audit and Evaluation Sector and addressed to Alexander Chief Kurt Burnstick. It summarizes a review the department ordered to determine if the band had used federal funds appropriately from April 2010 to March 2016. It asks council to review and comment on the findings by Aug. 18.

The review, conducted by Ernst & Young LLP, examined the expenses of 15 members of band council or band administration during 2010-2016, including Burnstick.

It found that these 15 people had received about $5.3 million in “unsupported” payments in this time period, defined as payments without proper receipts and documentation. Of that, some $2.5 million was estimated to have come from INAC funds.

Many problems

The review found a “general and widespread lack of supporting documentation and evidence of approval” in the band’s files for payments made by the band, and that the band lacked clear policies around financial management. Control and oversight of payments was inconsistent, with Coun. Marty Arcand telling reviewers that councillors were usually “handed a stack of cheques for signatures and asked to sign” without seeing supporting documentation (such as receipts) for them.

The review found that the band had paid travel expenses without having documented proof that the travel had actually happened, and made “widespread” use of cash advances without proper documentation. In most cases, these advances had not been fully repaid by the end of the study period.

The review found payments “for which we could not locate any supporting documentation,” and payments that were authorized by the same person who received them. The review also found cases where people had received Christmas bonuses from four band departments on the same day.

Of the $5.3 million in unsupported payments made by the band, some $1.9 million were made to pay for Visa credit cards linked to seven specific current and former band council and administration members, with another $1.7 million made on cards that could not be linked to specific Visa accounts. (The study did not determine if these were corporate or personal cards.) Some of those payments “appear personal in nature,” including cash advances taken at casinos, hotel stays, and purchases at Morinville-area grocery stores, a golf course, a pawn shop, and Netflix.

The review team noted that Burnstick had taken out two “significant” cash advances on a band credit card: about $44,000 in March 2014, and $13,500 in December 2015. Burnstick told the team that these advances were related to band business and included financial aid to band members. While he said he had documentation to support the advances, the team writes that, “We have not yet reviewed or received any such documentation.”

A damning report, says critic

Burnstick and other band councillors apart from Coun. Audra Arcand did not respond to requests for comment on this report. Arcand said she did not wish to comment.

When asked to review this report, Colin Craig, the interim Alberta director for the Canadian Taxpayers Federation and someone who had studied similar audit reports from governments across Canada, said it was a “damning audit.”

This was cash that was meant to provide services to band members, and that came from not only the federal government but also the band’s own oil and gas revenues, Craig said.

“If you were a band member, you should be doubly concerned.”

Craig said this report suggests that a large amount of federal cash had been improperly spent.

“What is the federal government going to do about it?”

In an email, Sabrina Williams, press secretary for the minister of Crown-Indigenous Relations and Northern Affairs, said that the department takes allegations of misuse or mismanagement of public funds very seriously. At Alexander’s request, it has brought on a third party co-manager to handle the band’s finances. The department was awaiting comments from band council on this review to determine next steps.

Kevin Ma: Kevin Ma joined the St. Albert Gazette in 2006. He writes about Sturgeon County, education, the environment, agriculture, science and aboriginal affairs. He also contributes features, photographs and video.