Ottawa is blaming flood victims when it criticizes First Nations leaders over how compensation funds are spent, the head of the Assembly of Manitoba Chiefs said Thursday.
Grand Chief Derek Nepinak said he takes "strong exception to First Nations being described as prone to financial mismanagement and fraudulent activity regarding the administration of disaster assistance funding."
His statement follows the findings of a federal audit that raises red flags over unexplained payments from a $10.5-million flood fund traced to band leaders at Peguis First Nation.
Criticizing how the money was spent amounts to blaming First Nations when they're victims of a disaster, the grand chief said.
"This is a classic divide-and-conquer tactic employed by governments time and time again," Nepinak said in a statement titled "Don't blame the First Nations for flooding."
In an interview, Nepinak said he used strong language because he's growing increasingly frustrated with the federal government.
He said the audit's findings don't make sense in light of how the system works.
Peguis First Nation leaders don't manage funds on their own, he said.
Ottawa retained a chartered accountant to administer the band's finances, a common strategy used when First Nations are in debt.
In this case, the co-manager would share equal liability with the First Nation and every expenditure would have been scrutinized first.
That doesn't seem to be the case with the flood funding, suggesting the audit has a political purpose, Nepinak said.
"The co-manager is not being called out. And there's an expectation that when you're forced into co-management that there is an added level of scrutiny that prevents issues like the one being raised now," Nepinak said.
For Ottawa to reach the conclusion it did may suggest there's something wrong with its own system of financial intervention.
"If the department is pointing a finger, they're really pointing a finger at themselves," he said.
Peguis Chief Glenn Hudson said in an earlier interview the co-manager, Dan Favreau from the Winnipeg accounting firm Meyers Norris Penny, will file a rebuttal that will demonstrate the federal audit was wrong.
In an email, Favreau deferred to the chief when asked for comment.
A federal spokeswoman said by email Thursday Ottawa never received a response to the audit findings from Peguis or its co-manager, even though one was requested.