Audit into former MKO chief’s expenses nearly complete

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This article was published 15/02/2016 (3711 days ago), so information in it may no longer be current.

Northern Grand Chief Sheila North Wilson inherited an organization owing thousands in unpaid rent, saddled with a large deficit and plagued by lingering rumours about the fate of $1.9 million in federal funds and thousands in dubious expenses, loans and contracts.

Now, a federal audit into expenses claimed by former Manitoba Keewatinowi Okimakanak grand chief David Harper is nearly complete. Sources familiar with a draft version of the audit say it raises questions about roughly two thirds of the $450,000 in expenses Harper claimed since 2010. Accountants hired by Indigenous and Northern Affairs Canada are troubled by expenses claimed without enough paperwork to be verified and travel claims at odds with cellphone records that pinpointed Harper’s location.

A related portion of the audit looking at MKO’s tangled federally funded training program is also nearly done and could be given to MKO for review in the next two months. That audit sought to untangle $1.9 million in federal funding given to MKO for the aboriginal skills and employment training program (ASETS), money that was meant to be dispersed to several First Nations for job training but never was.

Officials at Indigenous and Northern Affairs Canada would not discuss the status of the audit, which was ordered in August 2014 amid a growing spending scandal at MKO.

INAC staff said the audit is in the “fact verification” stage.

North Wilson, who saw a draft of the expenses audit late last year, would not reveal what the draft contains, saying it was meant to be confidential and the figures could still change. And she said she wants to share information with the 30 MKO chiefs first.

“I’ve always told them I would be transparent about it,” said North Wilson. “They know as much as I know about where the process is at.”

But some northern chiefs say they have been waiting for nearly three years for clear answers following a series of spending scandals that rocked MKO in 2013 and 2014.

God’s Lake First Nation Chief Gilbert Andrews said he’s still “in the dark” about the outcome of both the federal audit and a series of earlier ones done by Winnipeg firm Lazer Grant. Andrews was among the chiefs critical of Harper and among those calling for heavy scrutiny of MKO’s books. He said it’s his hope North Wilson will now aim to answer the outstanding questions and fix problems that have lingered for nearly three years.

“That’s my hope, that she would address it and not sweep everything under the rug,” said Andrews, who sits on MKO’s executive council.

Documents reveal turmoil

A series of documents obtained by the Winnipeg Free Press reveal more about the internal turmoil that gripped the northern chiefs organization starting in 2013, prompting several senior MKO staff to be placed on leave, a vote of non-confidence in then-grand chief David Harper and two separate reviews of the MKO’s books.

The first review done by Winnipeg accounting firm Lazer Grant, began in August 2013 when several senior MKO staff were placed on leave due to allegations credits cards and expense accounts were being misused. Among those placed on leave was David Monias, who was previously fired in 2010 from his job as executive director of the Awasis child welfare agency after a review found misspending there.

Documents from auditors Lazer Grant suggest Monias and another employee wiped computer equipment and laptops of all data before handing them back on the day they were placed on leave. The equipment was reset to factory defaults and all data were lost, hindering Lazer Grant’s audit.

In September 2014, an official with Lazer Grant gave the northern chiefs a briefing on the audit’s preliminary findings. They included tens of thousands in personal loans made to an Island Lake chief and to Monias from MKO’s economic development company called Wabung between 2011 and 2013. There were no policies or bylaws that permitted Wabung funds for employee advances or loans. It was not clear whether the loans were ever repaid.

At about the same time, MKO chiefs asked Lazer Grant to expand its audit to include the ASETS training program.

But that audit appears to have fizzled. Few final results of Lazer Grant’s work have ever been made public or provided to chiefs, nearly three years later.

Federal audit launched in 2014

A bigger, more serious audit by the federal government was launched in the summer of 2014 and looked at the ASETS training program, Harper’s expenses, and the funds paid to MKO’s former finance director. INAC’s review includes transactions dating back to 2010.

In December 2014, APTN reported that auditors hired by the federal government found that MKO effectively kept $1.9 million in federal funds from ASETS instead of flowing the cash to several MKO member First Nations.

For example, Mathias Colomb Cree Nation determined that it was owed more than $579,000 from the ASETS program and its previous incarnation. In the spring of 2014, Chief Arlen Dumas wrote increasingly angry letters to MKO demanding the cash. He later became one of Harper’s loudest critics. He repeatedly called for a vote of non-confidence in Harper’s leadership.

One was held in September 2014 and Harper survived. But a year later, he was defeated in an election by North Wilson. Several attempts to reach Harper in recent days were not successful.

In the months since North Wilson was elected, new troubles have popped up.

MKO owed the Island Lake Tribal Council more than $35,000 in back rent due for office space MKO used to rent in the tribal council’s Winnipeg building.

In September, a few days after North Wilson was elected, the four chiefs who make up the Island Lake Tribal Council wrote to MKO threatening to rethink their involvement with the northern chiefs organization.

North Wilson said relations with the four Island Lake chiefs have since been smoothed over and the debt repaid.

‘We inherited a leaky boat’

As of last August, according to MKO executive council minutes, MKO also owed $129,000 in back rent to the Awasis child and family services agency. MKO rented space from Awasis in Thompson.

In recent weeks, Awasis has agreed to forgive the debt and MKO has found new offices in Thompson.

Since she assumed office, North Wilson said she’s also hired an outside consultant to review MKO’s staffing, expenses and administrative processes. That review is almost complete.

“We inherited a leaky boat, but we started plugging the holes,” said North Wilson.

She also said MKO is facing a deficit, but she would not say how much except that it’s less than $2 million. Asked whether Ottawa may want MKO to repay some or all of $1.9 million in ASETS funds, North Wilson said she was hopeful an agreement can be reached with the federal government.

Asked if she would release the federal audit publicly or attempt to recoup any money spent inappropriately, North Wilson said that’s something she would have to decide in consultation with the 30 northern chiefs.

maryagnes.welch@freepress.mb.ca