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Hill Dispatches

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Karl Nerenberg has been reporting on federal politics from Parliament Hill for rabble.ca since September, 2011. In his long career, he has won numerous awards as a broadcaster and documentary filmmaker.

The true scandal of First Nations' funding -- not the Deloitte and Touche version!

| January 9, 2013
The true scandal of First Nations' funding -- not the Deloitte and Touche version!

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It's sad to report, but the strategic leak of the Deloitte & Touche audit of Theresa Spence's Attawapiskat band seems to have had its desired impact.

The leak has tarnished the reputation of a woman who has only been Chief since 2010 -- the audit goes back to 2005 -- and it has significantly distracted national attention from the fundamental issues at stake.

For example, a friend of mine -- who, admittedly, has a busy life and may not follow these matters as closely as some -- asked if the dressing down Deloitte and Touche gave Spence means the Attawapiskat Chief might actually be going to jail. Was she, perhaps, trying to commit suicide, this friend asked, to avoid a life behind bars?

It might sound like an oddly naïve question -- but you have to remember that most Canadians are preoccupied with their own very full lives. Chief Spence's fast and all the issues associated with it are only flickering media images on the outskirts of their awareness. And so, if you tell them a lurid story of what seems like improper handling of millions of (taxpayers) dollars, with no context and no background, they'll naturally be impressed.

And, by the way, of the 409 transactions in Attawapiskat that Deloitte and Touche said lacked proper documentation, only about 30 were conducted on Spence's watch -- pretty small beer for the current band Chief, and nothing approaching any sort of scandal, let alone crime!

Sheila Fraser found a true scandal

But that's not the real point. The real point is the way in which the system for providing First Nations services is fundamentally flawed.

When she was Auditor General, Sheila Fraser repeatedly warned that the management and funding system the Government imposes on First Nations would almost inevitably lead to problems of the sort Deloitte and Touche identified in Attawapiskat.

Fraser's most recent damning report on the entire system came out in June of 2011.

It got some scattered media attention at the time, but was generally treated as "same old, same old" -- not as the unmitigated scandal Fraser evidently thought it was.

In the fall of 2011, when Aboriginal Affairs officials went before the Commons Public Accounts Committee to answer to Fraser's charges, no media -- except for rabble.ca -- thought that worthy of any coverage.

A leaked auditor's letter to Chief Spence -- dated last August and lacking any specific detail -- gets breathless "CBC has obtained a copy" coverage.

A departmental response to a thoroughgoing critique of First Nations funding and services throughout Canada gets zero coverage.

Sadly, it seems the best way to get the mainstream media's attention is to make them believe you've given them some kind of "scoop." It sure worked for this week's leaker.

The fact is, however, that the only way to make sense of the Attawapiskat audit is to read it in the context of what Fraser says about the whole system.

So, for those who missed it the first time, here are some of the former Auditor General's key points.

What's wrong with 'contribution agreements?'

To start with, Sheila Fraser explains that the federal government uses those strange beasts called "contribution agreements" to fund the delivery of services on First Nations reserves, and then she bluntly states:

"We see several problems with the use of this funding mechanism for the provision of core government services."

The first problem with the contribution agreement system is the lack of targets or expected outcomes, a basic feature of all sound administration.

"While the agreements state the services or actions to be provided, they do not always focus on service standards or results to be achieved."

Then, there is the issue of gaps in funding, gaps which force First Nations to scramble and improvise.

"Most contribution agreements must be renewed yearly ... we have found that the funds may not be available until several months into the period to be funded ... Consequently, First Nations must often reallocate funds from elsewhere to continue meeting community service requirements."

As well, Fraser notes that the agreements do not define who is responsible for what:

"The use of contribution agreements between the federal government and First Nations may also inhibit appropriate accountability to First Nations members. It is often unclear who is accountable to First Nations members for achieving improved outcomes or specific levels of services...”

'A significant reporting burden for small First Nations'

And then Fraser gets to the nub of the problem that Deloitte describes (but fails to explain) in the Attawapiskat case.

That is the issue of the onerous and inappropriate level of paperwork, record-keeping and reporting imposed on First Nations -- an issue Fraser raised with the Department of Aboriginal Affairs on numerous occasions, to no avail:

"Contribution agreements involve a significant reporting burden, especially for small First Nations with limited administrative capacity. Communities often have to use scarce administrative resources to respond to numerous reporting requirements stipulated in their agreements. We followed up on Aboriginal Affairs efforts to reduce the reporting requirements of First Nations and found progress to date to be unsatisfactory..."

'Long-term planning difficult'

Fraser also underscores the constant financial insecurity to which the federally mandated system subjects First Nations:

"The use of contribution agreements to fund services for First Nations communities has also led to uncertainty about funding levels. Statutory programs such as land claim agreements must be fully funded, but this is not the case for services provided through contribution agreements. Accordingly, it is not certain whether funding levels provided to First Nations in one year will be available the following year. This situation creates a level of uncertainty for First Nations and makes long-term planning difficult..."

'Lack of expertise for delivering key programs'

Finally, the former Auditor General points out the challenges that small and relatively poor First Nations communities face in providing complex services that, elsewhere in Canada, are provided by larger, well-resourced entities such as school boards:

"The federal government established each First Nation band as an autonomous entity and provides separate program funding to each. Many of these First Nations are small, consisting of communities that often have fewer than 500 residents. There are more than 600 First Nations across Canada. Many of them are hampered by the lack of expertise to meet the administrative requirements for delivering key programs within their reserves. They often do not have the benefit of school boards, health boards, or other regional bodies to support the First Nations as they provide services to community members."

Tip of the iceberg

And that is just a small part of the Auditor General's withering critique of abject federal government failure in the provision of basic services to First Nations.

It is a critique that Sheila Fraser repeated frequently throughout her tenure.

In her final report, on her way out in June 2011, Fraser came as close as a public servant can to throwing up her hands in despair and frustration.

She had to conclude that the federal government had failed, over a period of many years, to adequately deal with the vast majority of her recommendations.

Now, if there's a scandal worthy of national media attention it is in what Canada's Auditor General found, systemically and throughout the country; not in what Deloitte and Touche uncovered in one Northern Ontario community.

Anyone have a brown envelope?



Everyone should watch this Interview with Harold Calla on the Cheif Spece Audit. this Man has let the truth out. 

You ask who is Harold Calla while ket me intoduce him :Minister Duncan Reappoints Harold Calla as Chair of First Nations Financial Management Board


Set Video to 20:43  Minutes in to get his interview with 


Interview that Michael Hutchinson has with Harold Calla will inform you more about facts of Audit  You ask who is Harold Calla


OTTAWA, ONTARIO  - The Honourable John Duncan, Minister of Indian Affairs and Northern Development and Federal Interlocutor for Métis and Non Status Indians, announced today the reappointment of Mr. Harold Calla as the Chairperson to the Board of Directors of the First Nations Financial Management
 (FMB) for four years.

Set Video to about 20:43 minutes to bypass ist part of News. JUST CLICK ON LINK BELOW TO HEAR WHAT MR. CALLA HAS TO SAY 


tdot wants to know, "Where did the money go???" Here's your answer: http://www.huffingtonpost.ca/chelsea-vowel/attawapiskat-emergency_b_1127066.html

now read it.

TDot, wow, you need education bad.  But I dont have time, I just wanted to assure you that Chief Spence did not hire her boyfriend.  The only one who could hire for that position is INAC, the government.  I know which sensationalizing news paper you have been reading, and I am sorry you were misinformed, no, not misinformed, just under informed.  The paper or station you chose to listen to, only picks out information what would incite the most anger, never telling the whole truth.  I advise you to dig deeper if you want truth.  Chelsea Vowel blog gives a breakdown of the money if you need to see it. 

TDot, wow, you need education bad.  But I dont have time, I just wanted to assure you that Chief Spence did not hire her boyfriend.  The only one who could hire for that position is INAC, the government.  I know which sensationalizing news paper you have been reading, and I am sorry you were misinformed, no, not misinformed, just under informed.  The paper or station you chose to listen to, only picks out information what would incite the most anger, never telling the whole truth.  I advise you to dig deeper if you want truth.  Chelsea Vowel blog gives a breakdown of the money if you need to see it. 

The cost of living in Attawapiskat is about three times that of Toronto, while the amount of government funding for social services, housing, education, health, etc. in Toronto is twice that of Attawapiskat, on a per capita basis.

Meanwhile, there are plenty of poor people living hand to mouth in Toronto. Maybe the Harperite trolls should be asking themselves where all of Toronto's government money went.

Tdot: How about paying attention? Did you read the report? It states that there is no evidence of wrongdoing. There is strong evidence of bad book keeping. Not the same. The money went where it was supposed to go, they just kept lousy books becuase the government regulations they are trying to use are conlficting, redundant and confusing.

The report further points to ongoing problems on teh Federal side, including that the reporting regulations are conflicting, redundent and confusing. It also states that the Minsitry failed to follow their own guildelines regarding disbursment of funds, follow up and checking on paperwork and funding.

So, take a pill, guy, the money is safe. <smile>

Your column is total bunk.  If the 'administrative duties' are too overwhelming, perhaps Chief Spence's lover who is acting reserve manager and being paid over $800 a day to do just this, could take a pay cut and hire some more help.  I'm sure the residents of Attiwaspiskat could use the jobs.  

The question is: Attiwaspiskat got over 100 million dollars from the feds since 2005 not to mention millions more from DeBeers and has a $9million stock portfolio (which includes big oil, by the way) and yet A) there is no accounting for millions spent in the books, B) Chief Spence pays herself $60,000 as Chief and tens of thousands more as daycare manager, C) Chief Spence broke conflict of interest rules by hiring her partner as manager at over $800 a day and D) many people in her reserve live in third world conditions.  

What this has to do with the government is beyond me.  Where did the money go??? 

If there is a Canadian out there who has an open mind and a desire to find the actual truth, let them now stand and be seen. Let them raise their voices to this Conservative Government and not only lamely ask,--but finally, and unflinchingly, demand until they get--the answers to the questions about illicit activities of this Federal Government since it got into office. If you have any single iota of intent to throw your support onto this lynch wagon being powered by the Stephen Harper Conservative Government---first look into the mirror and ask yourself what amount of credibility this Government deserves at this point in time. If there is any sense in your head you will already know the answer to that question.

That Auditor General’s report really did speak to heart of the struggles that Indigenous communities deal with. Forced into a corner, Administrations and Councils are more accountable to Aboriginal Affairs & Northern Development Canada (AANDC) than they are to their own community members. The precarious nature of funding is an axe that hangs over the head of all Indigenous communities. Uncertainty is the name of the game. Band administrations have been forced, over the years, to play a greater role as “Indian Agent” to their own people, with intensifying draconian demands placed on them. The political speak regarding accountability, accountability, accountability is simply a whitewash and smokescreen of the real issues. A council can’t be accountable to its members because of the burden of accountability to AANDC, and its an accountability for such an irrational, illogical and oppressive system.

There really are so many problems relating to, and created by not just underfunding, but illogical funding and unreasonable funding requirements. Canadians don’t understand how Indigenous communities have been set up for failure. The set-up-to-fail process they’re stuck in right now makes initiatives like C-45 and other oppressive legislation and policy requirements that much more palatable for the Canadian public to support and accept. The treadmill that Indigenous communities are stuck on wasn’t designed to encourage long term, effective, or positive change. It is there to maintain a certain level of oppression and distraction from important issues like self-determination, cultural reawakening, or even simple, fundamental capacity building. This is an excellent article and it does speak to what is probably a core issue that has created so many other complex issues.

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