Northern groups under microscope
Feds scramble to track down 'missing' funds
Yellowknife (Feb 14/00) - Two Northern groups were under the audit microscope as Human Resources Development Canada scrambled to find answers to questions raised in an audit of Transitional Job Fund grants.
The results of the random audit has caused a firestorm of controversy in Ottawa, as opposition parties and media hound the minister responsible, Jane Stewart, with questions about what happened with a billion dollars in grants given out across the country.
The audit took a random sample of 459 projects from April 1997 to June 1999. Of the audited projects, 37 were "flagged" by HRDC for further review, including two NWT organizations, the Dogrib Treaty 11 Council and Metis Nation. Six other grants to Northern organizations totalling nearly $3.8 million were among the original audit and approved.
For her part, Stewart, former Minister of Indian Affairs and Northern Development, said her office has recognized some accounting deficiencies, and emphasized that "money is not missing."
HRDC manager of communications Vicki Anderson said the initial reports were way off the mark.
"It was reported incorrectly," Anderson assured. "The information that had come out talked about a billion dollars, but the amount of monies in question is far less than that. It may be very minimal as it turns out."
"What they are doing is going back to these 37 and determining any information that was required," Anderson said.
Federal auditors visited the Dogrib Treaty 11 Council last week.
The council was awarded $242,600 for early childhood education training and early childhood education programs for Rae, Wha Ti, Rae Lakes and Snare Lake.
The Dogrib contract came under audit because the an HRDC audit said the sponsor claimed $71,874 in salary for nine months, while the agreement specified a salary ceiling of $40,000. Also, the auditors stated a $5,000 donation was claimed but not eligible.
Marcia Dean, co-ordinator for the Dogrib Community Services Board, said the basis for the extra scrutiny came about from an audit which was conducted unbeknownst to the board.
"They said, 'Well, it's because this auditor found some things wrong and we said 'What auditor?'" Dean said. She was told an auditor visited last summer.
A lone summer support worker was the only person at the office during the summer and Dean said the employee wasn't even aware an audit was taking place.
The auditor asked for a year-end report and Dean said the employee provided the report.
"Our year end runs from June to June with the school year and they were basing it from April to April with the federal fiscal year, so it didn't compute," she said.
Had the auditor contacted the comptroller or a board member, she said the mix-up would never have happened.
"We had no follow-up phone call from (the auditor), nothing. The director had no knowledge this audit had occurred, I had no knowledge this had occurred ... nobody knew," she said. "In fact this auditor that was out here, not only did he not have the courtesy to follow-up, but he didn't have the courtesy to read the approved proposal in the first place."
The diligent accounting by the comptroller quickly defused any concerns, Dean said.
"They asked to see every bit of paper and our comptroller, Dee Dee Steinwand, was incredible," she remarked. "She had every piece of paper they needed, every check stub, everything was documented, every invoice -- she was just incredible."
The new audit proved what the board had known all along, Dean said.
"We were below the $40,000 for the preschool teachers. We were below the $86,000 that was designated for the instructor for the Aurora College courses -- it was all there," she said.
As for the $5,000 donation that was disallowed, Dean said there was a human error and her staff will be very careful from now on in "using the 'D' word."
"It was a letter from St. Michael's Parish, requesting the money that had been set aside for the early child recreation program and that it be sent to the hamlet for them to do this," she said. "Unfortunately, someone had coded it as a donation, which it wasn't. It was to pay for this early childhood program.
"At the end of it, the auditor said, 'I can't believe what good records you have,'" she laughed
The Metis Nation was awarded a $200,000 contract for a Fort Smith youth employment program. According to the HRDC report, 19 per cent of the funding is not supported with evidence.
Accountant for the Fort Smith Metis Nation Local 50, Jim Hood, said to his knowledge no audit had been performed and that the money came through the Congress of Aboriginal People and that's where the audit should have taken place.
"The sponsor would be the Congress of Aboriginal People," Hood said. "So they were the ones who actually secured the funding and they just transferred the funds to us."
A financial officer with the Congress of Aboriginal People who refused to give his name said the audit did not take place in their office and since the money was spent in Fort Smith, that is where the audit should have been done.
Calls to Metis Nation president George Morin went unreturned.The Metis Nation was expected to make a statement about the audit today.
Other NWT contracts awarded, audited and approved by HRDC were:
-The North Slave Metis Alliance was awarded a contract for $954,630 for "community-based aboriginal labour force development."
-The Dogrib Treaty 11 received $1,539,250 for "community-based aboriginal labour force development."
-The Dene Nation was awarded a $970,400 contract to "ensure the implementation and on-going operation of child care in this region."
-The North Nahanni Naturalist Lodge was awarded $164,076 for "A project aimed at creating a sustainable tourist industry in the area. At the completion of the project there were six full-time and three seasonal workers."
-The Northwest Territories Literacy Council was awarded $64,115 for a family literacy project to "explore approaches to family literacy."
-The Town of Inuvik was given an $80,000 contract to "promote the hiring of students and summer recreation activities."