Iqaluit (Oct 23/06) - Police have been called in after a financial audit of the former regional office of the Kivalliq Wildlife Board (KWB) in Arviat discovered an estimated $330,000 in unpaid taxes and missing funds.

The KWB funneled money to the regional Hunter and Trappers Organizations (HTO) through core funding it received from the Nunavut Wildlife Management Board (NWMB).

The Arviat office closed in August 2004 after an operational review found significant infractions had taken place and financial records could not be located.

The KWB has been working with auditors to determine its financial position since the closure of the regional office.

According to board secretary-treasurer Willie Nakoolak, auditors were unable to account for $138,863.

As well, the audit determined that no tax was deducted from payroll over a 30-month period, amounting to $191,000. The Arviat KWB office administered the payroll for HTO managers in four Kivalliq communities.

Nakoolak said the board was worried that regional and HTO board members and managers who received honoraria through centralized payroll, as well as casual employees during that time, would be liable for non-payment of income tax on money they received.

He said the board paid $191,000 to Revenue Canada in August.

"Basically, we made that decision because these people were guilty of no wrongdoing," said Nakoolak.

"There's still another $51,000 owing in penalties and interest.

"However, because of the circumstances, we're hopeful we'll be able to get a substantial amount of that cleared or forgiven under the fairness legislation," Nakoolak said.

The KWB decided to turn over its files on the former regional office to the RCMP during a board meeting in Rankin Inlet this past week.

Nakoolak said the board will also contact the former administrative head of the Arviat office to advise her of what has taken place and try to recover some of the missing money.

The KWB is being supported by the Wildlife Secretariat, which was created in 2005 to administer its funds.

Since then, the secretariat has worked to clean up the HTOs' books and improve support for the HTOs and the NWB, but the job has not been an easy one.

During an August training seminar in Rankin, it was estimated about half of Nunavut's 27 HTOs and three regional boards owed money to Revenue Canada, with at least six owing a substantial amount.

The secretariat's executive director, Richard Connelly, said Revenue Canada has given a vote of confidence for what the fledgling organization is trying to accomplish, and has given it some flexibility to get the issues cleared up.

He said the secretariat and the NWB are worried about how the situation will be viewed at the federal level, especially after the Berger report recommended increased HTO funding.

Those negotiations are still ongoing.

"Obviously we're concerned because this is a black eye for the NWB," said Connelly. "But the board has chosen to be honest and accountable as to what happened.

"The secretariat believes they've taken the right approach and, hopefully, the negotiators will see that."

Connelly said many of the financial mistakes boil down to a lack of controls.

He said those controls have been put in place through the secretariat to ensure this doesn't happen again.

"Hopefully, that will shed a positive light on the negotiations.

"The feds may see there have been a lot of mistakes made, but it's now going in the right direction."