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IQALUIT - As the Nunavut Arts and Crafts Association (NACA) teeters on the fine edge of bankruptcy, some local artists are concerned they're being left in the dark.

The agency, which has fostered and supported Nunavut artists since 1998, remains frozen as a situation audit is completed on its activities.

"This is quite trying for everyone. We want to see this organization work, we want to see it be a success," said Steve Hannah, director of community economic development for the Department of Economic Development and Transportation (EDT).

Under its contribution agreement, EDT provides $200,000 in core funding to NACA each year to be used towards basic overhead and salary. It also provides funding towards the popular annual Nunavut Arts Festival and various NACA workshops.

According to Hannah, EDT requested repayment of some if its funds when financial statements from the 2005-2006 and 2006-2007 fiscal years showed the organization had "inadvertently misspent some funding" under the rules of that agreement.

When the first payment wasn't received by the end of August as agreed, a freeze was put on the funding.

The agency now appears to be $300,000 in debt, according to Hannah.

As well as bringing in a consultant to complete this current audit, EDT has provided "bail-out funds to the board to assist them in this trying period," Hannah said.

The association's members, meanwhile, would simply like some indication of where things are going. A request to have a special board meeting was turned down by the organization's chair, according to Iqaluit artist Mathew Nuqingaq.

"I'm getting so many phone calls from artists saying, 'What happened? What is going on?'" he said.

"We just need to be informed," added fellow association member, Danny Osborne. "The chair and board hasn't told us if they're looking for an interim director."

NACA represents about 800 members who work in various media throughout the territory. Since its inception, the non-profit society has provided workshops, promotion and other services around the territory and beyond.

Over the past decade, NACA has also been involved with the creation of Papataat (the collection of art at the legislative assembly), a sculpting symposium in Iqaluit and exhibitions in Canada and internationally, among other activities.

Last year, it also opened Gallery Atausiq to display artists' work and generate revenue.

Jerry Ell, chair of NACA's board, did not respond to repeated calls for comment.

In a letter to its membership obtained by Nunavut News/North, the board stated it terminated the employment of its long-serving executive director, Beth Beattie, in light of the current circumstances.

"Beth has served the artists of Nunavut since the creation of the association in 1999 and we thank her for her contribution to the world of arts and crafts," the letter stated.

"The Nunavut Arts and Crafts Association is close to bankruptcy. Of the contributions requested (totalling more than 500,000) for this fiscal year, we have only managed to secure one agreement for 200K. Of that 200K, we have only received 50K due to conditions that were not met by the association.

"The association owes over 250 thousand dollars to various creditors and departments of government. It is the responsibility of the board of directors to ensure the survival of the association and it is a responsibility that we do not take lightly."

The problem began when funds allocated for one project were carried over into another fiscal year, according to Beattie.

"Right project, wrong time," she said.

Over the past couple years EDT's funding schedule doled out funds in quarterly increments, sometimes late. In this case, funds were received three months before the end of the fiscal year, she said.

"Unfortunately sometimes the money comes in the last three months and it is difficult to spend," she said.

EDT then asked for its first repayment in August, shortly after it released its first quarterly payment.

"We had so many unpaid bills that I paid the rent, et cetera, instead of the first payment to EDT of $6,000," Beattie said.

"I think they are reacting crazy over a small amount of money," she said. "Maybe they don't really want NACA to exist, because to hold back core funding because of a $6,000 payment seems unfair."

Nuqingaq, who is NACA's former communications officer, said the situation likely boiled down to a lack of capacity within the organization to deal with the workload.

"I think they needed to have another person that would handle the fundraising, the financials. They just can't have one person doing anything," he said. "With the people, the artists I have talked to, they are asking, 'Why don't we try to get (Beattie) back, and have another person help her do the work?'

"When we lose good people we can never really get back to it," he added, pointing to the transience in many other Nunavut organizations.

Osborne also questioned the wisdom of having EDT involved with an arts organization at all.

"Arts in every other province and territory in the country is run by culture. The fact that we have no arts council in Nunavut has created a lot of confusion. You need an arts council with government involvement, but you need a completely detached advocacy group as well," he said. "Arts should go back to (the Department of Culture, Language, Elders and Youth), and there should be a good arts council started as well."

The situation audit will likely be complete by Christmas, and EDT would like to see the Nunavut Arts Festival go ahead as planned in the spring, according to Hannah.

"It is our fondest hope they'll be able to carry on as usual. Everyone wants to see this work," he said.

Iqaluit artist Claude Roussel said he believes the arts community will remain optimistic until then. "I think there's a real strength amongst each other," he said.