On March 31, Indian and Northern Affairs minister Chuck Strahl announced First Nations communities across Canada would be subject to a new audit clause which will be added to all 2008-09 funding arrangements, much to the dismay of the Assembly of First Nations of Quebec and Labrador (AFNQL).

When asked if there had been any previous problems with First Nations’ accountability in terms of governance that would have prompted these new measures, INAC representative Margot Geduld was quite defensive. “I am not sure if you understand exactly what this is. This particular clause is in fact really just to clarify and strengthen INAC’s ability to conduct audits of funding agreements. It’s something that other departments and agencies have in place,” she stated.

Throughout the rest of the interview Geduld responded only by reading from press releases that are available on the INAC website.

She continued, pausing when she lost her place in the document, “They (other agencies) often have more comprehensive audit-related clauses in place in agreements. As part of a response to the Office of the Auditor General regarding accountability, the clause will ensure transfer payments are used as intended. This particular clause is being put into place and will be an amendment in the subsequent agreements with First Nations.”

When asked if other fiscal policies were being dropped as a result of this new audit clause, if error margins would be changing and what types of scenarios would prompt an audit, Geduld once again only responded with quotes from INAC’s website.

“This particular process is going to give INAC the ability to conduct audits to ensure, as I was saying, that First Nations have the appropriate management, financial and administrative controls in place. The occasion to conduct an audit would arise under specific circumstances. These circumstances would possibly be requests by chief and council, information contained in the audited financial statements of First Nations and tribal councils, results of audits and evaluations, management practices reviews, and compliance reviews previously conducted by INAC,” she read.

While Geduld remained evasive throughout the interview and kept repeating the same statements, AFNQL president Ghislain Picard had much more to say on the new audit policy.

When asked what he thought of INAC’s new policy, Picard responded, “It’s surprising that this government would try to discredit First Nation governments as if corruption was rampant in communities. It’s unfair and unjustified that this government would go to such extremes.”

Picard cited how back in 2003 the Auditor General, before the Standing Committee on Aboriginal Affairs, demonstrated “that a good 90% of First Nation governments had no difficulties and no problems related to fiscal accountability. This has

been supported not only once but a number of times by the auditor general. And, it’s been demonstrated that First Nation governments have been responding to the requests by the government, completely and adequately.”

The December 2002 Report of the Auditor General of Canada, titled Streamlining First Nations Reporting to Federal Organizations, stated, “First Nations reporting requirements established by federal government organizations are a significant burden, especially for communities with fewer than 500 residents. We estimated that at least 168 reports are required annually by the four federal organizations that provided the most funding for major federal programs.”

The same report from the Auditor General also said, “We are concerned about the burden associated with the federal reporting requirements. Resources used to meet these reporting requirements could be better used to provide direct support to the community. Steps need to be taken to streamline reporting requirements. The current program structure established by federal organizations is an obstacle to reforming reporting requirements and needs to be reviewed.”

When asked if INAC already had stringent audit procedures in place prior to the latest audit clause, Picard responded, “Certainly! If you look at Canada, there is probably an average of 60 different reports in any given year that are presented to the department. And to me that should explain the relationship that exists between the federal government and First Nation governments.

“But at the same time, this government is certainly not looking at its own accountability to First Nation communities which for us has to be put out there as well. It is because of the fact that, sadly, a lot of the funding arrangements contribute to the situation, where you have communities that are highly dependent on government subsidies. Yet, when it comes time for the Department of Indian Affairs to do its annual reporting, the information is passed on to the government and not to our communities. For us, this is certainly a contradiction.”

Despite the AFNQL’s disappointment with the enforcement of these audit clauses, the audits will continue as long as the Conservative Party is in power.