Archived - Investigation of Allegations at the Bonaparte First Nation
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Date: 2011
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Background
In 2009, the Assessment and Investigation Services Branch (AISB) of the Department began an investigation based on allegations of misuse of funds at the Bonaparte First Nation.
Allegations included: improper use of government funds to pay the First Nation's outstanding debt to the local school district; improper management of the social assistance funds; improper use of education funding and; unjustified increases in honoraria and travel.
KPMG Forensic Inc. was commissioned to investigate these allegations and in particular to consider if AANDC funds were compromised. The investigation focused on three funding areas: Social Assistance; Education; and Band Administration (honoraria and travel expenses).
Findings
Social Assistance
AANDC's regional office in British Columbia conducted a compliance review of the Social Assistance program for this First Nation independent of this investigation.
No recoveries were deemed necessary.
Education
Between 2004 and 2007, AANDC funded approximately $1.5M towards the full cost of tuition of the Band's agreement with the School District No. 74. At the end of 2007, approximately $800,000 of the dedicated funds had not been paid to the School District. This allegation was confirmed.
By February 2010, the balance owing to the School District No. 74 had been paid by the Band.
School Districts are now paid directly by AANDC.
We observe education funds being paid to a student who was not registered with an educational institution for a period of time where support payments were made.
From 2008 to 2010, $119,303 was charged to AANDC-funded programs for expenses that do not qualify under AANDC funding agreement (education and extra-curricular activities, such as gym memberships, hockey tickets, sporting equipment, sports sponsorship, travel to sporting events, clothing, jewelry). The recipients (a total of 125) include individuals and organizations.
In addition, approximately $164,000 was charged to other programs not funded by AANDC for similar expenses.
Band Administration
From 2009 to 2010, honoraria and travel expenses increased significantly. No Council minutes could be located to support the approval of this increase.
Honoraria
- 2008: $41,000
- 2009: $56,200
- 2010: $112,500
No travel policy could be found for the First Nation.
Recommendations
It is recommended that appropriate accounting and reporting process be put in place in order to meet AANDC contribution agreement requirement: "The Council shall maintain accounting documentation regarding all funding provided by DIAND and other Federal Departments in a manner that will allow for an audit."
At a minimum, the following policies and procedures should be developed and enacted:
- General financial oversight policy, including policies and procedures on the processing and approval of payments;
- Band travel policy;
- Sport and activity fee reimbursement policy.
It is recommended that AANDC recovers the funds ($119,000) that were misused for education and extra-curricular activities.