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The organization that represents 74 First Nations in Saskatchewan says it will fight Indigenous Services Canada (ISC) in court over an audit of its spending that found the organization must repay more than $12.3 million.
In a news release, The Federation of Sovereign Indigenous Nations (FSIN) said it has received ISC’s final decision and “does not accept” it or the $12,376,807.40 the federal department has classified as ineligible spending.
FSIN said it has started legal action but did not provide details.
“ISC may have concluded its process, but this matter is not concluded for the FSIN,” FSIN Chief Bobby Cameron said in the release.
FSIN says almost $8 million of the contested amount is for personal protective equipment (PPE) bought during the COVID-19 pandemic. It says ISC representatives confirmed on June 12 that those purchases were substantiated and removed them from the list of disputed expenses.
“We are surprised that this would be added back on despite the ample evidence provided and the advice of their own ISC staff,” the release said.
“We remain confident that when this matter is subjected to a fair and independent review, that all expenditures will be proven eligible and the allegations proven false,” Cameron said in the release.
CBC News has reached out to ISC to confirm when the decision was delivered to the FSIN and what it states.
The audit
The forensic audit, carried out by accounting firm KPMG for ISC, covered FSIN spending from April 2019 to March 2024.
KPMG reported auditing $47.1 million in transactions logged by the FSIN, and flagging $34.3 million worth of them. It classified $3.7 million as “ineligible,” $30.4 million as “questionable” and $156,000 as “unsupported.”
KPMG’s presentation said the “questionable” expenses were those without complete supporting documentation. It said they were primarily related to consultant expenditures where “the deliverables and rationale for the procurement appear vague.”
The largest amount flagged in the audit was $23.5 million in questionable expenses related to COVID-19 funding.
Between April 1, 2020 and March 31, 2023, KPMG reported that the FSIN received $30 million in COVID-19 related funding. It audited $26.5 million of those funds, and found that only $3 million of the reviewed transactions could be classified as “eligible.”
KPMG also questioned $8 million in administration fees and most of the “internal charges,” including nearly $74,000 worth of excess photocopying charges.
The audit also flagged payments to a former employee, classifying $246,524 paid to that person as “ineligible.” KPMG said the person received money through a contract with FSIN to a personal company “to perform services that appear to align with their responsibilities as an employee,” and received a severance package that appears to have been inappropriate.
