The Waskaganish band’s finances are a in a desperate state, plagued by large cost overruns on major construction projects, numbers that don’t add up and serious flaws in record-keeping, say auditors.
“Budget control and follow-up seem to be deficient at all levels,” said auditors in a scathing report issued last July 24, just obtained by The Nation.
The report calls for what amounts to a complete overhaul in the band’s administration.
Numerous projects “were undertaken without detailed approved budgets,” said auditors. When a budget did exist, “the budgeted amounts differ substantially from the actual revenues received and the expenses incurred by most programs and projects,” the auditors reported.
Auditors discovered that funds earmarked for certain purposes were often spent on other projects that had gone overbudget. So much money was diverted in this way that the band started to have cashflow problems in its daily operations, auditors said.
In order to protect the funds of certain projects, band managers went so far as to hide band money in personal bank accounts – accounts for which the authorized signers were different from those of the band’s. The auditors strongly cautioned against this practice.
The eight-page report, entitled “Waskaganish Band management letter,” was prepared by Montreal auditors Pratte, Bélanger (see page 15 for excerpts).
The report could cause the
band problems with the federal government.
Indian Affairs could end up stepping in and freezing a band’s finances or taking back funds if money was diverted to purposes other than those intended, said Ian Corbin, Indian Affairs acting director of community development.
“There are steps that would be taken, in most cases, to recover the money or see that the intended project gets done.”
In an interview, Corbin said he isn’t informed on the Waskaganish situation, but in general the government could also withhold future funds until an agreement is reached resolving the problem.
The issue burst into the public eye in Waskaganish last summer after the band council decided take $450,000 in federal funds earmarked specifically for housing renovations and use it to cover the band’s soaring debt.
Residents of 69 old homes have patiently awaited the renovations for many years. The houses are in bad need of repairs and some are so moldy it is causing health problems for some residents. Some have rotting walls.
Although the band has released no official figures, its debt reportedly stands at about $8 million. Of that, $6.3 million is within the band’s “special projects fund,” which financed items like a gravel pit, police, aircraft, tourism marketing, economic development, a lagoon and an account called “past inactive projects.” The band’s debt grew by over $1 million in just the last year, according to band documents.
