Indigenous Services Takes Closer Look at AFN Cash Flow in Financial Review Request

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Indigenous Services Canada secretly stepped up its monitoring of cash flow at the Assembly of First Nations shortly after RoseAnne Archibald, who called for a review of the lobby group’s books, was elected national chief, broadcast notes unclassified internals.

But even before that, ministry officials had “long expressed concerns” about the AFN reallocating program funds to address operational funding shortfalls, which the ministry’s agreements with the AFN wouldn’t allow – and what the APN denies ever happened. – according to a note dated November 5, 2020.

“ISC Sectors have also expressed concerns about the added value of certain Assembly of First Nations activities and proposals, including the lack of progress on key activities and recurring requests for deferral,” the memo reads. service, which was published through access to information. right.

As a result, the ministry has been reluctant to consider AFN requests for more flexible funding. Citing “continuing concerns and uncertainties,” the memo instead recommended that Indigenous Services undertake a “comprehensive review” of the department’s funding of the AFN.

Patty Hajdu, center, was sworn in as Minister of Indigenous Services in October 2021. Crown-Indigenous Relations Minister Marc Miller, right, previously held the position. (Adrian Wyld/The Canadian Press)

“It will be important to balance ongoing accountability and program considerations with the need to provide predictable and sustainable funding to partner organizations,” he says.

The review would eventually lead to a new quarterly monitoring program.

Archibald raised questions soon after

Before that happened, however, then-Ontario Regional Chief Archibald also began to independently question AFN finances.

She raised her concerns with the Chiefs of Ontario, which is made up of representatives from 133 First Nations, during a closed session in February 2021.

Documents released at the time were later released to the media, along with a confidential resolution in which the chiefs demanded an independent review of the AFN’s financial management policies.

A few months later, in June 2021, officials from Indigenous Services and Crown-Indigenous Relations came together to form “a technical working group” to address what the memos describe as “ongoing issues in the development of operational funding policies” at the AFN.

AFN National Chief RoseAnne Archibald requested a forensic audit at the 2022 Special Assembly. She previously demanded a financial review. (Ben Nelms/CBC)

In that fiscal year, which ended a month earlier, the departments together gave the lobby group $39 million for program-specific activities and core operational capacity. According to the documents, the money moved through an increasingly complex network of separate agreements.

To monitor these arrangements more closely, Indigenous Services officials have developed a plan to present to Deputy Minister Christiane Fox.

In a memo dated October 7, 2021, they proposed implementing a “quarterly financial report”, which would involve producing regular line-by-line breakdowns of the AFN’s current financial situation.

The program was approved and rolled out soon after.

Reports Reveal Details of Funding Structure

In February 2022, the department had already provided Fox with its second quarterly update. The report, which has not been made public so far, offers insight into how the Canadian government funds the AFN.

It reveals that Indigenous Services funds the AFN through program-specific agreements with various ISC branches, such as the First Nations and Inuit Health Branch (FNIHB), which offers 10-year flexible terms for health and social services. Its other sectors offer less flexible five-year agreements for things like education, housing and policymaking.

The memos have been censored, but they contain no evidence that the ministry informed the AFN of this new surveillance system.

On November 29, 2021, Deputy Minister Fox and Daniel Quan-Watson, her counterpart in Crown-Indigenous Relations, sent AFN CEO Janice Ciavaglia a letter explaining “how to best manage ongoing funding agreements necessary to support your work.

Clearly, the AFN had its own concerns about late payments, rigid agreements, and clumsy approval processes. The ministry conceded that the money the organization receives “is often reactive in nature”, making long-term planning difficult.

MPs pledged to try to improve the funding system, but they did not raise any of the issues causing internal hesitation.

They did not express any of the department’s “continuing concerns” about the “lack of progress” or the reallocation of funds. Nor did they mention the quarterly reporting system proposed, and potentially approved at this stage.

The AFN says it does not know the details of Indigenous Services’ internal reporting structure and was never made aware of the department’s concerns, according to a statement from Jonathan Thompson, vice president of operations and administration at the AFN. APN.

“No one at ISC has raised concerns with the AFN, including during our periodic funding audits,” the statement said.

“If you look at our annual statements, you won’t see any operating deficits.”

“Activities on behalf of the department”

The documents also offer a rare insight into the department’s deliberations on this issue.

For example, the October 2021 memo states that the Indigenous Services sectors fund the AFN “to conduct activities on behalf of the department.” The November 2020 memo states that FNIHB similarly funds the AFN “to support activities carried out on behalf of its programs.”

A July 2021 memo to the minister says Indigenous Services supports the payment of travel and engagement costs for National Indigenous Organizations, but believes these organizations need guidance “to ensure they can continue to carry out activities on behalf of the Ministry within the framework of the financial directives”.

In its statement, the AFN said it does not operate “on behalf” of the federal government, but rather Chiefs-in-Assembly who delegate the AFN its lobbying mandate.

In response to questions from CBC News, Indigenous Services said these considerations are not designed to control the AFN through money or use it as an agent of Liberal politics.

Neither Indigenous Services Minister Patty Hajdu nor Crown-Indigenous Relations Minister Marc Miller were made available for an interview. Their offices provided a statement instead.

The statement says the AFN and Canada have “a mutual interest” in seeing the department achieve its “long-term goals,” which are to eventually transfer service delivery to First Nations organizations themselves.

The statement said the quarterly funding update is one of many tools it uses and that, despite overlapping timelines, the heightened scrutiny is unrelated to Archibald’s calls for a financial investigation.

“Plans to implement a new Quarterly Funding Update predate National Chief Archibald’s call for a review of AFN finances and were, in large part, a need to put the appropriate financial management tools following the dissolution of Indigenous and Northern Affairs Canada,” the statement said.

Indigenous and Northern Affairs was disbanded in 2017 and replaced by Crown-Indigenous Relations and Northern Affairs, and Indigenous Services, which were formally created two years later with a new service delivery mandate, but which remain responsible to administer the Indian Act.

The National Chief’s office said via email that Archibald “welcomes any process that brings truth, transparency and accountability to the AFN.”

Archibald has an ongoing commitment to AFN Resolution No. 03/2022, which the Chiefs passed in July, the statement added.

The resolution directs a committee of chiefs to review the AFN’s finances and “if necessary” to order a forensic audit.

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