This post is a bit unusual, in that it raises no legal issues per se (but I’ll come back to that at the end), but demonstrates the relatively extreme amount of power that the government may exercise over First Nations – all through the power of “contract” (though we learned in the Attawapiskat case that a consolidated funding agreement is no ordinary contract).
Through these comprehensive agreements, in which the terms are effectively dictated to First Nations, AANDC is able to control what programs are delivered, how they are to be delivered and how results are to be reported under those programs. Doesn’t always (or often perhaps) leave a lot of room for local self-government, or more accurately, self-administration.
A more subtle point on such funding agreements is their length and complexity. The complexity of funding agreements means it can be very easy for First Nations to get ‘caught offside’ on some technical requirement (which may or may not be very important) and run afoul of its commitments.
The flip side of those funding arrangements is that it is also very easy for AANDC to run afoul of its responsibilities! When First Nations run afoul of their commitments, it is often raised by the department, and usually picked up by a number of press outlets as a ‘mismanagement’ or ‘corruption’ story. When the department runs afoul of its commitments (or is accused of sloppy administration), it is usually by the Auditor General, and similarly receives some degree of press coverage as an uncaring or incompetent department.
Audits are back in the news, it seems, as an audit, allegedly of Attawapiskat First Nation’s housing program, was leaked out recently. The release of this audit was accompanied by a series of relatively coherent lines alleging that the Audit concluded there is rampant mismanagement at Attawapiskat First Nation.
This audit has nothing, or at best, very little to do with Attawapiskat’s actual finances. Page 2 outlines the scope of the audit. At no point does the “objective and scope” mention Attawapiskat First Nation. It does however state:
The objective of this internal audit was to “provide the Deputy Minister and Minister of AANDC with assurance that the AANDC management control framework in place was adequate and effective in ensuring compliance with Treasury Board and departmental policies and directives governing transfer payments and that AANDC monitoring, oversight, and reporting practices were effective and functioning as intended.”
Moreover, the recommendations that the Audit makes are not directed at Attawapiskat First Nation, but rather at AANDC. Specifically:
The Audit and Evaluation Sector recommends that:
1. The Ministerial Loan Guarantee process should be reviewed, in consultation with CMHC, giving consideration to the following:
• Developing stricter enforcement practices with respect to eligibility requirements and taking remedial action with regard to non-compliance;
• Implementing practices to certify completion of housing units by a suitably qualified professional according to National Building Code of Canada standards or an accepted equivalent set of standards;
• Conducting a risk-based periodic review of First Nation inspection records; and,
• Developing formal practices (e.g. Memorandum of Understanding between AANDC and CMHC) to require that the results of CMHC Physical Condition Reviews and client visit reports be shared with AANDC as a mandatory requirement of the eligibility process.
2. The Capital Facilities and Maintenance (CFM) Program terms and conditions should be reviewed, giving consideration to the following:
• Including eligibility requirements which require demonstrated financial management capability with respect to the First Nation’s housing program (e.g. Replacement Reserve Account, collection practices, reliable housing reports);
• Adding the requirement that a separate Housing Authority be established as a CFM eligibility
• Discontinuing the practice of allowing minor core capital to be used for the purposes of debt
• Clarifying housing report definitions and developing housing performance indicators which can be used to assess maintenance needs and establish a baseline on which to measure ongoing
Given that the audit was directed at AANDC management control systems, rather than at Attawapiskat FIrst Nation, it is entirely possible that transactions which lacked documentation may not have been undocumented at all – just undocumented at AANDC!
To be fair, it is quite possible that Attawapiskat First Nation does have weak financial controls. And that the ‘undocumented transactions’ lack proper documentation both at AANDC and in the community. This audit; however, was focused on and made conclusions about AANDC’s financial controls. To the extent the press represents this audit concludes Attawapiskat First Nations actual finances are in disarray, they are misleading the public.
To me,this episode is less about a ‘smear’ campaign (though I can see how one could reach that conclusion) and more about the inability of AANDC – an entity which is large, sophisticated and dictates the ‘rules of the game’ to First Nations, to manage increasingly unwieldy and complex financial arrangements. This case points to the growing need for genuine reform of administration, at the community, regional and national levels and in terms of financing, delivering and reporting on both funding and outcomes.
As is usually the case (whether AANDC or the Auditor General is doing the ‘accusing’), the need for administrative reform is going to be lost on politics — to my mind, the most unfortunate aspect related to the timing of this report’s release/leak. I don’t think AANDC is genuinely interesting in any meaningful reform (indeed, if administration is a problem at Attawapiskat, this report certainly doesn’t seem to be suggesting any community level solutions) and I certainly don’t believe Attawapiskat’s leadership, First Nations leadership or even First Nations grassroots are particularly interested, either (because they are consumed with the, I think reasonable, accusation this audit is being released as some kind of ‘smear’ to turn the press against Attawapiskat’s Chief).
And that’s really a shame.
Because the only serious indication I’ve seen that practice around funding agreements might change comes from the Attawapiskat case at the Federal Court, where the Court suggested that funding agreements may implicate the Honour of the Crown.
If First Nations Chiefs and AANDC officials can’t agree on how to meaningfully reform funding agreement policy, then it may be that the court’s may have to impose reform on them. It would be expensive, time consuming and uncomfortable – but it may be one of the few ways left to achieve progress in such a polarizing discussion (and an even more polarizing debate).
I’m sure many would prefer if reconciliation could be achieved through purely political processes (for a variety of reasons), but I think reconciliation can only work if courts are prepared to step into debates where political action and negotiation is unable to deliver any meaningful progress. But the alternative, at least on this issue, is no progress at all (and indeed, very little space for any reasoned debate).