Forensic audit underway in Saddle Lake

A forensic audit into Saddle Lake Cree Nation’s band finances has begun, confirmed Rola Tfaili, a spokesperson for Indigenous Services Canada.

This comes after weeks of in-fighting between the band council and Chief Eric Shirt with accusations from all parties of mismanaging money and acting independently without consultation.

In an e-mailed statement on Wednesday, Tfaili said the accounting firm Ernst & Young was present in Saddle Lake on Oct. 24 to obtain the needed financial information. 

Tfaili said the department takes allegations regarding the misuse of public funds seriously. 

“The Assessment and Investigation Services Branch (AISB) of Indigenous Services Canada (ISC) received allegations regarding financial irregularities at Saddle Lake Cree Nation. To maintain confidentiality, the Department does not provide information which may lead to identifying the complainant(s).

“To that end, the Department has put a process in place to ensure these allegations and complaints are examined properly and that appropriate action is taken, and as part of the New Fiscal Relationship, the Department along with First Nation partners is continuing to work towards putting in place the building blocks for a mutual accountability relationship between First Nations and Canada that affirms the primary accountability of First Nations to their members.

“AISB initiated a forensic audit of funding provided to the Saddle Lake Cree Nation through the funding agreements in place between Saddle Lake Cree Nation and Government of Canada (through ISC).

“This forensic audit is being conducted in accordance with specific provisions of the funding agreements between and Saddle Lake Cree Nation that enable ISC to conduct such audits.

“As the investigation is underway, the Department cannot comment any further,” said Tfaili.

Chief and Council

The forensic audit is the latest escalation in an ongoing power struggle between current Chief Eric Shirt and the band council, which consists of former chiefs Eddy Makokis, Leonard Jackson, and Cherilene Steinhauer as well as John Large, Darcy McGilvery, Pamela Quinn, James Steinhauer, and Jason Whiskeyjack.

Shirt and the council were elected in June 2019 with Shirt winning the Chiefship by a narrow 55-vote margin.

The dispute between Shirt and council appears to be focused on a memorandum of understanding signed between TC Energy and Natural Law Energy (a treaty alliance of which Saddle Lake is a member) to pursue an equity interest in the Keystone XL pipeline project, as well as allegations of mismanagement of band funds stemming from a $20 million reduction in annual funding from the federal government, and recommendations from an organizational review completed earlier this year.

When Lakeland Connect reached out to Shirt he declined to comment. Shirt has published letters addressed to the band dated Oct. 13, Oct. 14, Oct. 25, Oct. 26, and Oct. 27.

Calls to other band councillors were not returned.

Petition calls for greater transparency and accountability

A Change.org petition by members of the Nation began circulating on Oct. 14 and as of Oct. 28 had 178 signatures online.

“What has transpired over the past few weeks calls into question whether some of our leadership are able to practice accountability, transparency and good governance to maintain peace, security and goodwill within our Nation,” reads the petition.

“It is sad, distressing and disheartening to observe the in-fighting, gossip and allegations posted in the public sphere (including the world wide web) for the world to see. 

“It is clear that some of the current leadership are unable to keep our membership informed in a way that practices our nehiyaw laws, values and teachings and therefore, we must take our rightful place to direct you about what needs to get done to ensure our Nation can operate in a way that serves the interests of the people in an open and transparent manner.”

The petition makes nine specific requests calling for the disclosure of all minutes, motions, and resolutions related to the Natural Law Energy MOU, financial decisions, sponsorships, and operations of band business entities.

The petition requests a forensic audit of the band’s finances from 2010-2020 “to be disclosed to membership at a public meeting that is advertised in advance for people to attend.”

The petition also includes a number of items relating to governance and developing processes to improve transparency and accountability, many of which mirror the recommendations made by Edmonton based Ballad Group.

Ballad Group completed an organizational review of the Saddle Lake Cree Nation earlier this year at the request of Chief and Council.

Ballad Group recommendations

“The challenge exists where the Tribal Administrator, Chief and Council, and the advisory boards each try to govern, direct, and influence departmental operation in different ways and in an uncoordinated fashion, resulting in confusion and erosion of confidence in leadership across the organization,” according to Ballad Group’s final report, dated May 1, 2020.

“A lack of financial control and accountability among elected and politically appointed positions, bordering on misappropriation of funds [sic], further erodes confidence in leadership and employee engagement, and represents a significant opportunity for savings.”

The report makes five key recommendations for immediate action.

These include changes to the organizational structure and framework, strengthened financial controls and accountability, disbanding the Economic Development Department, repurposing existing advisory boards, and strengthening communication and accountability between band administration and politically elected and appointed council and boards.

The authors of the report estimate annual savings of $1.5 million to $2 million if the recommendations are implemented and immediate savings of approximately $500,000 through the elimination of the Economic Development Department.

“The Economic Development department has consumed up to $500,000 annually, up to 80 per cent of which has gone to operating the office, and generally showing no return on investment or employment opportunities being created.”

Further to the immediate recommendations, the 75-page report highlights positives observed as well as areas for future improvement in each department of the Saddle Lake Cree Nation administration.

Band meeting cancelled

A band meeting scheduled for Oct. 29 was postponed due to the rising number of COVID-19 cases on the First Nation.

As of Thursday, Indigenous Services Canada spokesperson Rola Tfaili said Eric Shirt is the recognized Chief of Saddle Lake Cree Nation.

“The Department has not received notification from Saddle Lake Cree Nation of changes in leadership,” said Tfaili.

In his Oct. 26 letter, Shirt called for a general band meeting at the Saddle Lake Arena on Nov. 28 at 1 p.m.

In response to concerns about social assistance money and payroll being distributed to members of the Nation, Tfaili said “Social assistance payments and Band payroll can and will continue as previously planned and scheduled. Further questions regarding pay roll are best directed to Saddle Lake First Nation.”

In a notice posted to Facebook on Oct. 28, Interim Tribal Administrator Sheila Redcrow said “staff who use direct deposit for their SLCN payroll are also affected; so please be patient, finance is trying their best to have all payroll out by Friday, October 30, 2020. Hourly staff/contractors are impacted as well by no server/computers in finance.”