Forensic audit of FSIN finds over $34M in questionable, ineligible or unsupported spending

A summary of the forensic audit of spending at the Federation of Sovereign Indigenous Nations (FSIN) reveals the organization has millions in “questionable, ineligible and unsupported expenditures” over a five year period. The investigation by Indigenous Services Canada (ISC) into spending at the FSIN was launched in March 2024 to look into “various allegations raised, and where possible, determine if the Allegations are substantiated or not,” according to ISC. Accounting firm KPMG examined expenditures dating back to April 1, 2019 to March 31, 2024, focusing on allegations raised with the Assessment and Investigation Services Branch (AISB) “KPMG was asked to provide an independent and objective report on whether funds provided to FSIN by ISC through contribution agreements and other funding arrangements have been used for their intended purposes,” says a news release on ISC’s website. KPMG looked specifically at allegations of a lack of transparency in the organization, COVID-19 expenditures, travel expenses, pay increases to FSIN executives, payments made to a former employee, purchases and sales of fleet vehicles, procurement from certain vendors, the use of administration fees and costs related to the FSIN’s new office building in Saskatoon. According to the audit, $23.4 million in COVID-19 funding has been deemed questionable, ineligible or unsupported, in part because Indigenous Services Canada was unable to “obtain complete supporting documentation to determine eligibility,” according to the summary. It also says it couldn’t “assess how or if purchased Personal Protective Equipment was distributed to the 74 member First Nations of FSIN,” citing a lack of documentation. A whopping $10,946,593 was spent on administration fees. Of that $7,925,783 was deemed questionable, ineligible or unsupported. KPMG also looked at money spent on travel and found more than $316,000 in ineligible, questionable or unsupported expenditures. It noted that some of that was comprised of travel costs “incurred by a Vice Chief during an unpaid leave of absence.” “Questionable expenditures in the amount of $47,894 are comprised of costs that may be in contravention of FSIN’s Employee and Executive Travel Policies” and where KPMG was “unable to determine the travel purpose.” $1.5 million in spending on FSIN’s fleet vehicles was examined with $427,966 determined to be ineligible, questionable or unsupported. ISC recommended the FSIN consider “obtaining a fair value assessment of the vehicle in advance of an auction sale. Where vehicles are sold at less than fair value, accounting records should reflect a loss to FSIN to the benefit of the purchaser.” As an alternative, ISC says “FSIN could consider trading in fleet vehicles to the dealership when new fleet vehicles are purchased instead of auctioning to employees.” More than $580,000 was paid to a former employee during the period audited, and $246,000 was found to be questionable, ineligible or unsupported. An accounting of expenditures for the FSIN’s new office building showed just under a million dollars in questionable, ineligible or unsupported expenses. A number of recommendations have been made to FSIN according to ISC. They include looking at internal policies and procedures to ensure that trips are reviewed and approved in advance of travel to “ensure adherence to policies.” ISC also recommends implementing an FSIN Treasury Board review of proposed severance packages for employees prior to payment as well as  documenting the rationale for termination, and where terminated employees have been rehired, documenting rationale for rehiring. In the area of administration fees it recommends “FSIN and ISC discuss and formally agree to the process by which FSIN determines the appropriate amount of administration fees to budget for a given funding agreement as well as the appropriate use of same.” It also recommends that eligible administration expenses be allocated to a separate department to ensure that use of administration fees can be tracked. The FSIN has so far not commented on the audit findings. Some of the findings of the audit have been sending ripples throughout the Indigenous community in Saskatchewan since images from an ISC slideshow presentation to FSIN leadership Sept. 11, were posted on social media. ISC has not revealed who or where the complaints came from. The FSIN held its election in October 2024, and in spite of the ongoing audit, almost all of the existing leadership team were re-elected, including Chief Bobby Cameron who is in his fourth term at the helm, and First Vice Chief David Pratt who is serving his third term. Cameron is from Witchekan Lake First Nation in northern Saskatchewan and also serves as regional chief for the Assembly of First Nations. The federation represents more than 160,000 people in 74 First Nations across Saskatchewan. Continue Reading