Manitoba FN organization hosting AFN election facing financial, political turmoil - APTN NewsAPTN News

Manitoba FN organization hosting AFN election facing financial, political turmoil

(Pictured: Manitoba Keeewatinowi Okimakanak Grand Chief David Harper)

By Jorge Barrera
APTN National News
When Assembly of First Nations chiefs on Tuesday decided to hold the election for national chief in Winnipeg this coming December, Manitoba Keeewatinowi Okimakanak Grand Chief David Harper, who will be the host, told the Halifax gathering his organization was “financially ready” to hold the event.

Harper’s claim, however, is disputed by chiefs within his own organization.

They paint a picture of MKO as a financially troubled organization run by a grand chief who is rapidly losing the confidence of the chiefs who elected him to the job.

According to documents obtained by APTN National News and interviews with three MKO member chiefs, the organization is swimming in red ink and there is a move to oust the sitting grand chief.

MKO chiefs are set to meet in Norway House, Man., next week from July 22 to 23.

All three chiefs interviewed by APTN National News requested anonymity for now. The chiefs will be identified as first, second and third MKO-member chiefs.

“I don’t have any confidence in Grand Chief Harper, especially in telling the truth,” said the first MKO-member chief.

APTN National News requested an interview with Harper, who is Halifax at the AFN’s annual general assembly, but he declined the offer.

MKO represents 30 northern Manitoba First Nation communities and some are among the poorest in the country. The organization handles about $17 million in program revenues.

The chiefs interviewed by APTN National News said they questioned Harper’s claim MKO is financially ready to host the event.

“That was pretty bold of him to say that…We don’t have any documentation to back up that statement that he made publicly,” said the second MKO-member chief.

“I don’t think MKO is in a good financial position to host the AFN assembly,” said the third MKO-member chief.

MKO spokesperson Brennan Manoakeesick said MKO would be relying on “third-party” dollars to fund the AFN election event. He said Manitoba and Tourism Winnipeg had already promised to put in $200,000 toward hosting the December gathering.

“MKO has very little liability,” said Manoakeesick.

Manoakeesick, however, said only Harper could answer questions about the organization’s finances.

The chiefs interviewed by APTN National News said it’s difficult for them to get any accurate information on the current state of MKO’s finances.

“Some of the chiefs who have asked about these improper authorizations are being vilified. We are made out to be the bad buys, basically, for trying to do the right thing,” said the second MKO-member chief.

MKO is in the midst of an internal forensic audit of all its books and those of its subsidiaries by Winnipeg-based firm Lazer Grant. The audit was requested by MKO’s executive council of chiefs.

The last phase of the audit, however, is being held up until MKO pays Lazer Grant for work done during the earlier stages of the audit.

According to a timeline of events distributed among a select group of chiefs and obtained by APTN National News, Lazer Grant reported in January of this year that its mandate had been “severely restricted.” The timeline alleged Harper was behind efforts to curb the audit.

“The mandate of Lazer Grant was arbitrarily changed by Grand Chief David Harper without a proper executive approval or a proper notice to all executive members,” said the timeline.

The seeds of the forensic audit date back to an MKO executive meeting in June 2013, following the resignation of financial officer Glen Buchko. During this meeting, chiefs were able to see Buchko’s contract for the first time and it was later revealed he was making about $250,000 annually.

“They were contracts that were authorized without the knowledge of the executive council,” said the second MKO-member chief. “There are serious transactions that are in question and we are very concerned.”

Lazer Grant was formally engaged to launch the forensic audit in August 2013, the same month MKO received a report from an independent accountant that determined the organization faced a significant “risk” as a result of its finances.

APTN National News has obtained the report sent by Bernie Shore, a Winnipeg-based accountant, to MKO that month stating he could not conduct an audit on the organization’s books because he had “not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the March 31, 2013, and March 31, 2012 financial statements.”

Shore’s report noted MKO’s accumulated deficit for the fiscal year ending on March 31, 2013, had ballooned to $976, 025. The report said MKO had accumulated an operating deficit of $609,058 by March 31, 2013. The report said this was a 71 per cent increase over the previous year’s operating deficit of $356,108.

“There is a risk that Aboriginal Affairs and Northern Development Canada may put the organization in co-management or worse still, the organization may be placed in a third-party administration,” stated Shore.

Shore’s report recommended a major curtailing of travel costs, which rang in at $336,374 in 2013.

“I would recommend that in the future travel must be on budget and that controls be put in place to ensure this doesn’t exceed budget. This is the second fiscal year where travel has consecutively been over budget. This is a critical point for the organization as MKO cannot sustain these operational losses,” stated Shore.

He also recommended MKO cut the money it spends on outside consultants, which reached $178, 944 in 2013 and $255,724 in 2012.

He said MKO hired consultants with “no budget lines being identified for a funding source.”

Shore stated MKO’s chiefs needed to set hard guidelines on both matters.

“This is bordering on a critical situation,” stated Shore.

Shore also highlighted problems with the use of MKO’s Visa credit card.

“There were several payments and charges on MKO Visa made during the year that were not supported by actual invoices or evidence of the purpose,” stated Shore. “Without an actual invoice and details of the purpose, evidence does not exist that the amount paid was a legitimate expenditure relating to MKO business.”

The third MKO-member chief interviewed by APTN National News said the financial irregularities are especially troubling given the level of poverty faced by many of the organization’s member communities.

“It is despicable, especially when he is not doing the advocacy he is supposed to do,” he said.

jbarrera@aptn.ca

@JorgeBarrera

 

 

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