FSIN Audit Reveals $30 Million in Questionable Expenditures

A forensic audit of the Federation of Sovereign Indigenous Nations (FSIN) has identified over $30 million in questionable expenditures. The audit, conducted by Indigenous Services Canada (ISC) and administered by KPMG, covers the period from April 1, 2010 to March 31, 2024. The finalized report, which has been released to the public, includes eight recommendations aimed at enhancing transparency and accountability within the organization.

The audit flagged $3,732,982 as ineligible program expenditures, while $30,362,990 was noted as questionable spending. An additional $155,595 was categorized as unsupported. The review highlighted several instances where expenditures did not comply with the terms and conditions of government funding. A significant portion of the flagged amount relates to the $30,024,786 allocated to the FSIN as COVID-19 relief funding.

The ISC stated, “Expenditures were categorized as questionable in the amount of $23,451,907 where we were unable to obtain complete supporting documentation to determine eligibility.” This included potential recoveries of $60,335 in ineligible expenditures and $1,050 for unsupported spending. The audit reviewed a total of 34 samples amounting to $2,618,336, which lacked appropriate approvals.

Recommendations for Increased Accountability

The audit presents several recommendations for the FSIN to enhance its financial governance. It suggests a thorough review of all travel expenditure policies, emphasizing the need for prior approvals for all trips. The report highlights various issues, including $3,000 in travel expenses claimed by a vice chief who was on unpaid leave and approximately $48,000 in unexplained travel costs.

Moreover, the audit raises concerns over substantial pay increases for FSIN executives. A briefing note prepared for the FSIN’s treasury board on November 5, 2020, proposed a $60,000 increase to the Chief’s remuneration and a $40,000 increase for the Vice-Chiefs. It remains unclear whether these adjustments included retroactive pay, potentially leading to overpayments of up to $147,000.

The report also noted that $7.9 million was allocated to administrative fees without adequate supporting documentation. Additionally, nearly $1 million was spent on a new office for the FSIN.

The Canadian government has emphasized the necessity for strict adherence to travel policies and improved tracking of administrative fees, recommending that these be managed by a separate department.

Ongoing Investigations and Future Steps

As of now, FSIN leadership has not responded to multiple requests for comment regarding the audit findings. The Royal Canadian Mounted Police (RCMP) has not provided updates on whether a criminal investigation is currently underway.

With the completion of this audit, the FSIN faces significant scrutiny over its financial practices. The recommendations outlined by the ISC aim to restore public confidence and ensure that federal funding is utilized effectively and transparently. The ongoing discussion around these findings reflects broader concerns about accountability in organizations managing public funds, particularly those serving Indigenous communities.