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Audit exposes native group's flood missteps

First letter details spending woes

Mike Bruneau

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Mike Bruneau (PHIL HOSSACK / WINNIPEG FREE PRESS FILES)

Misty Lake Lodge owner Mike Bruneau is suing MANFF for $3 million in unpaid bills for evacuees housed at the lodge.

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Misty Lake Lodge owner Mike Bruneau is suing MANFF for $3 million in unpaid bills for evacuees housed at the lodge. (KEN GIGLIOTTI / WINNIPEG FREE PRESS FILES )

OTTAWA -- The Manitoba Association of Native Fire Fighters transferred hotel loyalty points to board members for personal use, didn't care about properly managing evacuation costs and was unable to provide a full accounting for its management of the 2011 Manitoba floods, an audit firm hired by the federal government reported last winter.

KPMG was hired by Ottawa in April 2013 after allegations of financial abuses and mismanagement were made about how MANFF handled accommodation and meals for more than 2,000 evacuees from more than a half-dozen Manitoba First Nations in the spring of 2011.

Sylvie Lecompte, the director of the assessment and investigation services branch of Aboriginal Affairs and Northern Development Canada, wrote to MANFF executives in January 2014, to inform them of what KPMG investigators found after nine months of investigations.

She said KPMG couldn't give a full accounting because MANFF had yet to provide its full financial information, or its claims submitted for expenses related to the 2011 flood.

"We understand that MANFF's auditors and co-managers are currently tasked with correcting these issues," Lecompte wrote in a confidential letter.

KPMG said it couldn't say whether MANFF was in compliance with its agreements and MANFF staff acknowledged "cost and value for money were not a major focus in decision-making" because whatever the costs were, they would be claimed and paid for by AANDC.

"MANFF's financial systems were not up-to-date and adequate financial reports were not produced," says the letter.

MANFF staff wasn't bothering to try to help sort it out, either, but was relying on its auditors and co-managers to do that, the letter says.

KPMG reported MANFF was in over its head trying to manage the 2011 flood evacuations, which at the time of the letter-writing were 27 months long and counting.

As of July 29, 1,953 people from six First Nations in western Manitoba were still out of their homes, which were permanently damaged in the spring of 2011.

KPMG also found a number of questionable costs and decisions, including overpaying and over-ordering snacks for evacuees, sending an excessive number of people to a search-and-rescue competition in Toronto and paying one employee $42,000 a year in overtime claims without proper documentation.

KPMG also found MANFF board members received the equivalent of $61,800 in reward points for Canad Inns hotels from points accumulated by the payment for evacuee rooms.

Nobody at MANFF responded to the Free Press request for comment. Mike Bruneau, the Manitoba hotel owner who blew the whistle on the problems with MANFF's management in April 2013, said nothing in the letter surprises him. Bruneau is suing MANFF for $3 million in unpaid bills for evacuees.

Bruneau said Thursday he was told MANFF has not responded to the government's letter asking for a response to the allegations.

Despite all the allegations, and the findings of the audit, the federal government continues to fund MANFF -- it receives nearly $700,000 a year in operating funding -- and call upon it to help manage emergency evacuations during forest fires and floods on reserve. MANFF voluntarily withdrew from providing services for 2011 flood evacuees in 2013, and those people are now being managed by the Canadian Red Cross.

A spokeswoman for the department said "AANDC takes allegations and complaints of misuse of taxpayer dollars very seriously and is committed to ensuring that they are being directed toward the purpose for which they are intended."

Michelle Perron said the full KPMG audit will be posted on the web once it is available.

mia.rabson@freepress.mb.ca

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This should have been sorted out years ago!! Whom is stealing from whom!!!
The KPMG audit should be front page news when completed. We need to learn from these horrible mistakes, no accountability.

The NDP gov't needs to come forth and explain!!

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