Existing legislation fails to protect the economic rights of First Nations band members or allow them to hold leaders to account financially, critics say.
Band representatives across the country are calling for new legislation and measures, based on widespread consultations with grassroots First Nations members, to correct the problem.
"The system does not protect the rights of band membership," said Karen McCarthy, an off-reserve member of Alberta's Whitefish Lake First Nation 128, 220 kilometres northeast of Edmonton.
'Under the Indian Act there is no recourse for band membership to challenge their chief and council' - Karen McCarthy, Whitefish Lake First Nation 128
"The Indian Act system just protects the chief and council," added McCarthy, who has a management degree in First Nations governance.
In September, a CBC Edmonton investigation revealed an audit had identified $2.1 million in "unexplained payments" to a former chief and some staff at Alexander First Nation, which has a reserve northwest of Edmonton.
Since then, band members from eight communities across Canada have contacted CBC Edmonton with similar complaints about financial irregularities involving band leaders.
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McCarthy has recently held meetings to help foster greater understanding among band members about First Nations finances and rights.
"Under the Indian Act there is no recourse for band membership to challenge their chief and councils," she said. "And the system where we file grievances and allegations to INAC [Indigenous and Northern Affairs Canada] — it doesn't really go anywhere."
'We need help'
It's an issue Charmaine Stick hoped to see addressed at this week's Assembly of First Nations (AFN) special chiefs meeting in Gatineau, Quebec.
"They need to start listening to grassroots people," said Stick, a resident of Onion Lake Cree Nation. Its two reserves straddle the Alberta-Saskatchewan border, with an office in Edmonton to assist off-reserve members.
Stick earlier this month launched a court application, paid for by the Canadian Taxpayers Federation, to force her band administration to disclose detailed financial information.
She said the taxpayers organization took up her case after a three-year struggle in which INAC and the AFN refused to help.
"They (INAC and AFN) need to help us," she said. "We need help instead of taking our own leadership to court."
AFN did not respond to a request for comment.
Philip Chief, associate director of operations for Onion Lake, a leading oil-producing First Nation, said while the band does not provide copies of audits, they can be viewed at the administration office or at membership meetings.
Onion Lake drafts financial policy
The band has also drafted financial administration policy laying out rules around investment, conflict of interest and transparency, Chief said, adding investments into infrastructure total nearly $250 million.
"I'm not going to say every community is as lucky and fortunate as Onion Lake is," said Chief. "There's some communities out there that do require that overarching supervision or monitoring because of their lack of ability or because of their isolation."
'There's some communities out there that do require that overarching supervision' - Philip Chief, Onion Lake Cree Nation
The First Nations Financial Transparency Act (FNFTA), passed under the former federal Conservative government, aimed to respond to that need, in part by penalizing bands that did not submit annual audits.
But last year the federal court sided in a ruling with Onion Lake and other bands that refused to publicly report financial information.
They argued the requirement violated privacy and treaty rights, while undermining the competitiveness of business ventures.
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Two months after the ruling, Indigenous Affairs Minister Carolyn Bennett ended penalties under the law, noting most members continue to comply anyway. Her office has said upcoming talks with First Nations will look at new approaches.
In October, dozens from the Samson Cree First Nation marched in protest, backed by the collection of more than 300 signatures, to demand a forensic audit in that community south of Edmonton.
A few days later, Conservative MP and Indigenous Affairs critic Cathy McLeod raised their request with Bennett during question period in Ottawa.
"Any member of any First Nation can ask our government to provide the audited financial statements at any time," replied Bennett.
'Any member of any First Nation can ask our government to provide the audited financial statements at any time' - Carolyn Bennett, Indigenous Affairs Minister
Although anyone from a band can technically request a forensic audit, the chances of getting one are slim, according to McCarthy.
She said they require approval by the chief and band council, which pays for them.
"A First Nation with a council that isn't being transparent or accountable to their nation aren't going to do an audit on themselves," said McCarthy.
'Nowhere to turn'
Angela Flett, from Ojibways of Onigaming First Nation in northwest Ontario near Kenora, waited nearly a year to find out the federal government had rejected the forensic audit she and others had requested.
In a letter dated Dec. 10, 2015, INAC wrote that the investigation services branch determined her concerns were "not within" the department's mandate and "therefore we are unable to assist you in these matters."
The letter encouraged her to remain in contact with her chief and council.
But Flett said concerns had already been raised with the band leadership around spending, expenses and the investment of a land claim settlement. And annual audits don't reveal the entire financial picture, she added.
"We have nowhere to turn," said Flett. "The people that are supposed to be responsible for First Nations are not addressing these issues."
In the March budget, the Liberal government committed to invest $8.4 billion over five years into First Nations communities. But Flett questions whether it would filter down and "put a dent into the social problems" such as high unemployment, housing and suicide.
Flett called for an independent body to rule on disputes between band administration and members in a timely way. Creation of a band hotline staffed by experts to address ongoing concerns would also be beneficial, she suggested.
In a statement to CBC News, Onigaming Chief Kathy Kishiqueb said proper financial policies, controls and personnel are in place and independent audits are submitted annually to the federal government.
"I can say without hesitation as Chief that we are operating properly and honestly," said Kishiqueb, encouraging those with concerns to approach chief and council. "The allegations are simply wrong and slanderous in nature."