The Liard First Nation is behind schedule in producing an audit.
The audit was promised before the election in December but it has still not been published.
Daniel Morris, who was elected chief on Dec. 16, cited the lack of an audit as one reason for the sudden layoff of about 40 staff.
Morris says he wants to investigate the First Nation's finances before spending any more money.
But the First Nation's previous chief, Liard McMillan, says he doesn't understand the layoffs or why the audit is missing.
“Prior to the election, I know for a fact that the audit was near complete and probably less than a week and a half or two weeks away from completion. And that’s according to the auditing firm itself,” McMillan says.
“The audit is one of the most important things in terms of ensuring that funding from departments like Indian Affairs and Health Canada continues to flow into the First Nation.”
A news release from the Liard First Nation says it is seeking help from Aboriginal Affairs and the Yukon Government to "provide any assistance they can in helping it to review the current financial situation asap and to come up with a strategy for immediate improvement."
The First Nation also portrays itself as being in debt to vendors.
In the release, Councillor Cindy Porter is quoted as saying “we have vendors who require payment as soon as possible. This is of very high concern for our Council and we will be doing our best to make sure all vendors will be paid asap.”
McMillan says the First Nation should have financial reserves, and not have to resort to immediate layoffs.
"Between cash in the bank as well as cash that was due in from one funding agency that doesn't require the audit, there should have been about a half a million," McMillan says.
The federal government has said it will launch its own audit of the First Nation.
That will investigate the First Nation's finances over the past three years.
A news release from Aboriginal Affairs and Northern Development Canada last week said "responsible management of Canadian taxpayer’s money is a priority of this Government, and we are committed to make certain that funding recipients use public funds for their intended purpose which is to improve the living conditions for First Nations."
Chief Daniel Morris of the Liard First Nation could not be reached for comment.