Audit of Caldwell First Nation powwow shows $247K in 'unsupported' payouts

Members of Caldwell First Nation are shocked by the findings of a forensic audit concluding there were "minimal controls" over hundreds of thousands of dollars in cash-stuffed envelope prize payouts and that a large contract was sole-sourced to a company owned by the chief's son during a powwow last year.

$190K contract to record a video of the powwow went to company owned by chief's son

Caldwell First Nation Chief Louise Hillier was suspended along with other members of council after a general meeting on June 3. (CBC)

Members of Caldwell First Nation are shocked by the findings of a forensic audit concluding there were "minimal controls" over hundreds of thousands of dollars in prize payouts for a powwow last year and that a large contract was awarded without competition to a company owned by the chief's son.

The audit, which was requested by band members, details $247,790 in "unsupported" prize money that was handed out to dancers and drummers during the two-day event held near Leamington, Ont. last August.

It also concluded a $190,000 contract to live-stream the powwow and to create a video telling the story of the Caldwell Nation was granted to Moccasin Media, a company owned by Chief Louise Hillier's son David, without soliciting competing bids or council's approval.

"Considering the value of the Moccasin Media contract, we would expect that the conventions of Council surrounding the approval of large contracts would be followed and at least three quotes would be obtained. We would further expect that Council would have the opportunity to approve the contract," the audit reads. "Based on our discussions with Council, no quotes were obtained for production services, beyond that of Moccasin Media. Further, the Moccasin Media contract was never brought to Council for approval."

Members of the Caldwell First Nation in Leamington, Ont. are shocked by a forensic audit that shows there were "minimal controls" over more than $240,000 in prize money for a powwow last year. (Caldwell First Nation website)

Councillor Lonnie Dodge told the auditors it was his opinion that council did not have to vote on the contract as it was within the approved $500,000 budget for the powwow.

The audit recommends a legal opinion be sought as to whether Dodge, who signed the contract, breached his fiduciary duty to the band. The audit also recommends a legal opinion be sought as to whether a conflict of interest exists between Chief Hillier and Moccasin Media.

"There is a lot of shock and confusion," said a member of the First Nation who did not want to be named for fear of reprisal from other members of the close community. "How could this have happened? How were they allowed to spend this much?"

Chief said council supported the audit

The audit was completed by London-based Matson Driscoll & Damico Ltd. and was commissioned following a June 3 meeting when the membership voted to suspend the chief and council. The audit's findings were recently released to the 300-odd voting members of Caldwell. CBC News obtained and reviewed a copy of the document. 

In June, Hillier said she and council supported the audit process. 

"In my mind, it's not that anything was done wrong, it's clarifying that nothing, in fact, was done wrong," she said at the time.

Hillier declined to comment Monday and directed all questions to the nation's Director of Operations Allen Deleary.

Deleary said he was hired about a week before council was suspended and one of his first tasks was to find a firm to carry out the audit, so he was unable to comment on the financial decisions that led to it.

"A forensic audit is a basic detailed look at what may be perceived as discrepancies in the financial accounting of the organization," he said.

"My role and function is to make sure those policies are in full place and functioning properly so these type of things don't occur," he added."I wasn't there and it's not my place to comment."

According to the audit, expenses for the powwow totaled $576,111, but $289,276 of those costs were "unsupported."

I was really shocked by how much was spent. A powwow usually goes for about $40,000.- Member of the Caldwell First Nation

The 27-page document describes controls over the cash withdrawn for prize payments as "minimal" and said at least $3,240 remains unaccounted for.

"No information on winners beyond their names has been provided," it states. "As we have not been provided with the sign-up sheets, we are unable to confirm the amounts paid to the individual competitors."

It also states the decision to award the massive contract to Moccasin Media without entertaining other bids was "not treated similar to other contracts that Caldwell typically enters into" — especially as quotes for similar services ahead of a now-cancelled 2017 powwow show the Moccasin cost was "significantly higher."

"I was really shocked by how much was spent. A powwow usually goes for about $40,000," said a member of the nation. "There are better things we could have done with it like progressing on making the reserve status, employing members of the community at different jobs."

Audit could feed existing prejudices

The member added that the audit is problematic because it may serve to further entrench prejudices against First Nations when it comes to spending, but stressed the decisions were made by council and against the wishes of most members.

"No matter what you do it's going to have repercussion for the community," he said. "This is going to make things look bad for a while."

When asked about transparency concerns stemming from the audit, a spokesperson for Indigenous and Northern Affairs Canada issued a statement from the department saying it did not commission the forensic audit so could not comment on it.

There should be no money missing. It should be 100 per cent accountable,- Member of the Caldwell First Nation

Deleary said the Caldwell First Nation has met all of its legislative obligations when it comes to financial transparency.

The audit provides a long list of recommendations for controls at future powwows, including that a list of dancers and drummers should be kept, that 'terms of reference' for events and their costs should be created, and that any cash payments be properly documented with invoices.

Members will have a chance to comment on the audit and its findings during a meeting scheduled for September 23, and Deleary said it's his job to ensure the recommendations from the audit are followed in the future.

Members say it may be time for new council

After being suspended, Chief Hillier said she and her fellow council members would most likely return to their roles after the audit was completed.

But at least one member of the nation said he's not sure that will happen now.

"There should be no money missing. It should be 100 per cent accountable," he said. "You're voted in to do a job and if you can't do it or you're doing it for the wrong reason it's time to go."