The council of the Caldwell First Nation has removed Chief Louise Hillier and Councillor Lonnie Dodge from their positions in the wake of a forensic audit that found lax financial controls surrounding a 2016 powwow.

Dozens of Caldwell members gathered in Leamington for a meeting Saturday to review the forensic audit that concluded there were "minimal controls" over hundreds of thousands of dollars in powwow prize payouts and that a large contract was awarded without competition to a company owned by the chief's son.

Jesse Savoie said it was a tense, emotional meeting.

"It's difficult with First Nation's governance because you always have that hint of nepotism," he explained. "It's easy for someone to say, 'The Chief did something wrong,' but it's tough to say 'Aunt Louise did something wrong,' and I think that's part of the problem."

Jesse Savoie, Caldwell

Jesse Savoie said members of the Caldwell First Nation were shocked by the forensic audit that showed more than $247,000 in unsupported prize payments. (Dan Taekema/CBC)

Savoie added many members of the band were "shook up" by the "tremendous amount of misspending" the audit found, especially as it could imperil future generations of Caldwell. But the meeting gave him reason to hope.

"I'm really optimistic for the future of our nation," he said.

Deb Cloutier agreed, calling council's decision a "small victory."

"I'm much more hopeful now," she said.

General election to take place within 90 days

The band now has 90 days to hold a general election for a new chief and all four council positions.

Members also voted to try to reclaim $60,000 the audit states was withdrawn by Hillier to pay Moccasin Media, a company paid to produce a video and live stream of the event and owned by her son, David.

The First Nation also decided to recover $55,000 from David, according to Cloutier.

Theresa Lewis, Deb Cloutier, Caldwell

Caldwell members Theresa Lewis (left), and Deb Cloutier said they were happy with council's decision to remove Chief Louise Hillier and Councillor Lonnie Dodge. (Dan Taekema/CBC)

The chief declined to speak with reporters and requests for comment from Director of Operations Allen Deleary went unanswered.

The audit, which was requested by band members at a June meeting when they voted to suspend Hillier and council, details $247,790 in "unsupported" prize money that was handed out to dancers and drummers during the two-day powwow 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, 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."

Caldwell First Nation meeting

Members of Caldwell First Nation walk into a meeting in Leamington on Saturday, Sept. 23 to discuss the findings of a forensic audit that found 'minimal controls' over powwow prize payouts. (Dan Taekema/CBC News)

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.

Hillier supported audit process

The audit's findings were recently released to the 300-odd voting members of Caldwell, many of whom brought the document to the meeting in large brown envelopes.

Chief Hillier has not spoken to CBC News since the audit was released. Back in June, when the audit was commissioned, she said she 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.