Students of the Regina-based First Nations University of Canada will be able to complete their academic year with the help of $3 million from the federal government. (CBC)

Ottawa announced financial help Wednesday that will allow students at the beleaguered aboriginal university in Saskatchewan to finish their academic year, but future funding will depend on the institution's ability to reform.

The federal government has earmarked $3 million for about 800 students of the First Nations University of Canada to finish their academic year ending Aug. 31.

“There is lots of work to do, but this money will get them through to the end of August,” said Indian Affairs Minister Chuck Strahl.

Student Shane Keepnes, who is worried about the university's future, said the money is not enough.

"I really want to continue on and I really have high hopes for this institution, but $3 million just isn't going to cut it," he said. "What about enrolment in the fall? Students that want to come to this great institution might not have that opportunity, so the funding really needs to be extended."

Strahl said future funding for the school hinges on its ability to complete necessary reforms.

“What is not clear to us, and is not completely evident, is whether all of the planned reforms that are being talked about are going to happen,” Strahl said. “They’ve got other issues that so far have not been addressed, including things like severance packages, outstanding debt, money that has gone missing and a bunch of other academic problems.”

The money, provided by the Indian Studies Support Program, won't flow directly to FNUC, Strahl said.

“FNU is an institution in a lot of trouble and it has to run their programming and their financing and their accountability through the University of Regina," Strahl said. "And so the money that we will make available will have to flow through the University of Regina.”

Sources said the money is for student programming and not intended to repay the aboriginal school's debt or to cover operational costs.

FNUC, which is still trying to negotiate a deal with the federal government that would see its $7 million a year in funding reinstated, said Wednesday it may turn down the offer.

"That's not a way that a university can survive. … That doesn't provide security to our facility … to our staff … in terms of getting tenured faculty to remain at our university," said Joely BigEagle, FNUC's board of governors chairman.

The board will meet next Wednesday to decide whether to accept the $3 million. If it votes to turn down the money, it will have to start looking at making cuts to the institution that has about 800 students at its main campus in Regina and satellite campuses in Prince Albert and Saskatoon.

Funding suspended

Both the federal and provincial governments suspended FNUC's funding earlier this year.

In recent years, there have been numerous dismissals and departures of top administrators, allegations of misuse of funds, repeated deficits and declining enrolment.

Ottawa and the province both said they cut funding because FNUC wasn't fixing the problems fast enough.

However, a week ago, provincial officials signed a memorandum of understanding with the University of Regina and the Federation of Saskatchewan Indian Nations under which provincial funding would support FNUC again.

Under the first year of a proposed four-year agreement, the province would contribute $5.2 million as FNUC restructures. University of Regina officials would administer FNUC's spending and manage the school.