Audit identifies $2.1M in 'unexplained payments' to Alexander First Nation former chief and staff
'It’s a one-sided report to me,' former chief Herbert Arcand says
A "forensic investigation" has identified $2.1 million in "unexplained payments" to a former chief of the Alexander First Nation and seven administrative staff, according to a leaked internal document.
The document says about half of the unexplained amounts, totalling more than $1 million, were paid to former chief Herbert Arcand and current tribal chief administrator Alphonse Arcand.
"I dispute this whole report," Herbert Arcand told CBC in an interview Thursday. "It's a one-sided report to me. It was a personal attack on certain individuals."
Those findings are contained in a 49-page report prepared for a powerpoint presentation titled Forensic Investigation: Presentation to Band Membership, which was provided to CBC News. It summarizes an audit conducted earlier this year by accounting firm Meyers Norris Penny.
Loretta Burnstick, the band's former interim chief financial officer, said she helped launch the investigation after noticing questionable financial activity.
"It was obvious to many members in the community for years," said Burnstick. "We did not have the physical proof until this forensic investigation took place to prove it was happening."
Between 2013 to 2015, the document says Herbert Arcand received $405,119 in unexplained payments, in addition to his "expected salary" of $186,666.
As part of the unexplained amount, a band credit card in his name was used to take out a total of $91,156 at casinos and book an all inclusive-vacation for two relatives at a five-star Jamaican resort then paid off by Alexander First Nation, auditors say.
Payments for 'extra duties'
According to the document, Alphonse Arcand received $637,920 in unexplained payments, in addition to his expected salary of $280,000. He collected two sums authorized by himself, including $16,462 for "extra duties" plus salary advances of $11,500, yet to be paid back, according to the auditors.
Auditors also say the band made payments to Alphonse Arcand's personal credit card in 2013 totalling $349,878.
Burnstick, now a finance clerk on stress leave, is one of several people distributing the document to community members. That's because "they have a right to know where their money is being spent," she said.
"Our concern is it would have been buried," she said, adding the distribution of the audit summary is being done at the request of her brother and current Chief Kurt Burnstick.
Chief Burnstick is facing three sexual assault charges and pressure to resign from the community, in Sturgeon County just northwest of Edmonton. But he insists he is innocent and refuses to step down.
In a statement released to CBC News, the chief confirmed MNP prepared a forensic financial report for the band council.
"As Chief of Alexander First Nation I am obligated to bring this MNP report to the members of the community as relates to the financial affairs of Alexander First Nation," he wrote. "This is an unresolved issue regarding transparency and accountability."
He is the successor to Herbert Arcand, who held the position of chief from 2011 to 2014.
'To me they're allegations and that's all they are," said Arcand, adding the audit process was flawed. "They're not giving anybody any type of opportunity to come forward" with documents which would paint another picture.
Payments not for 'personal benefit'
Alphonse Arcand told CBC News the financial transactions attributed to him and described as unexplained in the report did not benefit him personally.
All receipts and credit card statements were given to the finance department for approval and payment, he added.
"These amounts were not for my personal benefit," he wrote in an email.
Alphonse Arcand said his personal credit card was regularly used by the band for purchases, as well as assisting other band members with expenses approved by band council.
"The MNP report showing the payments to myself without specifically reporting my credit card being used for Nation business was incomplete and out of context and has caused significant distress to myself and the community," he wrote. "Seems to me that there was a lot of supporting financial information and documentation that may have not been submitted to MNP that may have caused the 'unexplained payments.'"
We did not have the physical proof until this forensic investigation took place to prove it was happening.- Loretta Burnstick
The auditors examined 70 boxes of documents, totalling 36,178 pages and 22.8 gigabytes of electronic data, including bank statements, cheques and accounting databases. Still, they warn their investigation was of a "limited scope."
In the document, the authors said they relied on information provided by Alexander First Nation, but reserve the right to review calculations "in light of any new information."
They did not interview the eight individuals, and were not able to discuss results with Alphonse Arcand "despite several attempts," the report said.
Former chief and band councillor Allan Paul cautioned the findings are "very incomplete."
The chief and four councillors, which did not include Paul, passed a motion on March 10 to appoint MNP to provide investigative services "into the employment activities of the past and present elected officials and staff" of Alexander First Nation.
In an emailed statement to CBC News, a legal counsel for the First Nation said the investigation was prompted by concern over financial activities.
"The Forensic Investigation was required as a result of serious concerns involving financial irregularities," wrote lawyer Colleen Verville of the firm MacPherson Leslie & Tyerman LLP.
Verville said the auditing firm then commenced "an extensive Forensic Investigation and identified eight former and current employees who were involved with questionable transactions."
Looking for justice, says critic
According to the document, the investigation confirmed the eight received on average $17,544 per person in bonuses over three years, and a total of more than $41,000 in "financial assistance." The administrators racked up $200,000 in meeting expenses over the same period.
Ernie Bruno, one of the community members seeking to make the document public, said he believes the audit findings are just the latest example of financial irregularities on the reserve.
Bruno said he and another band member have filed a complaint with the RCMP about the payments cited in the audit. While questionable financial activities are taking place, some elders in his community still live on properties without access to power, forcing them to haul water and chop wood, Bruno said.
He had a message for the band leadership: "Look after your people, look after your grandchildren, your children, all the members."
Loretta Burnstick is calling for MNP auditors to continue investigating past and present elected officials and staff.
She has forwarded the audit presentation document to both Prime Minister Justin Trudeau's office and the ministry of Aboriginal Affairs and Northern Development Canada. She hopes the federal government will pay for an investigation into years of questionable spending.
"The money could have helped so many more of our people from my nation," she said, adding many are struggling financially. "It has to stop. If not, more and more of our kids and our grandchildren are going to suffer."