Move forward with aboriginal audits
National Post
Published: Saturday, April 08, 2006
Tucked away in a corner of the new Federal Accountability Act (FAA), soon to be introduced by the Conservative government, is a provision giving the Auditor-General the authority to examine the books of aboriginal band governments. While this news has already provoked predictable how-dare-they outrage from national native leaders -- who would prefer their spending of billions in annual federal grants go unsupervised -- the move is necessary. If native communities are to become self-sufficient and self-governing they must first become accountable; at present, many are not.
Ottawa now spends well over $8-billion annually -- nearly 5% of the federal budget -- on programs directed at aboriginals. That is more than $50,000 per aboriginal family. So why are so many native communities so squalid? Why is infant mortality among natives 50% higher than for non-native babies?
Dozens of reserves have no potable water. On-reserve unemployment can run as high as 80%. Substance abuse, family violence and crime are all substantially higher than the national average. And yet nearly all federal cash given to bands is never properly accounted for.
Considering that almost every other federal expenditure category can be examined, why should taxpayers not demand a role for the Auditor-General in determining value for money from native spending? Indeed, why would natives themselves not demand it? As aboriginal Canadians slip further and further into pools of despair, should they not be the most troubled by the apparent disconnect between all that money and the continued desperation of their people?
And yet, every effort by Ottawa to improve First Nations governance is met with allegations that it violates the native right to self-determination. Phil Fontaine, National Chief of the Assembly of First Nations (AFN), has even threatened a court challenge under the Charter of Rights and Freedoms if the Conservatives go forward with their planned expansion of the Auditor-General's purview.
Mr. Fontaine is a past master of using veiled allegations of racism and charges of paternalism to deflect federal efforts to improve on-reserve governance. He is fond of contending, for instance, that the Auditor-General has said band councils are already burdened with onerous audits that no one reads -- the implication being that additional ones are unnecessary. But what Sheila Fraser, the Auditor-General, actually said in her 2002 report to Parliament is that bands submit to Ottawa each year such a "crazy quilt of audits" that they cannot be properly scrutinized within the federal Indian Affairs department.
The current audits are too diverse in their methodology to be analyzed against one another. Lack of standardization makes them useless, too, as reports on the authenticity of band spending. Of the nearly $4-billion in native spending Ms. Fraser examined that year, nearly 90% of it could not be accounted for -- in part because of inadequate financial reporting between Ottawa and the bands.
Besides, even if the audits of all 600-plus bands in Canada followed generally accepted accounting principles, that would not mean those examinations were the same as an A-G's audit. Ms. Fraser and her staff perform value-for-money audits, not mere reviews of annual revenues and expenditures within departments.
Recently, the AFN proposed its own independent national auditor. This is a good idea. But again, it is no substitute for bringing aboriginal governments under the same financial microscope to which other federally-funded entities must submit.
Despite the criticism they will undoubtedly face, the Conservatives should forge ahead with this change.
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