Attawapiskat Chief Spence's 'life partner' challenges department to launch forensic audit, says band has nothing to hide

Attawapiskat Chief Theresa Spence’s “life partner” says the federal Aboriginal Affairs department should finally launch the forensic audit requested by the community in 2004 if it’s serious about tracking the millions of dollars that have flowed through the band’s coffers.

NOTE: In sidebar at end of story Clayton Kennedy discusses donation bank account for Attawapiskat Chief Theresa Spence’s hunger strike

By Jorge Barrera
APTN National News
Attawapiskat Chief Theresa Spence’s “life partner” says the federal Aboriginal Affairs department should finally launch the forensic audit requested by the community in 2004 if it’s serious about tracking the millions of dollars that have flowed through the band’s coffers.

Aboriginal Affairs on Monday released an audit done by Deloitte and Touche that found a missing paper trail for millions of dollars in funding flowing through Attawapiskat First Nation between 2005 and 2011. Attawapiskat has a population of about 1,828.

The audit, which examined funding from Aboriginal Affairs and Health Canada along with Canada Mortgage and Housing Corporation, detonated like a grenade as First Nations leaders prepared for Friday’s scheduled meeting with Prime Minister Stephen Harper.

The audit, targeting the $104 million the northern Ontario community on the Attawapiskat River received between 2005 and 2011, examined 505 financial transactions, 400 from Aboriginal affairs and 105 from Health Canada, and found that 81 per cent of those transactions did not have the proper documentation and 61 per cent had none.

“We were unable to determine if the funds were spent for their intended purpose,” said a Deloitte and Touche management letter to Attawapiskat Chief Theresa Spence, dated Aug. 28.

The auditors also noted that CMHC never bothered to tell Aboriginal Affairs about its own inspectors’ findings that housing conditions were worsening in the community.

Spence’s partner, Clayton Kennedy, who is also the band’s former co-manager, said financial accountability had improved over the last two years in Attawapiskat, which posts all its financial documents online. He said none of the money was ever misappropriated and every dollar could be tracked by simply approaching the vendors and the banks involved. He said the department should call in the forensic audit requested by the community back in 2004.

“If everyone is so concerned about the lack of documentation, then fine, come back, start contacting the suppliers, go through the banks, get into it in a little more detail because I don’t think you’ll find any misappropriation of funds,” said Kennedy, who was the band’s co-manager between July 2010 and August 2012.

Kennedy was also the band’s director of finance, band manager and co-manager between 2001 and 2004 and left the community until he was hired again.

Spence, who was deputy chief from 2007 to 2010, has been on a hunger strike since Dec. 11, consuming fish broth two or three times a day along with water and traditional medicine teas, to force a meeting between the prime minister, the governor general and First Nations leaders.

With the meeting now scheduled for Friday, Spence says she will continue to abstain from consuming solid foods until she is satisfied with its result.

Spence has developed a type of sainthood among many who travel from all over the country just to see her, give her gifts and pray for her.

She also has developed a fiercely loyal group of supporters and they barred media Monday from entering the log-fence compound on Victoria Island on the Ottawa River where Spence has been living in a teepee.

Attawapiskat’s deputy chief George Mattinas told APTN National News all media were now banned from entering the community.

Spence has lost about 22 lbs since she began her hunger strike and a nurse who checked her on Monday noticed her blood-sugar level was dropping, said Kennedy. Kennedy also said Spence has been suffering pain from her stomach contracting from lack of food. He said she is not consuming any vitamins or supplements.

“She is extremely weak,” said Kennedy. “I am concerned.”

Kennedy said he’s worried Spence continues to refuse solid food.

“I don’t like where all this is heading in terms of her continuing,” he said. “I think she’s probably done enough…but it’s her decision to do this.”

Kennedy said he believes the government released the “comprehensive audit” to politically torpedo Spence and weaken the Idle No More movement, which shows no signs of abating through continued round dances, rallies and highway blockades across the country.

“It’s a witch-hunt,” he said. “This whole report that is being exposed as nothing more than a deflection to take pressure off the government because they are in the midst of protest by Indigenous people across this country and people around the world…they just needed to put something out to discredit the movement and discredit the chief, it’s all part of politics.”

Kennedy said the audit proves things improved after Spence became chief on Aug. 27, 2010.

“Prior to Theresa coming on as chief, there were problems,” said Kennedy. “Hence that is why I was brought in by council, with the full knowledge of Aboriginal Affairs, to get things turned around and for the most part I did get them turned around.”

The audit’s examination of 400 Aboriginal Affairs transactions supports his assertion. Between 2009 and 2011, the audit found 31 transactions lacked supporting documentation. Between 2005 and 2009, the audit found 214 transactions lacked all supporting documentation.

“There was a lack of oversight, there was a lack of controls,” said Kennedy. “It was all relatively young finance staff.”

Kennedy cites as an example of several entries in the Deloitte audit on “write down of accounts payable” that were found to have incomplete documentation. Kennedy said those were entries he was trying to correct after staff duplicated invoices for capital projects which are handled by external accountants and project managers.

“I had to take them off the books of account,” he said.

Kennedy said Attawapiskat, which has been in co-management for 10 years, was on the brink of bankruptcy when he took over.

Kennedy said the band was previously co-managed by BDO Canada from November 2009 to April 2010, but the band council decided to not continue with them after the firm asked for $400,000 a year over five years to do the job. Kennedy said he earned about $140,000 by comparison.

“Council was suspicious of the fact they hadn’t done anything in six months in terms of producing financial statements,” said Kennedy.

David Facca, a BDO partner in Thunder Bay, was involved, but said he wasn’t authorized to comment when contacted by APTN National News.

Before BDO, the band was co-managed by George Lanouette, who has since died.

The band manager through the majority of the audit period, former chief Ignace Gull, was let go from his position in December 2011, said Kennedy.

Gull could not be reached for comment.

Kennedy said he’s not surprised the auditors failed to find documentation for transactions dating back to 2005.

Aboriginal Affairs Minister John Duncan called for the audit in December 2011 at the same time he imposed a third-party manager on the community, seizing financial control away from the band council and administration.

When the auditors landed in the community for two five day stints in early 2012, the band’s staff was already working to the limit dealing with the third-party manager, who was from BDO Canada’s Winnipeg office.

“My staff didn’t have time to get to the nuts and bolts,” he said. “We were worried about payroll and welfare payments that were withheld. I had to provide a raft of information…(The third party manager) wanted to take over all the payroll, he wanted all the information, personal information for every employee by program.”

Kennedy said most of the band’s accounting staff had “no knowledge of the majority of transactions.” He said they pulled out boxes of files from a warehouse to meet the auditors’ demands.

“My staff was preoccupied with operations and did not have a lot of time to devote to the auditor’s queries,” he said.

Duncan’s spokesman Jan O’Driscoll said the audit “speaks for itself” and the minister’s office accepts “its conclusions and recommendations.”



Kennedy says all donations accounted for

Clatyon Kennedy, Attawapiskat Chief Theresa Spence’s life partner, said he wants to allay concerns raised in the media about a savings account he set up to for donations to support Spence’s hunger strike.

So far, the account has received about $31,000 in donations and spent about $20,400 on expenses like hotels for support staff at the site and Spence’s family along with food, stoves, gasoline and the rental of a car, he said.

Kennedy said he has kept all the receipts and will be providing a detailed breakdown of the spending to the major donors.

“I have the spreadsheets, I have the documentation, if anyone is worried,” he said.


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18 thoughts on “Attawapiskat Chief Spence's 'life partner' challenges department to launch forensic audit, says band has nothing to hide

  1. I’m an aboriginal from a reserve and who grew up on a reserve. This is no surprise as it happens in my community all the time. Funny how much we as a people deny this is happening and let it cloud our judgments. Wake up people, THIS DOES AND IS HAPPENING AS WE SPEAK!. If we are ever going to be taken seriously we have to stop defending this type of behavior and style of government. Flat out denying this makes us look like illogical, unreasonable people. Our corrupt politicians/administrations have done so much damage to us and they are continuing to cause damage even to a good intention’d demonstration from our people, then we defend this action with no logical premise. Let’s at least admit, addition to all the problems that plague our communities, internal corruption is an issue as well. This will help our cause.

    There are many people who will defend this as they benefit directly or indirectly from the system as is. I respect the idol no more movement, but not chief spence. I will not support corruption and obvious conflicts of interest. Her bf? i mean come on, common sense can tell you that is a conflict of interest.

    I understand the timing is questionable, but timing or not this is happening in most of our communities, yesterday, today and probably tomorrow if we don’t address it.

    I’m not betraying my people, as I am proud of my honest, hardworking, good hearted people, rather i am saying we have to stop this, and stop acting like we’re blind.

  2. Earning $140,000 a year? Read elsewhere $850. a day?
    Clatyon Kennedy has definately proven to be a financial expert.

    1. Plus expenses. Total Spence family income $270 000 tax free. Nice job if you can get it.

  3. I’m curious as to who he is…what were his credentials to co-manage the reserve? Was this not a huge conflict of interest that his “life partner” is the Chief?

  4. The fact that they’ve spent $20,000 on a “hunger strike” in less than a month says enough about the fiscal management abilities of this crew. Here we thought these supporters were there for the cause, but now I’m left wondering if they’re being paid.

  5. It looks to me from this report that the poor record keeping was at least a co-responsibility of the government staff who signed off on each expense with band staff. Given all we hear about Indian Affairs imposition of bureaucracy on band councils, it seems Harper may have opened his own can of worms!

  6. Doesn’t sound like the journalist knows anything about standardized financial record keeping, nor the administrative processes found in all band offices across Canada. Clayton sounds prepared to answer each inquiry fully with verifiable detail in relation to the audit but not permitted to finish his statements – I would’ve liked to’ve heard the complete answers. Chief Spence is elected by the majority of her membership to carry-out the duties of the Chief position, apparently the fast she is on has been sanctioned.

    How about a full interview with Clayton rather than rushed questions / accusations where the news-consumer doesn’t feel like he’s been cheated out of realizing credible information from the first person source of the news by a simple question-reader?

  7. Is he actually demanding another forensic audit? How many have to be done to convince these people there is something radically wrong. It is not the job of the auditors to chase after vendors and banks. That’s what the chief and council get paid for. The audit is out and Spence and her “life partner” should be removed as leaders of Attawapiskat by the national aboriginal leadership. That is ultimately who is responsible for the overall managment of reserves; not Stephen Harper or the Aboriginal Affairs dept. in Ottawa.

  8. As always, INAC/AANDC sidesteps it’s own accountability issues.

    These Deloitte characters left a trail of financial hilarity all over the World.
    They aren’t competent enough to handle the finances of a lemonade stand.

  9. Good for A P T N , Seen the interview It was good, Now will the Natives ask for a forensic audit of the Harper’s Conservative party , and into how much money was spent on Robo _calls.

    1. Nice try. The fact is Spence and her life partner were responsibile for managing the financial affairs of the reserve. Their management has been found wanting and they should now be removed with a new chief and band council elected.

    2. Canada’s Conservative party is funded by donations. Band allotments are funded by taxpayers. Any questions about financial management have historically been dubbed ‘racist.’ This won’t wash any more– we’ve all seen the conditions on Chief Spence’s reserve and we know the amount of money she was responsible for managing. Why don’t most bands do appropriate due diligence.. hire decent accountants? If the money is well allocated, proper documentation is not complicated. Accountability does not seem unreasonable given the scope of the problem and the vast amounts of money involved.

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