Indigenous Services increased scrutiny of AFN cash flow amid call for financial review

Indigenous Services Canada secretly intensified its monitoring of cash flow at the Assembly of First Nations shortly after RoseAnne Archibald, who had called for a review of the lobby group's books, was elected national chief, unclassified internal memos show.

But even before that, departmental officials had "long raised concerns" about the AFN re-allocating program money to make up for deficits in operational funding, which the department's deals with the AFN wouldn't allow — and which the AFN denies has ever happened — according to a memo dated Nov. 5, 2020.

"ISC sectors have also expressed concern with the value added of some Assembly of First Nations' activities and proposals, including lack of progress on key activities and recurring carry-over requests," says the memo, which was released through access-to-information law.

As a result, the department hesitated to lean into AFN requests for more flexible funding. Citing "ongoing concerns and uncertainties," the memo instead recommended Indigenous Services undertake a "full review" of the department's AFN funding.

"It will be important to balance ongoing accountability and program considerations with the need to provide predictable and sustainable funding to partner organizations," it says.

The review would eventually lead to a new quarterly monitoring scheme.

Before that happened, however, then-Ontario regional chief Archibald started independently questioning the AFN's finances too.

She brought her concerns to the Chiefs of Ontario, which is composed of representatives from 133 First Nations, during a February 2021 in-camera session.

Documents circulated at the time later leaked to the media along with a confidential resolution in which the chiefs demanded an independent review of the AFN's financial management policies.

A few months later, in June 2021, officials at Indigenous Services and Crown-Indigenous Relations linked up for "a technical working group" to address what the memos describe as "ongoing issues related to operational funding policy development" at the AFN.

In that fiscal year, which ended a month earlier, the departments together gave the lobby group $39 million for both program-specific activity and basic operational capacity. The cash flowed through an increasingly complex web of separate deals, according to the documents.

To keep closer tabs on these arrangements, Indigenous Services officials drew up a plan to present to deputy minister Christiane Fox.

In an Oct. 7 2021 memo, they proposed implementing a "quarterly financial report," which would involve producing regular line-by-line breakdowns of the AFN's current financial state.

The scheme was approved and rolled out soon after.