FSIN launches legal action over Ottawa’s $12.4M audit claim

The Federation of Sovereign Indigenous Nations (FSIN) says it has launched legal action after rejecting Indigenous Services Canada’s (ISC) final decision in a long-running dispute over millions of dollars in spending.

In a statement released Wednesday, the FSIN said it does not accept the federal government’s conclusion or its claim that close to $12.4 million in expenditures are ineligible.

“ISC may have concluded its process, but this matter is not concluded for the FSIN,” Chief Bobby Cameron said in the statement.

The decision marks the latest development in a dispute that earlier this year saw Indigenous Services Canada identify $28.7 million in ineligible and unsupported expenses between April 2019 and March 2024.

That figure stemmed from a forensic audit conducted by KPMG that reviewed the FSIN’s use of federal funding for compliance with funding terms, conditions and accountability standards.

The FSIN, which represents 74 First Nations in Saskatchewan, has consistently disputed the findings and defended its spending.

In its latest statement, the organization said it participated fully in the federal review and held extensive line-by-line discussions with a negotiation team appointed by Indigenous Services Canada.

The FSIN said the two sides had substantially narrowed the amount in dispute by June 12.

According to the FSIN, federal representatives had confirmed that all purchases of personal protective equipment, accounting for almost $8 million of the current $12.4-million claim, were substantiated as purchased and delivered and had been removed from the list of ineligible or questionable expenditures.

The organization said it was surprised those expenses were subsequently added back to the amount being claimed.

The FSIN said the remaining approximately $4.4 million is mainly related to administration fees, and alleged Indigenous Services Canada has failed to provide policies supporting its position.

The dispute over pandemic-related spending has been a major part of the audit process. In March, Indigenous Services Canada identified more than $23.2 million in COVID-19-related expenditures among unsupported costs, saying at the time there was insufficient documentation to validate purchases of personal protective equipment and their delivery and distribution to First Nations.

The FSIN disputed that position, saying it had documentation supporting the rollout, including sign-offs from chiefs on deliveries. Cameron said at the time that the organization believed it had followed appropriate financial procedures.

“We fully believe that we don’t have to repay a dime,” Cameron said in March.

In Wednesday’s statement, Cameron said FSIN staff had co-operated with the federal government and provided the requested records.

“We remain confident that when this matter is subjected to a fair and independent review, that all expenditures will be proven eligible and the allegations proven false,” Cameron said.

Indigenous Services Canada confirmed the letter to Global News but did not provide a comment.

–with files Vanessa Tiberio