A second audit of Sheshatshiu finances has raised more questions from citizens concerned about the Innu First Nation's leadership.
Former provincial auditor general John Noseworthy was hired late last year by a group of citizens to audit the financial activities of the Labrador band's leadership. Noseworthy drew few conclusions on scant information but raised several questions about how money was being monitored and spent.
On Friday, Noseworthy released his report on a second audit requested by local businessman Max Penashue on behalf of the concerned band members, this one on the trust fund established in 2007 by an impact benefits agreement between the Sheshatshiu and Innu First Nations with Vale Inco Newfoundland and Labrador for its mining operations.
"Max Penashue was very concerned about the change in how the trust funds were going to be distributed," Noseworthy told The Telegram Friday. "That's the big issue here."
Noseworthy looked at the financial statements for Dec. 31, 2010, the most recently audited statements, and found the trust fund for Sheshatshiu had only around $900,000 in it.
"It basically had been depleted."
Half of all money received goes into the Teshipitakan Fund for future generations, while the other half is split between the Sheshatshiu Innu Improvement Fund and the Mushuau Improvement Fund. As of Dec. 31, 2010, while Sheshatshiu's fund had less than a million dollars, the Mushuau fund had $8.9 million. And the Teshipitakan Fund - the "T-fund" - had more than $115 million. Noseworthy said citizens are concerned the Sheshatshiu chief and council want changes made for more direct access to the T-fund.
"The concern is that because there's so much money in this T-fund, so much cash available, Max and some other citizens are very concerned that they're going to try to amend the trust deed so that they'll be able to access the T-fund and make distributions for payments to members and that sort of thing," said Noseworthy. Much like the previous audit, the report raises questions about how funding requests are assessed and approved.
The current trust deed has a provision that won't allow changes until after April 1, 2013, Penashue told The Telegram, but he's still concerned about the chief and council trying to change the rules. He and the other citizens have called for elections to replace the chief and council, which the chief sought to block with a court injunction. Both sides are attempting to come to an agreement outside of court, but any agreement would have to include elections, he said.
"There's got to be new elections," he said. "Going with this leadership, the trust fund - what it looks like to me - is being misused."
Since the fund was established, about $16 million has been distributed to band members from the Sheshatshiu fund, compared with $8.8 million from the Mushuau fund to its members, said Noseworthy, although the Mushuau First Nation has a smaller population.
Both nations have received about $39 million since the funds were established, he said.
Sheshatshiu chief Sebastien Benuen declined to comment on the audit or the legal battle over new elections.
Representatives from BMO, which administers the fund, will have a public meeting in Sheshatshiu next week.
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