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Sweetgrass First Nation band members looking for answers after troubling review of housing project

January 23, 2020
Sweetgrass First Nation band members looking for answers after troubling review of housing project

SWEETGRASS FIRST NATION, SASK- Grassroots band members are demanding answers after an accounting firm found a housing project on a Saskatchewan reserve went hundreds of thousands of dollars overbudget without explanation.

The reserve in question is Sweetgrass First Nation, a community located between North Battleford and Cut Knife in Saskatchewan.

Band member Constance Paskemin told the Canadian Taxpayers Federation that the review went out to band members in November, during the tail end of their most recent election.

She said some band members had told her they only read halfway through the document before they “felt disgusted, and sick to their stomach.”

“That’s how I feel too,” said Paskemin.

“Seeing the conditions on some people’s houses on the reserve, I don’t think that this is fair.”

However, the federal agency that provided the funding has yet to confirm whether its even looking at significant questions raised by the accounting firm.

The financial review of the ten-unit housing project found the project overbudget by $294,775, with variances among costs for some houses as much as 48 percent over the original budget, while others were below the budget by nine percent.

The most expensive unit cost $84,771 beyond what was set out originally, and was going to Darius Albert, then a member of Sweetgrass band council.

Reviewers couldn’t find documentation illustrating why the budget changes occurred, or any documentation showing council approval of those changes.

The review was conducted by MNP, after the company was asked by Sweetgrass to review the band’s housing department.

The review was focused on the ten-unit project, built with funding from the federal Canada Mortgage and Housing Corporation (CMHC), as well as a review of accounting for new homes built on-reserve since January of 2017.

The report states Sweetgrass applied to CMHC for the ten-unit project funding in 2016, with a total budgeted cost of $1.78 million for the set of identical homes.

Project planning had gotten underway in 2015, and construction began around July of 2016. Work was “substantially complete” by Dec. 31, 2017.

The review came back to Sweetgrass’s then-chief Lawrence Paskemin and the band council on Nov. 14, 2019, with MNP mentioning in the report that they did not reach out to CMHC during their work for supporting documents.

According to the package MNP supplied to council, this was done to avoid jeopardizing any funding for future projects.

The report indicates multiple concerns were raised around the ten-unit project. Those included the work going overbudget, as well as extras being worked in for homes going to council members or their relatives.

The council member most discussed was Albert.

From the review:

“At the time of the build Mr. Darius Albert was a Councillor. From our meetings and discussions, we understand that there is concern Mr. Albert received benefits in the form of upgrades and or alterations to his home.

“The total cost for unit 32 was the highest costed unit of the project totaling $263,172. This was $84,771 (or 48%) over the original budget of $178,402.

“We note that this home had a number of changes/additions made to it.”

Ultimately, the reviewers found Albert agreed to pay back Sweetgrass for some of the cost overruns, with $34,284.41 set up as the balance to pay back, but questions remain.

From the review:

“We understand that Mr. Albert agreed to pay the Nation for some of the cost overruns. From a review of the general ledger we note that an accounts receivable in the amount of $34,284.41 was created for Mr. Albert on August 6, 2018. As per the general ledger detail, this balance remained outstanding as of May 31, 2019.”

The report also mentioned concerns around the project manager.

The manager in question was a man named Aaron Ledoux, who reviewers were never able to contact during the course of their work.

From the review:

“From our discussions and interviews we understand that Aaron Ledoux was hired to manage the housing projects for the Nation. As noted above there were multiple building and renovation projects occurring at the same time.

“From our interviews with Councillors and Nation Employees we note the following comments:

Aaron Ledoux was not a Band Member and had been hired by the former Chief without any known project management experience;

“There was no contract for the services of Mr. Ledoux; Mr. Ledoux was submitting invoices for his weekly work until February when he submitted an invoice for overtime for every weekend during the months that he was project manager.

“There was no support that he worked on those weekends; The Council was unaware of the progression on the work site.

“The Chief was the main contact with Mr. Ledoux; and, Mr. Ledoux was given authority to sign and authorize purchase orders.”

The reviewers were also unable to determine if the CMHC funding for the project was spent as planned, or received in the first place, after a review of the band’s general ledger.

From the review:

“As noted, there was more than one project with CMHC ongoing during the time period. From a review of the general ledger, we have been unable to determine if all expected funds have been received from CMHC for the applicable projects.

“We were also unable to directly trace the deposit and subsequent use of the CMHC funds to determine if the funds were spent as planned.

“We understand that CMHC would require full inspections reports be completed prior to the release of all funding. We have not contacted CMHC in order that we do not jeopardize future funding.

“A more detailed review of bank statements and accounting records may be required to determine the timing and actual source and use of funds for the units.”

Paskemin indicated around 50 band members have written to CMHC in the wake of the report’s release, expressing their concerns about the findings. At least one member received a response in late December from Romy Bowers, a senior executive with the housing authority.

In the response, Bowers thanked the band member for sharing the information, and encouraged them to take it up with their band council, who “will be able to answer your concerns.”

The response also stated CMHC had internal controls, to ensure funding was spent “in accordance with program requirements.”

Paskemin wasn’t happy with the response, with Whitecalf involved at the start of the project and now back as chief after the most recent election.

“I want to know why they just sent us a page telling us to deal with this at the chief and council level, when it’s the same chief and council that created the deficiencies in this audit that came out,” she said.

She believed CMHC should take action.

“They need to hold Sweetgrass accountable and responsible,” said Paskemin.

“(They should) require policies for Sweetgrass to follow to stop this garbage from happening in the future.”

Speaking for herself, she believed more transparency would be beneficial to the community.

“Transparency should be something that should be practised, all the time, especially when you’re dealing with taxpayers’ dollars,” said Paskemin.

“You want to bring up your community, so people can be self-sufficient, so people can live happily, so there is no mould in houses, so people don’t have to be born with some kind of medical problem due to lack of quality housing.”

The Canadian Taxpayers Federation reached out to CMHC for comment on the review and the findings it contained. In a pair of statements, agency spokesperson Audrey-Anne Coulombe said the review was external, outside of CMHC’s reporting requirements, and directed questions on the findings towards Sweetgrass’s leadership.

“CMHC has its own internal controls in place to ensure that funding is spent in accordance with program requirements and to determine if the First Nation is complying with the operating agreement,” wrote Coulombe.

“To be more precise, the First Nation must submit a statement of audited final total capital costs to CMHC, once a project is completed. This financial audit statement will confirm costs and the final loan amount from CMHC. The loan amount may be reduced if costs are lower. Any cost increases or overruns over the approved loan amount are the responsibility of the First Nation.”

The first statement ended by saying CMHC continues to work with Sweetgrass, with “housing specialists” available to give support and answer the community’s questions, as needed.

When asked if CMHC had any concern about what the review showed, or if the agency was planning any follow-ups to examine or deal with the findings, Coulombe simply said CMHC was aware of the concerns that had been raised.

“We will continue to ensure funding is spent in accordance with our program requirements,” said Coulombe.

“We will continue to work closely with the community.”

The Canadian Taxpayers Federation reached out to Chief Lorie Whitecalf and Aaron Ledoux for comment on the report.

While Whitecalf did not reply to multiple requests for comment, Ledoux indicated he was open to an interview.

However, after questions were sent to Ledoux, he chose not to comment in detail, citing a direction from Sweetgrass’s “senior leadership”. However, he stated that “everything” in the report was wrong.

The Canadian Taxpayers Federation has submitted multiple access to information requests regarding the overruns.

Link to review:

-Story by James Wood


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