Audit shows INAC failed to track funding. (News).

It was only on the Indian and Northern Affairs (INAC) Web site for a short while, but the "Audit of Self Government Negotiations Funding Process and Practices" revealed that INAC could use a little governance capacity building of its own.

It also has First Nations self-government negotiators wondering when the minister received this audit and questioning INAC's motives for saying the government should walk away from negotiations where there's little or no progress being made. Was an INAC policy decision or a response to orders from the Treasury Board?

Government sources confirmed the audit was put on-line "prematurely." First Nations technicians believe it was posted n error and quickly removed on June 4 when reporters started asking questions.

The audit, prepared by INAC's departmental audit and evaluation branch, reveals that the $75 million the department distributed to First Nations for self-government negotiations since 1996 was not monitored to see if it was used according to Treasury Board guidelines.

Starting the fiscal year 199697, funding flowed to 37 sets of negotiations that involved more than 300 First Nations communities.

After Ottawa recognized the inherent right of self-government in 1995, the department sought to begin self-government negotiations with First Nations. In 1996, the Treasury Board produced guidelines designed specifically to cover how funding for self-government negotiations should be used. In 1998, INAC's Gathering Strength policy, which included a provision that government money would be provided to help First Nations "build capacity" or gain the knowledge and expertise required to conduct high level negotiations, changed the rules of the game.

The audit reveals that INAC did not find a way to provide funds to build capacity and still meet Treasury Board guidelines.

"Gathering Strength, an action plan regarding the recommendations of the 1996 Royal Commission on Aboriginal Peoples, placed emphasis on strengthening Aboriginal governance, capacity building, issues of larger groupings for effective self-government and developing new fiscal relationships," the audit states. "The introduction of new management and operational practices to meet the 1996 [Treasury Board] authority requirements created a major challenge for the department. These demands were further compounded by the need to devise methods and establish fundings related to Gathering Strength initiatives such as nation re-building, communications and fiscal tables. A broader view of the self-government process emerged where negotiations was only part of the process."

The audit also suggests that fewer final agreements have been reached than the central agencies of the Canadian government think should have been reached for the money spent.

"Given the timeframes for reaching a final agreement (three to four years m the case of First Nations and tribal councils), many more final agreements would have been expected by 2001 than the five that were reached. The slower than expected progress is caused by a number of factors. A key variable has been the rapidly expanding self-government development work on capacity development, good governance and communications. While these solidify the basis for self-government they have, at the same time, had an impact on the progress of the negotiation process.

The auditors reported five areas where current practices are not "providing senior management with reasonable assurance that self-government funding is managed according to authorities and in a manner that supports the evolving nature of self-government and the risks therein."

It was recommended that a "unified and all-inclusive strategy" be developed that will bring funding for capacity building in line with Treasury Board policies. The auditors noted that any new policy may "require greater flexibility of funding maximums and timeframes according to the unique characteristics of different sets of negotiations."

INAC was also advised to come up with a way to measure the success of negotiations and monitor "uncertainty" in negotiations.

"The current informal and intuitive analysis of uncertainty, based on past experiences at the tables and networking, may lead to inconsistent understandings and communications about which negotiation paths have high, medium or low levels of uncertainty. More formal attention to uncertainty puts funding decisions and results into context," the audit stated.

The auditors also said that the roles, relationships and responsibilities of government officials need to be defined in more detail in order to ensure that the money is being used as it was intended to be used.

Six recommendations were made so that INAC managers could improve accountability to Treasury Board.