SASKATOON, Sask. — Indigenous Services Canada (ISC) says the federal government must manage public funds transparently and use them for their intended purposes, as it seeks to recover more than $12.3 million from the Federation of Sovereign Indigenous Nations (FSIN) after a forensic audit.
ISC is demanding that FSIN repay $12,376,807.40 in expenditures it deemed ineligible after reviewing federal funding provided to the organization. FSIN denies any wrongdoing, says it fully participated throughout the audit process and is preparing to challenge the federal government's decision legally.
The recovery demand follows a forensic audit covering the period from April 1, 2019, to March 31, 2024, including funding provided during the COVID-19 pandemic. ISC said it could not obtain complete supporting documentation for some expenditures.
ISC spokesperson Carolane Gratton said the department emphasized its responsibility to ensure accountability in administering federal funding and issued a recovery letter to FSIN on Wednesday, Oct. 14, giving FSIN until Nov. 13, 2026, to contact ISC or repay the full amount to the Receiver General of Canada.
“The Government of Canada has a responsibility to ensure public funds are managed transparently and used as intended. Each year, [ISC] conducts independent program evaluations, internal audits, financial reviews, and forensic audits in accordance with Treasury Board Secretariat Policy,” Gratton said.
Gratton clarified that the minister of Indigenous Services does not participate in the initiation, execution or findings of forensic audits, which are conducted by departmental officials through established processes.
According to ISC, auditors met regularly with FSIN representatives throughout the review to provide updates, request additional documentation and present their findings. However, the department said it would not disclose further details beyond the publicly available summary report.
“The summary report, available on the Indigenous Services Canada website, is the only public record of this audit,” Gratton said.
She also cited privacy requirements and contractual obligations between the federal government and the recipient organization as reasons ISC could not share the recovery letter or discuss its contents. She said the letter was available elsewhere online but that ISC would not disclose details of subsequent meetings between ISC officials and the FSIN executive.
“However, due to privacy requirements and contractual obligations between Canada and the recipient, we cannot share the letter, discuss its contents, or disclose details of any subsequent meetings between ISC officials and the FSIN executive,” added Gratton.
Gratton said ISC officials remain available to meet with FSIN representatives. However, as part of the recovery process, ISC will file a statement of claim against FSIN seeking repayment of the funds. She said compliance measures are intended to promote accountability.
She added that responsible stewardship of public resources maintains public trust and ensures federal funding achieves its intended outcomes. The recovery demand follows the completion of the audit, although the dispute over the findings and repayment remains unresolved.
FSIN has rejected allegations of wrongdoing and indicated it intends to challenge ISC's decision through legal channels. Its response sets the stage for a potential legal dispute over the federal government's audit findings, the classification of expenditures as ineligible and the repayment demand. The outcome could determine how the parties resolve the disagreement over the funding reviewed.
Gratton said that throughout the forensic audit, ISC auditors met regularly with FSIN to share updates, request additional documentation as needed and present the audit findings. Despite the dispute, ISC said it remains committed to meeting with FSIN and maintaining its relationship.
She added that filing a statement of claim against FSIN for repayment is part of the process. With the Nov. 13 deadline, both sides face further discussions and possible legal proceedings over the repayment of more than $12 million in federal funding.
“Compliance measures are designed to support accountability and sound stewardship of public resources, helping to maintain public trust and ensure funding delivers the intended benefits and outcomes. ISC will work to maintain and build relationships with FSIN and its member Nations,” said Gratton.
