According to emails obtained by paNOW, the Montreal Lake Cree Nation (MLCN) is nearly $20 million in debt.
Emails between band officials and First Nations Bank of Canada employees sent on Nov. 1 and obtained by paNOW, state the band’s accounts are “at a point where funding is no longer revolving the cash balance.”
Operating lines have been extended a total of six times in the last two years. They were extended in April and July of 2016 and were further extended in July, August, September, and finally in October of this year for a total of $1.15 million dollars.
The First Nations Bank of Canada employee advised band officials the bank would only approve essential payroll and social assistance transactions from November and beyond until the financial situation is sorted through.
On Nov. 7, an email from the same First Nations Bank of Canada employee to the same band officials states the bank was willing to work with the Cree Nation to rectify cash flow issues, but the bank needed to understand how the debt issues would be resolved.
“Total outstanding obligations for MLCN is just shy of $20 million,” the email on Nov. 7 read. “Budgets need to be formulated and communicated to the bank so we can work together.”
The email provided a break-down of the “outstanding obligations.”
It showed that $5 million is outstanding in deficit or unfunded capital revenue not spent on projects, and just shy of $4.3 million is left for outstanding accounts payable.
In terms of monies owing to the First Nations Bank of Canada, $543,000 is broken into two separate loans, while just over $5.8 million is outstanding for the construction of the new William Charles Health Center. A loan from TD Bank for the construction of the Center is pegged at $3 million.
A further $1.2 million is due in operating deficit.
This brings the band’s total outstanding monies to just under $20 million.
Acclaimed chief responds to debt situation
Newly acclaimed Montreal Lake Cree Nation Chief Frank J Roberts said the band is addressing the debt.
“We are working with the bank as we speak to rectify whatever financial situation the band was put in as a result of mismanagement from the previous band manager,” Roberts said.
Roberts said band manager Mark D’amato no longer works with the band and has no authority to speak on behalf of the Montreal Lake Cree Nation. A new band manager was hired in his place.
Roberts explained D’amato was given leeway in regards to the band's financials. However, sole responsibility falls on Chief and Council.
He said people receiving social assistance or post-secondary education living allowances and have experienced issues, will also have their situations rectified. Band employees, who hadn't been paid for a number of weeks, were paid at the start of this month.
“We’re at a changing point in our Cree Nation where we’re taking back our governance structure,” Roberts said. “We’re working with the bank at rectifying this situation and we have an action plan in place to ensure this doesn’t happen again.”
D'amato disputes deficit reports
In emails sent to paNOW, D'amato declared any Band Council Resolutions (BCR) or orders issued by Roberts illegitimate. D'amato said the Band Council Resolution which was issued declaring him terminated will be countered by his legal counsel.
"The BCR terminating me was signed by five council members, however, two of the three council members have since come forward with statements that they were coerced or threatened to sign against their will," D'amato's email read.
D'amato said he would be waiting for the federal courts to decide if Roberts is chief of the Cree Nation. He said BCRs issued with his signature are "nothing more than worthless paper at this time."
He also disputed the Cree Nation's financial standing of a $20 million debt. According to the most recent consolidated financial statements on their website, the band's net debt is roughly $11.5 million. D'amato explained just over $8 million of the net debt is short term lending for the Cree Nation's health centre. The remainder, roughly $3.4 million, is operating deficit.
He said the current year's deficit was incurred by the former councillors who “went on a spending spree in an attempt to pave their way with membership into the upcoming March 2017 election.”
“Former councillors are in fact responsible for the uncontrolled spending, with their signatures on the cheques as factual evidence,” D'amato said, adding neither he nor elected chief Henderson had access to the band's chequing accounts.
D'amato cited a Meyers Norris Penny (MNP) management letter, issued on Aug. 7, 2017 as evidence of “unchecked and uncontrolled spending.”
“We observed payments being issued without band manager approval which undermines any process to help ensure expenditures are within plan,” the letter read.
He further stated discretionary expenses, member assistance, travel, and increased wages as examples of unchecked and uncontrolled spending. The MNP letter encouraged Montreal Lake's chief and council to immediately address these issues.
D'amato said it was this spending which forced accounts to reach critical levels. Ultimately that spending brought about the Cree Nation's Financial Management Act on Sept. 29, 2016.
“During that year I was publicly 'tarred and feathered' in front of the community at Montreal Lake and portrayed as being the 'bad guy' for saying no and attempting to control spending,” D'amato said. “With the passing of the [Financial Management Act] spending was curtailed and controlled as the [Financial Management Act] required.”
On Twitter: @BryanEneas
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