Salt River audit found ‘significant mismanagement:’ Martselos

An independent audit found “significant mismanagement of Salt River First Nation funds by certain previous councillors,” says Chief Frieda Martselos in a letter to band members earlier this year.

Last week, Martselos handed over the results of a forensic audit to RCMP. In a news release, RCMP confirmed that its Financial Crimes Section would investigate “financial irregularities."

Martselos was re-elected chief of the Salt River First Nation in Fort Smith, N.W.T. in April last year. She says she ordered the audit shortly after taking office.

“We looked at the numbers — chief and council looked at the numbers — and we felt that there was a lot of irregularities and mismanagement of honoraria that was paid out to the former councillors. We wanted to verify some of these numbers.”

The resulting audit led to four former councillors receiving bills for over $60,000. One of those former councillors told the CBC the bills were a ploy to prevent them running in the upcoming band election.

Martselos disputes that claim.

“I’m doing everything I can to make Salt River a very strong and vibrant band once again, and the majority of the membership knows it.”

The four former councillors are pursuing legal action. 

The band election is scheduled for Sept. 29.

Gas bar money spent, but no new building

Martselos would not release the audit itself, done by Edmonton-based MNP, saying “it’s a private document,” but she outlined some of the highlights in a July 18 letter to band members.

In the letter, she says that when she resigned as chief in September of 2011, the First Nation had almost $7 million in the bank.

When she returned as chief 18 months later, she found $16,000 in the bank and $1.2 million in unpaid bills.

Martselos says about $2.5 million was set aside to build a gas bar on reserve land in Fort Smith. Most of the money was spent, but the gas bar is still operating out of a temporary trailer. Councillors billed a total of $88,491 in travel expenses related to the project, which forensic investigators concluded was “grossly mismanaged,” according to Martselos.

Martselos says there was also a $200,000 line of credit and a maxed out credit card. That debt has now been eliminated.

David Poitras was chief of the Salt River First Nation for just over a year and a half between Martselos' resignation and return as chief.

He refused to comment on the matter.