OTTAWA - The protesting chief of the Attawapiskat First Nation brushed aside a damning audit as a "distraction" and said the federal government is using it to undermine her credibility ahead of a key meeting this week with Prime Minister Stephen Harper.

A new audit of the finances of the beleaguered Attawapiskat First Nation found little or no supporting paperwork for more than $100 million in funds it received over a six-year period ending in 2011.

"There is no evidence of due diligence in the use of public funds, including the use of funds for housing," Deloitte partner Serge Desroches wrote in the audit which was given to Attawapiskat Chief Theresa Spence and her band last summer.

Spence is the chief who has been protesting the way the way the federal government treats First Nations by camping out on an island in the Ottawa River near the Parliament buildings and living on nothing but fish broth, water and tea since Dec. 11.

Spence has been in charge of reserve operations as chief since 2010. She was deputy chief from 2007 to 2010. The audit covers spending by the band on housing, health, and other operations between 2005 and 2011.

The independent audit by Deloitte Touche also tweaked the federal government's nose for inadequate financial controls of the money it gave the band.

The audit was released Monday by the Department of Aboriginal Affairs and Northern Development.
Deloitte said more than 400 out of 505 financial transactions between 2005 and 2011 lacked proper documentation.

"An average of 81% of files did not have adequate supporting documents and over 60% had no documentation of the reason for payment," Deloitte said.

"A controversial ... audit is no more than a distraction of the true issue and to discredit Chief Spence who is willing to lay down her life for a larger cause," said a statement issued by Spence's supporters.

Journalists were barred from Spence's camp following the audit's release and she did not speak to reporters.
Aboriginal Affairs Minister John Duncan did not speak to reporters, either, but his spokesman said the audit "speaks for itself."

NDP MP Paul Dewar said the timing of the audit's release is questionable, but suggested both the First Nations and the feds can both learn from the audit's recommendations.

Government memos obtained by QMI Agency last year indicate Attawapiskat was dubbed a "high-risk organization" - in part because of its lack of financial paperwork - years before its housing crisis made headlines.