NPC finance chief was boss of NPC’s travel agency, federal report reveals

The Nunavut Planning Commission’s former part-time senior finance officer, Nunavut business owner Victor Tootoo, is president of a firm that served as the NPC’s exclusive travel agent and is also president of a consulting firm that has received substantial professional fees from the NPC. (FILE PHOTO)

The Nunavut Planning Commission’s former part-time chief finance officer, Victor Tootoo, served in that job at the same time two that companies he holds interests in supplied services to the commission, a three-year financial review of the NPC by Indigenous and Northern Affairs Canada has revealed.

INAC’s financial review of the NPC, done by the accounting firm KPMG, covers a three-year period between 2012-13 and 2014-15, and was completed in August 2016.

The review found that two of Tootoo’s companies, the Northern Allied Inc. travel agency and Aarluk Consulting Ltd., performed work for NPC when Tootoo served as NPC’s senior finance officer.

“The report noted that the CFO of NPC [Victor Tootoo] held an interest in Northern Allied, the exclusive travel company used by NPC,” Jean-Marc Lafrenière, director of INAC’s assessment and investigation services branch, said in a letter to Sharon Ehaloak, the NPC’s executive director.

The report said KPMG could not find any documents explaining why NPC chose Allied Travel.

“KPMG did not have any concerns with the fees charged but noted a lack of supporting documentation around the decision to select Northern Allied,” the INAC letter said.

The financial review also found Aarluk Consulting received substantial fees.

“A large proportion of NPC professional fees over the period 2012-2015 relates to Aarluk Consulting, of which an individual is a partner as well as the part-time CFO [chief financial officer] for NPC,” the financial review report said.

Tootoo’s LinkedIn profile states he was president of Northern Allied and president of Aarluk—now called Nvision Insight Group—during much the period covered by the financial review.

“I help my friends solve their professional problems,” Tootoo’s LinkedIn page says under the entry describing his position as president of Aarluk.

Documents contained in 138 pages of emails and letters obtained by Nunatsiaq News reveal that Tootoo served also as the NPC’s acting executive director during periods when Ehaloak was off work.

One email from Ehaloak obtained by Nunatsiaq News suggests that Tootoo was acting executive director just recently, during the week of Aug. 15, 2016.

On its website, the NPC now lists the name of a different person as its senior finance officer.

But job advertisements that NPC posted in 2015 list Tootoo as chief financial officer and a job advertisement posted in 2014 lists him as “Aarluk Consulting.”

The financial review does not state how much money Tootoo’s companies received but NPC’s 2013 financial summary shows travel and accommodations accounted for about $1 million in NPC spending and spending on professional fees stood at $356,356.

During part of the period examined by the federal review, Tootoo’s brother, Hunter Tootoo, who now represents Nunavut as an independent MP, served as chair of the NPC.

Hunter Tootoo was appointed NPC chair on Jan. 26, 2015, some time after Victor Tootoo began working with the commission. Hunter Tootoo resigned the position shortly after July 27, 2015, when he was nominated as Liberal candidate for Nunavut.

Bernard Valcourt, the former INAC minister, ordered the financial review in July 2015, just weeks after Nunavut Premier Peter Taptuna had urged him to do so.

However, INAC staff were instructed to deny that Taptuna had any influence over the decision.

Staff were ordered to say, if a reporter were to ask if the financial review was done in response to Taptuna’s request, that “this was an independent decision made by AANDC [Aboriginal Affairs and Northern Development Canada, now INAC].”

In mid-2015, Taptuna was upset with a decision by the NPC to deny Baffinland Iron Mines Corp.’s Phase 2 project for its Mary River iron mine, because it did not comply with the North Baffin Land Use Plan.

In a May 2015 letter to Valcourt, Taptuna said Ottawa should take a look at NPC’s finances.

KMPG did look at NPC’s finances from 2012-13 to 2014-15, to see if its funding from Ottawa was spent in accordance with NPC’s agreements with the federal government, which put $55 million into the commission from 2001 to 2012.

In 2015, the NPC received an increase of 25 per cent in its core funding as part of the out-of-court deal that settled Nunavut Tunngavik Inc.’s longstanding lawsuit against Ottawa.

In 2015-16, the NPC received $7.2 million as part of that settlement and can now count on core funding of about $5.3 million a year, according to numbers in media lines from Aug. 4, 2016 that INAC staff were instructed to cite, documents reveal.

The KPMG review focused on the NPC’s finance department, looking at such items as accounts payable, accounts receivable, administrative preparations for board meeting, attendance, travel advances and travel procedures.

The review found overall that the NPC’s management controls were “adequate” and “improved over the period of the review.”

But it did note that NPC passed all of its travel expenses through a travel company called Northern Allied, for which Victor Tootoo serves as president.

Tootoo’s LinkedIn page lists the company as an “Inuit owned, Nunavut-based travel management company. Taking the headache out of northern business travel.”

“This could create in the eye of some a lack of transparency and NPC should consider how to deal with this issue,” Lafrenière said in his July 13, 2016 letter to Ehaloak.

A later, finalized letter from August is now published on INAC’s website, available here.

KPMG said Northern Allied charged no unusual fees, its service fees were paid on a flat fee basis and that these service fees “appeared reasonable.”

KPMG mentioned that a payment to Ehaloak, for unused vacation in 2012-13 was “the only unusual salary payout.”

Other expenses that KPMG noted are the NPC’s legal fees. They increased by 86 per cent from 2012-13 to 2013-14.

In 2012-13 those legal fees, which stood at $252,177, would have risen by about $117,000 in 2013-14 to nearly $400,000, although more recent financial statements for NPC are not posted online.

But the NPC declined to provide the supporting documents for the “significant legal fees incurred.”

“This is unfortunate as a significant amount of money has been spent that KPMG was not able to report on,” Lafrenière said.

The review report said some of those legal fees are related to a lawsuit against the federal government that NPC filed in 2014 and that NPC did not want to provide its invoices to KPMG, because they might contain legal opinions.

In the lawsuit, NPC alleged the federal government had denied extra funding—about $1.7 million—required to host an additional final round of consultations, and a final hearing on its draft Nunavut land use plan.

The INAC review also found that NPC did not report on progress or stick to its budget: “NPC does not fully align with the tasks approved by INAC in the work plan at the beginning of each fiscal year.”

“Significant variances exist in actual expenditures when compared to approved budgets, and tasks expected to be completed are not formally reported in the activity report,” Lafrenière quoted KPMG as saying.

But the KPMG review found the NPC’s explanations for those variances “appeared reasonable.”

Hunter Tootoo said in July 2015, when he still served as chair of the NPC, that the federal financial review was unnecessary, but that the NPC would co-operate.

“We submit our work plan and budget on an annual basis. And they approve it every year. But if they want to come in and do it all over again, they can knock their socks off. That’s their prerogative. We have nothing to hide,” Tootoo said.

On its website, the NPC says that a final hearing is planned for March 2017 in Iqaluit to wrap up its draft Nunavut land use plan “subject to funding availability.”

INAC letter to NPC executive director by NunatsiaqNews on Scribd

Financial Review of Nunavut Planning Commission by NunatsiaqNews on Scribd