The federal government launched an ongoing financial probe of a national Métis organization following a meeting with investigators with the RCMP, CBC News has learned.

The federal Crown-Indigenous Relations Department hired Ernst & Young to conduct a compliance audit that began in July 2018 of the Métis National Council (MNC), which receives millions of dollars annually from the federal government for its operations.

The audit was launched after department officials met with investigators from the RCMP's sensitive and international investigations unit who had opened a case on the MNC, according to email correspondence between the former employees and RCMP investigators obtained by CBC News.

The RCMP investigators approached the department after interviewing three former employees of the MNC. CBC News has spoken to two of the three former employees and reviewed email correspondence confirming the interview with the third employee.

The complaint from the former employees filed with the RCMP, obtained by CBC News, names two individuals in advisory roles with the MNC who own, owned or are connected to companies that have received hundreds of thousands of dollars in contracts from the organization over the last four years.

CBC News agreed to withhold the names of the two former employees over concerns revealing their identity could affect their current jobs.

The complaint alleged that some federal funds transferred to the organization for Métis programs were redirected through double payments for travel, expenses and equipment and through contracts to a select group of companies and consultants.

None of the allegations has resulted in any charges or been proven in court.

David Chartrand, the MNC's minister of finance and the president of the Manitoba Métis Federation, told CBC News the allegations were false and that the organization has nothing to hide.

Chartrand denied the existence of the RCMP investigation, or that there were any financial improprieties with the way the MNC conducts its business.

'Financial review' being conducted

Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC) has tasked Ernst & Young with examining transactions between 2015 and 2018, according to a Dec. 24, 2018 letter sent to the MNC by Jean-Marc Lafrenière, director of CIRNAC's assessment and investigation services branch, which was provided to CBC News by the MNC.

Lafreni​​​​​​ère's letter said the department received allegations over the "procurement of professional services and the reimbursement of expenditures which may have resulted in departmental funding being used for ineligible expenditures."

CIRNAC told CBC News in a statement that its assessment and investigation services branch retained Ernst & Young LLP on July 11, 2018 to conduct a "financial review" of its contribution agreement with the MNC.

Contribution agreements govern how funds from the department to the organization should be spent.

"As the financial review is not yet finalized, the department cannot comment further," said the statement.

The RCMP's National Division sent a statement to CBC News saying the federal police force does not confirm or deny the existence of ongoing investigations.

The RCMP's investigative file remained open as of March 2019 while investigators await the end of the Ernst & Young audit, according to emails obtained by CBC News.

RCMP investigators expect to meet with department officials once the review is complete, according to the email correspondence.

Crown-Indigenous Relations Minister Carolyn Bennett's department launched the financial review of the Métis National Council after department officials met with the RCMP. (Justin Tang/The Canadian Press)

'There is no RCMP investigation': Chartrand

The MNC's funding from Ottawa has grown to nearly $8 million in 2018 from approximately $3 million in 2015, according to its yearly audited financial reports.

David Chartrand said the MNC has never been contacted by police investigators.

"There is no RCMP investigation; the RCMP never investigated anything," said Chartrand.

Chartrand said a "disgruntled former employee" who left with "strong undertones of threats that he was going to bring the MNC down" went to the RCMP with a complaint.

"The RCMP wouldn't look into it, and it was passed back to [the federal department]," said Chartrand.

Chartrand said the organization has been co-operating with Ernst & Young, and auditors have not found "any really major red flags" with the organization's finances.

'They have gone really in depth'

Chartrand said the auditors did find issues with financial coding and are focused on matters like flights, who was on the flights, the agenda for the trips and whether the agenda matched the department's rules on how the funding should be used.

"They have gone really in depth into small stuff because they can't find nothing in the major side right now, in the bigger numbers, bigger contracts," he said.

Chartrand said a high number of contracts were awarded to a small group of firms, some either owned or which have been owned by individuals identified as advisers to the MNC, because they have worked with the organization for years.

The MNC's own rules require competitive bids for all contracts over $10,000, according to an audit done on the organization in 2012.

"The reason a lot of these companies have stayed with us is the patience they have in collecting their payments," said Chartrand.

"We don't get our funding until late in the year and sometimes in the spring, and we fund ourselves independently between those time periods."

Chartrand said he's confident the MNC will emerge clean from the financial review.