Key First Nation

Voluntary Forensic Audit of Key First Nation

March 24, 2011

ATTENTION KFN BAND MEMBERS;

Please be advised that the Chief and Council have voluntarily called for a Forensic Audit to all Key First Nation program funding, including KFN PHL Trust Funds. This action is being undertaken due to unresolved questions in respect to the financial accounts of many PHL Band Account and Band Programs and Funding.

A highlight of the KFN PHL Trust forensic audit is that it shall include a microscopic examination of the Pelly Haylands Trust (Property) from the inception date of the KFN PHL Trust Agreement Settlement of September 2008. Furthermore this investigation will specifically include a thorough examination of the KFN PHL Trust Agreement Royal Bank of Canada (RBC) payment of existing debt of KFN, authorized under article 4.01 (d) of the trust agreement.

Highlights of the forensic audit for the Key First Nation band funding is that this examination shall look at the last seven years of Band Funding. This examination will be conducted by financial experts that will conduct Financial Transaction Reconstructions.

These Financial Transaction Reconstructions will look at financial transactions and records of those transactions at the banking institutions that served these transactions. Any resulting lack of record of First Nation documentation of authorization at the band level will not excuse the culpability of any individuals involved in any potential situations where breach of trust or abuse of authority has occurred.

Please be advised once again that this action is being carried out on a completely voluntary basis by the current Chief and Council. The KFN Band Administration forensic audit is authorized under article 3.3 of the KFN Comprehensive Funding Agreement. The KFN PHL forensic audit is authorized by the Chief and Council due to valid concerns with respect specific circumstances that Chief and Council will be free to report upon once completion of the KFN PHL Forensic Audit investigation is attained.

In closing please be advised that Chief and Council have also directed that if any circumstances of wrong-doing are uncovered in this investigation, then these findings will be forwarded to law officials for any required prosecution under the full extent of the law. The forensic audits are anticipated to begin in early April, 2011.

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