OTTAWA - Prime Minister Stephen Harper says he's not happy that millions of federal dollars have not alleviated the housing crisis in the Northern Ontario native community of Attawapiskat.

"This government has spent some $90 million since coming to office just on Attawapiskat," he told the Commons on Tuesday. "That's over $50,000 for every man, woman and child in the community.

"Obviously we're not very happy that the results do not seem to have been achieved for that."

He and Aboriginal Affairs Minister John Duncan said officials are looking into the situation.

But a 2010 audit of federal funds spent on reserve housing suggests there's a lack of oversight on the part of the federal government into how that money gets spent.

"There remain significant gaps to provide assurance that governance, risk-management and control frameworks are adequate to provide a reasonable expectation that funds for on-reserve housing are used for the intended purpose and that outcomes will be achieved," the audit of the Aboriginal Affairs department said.

It found that housing funds were allocated using dated reference levels, raising the risk it doesn't reflect actual need.

Meanwhile, the department didn't explicitly track the money it spent, so it couldn't say whether it actually achieved results.

The department also relied on reports from First Nations on the state of housing but did not double-check those reports, the audit said.

"There is a risk that housing-performance information being tracked and reported by the department is not accurate, complete and reliable," the audit found.

The study also found that government officials weren't regularly checking on housing projects and when they did, they didn't document what they found.

The federal government regularly spends about $272 million a year on reserve housing and allotted an additional $192 million over five years in the 2005 budget.

A further $400 million was allocated through the stimulus program.

The money flows through Aboriginal Affairs and Canadian Mortgage and Housing Corp., though the audit only examined Aboriginal Affairs funding.

A government response to the audit's seven recommendations suggested that as of last March 31, some changes had been made.

A formal monitoring and oversight program was also scheduled to be developed this year.

This week, the Conservatives said they'd give the Attawapiskat reserve in the James Bay region up to $2 million more to deal with a housing crisis — if the band produces solid, detailed plans for building more homes.

Getting all First Nations to develop more thorough plans was a suggestion raised in the audit, which said management practices and reporting expectations related to housing are inconsistent across the country.

"Formalized processes are not in place in regions for the review and challenge of community housing plans or for the monitoring of the extent of implementation and current status of existing housing plans," the audit said.

According to figures providing by Aboriginal Affairs, the Attawapiskat Cree band has received just over $3 million in funds specifically for housing and a further $2.8 million in infrastructure money since 2006. In total, the department says the community of around 2,000 has received over $90 million since 2006.

Yet families are living in tents, uninsulated shacks or abandoned construction trailers in the snows of early winter.

The community has declared a state of emergency three times in the last three years, once over air quality concerns following the demolition of a school, once over a wastewater backup that forced homes to be evacuated and now over housing.

"The community has a number of challenges, one of them being its financial challenge," Duncan said in the Commons last week.

"Part of our overall next steps is to get to a place where proper local administration and governance can ensure there is progress being made in the community," he added.

Loading Slideshow

• A child with a facial rash from lack of clean water and sanitation.

• Many children are scalded and burned from living in densely overcrowded houses with makeshift wood stoves.

• Inside a makeshift tent -- home to a family of six.

• A young mother stands in front of the tent she has shared with her husband and four children for two years.

Video and photos courtesy of Charlie Angus