Bernard Valcourt, minister of Aboriginal Affairs and Northern Development Canada, issued a statement late Monday saying that after discussions with MANFF officials, it was decided they are ill-equipped to deliver long-term recovery services and support for evacuees.
"While the Manitoba Association of Native Firefighters (MANFF) has done important work in the areas of emergency preparedness and response, their capacity to deliver long-term recovery services and support for evacuees is limited," Valcourt said in the statement.
"This is something that MANFF has indicated in discussions with my department."
He has asked officials from his department to start working on a "transition plan" involving MANFF, the affected First Nations, and the Manitoba government.
The Red Cross will be brought in to help but has not yet agreed to handle federal money, saying it is still examining the situation.
Officials with the agency told CBC News they will conduct a summer-long assessment of the flood evacuees' accommodations and food arrangements, among other things.
The changes come after a series of investigations by the CBC I-Team, which found that MANFF has been accused of not paying some of its bills to hotels, filing questionable overtime charges, and spending more than $1 million at a Winnipeg restaurant for late-night snacks over an eight-month period.
The owner of two hotels that house flood evacuees told the I-Team last week that MANFF co-ordinators had been negligent and even intimidating towards hotel staff and evacuees.
There is an ongoing federal investigation into the activities at MANFF.
The association was tasked with disbursing federal funds to First Nations members whose reserves were severely damaged by spring flooding in 2011.
Many First Nations flood evacuees continue to stay in temporary accommodations, mainly in hotels, over two years after they were displaced.
"Our government's priority is the health and safety of First Nations people and that's why we are focused on ensuring that Manitoba flood evacuees continue to receive the services and support they need until they can return home," Valcourt said.
The Red Cross had been in contact over the last week with hotels that house flood evacuees, CBC News has learned.
MANFF welcomes change
In a statement issued Tuesday, MANFF said it "welcomed the transition, from its organization to the Canadian Red Cross, of services relating to the 2011 flood evacuation."
"In 2011, MANFF was asked to provide support for a challenging evacuation that was not only outside its mandate, but without precedent in Manitoba," the agency's statement reads in part.
"It felt that both the board and its employees did the best job possible and hopes that it provided some measure of support to the First Nations people who have been dislocated from their homes and communities for such an extended period of time."
Bertha Traverse was forced from her home on the Little Saskatchewan First Nation and is currently staying at Misty Lake Lodge.
She said she’s glad to see MANFF go.
“I believe the evacuees will now be getting better care,” said Traverse. “There’s a lot of people out there that are having social problems — a lot of depression.”
Traverse said MANFF didn’t respond to concerns she brought to them, and she hopes the Red Cross will be able to do a good job of managing the evacuees moving forward.