New documents show the federal government turned down the assembly's request for an extra $324,000 to cover the unforeseen expenses that arose when Atleo quit his job last May.
Atleo stepped down amid fears that he'd become what he himself called a "lightning rod" for controversy as a result of having backed the Conservative government's proposed reforms to First Nations education.
The AFN told Aboriginal Affairs and Northern Development Canada it needed the money to help pay for a special gathering of chiefs from across the country and an earlier-than-planned election for a new national chief.
But Aboriginal Affairs Minister Bernard Valcourt rejected the request. His signature appears next to a checked box that says "I do not concur" on a note sent to his office last December. The AFN confirmed that it did not receive the funding.
The Canadian Press obtained a partially censored copy of the document, as well as the AFN's proposal, under the Access to Information Act.
The AFN made its request last November — a little more than two weeks before Perry Bellegarde's election as national chief, but well past the department's February 2014 deadline for funding proposals.
But a briefing note sent to Valcourt in early December notes there was no way the AFN "could have anticipated the resignation of former national chief Atleo in May 2014 and the funding pressures it would create."
"If the current proposal had been submitted by the Feb. 21, 2014, deadline, it would have been eligible for consideration," the document says.
The briefing note says the AFN received $4.5 million in core funding and $738,720 for projects between April 2014 and the end of this month.
The extra cash the AFN asked for — $79,000 to appoint a chief electoral officer; $145,000 for a transition team for the new national chief; and $100,000 for a special assembly of leaders — was on top of the money it already received for the year.
The assembly says it paid for those things out of its "existing resources and revenue generated," a decision that it says could put the organization into a deficit position.
Valcourt's office has yet to respond to questions about the funding request.
The Conservatives' proposed reforms to First Nations education deeply divided the aboriginal community and precipitated Atleo's sudden departure as national chief of the AFN.
Some saw it as a first step — with a substantial dollar amount attached — that could improve the lives of First Nations children. Others viewed it as the government exerting too much control over aboriginal education.
Regional chiefs briefly showed their support for the education bill by attending a February 2014 event with Prime Minister Stephen Harper and Atleo, but that support quickly evaporated.
The legislation has been in limbo since last spring, when chiefs from across Canada rejected the Harper government's proposed reforms.
The Conservatives say the bill — and the $1.9 billion attached to it — will remain on hold and no new money will be spent until the AFN gets behind the legislation.
Bellegarde says the AFN has no intention of doing so.
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