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While hard winter weather closes in on the residents of Attawapiskat reserve, a war of words has broken out between the federal government and the leader of their squalid northern Ontario community.

Dismissing suggestions that millions have been misspent there, Attawapiskat First Nation Chief Theresa Spence said the reserve's financial statements are audited annually and government officials have visited the James Bay community 10 times in the past year.

She added that Ottawa placing the reserve's finances under third-party control was a classic case of blaming the victim. The federal government has stated it wants to determine how $90 million in federal funds was spent over the past five years.

According to Spence, "It is incredible that the Harper government's decision is that instead of offering aid and assistance to Canada's first peoples, their solution is to blame the victim and that the community is guilty and deserving of their fate."

Last month the reserve declared a state of emergency and called in the Red Cross to help those living in tents and trailers, which in some cases are surrounded by raw sewage.

John Saunders, the Ontario director of disaster management for the Canadian Red Cross, said he was shocked to see the living conditions in Attawapiskat.

"We're not necessarily used to seeing people living in shacks and sheds," he said. "And especially the numbers of people, where we're seeing five or six people living in an 8-foot-by-10-foot space as their entire living area. … It's somewhat shocking to many."

For the short term, the Red Cross has brought in sleeping bags and space heaters to help keep people warm but there are plans to bring in generators and additional heaters.

When asked about the crisis during a visit to Burlington, Ont. on Friday, Prime Minister Stephen Harper said the government's goal remains self-governance for Canada's First Nations.

He said the issue of squalid conditions in communities like northern Ontario's Attawapiskat had come up during a meeting Friday with Assembly of First Nations Chief Shawn Atleo.

"I think the long-term goal of everybody is to have strong, accountable systems of self-government for Aboriginal communities. I think we all realize that we're not going to get there in one giant leap," Harper said after meeting with Canada's top chief.

In an open letter, the chief of the Attawapiskat reserve said "smashing the status quo" of government-native relations is essential to the future of not only her reserve but many others in Canada.

"It should not take a crisis to prompt change," Spence said. "Blaming is hurtful and pointless."

She also accused the federal government of ignoring treaty rights and of dragging natives back into a failed system.

Charlie Angus, the New Democrat MP who represents the region, said there has been a media fixation on the money issue because people outside the north have no concept of the fiscal demands of living in the north.

"The fact is, if you are paid in Attawapiskat, for example, the per-capita spending is about one-half of what it is on a non-native Canadian," Angus told Â鶹ӰÊÓ.

"But meanwhile, you have to do all your infrastructure, all your education, all your health services. Things start to fall apart pretty quick and that's what's happened in Attawapiskat, it's happened in Pikangikum, it's happened in Kashechewan, it's happened in Fort Albany, this is happening across northern Canada."

Angus said Attawapiskat is one of a number of northern communities that have been ignored by Ottawa, while residents have grappled with horrendous living conditions and grinding poverty.

"You look across Northern Canada and these communities are collapsing, Attawapiskat is the tip of the iceberg," Angus said.