Indian tribe can’t account for $14.5 million

BILLINGS, Mont. >> Montana’s Crow Indian Tribe has been unable to account for $14.5 million it received for transportation programs, marking the second time in less than two years the tribe has been faulted for its handling of federal grant money, government investigators disclosed today.

The finding from the U.S. Interior Department’s Office of Inspector General resulted from an audit of a contract that provided federal money to build and maintain highways, bridges and transit facilities on the tribe’s southeastern Montana reservation.

The audit obtained by The Associated Press showed the tribe was unable to provide documentation on payments it made to subcontractors and vendors between Oct. 1, 2012 and March 31, 2017. Investigators could not determine what happened to the money.

They faulted the tribe for having “deficient internal controls” over the money and said its accounting system was inadequate to handle federal funds.

“We requested the necessary documentation numerous times during two site visits, and through emails to the finance and legal departments and the chairman of the Tribe,” investigators wrote in today’s report. “They all stated that the records have not been located. Therefore, we question the total amount of the agreement’s $14,492,813.”

Most of the money was received by the tribe under the leadership of former Chairman Darrin Old Coyote. Old Coyote lost in the 2016 election and was replaced by current Chairman A.J. Not Afraid Jr. in December, 2016.

Old Coyote flatly denied that any federal funding was unaccounted for during his administration and said that all money was properly allocated and documented during his tenure.

He instead said the problem was the fault of a contractor who managed the tribe’s finance department after he left office. He cited an excerpt from the audit that said that contractor did not know how to manage federal agreements.

The problems within the finance department happened after his term, and the inspector general is wrong to question the spending under his administration, he said.

“We’re being penalized for somebody else’s incompetence right now,” Old Coyote said. “We have all the audits, and if there was a question they probably would have asked us then.”

Not Afraid pinned the blame on Old Coyote and past administrations, saying in a statement that he was appointed to head the tribe’s finance department in 2013 but resigned because of the policies of the Old Coyote administration.

“I vowed to clean up the mismanagement of grants and programs that has occurred over the last decade,” Not Afraid said in a statement. “Change takes time, but it continues to be the priority of this Crow Administration to provide a responsive and financially responsible government to the Crow Tribal Members, as well as to the taxpayers of the United States.”

The tribe could be forced to repay some or all of the money if it cannot document where it went.

In 2016 the tribe had to repay more than $2 million to the federal government after an earlier audit revealed tribal officials diverted money meant for a new transit facility into the tribe’s general budget.

In that instance, investigators from the Inspector General’s Office said officials with the Bureau of Indian Affairs knew the money from a 2012 transportation grant was misspent but failed to take action.

The Bureau of Indian Affairs said in response to the latest Inspector General’s report that it had designated the Crow Tribe as “high risk,” meaning it can now receive government money on a reimbursable basis only and not in advance.

The bureau also imposed sanctions that limit grant funds to monthly installments until the tribe completes its own audit of spending during 2016, according to an April response to the Inspector General’s Office audit from Susan Messerly, acting bureau director for the Rocky Mountain region.

The tribe has hired a new team of certified public accountants to determine what happened to the $14.5 million and to better track spending of federal money going forward, Messerly said.

But the Inspector General’s Office said today that the steps taken by the bureau to date have been inadequate because officials did not include target dates for proposed changes to the tribe’s accounting system.