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Tribe works to address worries about internal fiscal controls

Jan 20, 2017 By Daniel Bendtsen, Staff Writer

Concerns over operations inside the Northern Arapaho Tribe's financial office became so grave late last year that the tribal business council considered decentralizing some of its finances and putting individual programs in charge on their own accounting.

Federal agencies frown upon decentralization when considering grant applications. Past decentralization reportedly has led to incidents of theft, with severe funding repercussions.

The proposal came at the request of program directors who have become frustrated with the financial office and who worried that mismanagement could lead to serious consequences.

On Dec. 17, Yufna Soldier Wolf, who heads the Tribal Historic Preservation Office, asked the Northern Arapaho Business Council for permission to detach from the rest of the tribe's finance office.

The THPO is responsible for sending tribal representatives to survey lands for burial grounds and other sacred sites. Whenever a cell phone company wants to build a new tower in areas where the Northern Arapaho have had a historical presence, for example, the company has to pay THPO representatives - typically ceremonial leaders and tribal elders - to ensure the construction does not disturb areas of cultural significance.

Such projects bring in substantial funds for the THPO; in the last five years, Soldier Wolf's office has garnered $1.5 million from cell tower revenue. More than half of that total came in 2016.

In a memo to the business council, Soldier Wolf said the funds are "important to the program and the vitality of the tribe."

"However, due to Northern Arapaho Finance's unaccountability and mismanagement of these funds, THPO will not function this way for the next upcoming years," she said.

She said the finance office jeopardizes grant funding by not making timely draw downs.

The finance office suffers from a "lack of ethical work procedures," she alleged in a letter to a business council. Bills are not paid in a timely manner, and there is little accountability or transparency around indirect cost funds.

THPO has filed a grievance against the finance office's compliance officer and travel coordinator, but Soldier Wolf said "nothing has been done" by the tribal administrator. She has prepared a draft resolution through which the NABC would separate her office and allow it to be governed by a seven-member advisory board that would oversee all THPO projects.

Previously, Soldier Wolf said she'd call for a special general council meeting to separate the finances if the business council didn't take action soon. She has since pulled back on the demand.

In a statement last week, Soldier Wolf told The Ranger that since a Dec. 21 meeting with the business council and tribal elders, "many of our concerns have been addressed and we are thankful to the business council for dealing with the issues which we shared with the council."

The Northern Arapaho Business Council said in a press release that the tribe's rapid growth is creating "unique obstacles," but that the new business council is "committing to addressing these obstacles by focusing on improving our management structure and providing additional support service for our program directors."

Reasons for decentralization

Consequences have arisen in recent years from poor financial management.

The tribe's poor accounting led to two disclaimed audits -- one in 2009 and one in 2010 -- and as a result, most federal agencies placed the tribe on reimbursement status, meaning it could only get federal funds after expending tribal dollars up front and then providing proper paperwork.

The disclaimed audits also required the Wind River Hotel and Casino to pay $25,000 in annual financing penalties.

The tribe was fortunate enough at the time to have enough cash-on-hand, but if the same situation were to repeat itself, banks may choose to deny or not renew loans.

When the tribe failed to maintain "appropriate internal controls" and to submit timely audits to Health and Human Services in 2011 and 2012, the agency imposed "special award conditions" to allow the tribe to keep receiving funds. Those conditions included a resubmission of reimbursement documents and the hiring of an outside accounting firm.

The tribe hired an outside certified public accountant, Anita Guerney, who worked on generating historical data and developing protocols that would prevent future mismanagement issues. In addition, the chief financial officer was replaced by Tracey Beckler.

Before long, Guerney butted heads with her new CFO and was forced out.

Still in reimbursement status, the tribe paid $2.9 million for substance abuse services.

The tribe was eligible for full reimbursement, but financial reports were not properly filed with the Substance Abuse and Mental Health Services Administration. Employees from the tribe's financial office were brought to Washington, D.C., to meet with SAMHSA accountants. The finance employees received in-service training, and SAMHSA struck a deal in 2013 to reimburse the costs if Beckler filled out financial reports. She never did, and the tribe was never reimbursed.

Despite the criticism that the financial office is mismanaged, Beckler has developed a positive reputation for preventing cases of outright corruption. Before she came on board, the tribe sometimes received hundreds of thousands of dollars in charges for insufficient funds, and Beckler also has been credited with efforts to address that problem.

History repeating itself?

When the Arapaho's central finance office experienced similar issues in the 1990s, the tribe began giving separate banks accounts to program directors. Even when programs were decentralized, though, the financial reporting process wasn't any better.

In 2008, Milton Trosper failed to submit quarterly reports for the senior services program to the Wyoming Department of Health, and the state agency came down hard on the business council.

"This continues to be an ongoing problem, even though promises to do better are made each time this situation reaches a breaking point," WDH aging division administrator Beverly Morrow said at the time. "My concern is that the Arapaho elders may be losing out on important needed services, and a higher level of helpful services, because valuable resources are being lost due to lack of compliance with contractual requirements that are not that difficult to accomplish."

Also in 2008, the tribe discovered that Trosper had been giving himself and his secretary $8,000 in kickbacks each month.

Around the time that Trosper was fired, the tribe discovered that Northern Arapaho Department of Social Services director George Moss also was misspending federal funds. Moss pleaded guilty to embezzlement or conversion of monies from an organization receiving federal funds and was sentenced to three years probation.

Amid the revelations of mismanagement, the tribe's auditor pulled 36 transaction tests on one of the tribe's programs. Thirty-four of the tests found very poor documentation.

After the Department of Interior's Office of Inspector General confirmed some of the embezzlement issues in 2016, the business council said in a statement that this "behavior was unacceptable and should never be tolerated again."

Despite the criticism that the financial office is mismanaged, Beckler has developed a positive reputation for preventing cases of outright corruption.

Before she came on board, the tribe sometimes also had hundreds of thousand of dollars in charges for insufficient funds, and Beckler also has been credited with efforts to stop that.

Even if the Arapaho's current program directors are all honest officials, sources believe a return to decentralized finances could open the door for embezzlement once again.

An accountant who specializes in cleaning up fiscal mismanagement in Indian county told The Wind River News that the Northern Arapaho Tribe already has a reputation of being financially irresponsible; decentralization could be "the kiss of death."

"When you get that type of a situation, almost every time it ends up a disaster," he said. "History has shown that it erodes controls and leads to misuse of funds. If one agency gets to split off, they're probably going to end up with less money and more problems."

Former business council members warned that such instances could re-arise if the new business council were to decentralize the finance office again. They said they would actively campaign against the idea if it arises in a general council meeting.

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2017-10-22

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