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Arapaho vow to improve fed funding receipts

Jan 24, 2017 By Daniel Bendtsen, Staff Writer

Data show the tribe might be missing out on as much as $50 million available funds.

The Northern Arapaho Tribe is severely underfunded when compared to other tribes across the United States.

The tribe, which shares the Wind River Indian Reservation with the Eastern Shoshone, has three main streams of revenue: gambling dividends, taxes and royalties from oil and gas development, and contracts from the federal government.

During the 2015 fiscal year the Arapaho received $11.5 million in federal contracts, or $1,071 per capita based on an enrolled membership of roughly 10,600.

The per capita amount is lower than almost every large tribe in the country: According to every available audit from the last year, tribes with at least 5,000 members received an average of $3,993 per enrolled member in the tribe's "service area."

The funding pictures emerged from hundreds of audit summaries compiled by The Ranger.

More available

Each month, various federal agencies publish millions of dollars of grant opportunities that the tribe doesn't apply for. Many of the grants target economic development and social issues that have long plagued the Wind River Indian Reservation.

The Northern Arapaho Business Council said in a press release that "one of our highest priorities is to create economic development opportunities for tribal members and the surrounding community.

"One way to achieve this is by maximizing the opportunities for increased federal funding provided under the Self-Determination Act, which encourages tribes to take greater control of services currently administered through the federal government," the NABC continued. "Working together with our programmatic staff, we hope to make the promise of self-determination a reality."

The tribe has worked in recent years to get back into favor with the federal government after a decade of financial mismanagement locally. Despite those efforts, however, the tribe still receives less money per capita from federal grants than tribes including Montana's Chippewa Cree, which had at least 25 high-level members indicted on embezzlement charges following investigations that began in 2012.

An auditor who has worked with the Chippewe Cree said that, even if a tribe has a questionable financial history, filling out the basic forms and having a competent finance office goes a long way.

Root causes

Former members of the business council said they've been aware that the tribe could be receiving as much as $50 million annually in federal funding, but they argued that they ran into several issues when trying to expand the federal grant program.

For one, they said, the financial office is not well equipped to handle the increased workload that would be required to apply for additional grants, and chief financial officer Tracey Beckler has opposed increasing staffing in her office, especially during difficult financial times.

New grants have been targeted for application in the past, the required paperwork was not filed. Beckler has been encouraged to use outside consultants, but she has declined.

According to some who've pushed for increased staffing at the office, Beckler has expressed concern over expansion because of inefficiencies that existed before she became CFO in 2012. Many staffers in the pre-2012 era, called "ghost employees," did little work, and the office relied on outside consultants to complete the bulk of its workload.

Employee attendance continues to be an issue.

Sources say Beckler excels at cost control and has resolved other financial issues effectively, but some say it's time to address revenue growth.

"As a bean counter, she's great, but she's not a CFO," said one former council-member who requested anonymity.

Beckler

In January 2016, leaders of the tribe, along with attorneys, consultants and finance staff, gathered to address an emergency cash-flow problem, which ultimately led to layoffs of tribal employees.

Beckler had said that the tribe was within three months of running out of money.

What the NABC didn't know at that meeting was that, less than a month prior, the federal government had $4.7 million sitting in its payment management system, waiting for the Arapaho to draw it down with a few clicks of a mouse.

The business council wouldn't find out about the money until accounting firm Donham & Associates noted the sum in a Sept. 30 audit.

Last year, an outside contractor for the tribe completed a feasibility study for developing a solar farm that would bring in new jobs and tax revenue. After the needed grants were identified, however, Beckler opposed moving forward on the project because it would have required the tribe to expend its own funds to hire a firm to complete the work.

In a prepared statement, the NABC said it would not address Beckler's performance, nor "any employee and their employment status."

"It would be inappropriate to publicly discuss personnel decisions and would be a violation of both tribal and federal personnel policies," the NABC said.

Ryan Spoonhunter, who served on the business council before he lost a re-election bid last fall, defended Beckler and said that the lack of federal funding does not result from a lack of effort.

He said tribal matches required by many grants are sometimes cost-prohibitive, especially given the decline in oil and gas revenue that has cash-strapped the tribe.

Two tribes

The Northern Arapaho and Eastern Shoshone are the only tribes in the country to share a reservation, which has also created issues with the amount of grant funding received.

Some agencies, especially the Bureau of Indian Affairs, have sometimes treated the two tribes as one, cutting funding in half for each group.

The dissolution of Joint Business Council also has reduced the funding the tribes have received. Before the JBC's dissolution, the joint finance office received $20.5 million each year in grants. In 2015, the office received just $3 million.

When the Arapaho left the JBC in 2014, they hoped the split would eventually lead to more funding for both tribes.

However, continuing disputes over the futures of the formerly shared programs have not allowed that goal to be realized.

The two tribes also have been eligible to split grants, which agencies prefer to divide proportionately based on population. But because the Shoshone have argued that grant funding should be split 50-50, Spoonhunter said it often was hard to find agreement on the terms of grant applications.

Audits

Council members believed their poor audits in recent years have also been an obstacle.

The tribe received two disclaimed audits -- one in 2009 and one in 2010. Since then, there have been numerous findings in each year's audit, and Donham & Associates has noted that the tribe does not qualify as a "low-risk auditee."

Spoonhunter credited Beckler with cleaning up current financial records.

In 2015, there was a breakthrough: The tribe received a clean audit with no findings.

Spoonhunter and other council members said they hope that the work that's been done in the past four years will free the tribe to pursue more funding in the future.

Others are concerned that lingering accounting issues could cause trouble for the tribe if they aren't solved.

After writing off $200,000 in water bills in 2015, Beckler listed $441,474 as accounts receivable, meaning she still expects to collect those water bills.

Before becoming the tribe's CFO, Beckler had been the accountant for utilities when programmatic funds were more decentralized.

In that position, she was encouraged by other accountants nearly a decade ago to write off a larger portion of those bills.

Despite the fact that she listed nearly three years of unpaid water bills as collectable, Donham & Associates did not issue a finding.

Charles Donham said that choosing not to issue a finding for the utilities department is a normal "judgment call" made by an auditor.

"In a perfect world, it would be true" that the tribe should write off those bills, he said, but doing so would require the tribe to issue an IRS 1099 form to customers, which would require already hard-pressed tribal members to pay taxes on those bills.

"It puts everyone in an odd situation. Now they'd have to deal with the IRS," Donham said. "I haven't run into a tribe that would be willing to do that."

During the period of the audit, the financial reports also indicate the tribe had $1.7 million in federal grant money it needed to spend. However, the report did not show that the available cash had been allocated to individual programs to pay bills. Instead, the money was held in the general fund.

An accountant who specializes in cleaning up fiscal mismanagement in Indian Country said that situation has sometimes led federal agencies to order repayment from tribes.

Donham disagreed that holding self-determination funds being held in the general fund is poor practice but acknowledged that "there's disagreement on that depending on who you ask."

Given the number of individual programs that the tribe operates, having separate bank accounts for each one would be "pointless," he said.

"The accounting system has enough cash to track that," he said. "If they didn't have enough cash, then it would be a finding."

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2017-10-20

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