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Minding the tribe's money

Oct 16, 2013 - By Chris Peck

The time -- and opportunity -- for change is now

The Northern Arapaho tribe is a big business in Fremont County.

Recent figures attached to a 2010 audit of the tribe's finances show that more than $28 million a year comes into Fremont County through various federal, state and locally-funded programs that target the approximately 7,400 enrolled members of the Northern Arapaho living on the reservation.

And that doesn't count revenues from the reservation casinos, private businesses, or collected tax dollars from oil and gas deposits that go into Wyoming state coffers.

Add it all up, and the Northern Arapaho probably are a $50 million business.

If it were a private entity, where corporate executives wore suits and ties and worked in a high rise, a business as large as the Northern Arapaho tribe would have bean counters.

Lots of them. People who checked every receipt, expense, reimbursement.

Because that's what big business is all about. The boss can look at any budget sheet on any day and tell where the dollars went, when they came in, and who spent what today, yesterday and last week.

Lack of this internal paperwork and losing track of dollars are what has recently landed the Northern Arapaho in hot water.

A news story outlining the tribe's' woeful accountability for that $28 million a year coming in from federal, state and local agencies was published nationally a few days ago by Justin Pritchard, a reporter for The Associated Press. The Ranger carried it on page 1. The story documents how boatloads of taxpayer dollars have been misspent or are unaccounted for on the Wind River Indian Reservation and other reservations around the country.

Locally, Pritchard's reporting found that at least $500,000 has gone missing from tribal coffers at the hands of the very employees who work for government-funded agencies and programs.

One manager of a publicly-funded program on the reservation took money earmarked for a diabetes treatment program and subsidized a personal shopping trip.

Another took money from a family welfare program and gambled it away at the casino.

Most of the abuses were small-dollar crimes. They occurred, in large part, because somebody could easily get to the program's bank account and know the chance of anybody finding out about it was small.

The Northern Arapaho suffered from what an accountant would call a lack of good internal financial control.

How bad is it?

Well, the 2010 federally-mandated audit of the tribe's spending and tracking of tax dollars, known as an A-133 audit, was so flawed that federal investigators declared it to be unusable.

More recently, the deadline for completing both the 2011 and 2012 federal audits has come and gone, and as of this week neither is yet completed.

An easy, knee-jerk reaction to this story of the Northern Arapaho losing track of its federal wold be to lump all of this into that well used bucket of government "waste, fraud and abuse."

But it's not that easy.

To begin with, the Northern Arapaho aren't stealing money. The tribe has legal treaties, agreements, and contracts to obtain federal dollars in exchange for living on the reservation. What's more, the tribe is an approved contractor for the federal government, meaning it is approved to spend federal dollars on needed programs on the the reservation -- where the average household earns about $16,000 a year.

For the record: the largest single use of federal dollars on the reservation is for supporting the heath and welfare of children.

What's more, the federal government is aware of the problems the tribe has in tracking money and already has come down hard.

The Northern Arapaho tribe today operates under the highest level of government sanctions. This means the tribe must spend its own money first on important social programs, money generated mostly money from oil and gas revenues and the casino, then submit receipts and invoices for services provided and be reimbursed for these expenses after a government auditor has looked it all over.

This is big pain, and not the way that many other tribes operate.

On reservations where the internal financial controls are strong, the federal government routinely will advance tribes money in big chunks twice a year to fund legitimate programs. That's far more simple and efficient than the "send in your receipts" model.

There is some good news buried in all of this.

Judging from recent Northern Arapaho tribal elections, the tribe is fed up with the bad accounting practices.

In January, a reform-minded state of candidates ran for the tribal business council -- and won.

These reformers, including Darrell O'Neal, Ronald Oldman, Al Addison Sr., Willard Gould, Dean Goggles and Ron McElroy Sr, ordered an immediate review of all tribal programs to determine if the proper internal controls are in place to track spending.

The new business council hired an outside accounting firm to look over the tribe's own operations to make sure everything is up to snuff.

The council also has a new chief financial officer, who is also a a certified public accountant, to better track the dollars and the paperwork.

As a result, the next A-133 for 2012 promises to be much better when it scheduled to be made public on Nov. 22. Not perfect, but much better.

Still, there is a challenge ahead for the Northern Arapaho.

This is a small tribe, where everybody knows everybody else, and is often related.

Efforts to clean up the accounting and cut down on the fraud inevitably will run into a political storm. One man's fraud is another man's past practice of how things work.

To truly get the tribe's financial house in order will require both a strong political will and wider understanding among all tribal members that cleaning up the finances will help every Northern Arapaho, not just a few who are taking advantage of the system.

One good step toward a long-term reform of tribal finances would be to change the election cycle for this current business council so they have time, and political cover, to do their work.

With a reform-minded business council now it place, this would be an excellent moment in time for the tribe to adopted staggered, four-year terms for the business council, rather than continue with two-year terms where every council member can be turned out at the same time.

Bottom line: the Northern Arapaho Tribe is a big business. It needs to be run that way. The time to start is now.

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Wind River Indian Reservation