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March 16, 2001
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Federal single audits show $113,841,024
awarded to Minnesota Indian tribes
by Bill Lawrence
and Clara
NiiSka
$113,841,024.
According to information provided by the General Accounting Office
(GAO), the most recent audits of federal funds awarded to Indian tribal
governments and reservation housing authorities in Minnesota detail
federal grants and contracts in excess of $113 million annually.
How much money is a hundred and thirteen million dollars?
More than the entire annual full-time earnings of every adult
reservation Indian at the minimum wage.
Or...a mere fraction of the $7.5 billion in federal funding which the
General Accounting Office calculates was appropriated for Indian
programs in 1998, and slightly less than two thirds of Minnesota’s
“fair share” of federal Indian expenditures per capita, calculated in
terms of the BIA’s “service population” of 30,827 Minnesota “Indians
eligible to receive services from the BIA.”
[In 1995, the BIA claimed a service population of: 21,446 eligible
Indians in the Minnesota Chippewa Tribe, 1,270 Minnesota Sioux, and
8,111 Red Lake Indians; and a nationwide total of 1,260,206. Press/ON
adjusted the BIA’s figures for accuracy, and estimates that there are
approximately 1.2 million people enrolled in federally-recognized
tribes with an “Indian blood quantum” of more than ¼ (the
cutoff for federal Indian service eligibility), and that less than
50,000 of these federally-recognized Indians are residing on
reservations in the U.S. The number of enrolled Indians residing on
their own reservation in Minnesota is about 13,000.]
Press/ON has provided you, the reader, with details of the audits as a
part of this newspaper’s ongoing project of informing the Indian tribal
councils so that you can make up your own mind about governments’
responsible use of this money. Tribal elections are coming up next
year, and tribal members may like to examine their tribal governments’
annual spending: more than a billion dollars in federal, state,
foundation and casino funds.
The audited $113 million tribal expenditures of federal funds is only
part of the total. The Single Audit Act of 1984, as amended, requires
reporting by “nonfederal entities” which spend at least $300,000 in
federal funds each year. Each “tribal enterprise” incorporated a
separate “entity,” so, far example, if “Red Lake Industries” or the
“Northern Winds Primary Treatment Facility” spent less than thirty
thousand dollars in directly appropriated federal money, no audit would
be filed with the federal government. The money spent by such tribal
enterprises is not included in the audits filed by the tribal council
or the reservation housing authority.
The federal Single Audit Act does not require tribal accounting of
state, county, or private foundation grants—even though state education
funding and county welfare payments, for example, are heavily
subsidized by federal dollars. The federal single audits do not include
income generated by tribal enterprises, such as the casinos.
Federally-funded services provided to tribal governments and/or tribal
members are also not reflected in the federal Single Audits. Thus, for
example, the $2.6 billion budget for the Indian Health Service is a
“federal” expenditure, even though the IHS provides health care
exclusively to tribal members. Similarly, the money specifically
intended for reservation Indian programs and expanded by the Justice
Department and other federal agencies is not included in the audits
published this week in Press/ON.
Staff at the Senate Committee on Indian Affairs informed Press/ON that
there is no comprehensive overview of Indian program maintained by
Congress. The General Accounting Office, in its 1998 report, “Indian
Programs: Tribal Priority Allocations Do Not Target the Neediest
Tribes,” notes that determining the “economic status” and needs of each
tribe involves information which “is not currently or readily
available.” Although the purpose of the Single Audit Act is to
safeguard federal funds, the GAO continues, “the financial information
submitted by the tribes under the act is the most readily available
from the majority of tribes...does not always provide a complete
picture of the tribes’ financial positions and, in some cases, is not
reliable... About half of these financial statement received auditors’
opinions indicating that the statement was deficient in some way and
did not fairly represent the financial position of the reporting
entity.”
There are a number of reasons why a tribal council or reservation
housing authority might believe incomplete financial reporting to be
advisable, among them concern that an accurate account of gambling
revenues might have—as the Red Lake Gaming Board put it during their
February 7, 2001 discussion of Press/ON publisher Bill Lawrence’s
formal request for certain Red Lake gambling audits— “...potential
effects on future grants and funding.”
Press/ON estimates annual profits from Indian gambling enterprises in
Minnesota at about one billion dollars, and Minnesota Indian gambling
gross revenues at about four billion annually.
The BIA: “no
attempt to
target the funds”
In 1978, the GAO reported that, “the BIA had been criticized by the
Officer of Management and Budget, the American Indian Policy Review
Commission, and the tribes for its failure to...ensure the equitable
allocation of TPA funds among the tribes on the basis of need.”
Twenty, years later, in its July 1998 report on Indian Programs, the
GAO reiterated its assessment that the BIA needed to complete and
maintain “accurate, current and comparable comprehensive tribal needs
analyses” which would be “considered” in allocating the TPA funds
entrusted to the Bureau by Congress. That same year, the Senate
Committee on Appropriations included a provision in its appropriations
bill, which “would have required the tribes to report their complete
financial information to the BIA as a precondition of receiving TPA
funding.”
The Senate committee’s provision requiring tribal accountability was
“not retained” in the final version of the bill. In its June 1998
“comments” to the GAO draft report, the BIA vigorously defended its
funding policies, noting that, “at the present time, there is not
statutory or regulatory basis for adjusting funding based upon tribal
assets.” In a letter signed by Kevin Gover, Assistant Secretary, Indian
Affairs, the BIA also explained that, “since there is no attempt to
target the funds,” the GAO’s “statement that we’ lack assurance that
funds are effectively targeted’ is meaningless.”
In September 1999, that Development of the Interior released its own
report, “The Tribal Priority Allocation Study (TPA),” which found that
“the level of funding across the board for all tribes was woefully
short.” As Secretary of the Interior Bruce Babbitt explained, “The
Tribes simply are not receiving the resources necessary to perform the
essential functions of government in most cases, and that needs to be
addressed adequately and quickly... The policy of the United States is
to assist the Tribes in developing strong, stable tribal
governments...” The BIA stressed its position by citation of the
Congressional mandate in the Indian Self Determination Act of 1975, and
observed that, “the tribes deserve a strong, functional Bureau of
Indian Affairs.”
The General Accounting Office responded with another report, “Major
management Challenges and Program Risks, Department of the Interior,”
in January 2001. In that report, the GAO reiterated its concerns that
BIA funding allocations are “largely based on historical
factors...[and] did not consider a tribe’s changing needs.” The GAO
writes that the “BIA acknowledged that funding inequities exist among
tribes exist but decided—with the concurrence of the [sic] tribes—that
current distribution of funds should not be changed...” The BIA urged
that the problem be resolved by even “greater funding” levels; the GAO
responded, “we believe BIA would have to develop criteria for
determining tribes’ needs and to establish the factors that will
determine funding levels. BIA has not done this, and until it does,
funding inequities will persist.”
Jeff Malcolm, Senior Analyst and Indian specialist with the GAO,
explained to Press/ON that the BIA’s concerns about revamping Tribal
Priority Allocations included that there would be a “large disruption
in tribal operations” if BIA funding levels were changed to reflect the
actual needs of the tribes. He said that among the “challenges”
identified by the GAO were that there has been no direction from
Congress that distribution of Indian appropriations reflect tribal
need, and that the BIA had cited “specific prohibitions” against such
effectively targeted appropriations. He also commented that the GAO is
“an organization that works for Congress—not in the business of making
policy decisions.”
Malcolm told Press/ON that “about 12” tribes voluntarily return that
BIA’s TPA funding allocations to the U.S. governments, but that there
were “some impediments” to their doing that, including the tribes’
potential liability under the Federal Tort Claims Act. For example, he
explained, “if the tribe gets money from the BIA for law enforcement”
and then returns the money to the US government unexpended, the tribal
council could conceivably be liable for not providing the services
which would have been funded by the unspent money.
The tribal councils’ rationale, apparently made to the GAO as an
explanation for the tribes’ disinclination to return unneeded funds to
the US government are extremely well-protected by sovereign immunity,
and are almost completely invulnerable to lawsuits under the Federal
Tort Claims Act, and BIA-tribal government contracting very clearly
requires the tribal government’s explicit agreement to provide specific
services. Also, either the state or the federal government can—and
does—provide law enforcement and other crucial governmental services,
under Public Law 280 and/or the Indian Major Crimes Act
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Bois
Forte
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total federal awards expended
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11,631,025
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Bois Forte Housing
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total federal awards expended
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774,577
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Fond
du Lac
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total federal awards expended
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16,665,570
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Grand
Portage
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total federal awards expended
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2,679,960
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Grand Portage Housing
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total federal awards expended
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399,123
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Leech
Lake
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total federal awards expended
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18,352,753
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Leech Lake Housing
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total federal awards expended
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4,599,057
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Minnesota
Chippewa Tribe
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total federal awards expended
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2,981,587
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Mille
Lacs
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total federal awards expended
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10,069,973
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Mille Lacs Housing
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total federal awards expended
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909,410
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Prairie
Island
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total federal awards expended
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949,173
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Red
Lake
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total federal awards expended
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22,287,807
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Red Lake Housing
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total federal awards expended
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2,382,829
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Shakopee
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total federal awards expended
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924,197
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Upper
Sioux
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total federal awards expended
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2,284,124
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Upper Sioux Housing
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total federal awards expended
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976,931
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White
Earth
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total federal awards expended
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13,102,549
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White Earth Housing
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total federal awards expended
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1,870,379
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Grand TOTAL
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$113,841,024
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