Navajo lost $18 million
Tribe will have to absorb money lost from unused grants, revenue

By Kathy Helms
Diné Bureau

WINDOW ROCK — The Navajo people have lost out on up to $18 million in services due to a loss of $5.6 million in collectible grant money and up to $12 million in revenue from indirect costs paid to the Nation for administering the grants.

The Budget and Finance Committee accepted audit results Tuesday from the Nation’s auditor, KPMG LLP. The audit contains more than 40 findings, some of which are repeat findings extending from as far back as 2002, according to B&F Chairman LoRenzo Bates.

Anslem Roanhorse from the Division of Health and several department heads were on hand for the presentation, along with representatives from Public Safety.

B&F had requested representation from the Office of the President and Vice President, however, it was not until after the presentation and a call from Bates warning of a subpoena that Chief of Staff Patrick Sandoval showed up and the presentation was repeated.

During the initial discussion, Roanhorse complained that the departments go through the same process every year, sometimes having to prove to Office of Management and Budget that they actually have reports they’ve submitted previously.

“There is a lack of written policies and procedures. It seems like these rules are being made as we go along,” he said.
B&F’s Nelson Begaye said the three branch chiefs should be involved right from the start, along with the division directors and the oversight committees.

“We need to do something different here. We can’t just be pointing fingers,” Begaye said.

Bates didn’t mince words. “This committee does not want to get into the micromanagement of administrative functions.
“However, one point that was brought before this committee is a $5.6 million loss in terms of collectible grants. Now, what does that mean? That means money that we spent that we would have gotten back is gone.

“What does that mean? That means that IDC (indirect costs) of anywhere from $10 million to $12 million, plus the $5.6 million — $17 million to $18 million of money that could have otherwise been used to provide services — the Nation has to absorb that.”

When grant money is awarded to the Nation, it basically has to spend its money first, provide the services, and then on the administrative end, provide an accounting for how the money was spent. Once that is done, the grant money is released to the Nation.

The Nation applies for and is paid 21 percent for indirect costs to administer the grant money. “The rule of thumb is for every point, it’s worth $1 million. So if you take that rule of thumb and apply it to the 21 percent, you’re looking at $21 million, maximum.

“That is considered revenue to the Navajo Nation. It has been decreased from the 21 percent to approximately 9 percent, so that’s a total of 12 points, or $12 million.”

With any audit it is expected that there will be some findings, Bates said, but not repeated findings that date back several years.

In regard to Head Start, it was found that they overinflated attendance numbers.

“It is federal dollars, people!” he told the audience. “When the federal government sees this they’re obviously going to come back to the Nation and say, ‘All right, explain this.’ And if that explanation does not satisfy that agency, then the Nation could possibly be in a situation to pay it back.”

The audit report will go to Ethics and Rules Committee on Thursday and the findings will be brought to the Navajo Nation Council during a special session prior to the summer session.

“This committee does not want to see this number of findings in 2008, specifically the ones that have continuously come up. When they date back to 2002, there’s obviously a problem,” Bates told the audience.

“And we certainly don’t want to see any more money being lost for whatever reason. Folks, this is an administrative function. Fix it! Fix it so we can tell Council, we can tell our people that we’ve got our act together, because we obviously don’t have it together.”