Crow Tribe and USBR held accountable for $14.5M in missing grants

Thursday, October 11, 2018

According to a Department of the Interior memorandum released Friday, Sept. 28, the Office of Financial and Contract Audits found the Crow Tribe and the United States Bureau of Reclamation were unable to account for $14.5 million in grants.

“We found that the tribe did not track and report its use of federal funds in accordance with the contract terms,” the memorandum stated. Furthermore, “The United States Bureau of Reclamation did not oversee the contracts in accordance with applicable federal laws and regulations and USBR guidelines.”

A statement released by the Crow Executive Branch released late last Thursday reads, “It is the objective of the Crow Administration to address the findings and repay the federal government for questioned costs.”

In conducting the audit, the department looked at interim costs to the tribe claimed under two separate contracts between Oct. 1, 2014 and March 31, 2017, and found, “The USBR did not verify, as it should have, the tribe’s process of transferring funds from the U.S. Treasury to the special tribal bank accounts… This enabled the tribe to use designated contract funds for unallowable expenses.”

The two contracts in question were awarded under the Crow Tribe Water Rights Settlement Act of 2010, a contingent of the Claims Resettlement Act, and referred to in the audit as the “Water Rights Settlement.” The USBR awarded the Crow Irrigation Project (CIP) for September 2011 through September 2021, and the Municipal, Rural and Industrial (MR&I) contract for August 2012 through August 2022.

The purpose of the Claims Resettlement Act was to “achieve a fair, equitable and final settlement of claims to water rights in the state of Montana for the Crow Tribe and the United States for the benefit of the tribe and allottees.” It also served to authorize, ratify and confirm the Crow Tribe-Montana Water Rights Compact, initiated June 22, 1999, and it further served to ensure the availability of funds necessary for the implementation of the compact.

In the department’s findings, the tribe did not track expenses or submit them in a Standard (SF-425) Form, nor did it submit a completed audit for the fiscal year ending Sept. 30, 2016.

The statement released by the Crow Executive Branch also reports, “Many of the [department’s] findings show gross mismanagement of tribal funds by the Bureau of Reclamation, including invoicing irregularities by the firm Bartlett & West. The firm was released from its contract with the tribe, after this mismanagement was brought to the tribe’s attention in 2017.”

According to the report, “Instead of setting up the Treasury’s electronic payment system so that funds would be transferred directly into the special tribal bank accounts as required, the tribe set up the transfers to go into its operations account. From that account, it could transfer money into the special tribal bank accounts without USBR approval. The funds had been transferred in this way since the tribe set up the transfers in 2011 and 2012, but the USBR never discovered the error because it never reviewed the transfers to verify that they were set up correctly.”

It is now 2018, however, and this audit is just now surfacing. After seven years of operating outside the guidelines of the contract, it is questionable where a majority the blame should be placed, but what is known is that moving forward will demand strict accountability in order to continue operating in collaboration with the USBR.

“I was elected to change a system that allows the federal government and the Crow administration to squander tribal funds,” stated Crow Tribal Chairman Alvin “A.J.” Not Afraid Jr. “We are working with the Bureau of Reclamation to implement a Corrective Action Plan, so that this kind of abuse does not – cannot – happen again.”

In response to the audit, the USBR stipulated, “[We] will verify the fiscal year 2018 funds, and future deposits, are made to the appropriate bank accounts.”