The Ottumwa Courier

AP National

October 7, 2013

AP IMPACT: Tribes mishandle funds, go unpunished

ETHETE, Wyo. (AP) — American Indian tribes have been caught misappropriating tens of millions of taxpayer dollars, according to internal tribal audits and other documents. But federal authorities do little about it — due to a lack of oversight, resources or political will.

The result? Poor tribes like the Northern Arapaho of Wyoming suffer.

One Arapaho manager pocketed money meant to buy meals for tribal elders. Another used funds from the reservation's diabetes program to subsidize personal shopping trips. And other members plundered the tribal welfare fund, then gambled the money away at one of the tribe's casinos.

Altogether, employees drained at least a half-million dollars from the coffers of a tribe whose members have a median household income of about $16,000 a year.

Federal agencies questioned millions more dollars the Northern Arapaho government spent, but decided not to recover any of the money — and even increased funding to the tribe.

The Wyoming tribe is hardly unique.

An Associated Press review of summaries of audits shows that serious concerns were consistently raised about 124 of 551 tribal governments, schools or housing authorities that received at least 10 years of substantial federal funds since 1997.

Fraud and theft occur across the range of nonprofits and local governments that get federal money. But tribes are five times as likely as other recipients of federal funds to have "material weaknesses" that create an opportunity for abuses, according to the review. Overall, 1 in 4 audits concluded that tribal governments, schools or housing authorities had a material weakness in their federally funded programs; the rate was 1 in 20 for nontribal programs.

Thousands of pages of audits and dozens of reports by federal investigators, obtained by the AP under the Freedom of Information Act, show evidence of embezzlement, paychecks for do-nothing jobs and employees who over-billed hours and expenses. The audits, conducted by private firms, are required of tribes that spend more than $500,000 in federal funds annually.

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