FILE - In this Dec. 3, 2012 file photo, Darrin Old Coyote, then chairman of the Crow Tribe, leads riders past Veterans Park as Crow Tribe members gather for the inaugural parade in Crow Agency, Mont. An audit released Monday, June 25, 2018 found that tribe cannot account for $14.5 million in federal transportation funding, most of it received during Coyote’s leadership. The tribe could be forced to repay some or all of the money if cannot document where it went. (Larry Mayer /The Billings Gazette via AP, File)

APNewsBreak: Montana tribe can't account for $14.5 million

June 25, 2018 - 6:43 pm

BILLINGS, Mont. (AP) — Montana's Crow Indian Tribe has been unable to account for $14.5 million it received for transportation programs, marking the second time in less than two years the tribe has been faulted for its handling of federal grant money, government investigators disclosed Monday.

The finding from the U.S. Interior Department's Office of Inspector General resulted from an audit of a contract that provided federal money to build and maintain highways, bridges and transit facilities on the tribe's southeastern Montana reservation.

The audit obtained by The Associated Press showed the tribe was unable to provide documentation on payments it made to subcontractors and vendors between Oct. 1, 2012 and March 31, 2017. Investigators could not determine what happened to the money.

They faulted the tribe for having "deficient internal controls" over the money and said its accounting system was inadequate to handle federal funds.

"We requested the necessary documentation numerous times during two site visits, and through emails to the finance and legal departments and the chairman of the Tribe," investigators wrote in Monday's report. "They all stated that the records have not been located. Therefore, we question the total amount of the agreement's $14,492,813."

Most of the money was received by the tribe under the leadership of former Chairman Darrin Old Coyote. Old Coyote lost in the 2016 election and was replaced by current Chairman A.J. Not Afraid Jr. in December, 2016.

Old Coyote flatly denied that any federal funding was unaccounted for during his administration and said that all money was properly allocated and documented during his tenure.

He instead said the problem was the fault of a contractor who managed the tribe's finance department after he left office. He cited an excerpt from the audit that said that contractor did not know how to manage federal agreements.

The problems within the finance department happened after his term, and the inspector general is wrong to question the spending under his administration, he said.

"We're being penalized for somebody else's incompetence right now," Old Coyote said. "We have all the audits, and if there was a question they probably would have asked us then."

A spokesman for Not Afraid, Jared Stewart, said he did not have an immediate response to the audit.

The tribe could be forced to repay some or all of the money if it cannot document where it went.

In 2016 the tribe had to repay more than $2 million to the federal government after an earlier audit revealed tribal officials diverted money meant for a new transit facility into the tribe's general budget.

In that instance, investigators from the Inspector General's Office said officials with the Bureau of Indian Affairs knew the money from a 2012 transportation grant was misspent but failed to take action.

The Bureau of Indian Affairs said in response to the latest Inspector General's report that it had designated the Crow Tribe as "high risk," meaning it can now receive government money on a reimbursable basis only and not in advance.

The bureau also imposed sanctions that limit grant funds to monthly installments until the tribe completes its own audit of spending during 2016, according to an April response to the Inspector General's Office audit from Susan Messerly, acting bureau director for the Rocky Mountain region.

The tribe has hired a new team of certified public accountants to determine what happened to the $14.5 million and to better track spending of federal money going forward, Messerly said.

But the Inspector General's Office said Monday that the steps taken by the bureau to date have been inadequate because officials did not include target dates for proposed changes to the tribe's accounting system.

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This story has been updated to correct that Stewart is a spokesman for the tribal chairman.

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