DOI Watchdog Warns Tribal COVID-19 Funds At Risk Of Abuse

By Andrew Westney
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Law360 (July 2, 2020, 7:45 PM EDT) -- The U.S. Department of the Interior's spending of $522 million in COVID-19 relief on programs for tribes and Native Americans could be susceptible to fraud and abuse, the DOI's Office of Inspector General has said.

The DOI watchdog's analysis came in a report on Wednesday on the "top management challenges" the department has had in spending $756 million it received under the coronavirus rescue package, including $453 million for the Bureau of Indian Affairs and $69 million for the Bureau of Indian Education.

"We have found emergency supplemental funding can face heightened risk of misuse and vulnerability to fraud," the inspector general report said, and "this risk can be exacerbated by pass-through funding from other federal agencies for BIA and BIE activities."

The relief funding for tribes includes $8 billion in direct tribal government aid, as well as some $33 million the U.S. Department of Health and Human Services has sent to the DOI and $150 million that the U.S. Department of Education may provide the BIA and BIE, according to the report.

"Our work suggests that when recipients face a tremendous crisis and then receive multiple funding sources, accountability mechanisms can quickly be overwhelmed," the inspector general report said.

The coronavirus relief bill, enacted on March 27, included an $8 billion "stabilization fund" to support tribal governments dealing with the coronavirus pandemic at the core of more than $10 billion in benefits available to tribes and tribal organizations.

The watchdog's report on Wednesday outlined three "broad challenges for the DOI as it handles pandemic-related responsibilities," including "providing expedient assistance to vulnerable populations while ensuring the money reaches intended recipients for intended purposes," "balancing public and employee safety with access to public land," and "guarding against increasing cybersecurity threats."

The inspector general said that "Indian schools and jails contain high-risk populations within a more general high-risk population — residents of Indian Country," pointing to the risk of overcrowding at BIA-funded detention centers and issues around school closures.

The watchdog said that in its past investigations and audits, it had "found weaknesses that leave federally funded programs and operations in Indian Country and the Insular Areas" — such as Puerto Rico and the U.S. Virgin Islands — "susceptible to fraud, waste, mismanagement, and abuse."

Those issues include "nepotism" and "improper payments to related parties," and specific to Indian Country, "inadequate employee background checks, unallowable commingling of federal funds with tribal funds, and a poor history of BIA oversight for funding to tribes," according to the report.

With the pressure of the pandemic, DOI contracts for the funds face potential problems including price gouging, contracts going to companies "without prior federal experience," "low bids with the expectation to add funds," and "the potential for breaches of ethical standards and safeguards," the report said.

Wednesday's report was prepared for the Pandemic Response Accountability Committee, one of three oversight bodies for the relief funds, alongside the Office of the Special Inspector General for Pandemic Recovery at the U.S. Department of the Treasury and the Congressional Oversight Commission.

--Editing by Nicole Bleier.

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