Report slams Indian Affairs

"Given the history, we are proceeding with an abundance of caution and additional oversight on all projects. Our plan has been and will continue to be that funds will only be distributed once we determine that there are sufficient controls over spending and accountability in place," Interior department spokeswoman Kendra Barkoff said.

That's a result of a February report conducted by the Interior Department's inspector general, Earl Devaney.

"The Alaska regional office's consistent decision to ignore sound management practices has resulted in the loss of millions of dollars and left Native American citizens without needed infrastructure," the report concluded.

Niles Cesar, who has directed the BIA's Alaska regional office since 1990, did not return calls seeking comment.

The Interior department, of which the Bureau of Indian Affairs is a part, said a new team is now in place overseeing the roads program that was criticized in the report. The department also immediately imposed a "corrective action plan" that includes a reporting and monitoring program.

ROADS PROGRAM

At issue is what's known as the BIA Alaska's "Indian Reservation Roads Program." In states like Alaska where tribes generally do not have reservations, public roads that serve Native communities are eligible for money through grant requests made by tribes.

Interior Department officials stressed that the misconduct identified in the inspector general's report dates from before the Obama administration came to office.

"This is a problem that we kind of inherited, and I'm very comfortable what we have a team in place that's going to do a great job with protecting our constituents and protecting the public's dollars," said Kim Elton, the Interior Secretary's special assistant on Alaska issues.

The inspector general's report found $32 million in program funding went to Alaska Native communities each year and only about $3 to $4 million in roads projects had any physical oversight or verification of work completed. The report conceded severe understaffing -- 12 of the 25 program positions were vacant -- but said that's long been a problem and the issues were not corrected despite the program apparently ending up with annual surplus operations money.

Devaney, the inspector general, wrote a memo to Interior Secretary Ken Salazar saying "the region's internal management controls have completely broken down, enabling wage-grade employees to earn over $100,000 in a given year without explanation."

The inspector's report said overtime pay claimed by unsupervised employees was approved with no verification and allowed a construction supervisor, for example, to make $130,000 in a year and a heavy-equipment mechanic to make more than $100,000 in the same year. The report said BIA Alaska road officials were unable "to explain or justify why employees would be paid such large amounts of overtime during the winter months (a slow time for road construction) and earn the large amount of wages shown in any given year."

The report also criticized specific projects. The inspector general said one investigation found a project in which more than $1.6 million was estimated to have been spent on unauthorized and unnecessary work. "Over six years later, this project is still considered dormant with the main road incomplete," the report said.

The inspector general also found "several other projects that indicated similar mismanagement and potential loss or theft of funds." The report listed two such examples -- although the Interior Department refused to say which tribes were at fault and revealed in interviews that the examples are actually more than a decade old.

In one case, the report said an Alaska Native community was advanced about $500,000 for a road project but instead "used those monies to purchase equipment and a restaurant/saloon." The road was apparently never designed and BIA took no perceptible action to get the money back, according to the report.

Another Alaska Native community was given an undisclosed amount of money for a project that was arbitrarily changed "from addressing the transportation needs of the community to creating an avenue of tourism revenue," the inspector general found.

STIMULUS MONEY COMING

Ron King, chief of surface transportation programs for the Alaska Department of Transportation, has read the report.

King said the many tribal transportation directors he's worked with over the past few years have been hard working and dedicated to improving transportation in their communities.

"The report does not reflect my personal experience," King said. "But of course there are 227 tribes and obviously someone may not have done everything right or at least did not have all of the checks and balances in place."

The inspector general's report urged caution in giving federal economic stimulus money to the program.

Interior department spokeswoman Barkoff said the BIA Alaska roads program will indeed receive stimulus funds, "but we are determining which projects in Alaska will receive money on a case by case basis."

More than $3 million in stimulus money has been lined up for BIA road and bridge work in Alaska, although it's not clear how much will end up given out through tribal applications to this program. Barkoff said none of the money has gone out to Alaska yet. "In the selection of specific road projects, we are proceeding with an abundance of caution and making sure there is strong oversight so to avoid the problems that the (inspector general) identified," she said.

Find Sean Cockerham online at adn.com/contact/scockerham or call him at 257-4344.