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Fort Belknap Indian Community in Harlem, MT, Did Not Properly Administer Its Indian Housing Block Grant Funds

The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General audited the Fort Belknap Indian Community (Fort Belknap) because HUD’s Northern Plains Office of Native American Programs received information indicating financial irregularities in the administration of Indian Housing Block Grant (block grant) funds.

The objective of the audit was to determine whether Fort Belknap administered its Federal funds in a manner consistent with program guidance, regulations, and the terms and conditions of the Federal award for its (1) HUD-accepted Indian housing plan, (2) block grant program, (3) submission of audited financial statements, (4) tenant accounts receivable, and (5) monthly equity payment accounts.

Fort Belknap did not administer its Federal funds in a manner consistent with program guidance, regulations, and the terms and conditions of the Federal award. It did not ensure that it (1) only completed renovation work in its HUD-accepted Indian housing plan, (2) used block grant funds for only allowable costs, (3) submitted its audited financial statements when required, (4) pursued collection of its past due tenant accounts receivable, and (5) properly established and maintained its monthly equity payment accounts.

We recommend that the Northern Plains Office of Native American Programs provide training to Fort Belknap on the proper administration of block grant funds. We also recommend that it ensure that Fort Belknap (1) recovers $182,940 in funds expended for non-accepted renovation work from the homeowners receiving that assistance or from other non-Federal sources; (2) repays $31,958 in unallowable costs from non-Federal sources; (3) receives training regarding HUD financial reporting requirements; (4) recovers more than $1 million in tenant accounts receivable, and (5) maintains a separate monthly equity payment account for every mutual help program home buyer and identifies and returns $300,000 in misspent payments to the correct home buyers.

We also recommend that the Northern Plains Office of Native American Programs refer Fort Belknap to the Departmental Enforcement Center for appropriate administrative sanctions and civil actions. We further recommend that it enforce the remedies in 24 CFR (Code of Federal Regulations) 1000.532 and 1000.538 for substantial noncompliance. These remedies range from adjusting the amount of block grant funds Fort Belknap will receive to providing a replacement tribally designated housing entity for the recipient.