The Bureau of Indian Affairs has misused millions of dollars in administrative funds, shortchanging Indian schools of money set aside for emergencies, according to a recent internal audit.

Over a three-year period, the BIA used at least $5 million in contingency funds for non-emergency purposes, the Department of Interior's inspector general said in March report. Investigators discovered that emergency funds were used to buy televisions, bean bag chairs, puppets, furniture, computer software, retreats for staff members and other items and services.

"Although these goods and services ultimately supported Indian education programs, the need for these goods and services did not arise from unforeseen or emergency circumstances, and the contingency fund should not have been used for these purposes," the report said.

According to the report, the BIA's Office of Indian Education Programs in Washington, D.C., used the contingency fund "as a discretionary fund for the director of OIEP rather than as monies set aside for emergencies or other unforeseen events." During the time period in question, the director was William Mehojah, who was replaced by Ed Parisian last summer.

The misuse of funds prevented the office from addressing actual emergencies, the audit said. When a school needed $395,000, OIEP was forced to take money away from other schools because the emergency fund had already been used up, according to the report.

Another time, the office spent more emergency money than it was allocated. OIEP "is unable to effectively track, monitor, and report the use of the contingency fund," the report said.

And even when there was money left, OIEP failed to distribute it to needy schools. According to the report, BIA schools are being denied at least $1.3 million due to the office's inadequate accounting procedures.

"OIEP does not follow sound business practices or federal accounting standards for planning, accounting for, and monitoring its use of administrative funds," the audit stated. Other problems included poor planning, negative balances in OIEP accounts and improperly awarded contracts.

In a March 9 letter, assistant secretary Dave Anderson and OIEP agreed with 12 recommendations to establish better financial controls. But Anne L. Richards, a regional audit manager for the Office of Inspector General, said the the response was insufficient and gave the BIA until May 21 to follow up.

The audit is the second time this year that the Inspector General has criticized the BIA's handling of school money. In a February report, investigators found problems with funds used to construct and build BIA schools.

At the same time, the BIA's education funding has been cut by the Bush administration. In fiscal year 2005, education programs will see a reduction of $79 million.

For the years in question under the audit, OIEP's central office budget was about $61 million.

Get the Report:
Bureau of Indian Affairs Office of Indian Education Program Central Office Management of Administrative Funds  (March 2004)

Related Reports:
School Construction Program: Improvements Needed To Ensure Safety And Program Performance (February 2004) | Improvements Needed in the Bureau of Indian Affairs Process for Conducting Background Investigations of Indian Education Employees (March 2004)

Relevant Links:
Office of Indian Education Programs - http://www.oiep.bia.edu