OMB to Expose to the World the Financials of Tribes Receiving Recovery Act Funds
In February 2009, the U.S. Congress passed the American Recovery and Reinvestment Act of 2009. The intent of the $2.5 billion allocated to Indian Country through the ARRA was to spur domestic economic growth within Indian Country and mitigate the negative effects being experienced by the American economy at large – the likes of which had not been witnessed since the Great Depression of the 1930s.
Federal funding allowed under the Recovery Act would be delivered to its intended recipients utilizing current federal program delivery systems administered by federal agencies. Thus, any person, organization, or state, local or tribal government that desired to receive federal Recovery Act funds would have to apply for the funds directly with the federal agency charged with its delivery. Within Section 1511 of the Act, Congress placed provisions in the measure which would instill transparency and provide oversight for the responsible use of allocated federal recovery funds.
To those ends, Section 1512 requires that recipients of Recovery Act funds provide a report to the federal agency that granted them the funds, which details the projects and activities for which the funds were spent by the grantee. Under Section 1512(g), federal agencies are directed to coordinate with the Director of the Office of Management and Budget (OMB) in that regard. In February of 2009, the OMB Director issued a letter detailing the procedures that federal agencies would have to utilize in order to satisfy Recovery Act reporting requirements. The OMB takes the position that the Single Audit Act of 1984, 31 U.S.C. 7502(h) (2008) and a related OMB Circular, would require non-federal entities who receive ARRA funds, including tribal governments, to complete and file Single Audit reports with the Federal Audit Clearinghouse (FAC).
The OMB also stated that all Single Audit reports filed with the FAC for fiscal years ending September 30, 2009, would be made publicly available for inspection on the Internet through a link from www.recovery.gov. The OMB directed federal agencies to ensure that any award of Recovery Act funds would be contingent upon a recipients successful reporting under Section 1512.
What this means is that if a tribal government is awarded federal funds under the Recovery Act, it will be required to report its projects and activities according to Section 1512, file a Single Audit with the FAC, and shockingly, allow the FAC to publish all of the tribe’s Single Audit reports on the Internet.
Tribal financial statements and audits have always been guarded with the utmost confidentiality. Disclosing the financial affairs of a tribal government has disastrous implication, in terms of outside scrutiny and backlash. Not to mention there is no identifiable business interest which outweighs the necessity for tribal financial confidentiality. Unlike Wall Street firms who received ARRA monies and thus must stand accountable to the American People, tribes are governments.
Indian Country should be alarmed. Individual tribal governments receiving Recovery Act monies should immediately discuss the reporting requirements with the federal agency grantors, to determine whether and to what extent they are (or should be) satisfying OMB’s reporting, auditing, and publishing directives. Moreover, tribes should band together to challenge OMB’s assertion that highly sensitive and proprietary tribal governmental financial information be disclosed on the Internet or otherwise be made publicly available. Indian Country should insist that FAC publish only the information that is detailed in Section 1512, meaning only relative to the activities for which Recovery Act funds were received and used.
Tribal concerns should be immediately communicated to OMB Director Peter R. Orszag, and each Tribe’s Congressional Delegation.
