Unique Federal Grants Challenges for Tribal Entities
This week we’ll focus on some of the particular issues that arise, both in general and under the Uniform Guidance, when a grant recipient is a tribal entity. Indian tribes occupy a unique place in the Federal grants environment, and they face a distinctive set of challenges throughout the grant process.
First, one of the key characteristics of many Indian tribes – their remote location – creates a number of disadvantages. Lack of business opportunities, minimal Internet access, and high travel costs can contribute to slow, limited communication between awarding agencies and recipients. Furthermore, limited opportunities for and awareness of financial management education exist in Indian Country. As a result, many tribal entities will qualify as high-risk recipients and need additional monitoring in order to achieve program goals.
What constitutes a tribal entity? The Uniform Guidance defines the term “Indian tribe” as:
“Any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village… which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.” (2 CFR §200.54.)
However, not all Indian tribes are Federally recognized. While the official Bureau of Indian Affairs list currently contains more than 560 Federally recognized tribal entities, and new entities are occasionally added, many more tribes are only recognized by the governments of their home states. As many grants are reserved solely for Federally recognized tribes, many potential recipients will not even have the ability to apply for these programs.
Another challenge in the grant application process occurs when a disparity exists between the supply of Federal grant funds and the number of eligible recipients. Sometimes, due to the high amount of political pressure surrounding Indian Affairs issues, Congress will make more funds available for a given program than can reasonably be awarded to capable recipients. As a result, funds may be awarded to entities that cannot manage them properly. Not only does this hurt the recipient, but it means that program goals go unaccomplished.
Turning to grants management, one of the main issues for tribal entities that I see with the advent of the Uniform Guidance is the greater amount of oversight responsibility no placed on non-Federal entities. Pass-through entities in particular now have increased responsibility with regard to risk assessment and monitoring. Furthermore, all grant recipients must have strong internal controls, as well as policies for procurement and avoiding conflict of interest. Some particularly small or disadvantaged tribes may have trouble implementing these requirements.
The small size of many tribes, often less than several thousand people, means that there may be only a few individuals in the community with the necessary education and experience to manage grants effectively. Some tribes choose to hire consultants to fill this skills gap. Unfortunately, bringing on outside help, such as a consultant or partner, occasionally leads to predatory business practices. I have seen several situations where a non-tribal entity such as a corporation teamed with a tribe or its members with the ulterior motive of taking advantage of Federal funds available only to Indians.
Legal and political issues also arise frequently in this unique Federal assistance environment. For example, frequent turnover in tribal governments, which, depending on the tribe’s election cycle, may occur as often as every two years, can change the tribe’s administrative priorities. In the case of loan guarantees, tribes may have trouble amassing the collateral needed for a loan, as liens cannot be placed on most tribal land. Interaction with the Federal government, including the Bureau of Indian affairs, also gives rise to complications. Many employees of government assistance programs come from the American Indian community and often have pre-existing relationships with the tribes who receive program funds. When working in such small, tight-knit communities, Federal officials must take great care to avoid conflicts of interest in the awarding of grant funds.
Finally, the issue of gaming comes up often in the world of Federal financial assistance to tribes. Federal regulations prohibit using assistance funds for building and operating gaming facilities. However, casinos often adjoin hotels and restaurants that are owned by the same entity. Awarding agencies and recipients should carefully craft their assistance agreements to ensure that Federal funds are spent in accordance with regulations while still allowing eligible tribal businesses to receive funding.
I’ve only touched on the many unique challenges of managing Federal financial assistance in Indian Country; a strong education for grants recipients can also help navigate this terrain.