Northern Arapaho tribe hit hardest by federal shutdown

Members of the Northern Arapaho tribe heaved a giant sigh of relief when President Barack Obama signed the bill on October 16 that reopened the federal government. Workers in tribal departments, who feared massive layoffs if the shutdown continued, would keep working the following week.

Things began to look bad for tribal workers on October 11, when the tribal government issued a memo canceling sick leave and vacations, and asking people to work no more than 40 hours to avoid overtime. The memo implied — and it was widely believed on the reservation — that many if not most tribal employees would be laid off on October 18.

“On Friday (October 18) we would have faced some very hard decisions,” said Ron Oldman, a member of the Northern Arapaho Business Council who took a moment to speak with WyoFile at the Riverton Walmart on Thursday October 17, the day the government reopened.

But the federal government shutdown was only part of the reason — it is not clear how large a part — for the tribe’s lack of cash to pay its employees. As tribal offices worked on contingency plans to provide services after the threatened October 18 layoffs, the tribal business council struggled to write invoices that the state Department of Family Services could pay.

The state DFS was forced to delay two payments totaling more than $700,000 because the business council submitted incorrect invoices. The money  reimbursed the tribe for the cost of running its DFS office in Arapahoe for more than half a year. But more important, it was money that could have forestalled layoffs scheduled for October 18.

“There is a history of invoicing problems with the tribe,” said Nick Baird, chief financial officer of DFS. The tribe must pay for the programs in advance and is reimbursed under a contract that allots up to $1.14 million a year for administrative expenses, according to Baird. But to get that money, the business council must submit invoices that follow DFS rules.  This proved difficult.

At one point in late summer, the business council sent DFS an invoice for November and December 2012. DFS responded in September that the invoice had already been paid in May. The tribe also sent an invoice for April, May, June and July, which DFS had to send back. June and July are in different fiscal years and must be billed and paid on separate invoices. The tribe said it faxed a corrected invoice on September 25. But the state DFS responded that it received no invoices from Northern Arapaho DFS on that day.

Meanwhile, the country hurtled toward budget standoff that threatened to partially shut down the federal government and freeze all funding that was channeled through the Bureau of Indian Affairs. State DFS owed the tribe $700,000. Without the grant money channeled through BIA, the lack of DFS funding would be felt more acutely.

The tribe finally submitted a correct invoice for $406,024, which covered tribal DFS administration costs for January, April, May and June. After being reviewed by DFS officials, who determined that it complied with the contract, it arrived in Baird’s financial department on October 16. DFS paid it on October 17. Another invoice for July, August and September was dated October 9. After review, it landed on Baird’s desk on October 17. DFS paid the invoice for $308,377 on October 18.

“When we got the correct invoices, we paid the next day,” Baird said. “We understand that this is money the tribe has already spent. We want to get it back to them as quickly as possible, but we need an invoice in order to pay them.” Baird said the money would be in tribal accounts October 21, the first workday after the Northern Arapaho DFS’s layoffs were scheduled to begin.

The new Northern Arapaho Business Council, which took office in January, appears to be trying to correct some longstanding accounting problems that have plagued the tribe. But problems remain. In less than 10 months in office, the NABC managed to be seven months and $700,000 behind when billing for its services.

In order to be $700,000 behind, the tribe must first pay out $700,000 in documented expenses. If the tribe is behind in its reimbursements, it has to draw money from unrelated sources to pay for the DFS office.

The money reimbursed by DFS pays only for the cost of staff, offices and expenses related to servicing clients. In addition, the tribe gets $286,000 quarterly to spend on services provided for clients. These payments go directly from the state to vendors like foster families and substance-abuse treatment centers.

The state DFS program does a brief pre-audit of each invoice to determine if expenses are appropriate under the contract, and then passes it on to Baird’s department. “When we have a correct invoice, we can pay it in a day or two,” Baird said. “We have been talking with the tribe, and it looks they may begin invoicing us monthly. We can pay them that way, too.”

State reimbursements for Northern Arapaho DFS were never threatened by the shutdown, according to DFS.

In fact, after the Northern Arapaho Business Council called DFS and informed the agency that it would be closing the tribal DFS office and laying off workers,  state DFS Director Steve Corsi wrote to reassure the Northern Arapahos that the state stood ready to reimburse them throughout the shutdown. “The federal shutdown, at present, has no implications or effects on the funding the State of Wyoming provides to the Northern Arapaho Business Council or NADFS,” Corsi wrote.

Tribal accounting culture

So far, the Northern Arapaho Business Council has declined WyoFile’s requests for a formal interview about the effects of the shutdown. On Friday, an administrative assistant at the tribal office told WyoFile that council members were not available to speak. Instead, the leaders passed along an article by Chris Peck from the October 16 Riverton Ranger.

The Ranger opinion piece references an October 7 Associated Press story about widespread misappropriation of funds by the Northern Arapahos and other tribes around the nation. Northern Arapaho tribal employees plundered $500,000 from senior citizen, tribal welfare, diabetes and other programs, according to the AP. Allegedly, some of the money was spent on shopping sprees and gambling.

The Ranger calculates that the Northern Arapahoe tribe spends $50 million a year in Fremont County and needs to be run with careful accounting like any other big corporation. “A business as large as the Northern Arapaho tribe would have bean counters,” the Ranger said. “Lots of them. People who checked every receipt, expense, reimbursement.” The Ranger calls on the new, reform-minded business council to create that sort of rigorous, big business accounting culture. The council would seem to endorse this view, given that they handed out the article.

But if the Northern Arapaho tribal government is indeed improving its accounting culture, the project is a work in progress. Oldman and other leaders attributed the tribe’s financial woes to shortfalls in federal funds that come through the BIA. In a balancing act made more perilous by its accounting and invoicing issues with the state, and perhaps with other bodies, the Northern Arapaho tribe appears to have been stretched too thin to survive any funding shortfalls. When the BIA furloughed most of its employees on October 1, federal funds administered by that agency were frozen.

“They could not take the 15 percent payment away from us,” said Oldman at Walmart, referring to the tribe’s commission on oil and gas production. “The problem was with some of the federal grants that pay us.”

In any case, when federal funds stopped flowing, the tribe’s financial problems quickly came to a head.

“The tribe is experiencing a cash-flow problem,” said Rep. Patrick Goggles (R-Ethete), who represents the reservation in the state House of Representatives. Goggles spoke before WyoFile became aware of the DFS reimbursement issues. He was asked about the issues leading to the possible layoffs. “The tribe has to upfront the operational costs of programs. And tribal expenses can exceed tribal revenues. The federal shutdown compounds the cash-flow problem.”

Uneven Impacts

Not every institution on the reservation suffered during the 16-day government shutdown. The Eastern Shoshone tribe, St. Stephens Indian School and Goggles’ Northern Arapaho Housing Authority never considered laying off employees during the shutdown, even though they are at least as dependent on federal funding as the Northern Arapaho tribe.

“We received all of our money except for about $153,000,” said Mike Hejtmanek, the superintendent of St. Stephens, before the government reopened. St. Stephens is funded entirely by the Bureau of Indian Education, a division of the BIA, except for some supplementary state funding to raise BIE teacher salaries to compete with those of Wyoming teachers. “We called about the $153,000 on September 30 and they said to call back tomorrow. The next day they were shut down.”

Hejtmanek says St. Stephens’ key to keeping the funding moving has been to get audits and funding requests in early. The main federal audit for school districts and others that receive at least $500,000 in federal funding is the Office of Management and Budget A-133 audit, which is due to the state bureau of audit in November the year after the audited budget year. Hejtmanek says his staff has long finished the audit of fiscal year 2012, which is due next month. Staffers are working on the 2013 audit due in November 2014.

The Northern Arapaho Housing Authority also maintains a cushion to survive fluctuations of the federal budget, according to Goggles, the director.

“I’ll still pay my tribal employees if the shutdown continues,” said Goggles. “We operate one year behind our federal funding.” In other words, Goggles saves this year’s funding and spends last year’s.

The Eastern Shoshone Business Council was unavailable for comment on the shutdown, but workers at tribal offices expressed no fears of layoffs. Baird said the Eastern Shoshones invoice DFS for providing services similar to those of the Northern Arapahos. The tribe has fewer members and the sums are smaller. DFS also has fewer problems with the billing. “We are holding one invoice now for the program audit,” he said. The program audit determines whether the invoiced expenses comply with the terms of the contract.

Even at the Indian Health Service clinics in Fort Washakie and Arapahoe, where about 60 employees worked without pay throughout the shutdown, the prospects looked brighter than in the Northern Arapaho offices. The workers did not get paid, but they never feared losing their jobs, even temporarily. The workers expect to receive back pay this Friday, October 25, according to a source close to the IHS.

Under a complex formula called “level of need” funding, the IHS on the reservation receives a federal appropriation that covers about 45 percent of the cost of keeping the clinics open. IHS is required to serve any descendent of a member of a federally recognized tribe at no charge. But IHS is also authorized to bill third parties such as Medicare, Medicaid and insurance companies, if its clients are covered.

“Third-party payments are what keeps these clinics going,” said one reservation resident familiar with the IHS. “That’s true during the shutdown, but it’s true during the normal times as well.”

Hardship and anxiety

For many Native workers, a single paycheck from a job at IHS or a tribal office must stretch to pay the bills in a large family. Many people in their 50s are raising grandchildren, or at least helping support them. The prospect of losing the job, even temporarily, was frightening for many rank and file workers.

After the Northern Arapaho tribe sent out the October 11 memo, effectively warning people that the pay period ending October 18 could be their last for a while, many tribal employees became anxious. “I was thinking, how am I going to pay rent?” said a worker in a Northern Arapaho tribal office, who asked not to be named. “How am I going to put food on the table? I need to think about my grandchildren.”

The juvenile probation officers in the tribal DFS department contemplated working without pay, if necessary, and made plans to consult with tribal judges on how to handle future cases. The Women, Infants and Children program (WIC) called all of its clients and urged them to come in before October 18 to make sure they received October benefits.

“I told my staff to pay all their bills and then buy enough food to last for a couple of weeks,” said Vonda Wells, the director of WIC. “I told them to prepare for the worst and think the best.”

Wells, who said the tribal council was supportive and honest in its meetings with department directors, never really believed that the shutdown would go longer than October 17, the day the nation reached it’s borrowing limit.

“Living in that political realm, I had the feeling that everything was going to work out,” said Wells, who lived in Washington, D.C. for a year as a Head Start fellow a decade ago. “The way the world looks at the United States, we are an economic power. I thought they would solve it in time.”

And they did solve it in time. Instead of laying off workers on Friday, the business council faxed a memo to Northern Arapaho department offices on Thursday announcing that no one will be furloughed. “It will be business as usual and employees may utilize their annual and sick leave,” the memo said.

At the juvenile probation unit in the Northern Arapaho DFS office, Angela McCann, a probation officer, said that when the memo arrived her colleagues were still working on contingency plans to service the 63 young people on the probation caseload.

“I think having this almost occur has made agencies more interactive,” McCann said. “We were talking more with Lander and Riverton DFS. I hope we keep talking. In any case, it’s a huge relief to know that the children will receive the best care we can give them.”

Correction:  The original version of this story reported incorrectly that the state Department of Family Services reimburses the Northern Arapaho tribe under a contract that allots up to $1.44 million a year for administrative expenses. The correct sum is $1.14 million. The contract is currently being renegotiated.