CROW TRIBE

ABANDONED MINE LAND

ANNUAL REPORT

EVALUATION YEAR 1998

PREPARED BY THE

OFFICE OF SURFACE MINING

CASPER FIELD OFFICE

DECEMBER 1998

TABLE OF CONTENTS

Part I. General 1

Part II. Results of Enhancement and Performance Reviews 5

Part III. Accomplishments and Inventory Reports 5

APPENDIX A. Enhancement and Performance Review Reports A-1

Part I. General

The Surface Mining Control and Reclamation Act of 1977 (SMCRA) created the Office of Surface Mining Reclamation and Enforcement (OSM) in the Department of the Interior to oversee the regulation of coal exploration and surface coal mining and reclamation operations and the reclamation of lands adversely affected by past mining practices. SMCRA provides that, if certain conditions are met, a State may assume primary authority for the reclamation of abandoned mine lands within its borders.

Because legislation for Tribes did not exist, a supplemental appropriations bill (Public Law 100-71) was enacted on July 11, 1987, to amend SMCRA and to authorize the Crow, Hopi, and Navajo tribes the right to obtain the Secretary of the Interior's approval of the Abandoned Mine Land Reclamation (AMLR) programs without first having regulatory programs as required by Section 405 of SMCRA. Once a Tribe has an approved AMLR program, OSM has responsibility to make investigations, evaluations, and inspections necessary to determine if the Tribal program is being administered in accordance with approved program provisions. The Crow AMLR Program was approved by OSM on January 4, 1989. The Tribe established a Crow Office of Reclamation (COR) to administer its abandoned mine land program.

The Crow Reservation, an area approximately 2,226,000 acres, is located in south-central Montana adjacent to the Wyoming border. Adjoining the reservation to the north is the 1,100,000 acre Crow Ceded Area, where the Crow Tribe of Indians holds extensive mineral rights. Prior to 1904, the Ceded Area was a part of the reservation. Congress required the Tribe to return the surface rights to the area to the United States through legislation enacted in 1904. The surface was then acquired by non-Indians. The Tribe retained ownership to the minerals, and has AMLR reclamation jurisdiction for the Ceded Area. Numerous small abandoned mines are located on the reservation and the Ceded Area. Historically, coal was mined for local domestic use by residents of the area.

The Tribe concentrated its reclamation efforts during the evaluation year on three high priority coal sites. The Tribe has been unable to obtain access to the few remaining high priority coal sites. Landowner where the sites are located have denied access for various reasons. The Tribe continues to work with these landowners in an attempt to obtain consensual access. As a result, all accessible high priority sites on the reservation have been reclaimed. Only low-priority coal projects remain.

All reclamation funds to support the Tribe's program are generated from the one active mine located in the Ceded Area. Calendar Year 97 production from this mine was approximately 7 million tons. This resulted in an FY98 allocation to the Tribe of $478,173 of Tribal share. This level of funding qualifies the Tribal program as a minimum program under SMCRA. Normally this would have resulted in a supplement of Federal Share funds of up to $1.5 million if sufficient high priority coal projects existed on the Abandoned Mine Lands Inventory System (AMLIS). In past years, the Tribe has received and accumulated supplemental funds from the Federal share sufficient to reclaim all remaining hazardous abandoned coal mine related problems recorded in AMLIS. Therefore no additional Federal share funds were provided to the Tribe in the FY98 allocation. The FY98 allocation plus the accumulated Federal share funds from prior years were sufficient to provide in excess of $1.6 million to the Tribal AML Program in the FY98 grant. If access is not obtained for the remaining high priority coal sites or additional high priority coal sites are not identified, the Tribe will no longer receive Federal share funds. Tribal allocations will be limited to Tribal share funds and continue at approximately the FY98 level ( $478,000).

The COR administrative staff is made up of 7.5 full time employees. This staff is responsible for the direction of all construction activities as well as all administrative functions of the program. To assure an acceptable level of control, OSM in their approval of the Crow Tribe AMLR program, required that the administrative functions such as grant application preparation, progress report preparation, payroll, procurement, property management, and all financial activities be separate from the Tribal systems. All construction to date has been accomplished with hand tools and manual labor.

The AML program is a major contributor to the economy of the Tribe. During the construction season of this evaluation year, the COR was one of the largest employers on the reservation. Approximately 65 laborers and foremen were employed to reclaim AML sites.

The 1998 evaluation period started on October 1, 1997 and concluded September 30, 1998. Evaluation of the Tribal AML program is conducted by OSM's Casper Field Office (CFO) located in Casper, Wyoming. Evaluation methods are based upon OSM Directive AML-22 and a Programmatic Agreement between the COR and OSM. This Agreement incorporates a shared commitment by the Tribe and OSM in determining how oversight will be conducted. The Tribe takes an active role in the entire oversight process. The Agreement was designed to evaluate whether the Tribe, through its AMLR program, is achieving the overall objective of Section 102 of SMCRA which states that AMLR programs are to:

"... promote the reclamation of mined areas left without adequate reclamation prior to the enactment of this Act and which continue, in their unreclaimed condition, to substantially degrade the quality of the environment, prevent or damage the beneficial use of land or water resources, or endanger the health or safety of the public ..."

Through the Agreement, specific topics are identified for review and review methodologies are developed for the evaluation period. The reviews are designed to result in an overall measure of the Tribe's success in achieving planned reclamation goals. By focusing on end results, OSM is able to determine the root causes of problems and concentrate its resources on prevention by providing assistance to the Tribe to improve its program.

During the previous evaluation year it was found that the overall reclamation success of the projects reclaimed was very satisfactory. The planned reclamation goals for all of the sites had been achieved with the exception of minor maintenance work requirements such as final weed control and incidents of sparse vegetation. However, it was determined that significant problems exist in the areas of controlling funds, maintenance of project inventory, and records management. These deficiencies did not affect the overall reclamation success of the projects undertaken during the year. The deficiencies did, however, result in (1) the Tribe inappropriately holding excess Federal funds in violation of US Treasury requirements, (2) untimely financial and performance reports to OSM, (3) an inaccurate record of program accomplishments, (4) inaccurate property records, and (5) an inability to produce project documentation such as proof that Rights-of-Entry had been obtained and that other pre-construction requirements of the program had been achieved prior to proceeding with construction. Virtually all of the weaknesses had been identified in the previous evaluation year and remained uncorrected. The weaknesses identified were determined to be a result of a lack of program management.

Through consultation with Tribal officials, the Tribe requested that OSM provide technical assistance by providing a program specialist to directly manage the program during the last three months of EY97. The purpose of the technical assistance was to allow the Director of the program to obtain on-the-job (OJT) management training by observing the management activities of the OSM employee. This effort required a significant dedication of OSM resources to provide on-site management of the program. The OJT management training was completed at the beginning of the current evaluation year and the level of technical support provide by OSM returned to its previous level. This decreased level of technical assistance allowed OSM and the Tribe to evaluate the effectiveness of the OJT management training.

OSM and the Tribe agreed that program evaluation efforts for this evaluation year should concentrate on the correction of the deficiencies noted during the previous evaluation period. Therefore the same Programmatic Agreement used for the previous evaluation year was used for this evaluation year. This allowed the evaluation of the same areas using the same methodology to determine if the problems from the previous year had been corrected.

As a result of the enhancement and performance reviews conducted for this evaluation period, it was again determined that the overall reclamation success of the projects reclaimed was very satisfactory. The planned reclamation goals for all of the sites have been achieved with the exception of minor maintenance work such as final weed control and incidents of sparse vegetation.

Unresolved deficiencies that existed at the end of the evaluation period relate to the administrative and financial activities of the program. The CFO found that the COR continues to have significant problems in the areas of project inventory maintenance; funds control; accounting procedures as they relate to travel expenditures, payroll and purchase order control; timeliness of financial and performance reports; and property control. These deficiencies did not affect the overall reclamation success of the projects undertaken during the year. The deficiencies did, however, result in (1) a delay of AML program funding by OSM, (2) unreconciled travel vouchers and unrecovered excess travel advances, (3) inconsistent payroll records and possible payroll errors, (4) inaccurate property records, and (5) an inaccurate record of program accomplishments. Due to the impacts of deficiencies, OSM considers these deficiencies to be major, requiring immediate correction.

OSM and the Tribe will design a Performance Agreement for the next evaluation year in a manner that assures that the identified deficiencies are corrected by the Tribe.

Part II. Results of Enhancement and Performance Reviews

Because of the weaknesses identified in the 1997 evaluation year, the same Performance Agreement was used for the 1998 evaluation year. Three Principles were identified in the Performance Agreement. They are: (1) Program States and Indian tribes must have approved reclamation plans which meet the requirements of Federal laws and regulations and conduct reclamation in accordance with their plan; (2) on-the-ground construction is to be achieved in a timely, cost-effective manner; and (3) programs should have systems in place to ensure accountability and responsibility for spending AML funds and a process to assure that such systems are working. Specific areas of interest within the first three principles were reviewed. The specific areas of interest for the first principle were maintenance of the approved Reclamation Plan, project inventory maintenance and right-of-entry. Overall reclamation success was evaluated for the second principle. Five specific areas of interest applied to the third principle. They included timeliness of drawdowns, adequacy of accounting procedures, timeliness of applications and reports, timeliness of A-128 audits and implementation of audit recommendations, and adequacy of procurement and management of property and services.

Appendix A contains the "Enhancement and Performance Review Reports" reflecting the details of the reviews conducted during the evaluation year.

Part III. Accomplishments and Inventory Reports

Prior to the effective date of SMCRA, coal mining on the Crow reservation resulted in subsidence, vertical openings, portals, highwalls and impoundments. Three deaths and six injuries are known to have occurred in association with abandoned mines. No deaths or injuries have occurred in recent years.

During this evaluation year the Crow Tribe completed reclamation on three coal projects. These projects were high priority projects consisting of mine openings, polluted water and dangerous highwalls. Approximately twelve acres were reclaimed. Construction efforts continued on one additional low priority coal project but it was not complete by the end of the evaluation year.

Since implementation of their approved AMLR program, the COR has eliminated safety hazards and threats to the environment posed by unreclaimed mines. Reclamation has involved coal and non-coal mines as provided for in SMCRA. Table 1 reflects the accomplishments of the Crow AML Reclamation Program since its inception and those problems which remain to be reclaimed. The reclamation accomplishments reflected in the Table have enhanced surrounding areas and returned the land to a condition that is of greater use to the Crow Tribe and others.

TABLE 1

APPENDIX A

ENHANCEMENT AND PERFORMANCE REVIEW REPORTS

CROW TRIBE OF INDIANS AML PROGRAM

ENHANCEMENT AND PERFORMANCE REVIEW REPORT

EVALUATION YEAR 1998

Principles Being Evaluated: Program States and Indian tribes must have approved reclamation plans which meet the requirements of Federal laws and regulations and conduct reclamation in accordance with their plan.

Subelement: Maintenance of Approved Reclamation Plan

Review Dates: Continuous

Personnel: Hugh White Clay (COR) and Orvel Gustafson (CFO)

Background: AML Reclamation Plans must be amended to comply with changing requirements of SMCRA.

Review Methodology: The Tribal program was continually monitored to assure that any new changes to SMCRA are not implemented without the necessary changes to the program.

Population / Sample: The population and sample size consisted of all potential AML Plan changes.

Findings and Conclusions: The Tribe made no changes to reclamation and related activities during the evaluation period that would require amendments to the Tribe's AML Reclamation Plan.

Corrective Actions: No corrective action is necessary.

CROW TRIBE OF INDIANS AML PROGRAM

ENHANCEMENT AND PERFORMANCE REVIEW REPORT

EVALUATION YEAR 1998

Principles Being Evaluated: Program States and Indian tribes must have approved reclamation plans which meet the requirements of Federal laws and regulations and conduct reclamation in accordance with their plan.

Subelement: Inventory Maintenance

Review Dates: Continuous

Personnel: Hugh White Clay Crow (COR), Wayne Turnsplenty (COR), and Orvel Gustafson (CFO)

Background: OSM's Abandoned Mine Land Inventory System (AMLIS) is an inventory of AML problems. The inventory is used to determine the extent of AML problems and related reclamation accomplishments. AMLIS is also used in determining funding levels for minimum programs. States/Tribes are responsible for maintaining a current inventory of AML projects. This is to be accomplished by the States/Tribes updating the inventory through direct automated access to AMLIS. The review conducted during the last evaluation period (1997) revealed that the Tribe's inventory of projects was incomplete and inaccurate. Thus this topic was again chosen for review during this evaluation period.

Review Methodology: The Tribe's process for maintaining a complete, current, prioritized inventory of eligible unreclaimed sites was reviewed for consistency with the Reclamation Plan. The procedures where tested through a review of the Tribe's internal inventory maintenance activities concerning the sampled sites. The review measured their effectiveness in entering accurate inventory data into AMLIS. The accuracy of the data contained in the Tribe's internal inventory and the data input into AMLIS was verified through project documentation, OSM's knowledge of the sites obtained during site visits and ongoing communications with Program personnel.

Population / Sample: The population consisted of all reclaimed sites and all sites identified for reclamation in the future. The sample consisted of the entire population. The population/sample consisted of forty five sites. Twelve of the sites were Priority 1 & 2 coal sites. The remaining sites ( thirty three sites) were high Priority non-coal and Priority 3 coal sites.

Findings and Conclusions:

The inventory appeared to be accurate for the high priority coal sites. Data entry errors concerning the non-coal and Priority 3 sites continue to be a problem. Errors included duplicate and erroneous problem area numbers, inaccurate problem types, and inaccurate or missing cost data. As a result of these deficiencies, the Tribe's inventory contained in AMLIS is inaccurate and incomplete and can not be relied upon to determine the reclamation accomplishment of their program. There appears to be no improvement from the previous evaluation year. This is in direct contradiction with the principle being measured and must be corrected. CFO will provide assistance to the Tribe based on a corrective action plan to be developed by the Tribe.

Corrective Actions: The Tribe has been directed to finish correcting the inventory during the upcoming evaluation year. The CFO will monitor this activity again in the upcoming evaluation year to assure that all deficiencies are corrected.

CROW TRIBE OF INDIANS AML PROGRAM

ENHANCEMENT AND PERFORMANCE REVIEW REPORT

EVALUATION YEAR 1998

Principles Being Evaluated: On-the-ground reclamation is to be achieved in a timely, cost-effective manner.

Subelement: Overall Reclamation Success

Review Dates: Continuous

Personnel: Hugh White Clay Crow (COR), Johnny Stewart (COR), and Orvel Gustafson (CFO)

Background: The Tribe contracts its design activities to a private consulting firm. AML sites are to be reclaimed to the design specifications. The objective of oversight is to determine if the reclamation projects have achieved their goal, as defined in preconstruction specifications. This is defined as "overall reclamation success".

Review Methodology: The evaluation of the overall reclamation success consisted of site inspections of the sample of completed projects to determine if the Tribe's reclamation objectives were met. A review of the Tribe's internal project documentation and the National Environmental Policy Act documentation was reviewed prior to each site visit to determine the reclamation objectives for the project.

Population / Sample: The population consisted of all reclamation projects completed during the last five evaluation years. The sample consisted of one reclamation project completed during the evaluation year. This was the largest project completed during the evaluation year.

Findings and Conclusions: In general overall reclamation success achieved by the Tribe was very good. Reclamation objectives had been achieved on the sampled site.

Corrective Actions: None

CROW TRIBE OF INDIANS AML PROGRAM

ENHANCEMENT AND PERFORMANCE REVIEW REPORT

EVALUATION YEAR 1998

Principles Being Evaluated: Programs should have systems in place to ensure accountability and responsibility for spending AML funds and a process to assure that such systems are working.

Subelement: Drawdown and Disbursement

Review Dates: September 29-October 2, 1998

Personnel: Phylene Big Man (COR), and Neal Jacquot (CFO)

Background: The US Treasury requires that grant recipients minimizing the time between the transfer of funds from the US Treasury and the pay out of funds for program purposes to the shortest time administratively possible. The COR makes all payments for their program through check payment. These payments are for payroll and all other costs and are paid biweekly. Timing of drawdowns is made to assure that check issuance occurs on the same day that funds from the drawdown are received in the COR's bank account. OSM reviewed the Tribe's procedures for drawdowns and disbursements in previous evaluation period (1996) and determined that it is administratively feasible for the Tribe to disburse funds within 3 days after drawdown. The review was conducted to comply with the US Treasury requirement that granting agencies review the grantees drawdown activities to assure that drawdowns are timely and that no excess funds are being held by the grantee.

Review Methodology: The analysis consisted of a review of month-end bank account reconciliations to determine the book/bank balances as of the last day of the month. These reconciled balances should equal $0 if no excess funds are being held unless a drawdown had occurred within 3 days prior to the end of the month.

Population / Sample: The population consisted of all month end bank balance reconciliations from October 1, 1997 through July 31, 1998. The sample consisted of the entire population.

Findings and Conclusions: Balances (excess funds) existed in the checking account from October 1997 through February 1998. Tribal funds were used from March 1998 through June 1998 because the FY98 grant was not awarded by OSM due to delinquent reports and a lack of a grant application ( see Performance Review Report for Timeliness of Applications and Reports). Since Tribal funds were being used during this timeframe, no excess Federal funds were held. The review of the COR's bank balances for July 1998 indicated that controls had been established and that excess funds were not held during that single month.

Corrective Actions: It appears that the deficiencies were corrected during the month of July, 1998. The CFO will continue to monitor the COR's drawdown activities during the next evaluation year to assure that the corrective action continues to result in appropriate controls.

CROW TRIBE OF INDIANS AML PROGRAM

ENHANCEMENT AND PERFORMANCE REVIEW REPORT

EVALUATION YEAR 1998

Principles Being Evaluated: Programs should have systems in place to ensure accountability and responsibility for spending AML funds and a process to assure that such systems are working.

Subelement: Accounting Procedures

Review Dates: September 29-October 2, 1998

Personnel: Laura Pretty Weasel (COR), Veronica Pretty On Top (COR), Elizabeth Other Medicine (COR), and Neal Jacquot (CFO)

Background: Grant recipients are required to account for all program income and expenditures, using generally accepted accounting practices. The Tribe's AML program does not generate program income. Expenditures are a result of payroll, travel, and accounts payable transactions. The COR pays payroll biweekly. The greatest amount of payroll activity occurs during the construction season. Travel occurs primarily for training and meetings with OSM. Some procurement actions require travel. Accounts payable mainly result from the COR's procurement of rental space, supplies, vehicles and gas related services, and utility services. In almost all instances payment of these account payables is conducted on a monthly basis. Due to the risk associated with a potential lack of internal controls necessary for these activities the associated accounting procedures where selected for review.

Review Methodology: The CFO reviewed all policies and procedures relating to payroll, accounts payable and travel and tested transactions to ensure that the Tribal policies and procedures were being implemented.

Population / Sample: The population consists of all payroll, travel and accounts payable transactions occurring during EY98. The payroll sample this evaluation year consisted of a review of two pay periods for the entire administrative staff and twenty construction laborers. All travel between October 1, 1997 and July 29, 1998 was included in the review of travel controls. The accounts payable sample consisted of all purchase orders executed from October 1, 1997 through March 23, 1998 and all purchase orders relating to purchases from five vendors from March through September, 1998.

Findings and Conclusions: The CFO found a small number of errors in payroll as it related to the payment of field personnel. Field personnel appear to be diligent in clocking in and out with very few exceptions. The administrative personnel are not as diligent in clocking in and out. There were numerous instances where the administrative personnel did not punch out for lunch or at the end of the day. There were also occasions where the payroll hours varied slightly from what was recorded on the time sheets. It appears that the administrative staff treat the time clock as a mere formality when it comes to the recordation of time. The intended controls are not being attained..

The CFO found that there was a total lack of control for the reconciliation of travel advances with travel expenditures associated with these travel advances. Eleven AML trips were taken during the period sampled. Travel advances were provided to the traveler for all of the eleven trips. Travel vouchers or trip reconciliations had not been filed for any of the eleven trips. Therefore, it is unclear whether there is travel advance funds due from the traveler. There were six canceled trips where advances were provided to the intended traveler. Travel advance checks were voided for three of these trips. For the other three advances, there is no evidence that either the advance checks were voided or the traveler returned the advance. Therefore, it appears that the three advances continue to be outstanding.

During the last evaluation year, the CFO found that the Tribe was allowing employee personal vehicle mileage compensation for work related local travel, without documenting why a program vehicle was not used. It is the program's policy that a program vehicle will be used when available. Based on the CFO finding, the AML Program developed an approval process whereby the need for the use of a POV would be documented and approved by the Director of the AML Program. A review of the documentation revealed that field and administrative personnel were diligent in obtaining approval for the use of POV's. However, the Director was approving the use of the POV's by administrative personal without requiring documentation of the reason why the use of a POV was necessary in lieu of the use of a program vehicle. The same documentation provided by field personnel for the use of POV clearly stated the reason for the use of POV in those instances. It appears that the intent of the control is not understood by the program director.

The CFO found that COR's purchase order file was not up to date. Purchase orders were either missing, unkept, or were not in sequential order. No system is in place to control the orderly issuance of and record keeping of purchase orders. This weakness was previously identified during the EY 96 and EY 97 evaluations. There has been improvement in this area since the previous evaluation year but further improvement is needed.

The AML program, based on Tribal policy, allows employee personal long distance calls to be charged to the AML program. Payroll deductions are used to reimburse the program for these costs. Even though the practice results in the use of program time (for both usage and payroll deduction efforts) the CFO, because of Tribal policy, agreed to allow the practice as long as it was reasonable. Personal usage during the previous years evaluation did not appear to be unreasonable with the exception of usage by the AML Director. This employee spent 8 percent of his available work hours during a nine month period conducting personal long distance telephone calls. The CFO considered this to be unreasonable usage requiring corrective action. A review was conducted during this evaluation year to determine if corrective action was taken by the Tribe. Again it was determined that personal telephone usage was reasonable with the exception of usage by the AML Director. This employee spent 5 percent of his available work hours during a twelve month period conducting personal long distance telephone calls. This was an improvement over the previous year but remains questionable as to its reasonableness.

Corrective Actions: The Tribe must (1) insist that the administrative employees be more conscientious when punching in and out, (2) implement better controls to assure accurate calculation of hours worked and correct known past errors to payroll caused by inaccurate recordation of hours, (3) immediately reconcile travel advances, collect any outstanding advance balances, and establish procedures that will control travel advances in the future, (4) document the necessity for usage of POVs on a case by case basis, (5) implement adequate controls over the issuance and maintenance of purchase orders, and (6) assure that the use of program time for personal use is held to a reasonable level.

CROW TRIBE OF INDIANS AML PROGRAM

ENHANCEMENT AND PERFORMANCE REVIEW REPORT

EVALUATION YEAR 1998

Principles Being Evaluated: Programs should have systems in place to ensure accountability and responsibility for spending AML funds and a process to assure that such systems are working.

Subelement: Timeliness of Applications and Reports

Review Dates: Continuous

Personnel: Hugh White Clay (COR), Phylene Big Man (COR), and Orvel Gustafson (CFO)

Background: The Tribe's grant/amendment applications for funds, interim and closeout reports, and requests for Authorizations to Proceed with projects must meet OSM's established timeframes. Grant/amendment applications are required sixty days before the requested effective date of the grant, interim reports are due thirty days after the end of the reporting period and closeouts are required ninety days after the end of the grant period. Requests by the Tribe for Authorizations to Proceed with projects require sixty days lead time to allow OSM to perform historic preservation consultations and obtain necessary approvals. These timeframes were established to assure that funding and project approval actions will result in continuous program operations and timely and accurate recordation of accomplishments and financial data relating to the Tribal AML Program.

In past evaluation periods, the Tribe has not met the established timeframes for grant action applications, financial and performance reports and requests for Authorizations to Proceed with projects. During these periods, the Tribe's delinquencies have resulted in untimely and inaccurate recording of the Tribe's financial and performance data. In past evaluation periods CFO was able to expedite the processing of necessary actions to avoid most shutdowns of the program. This has been a continuing problem as noted in CFO oversight as well as in past A-133 audits.

Review Methodology: CFO continuously reviewed the timing of Tribal submissions of grant/amendment applications for funds, interim and closeout reports, and requests for Authorizations to Proceed with projects to assure that they met OSM's pre-established timeframes which would result in continuous program operations.

Population / Sample: The population consisted of all grant/amendments applications, requests for Authorizations to Proceed, and reports required during EY98. The sample equaled the population.

Findings and Conclusions: At the beginning of the evaluation period, the Tribe was delinquent in submitting closeout reports for their FY95 and FY96 grants. During the evaluation period, the closeout for the FY97 grant became delinquent. These delinquent reports resulted in an inaccurate record of the Tribe's expenditures within the OSM financial system.

In addition. the Tribe was delinquent in submitting their FY98 grant application. The application was due on December 31, 1997 and was not submitted until June 17, 1998. The grant year was schedule to begin on March 1, 1998. As required by the grant terms, the CFO did not begin processing the FY98 grant application until the delinquent closeout reports were submitted on June 22, 1998. This resulted in an award date of July 14, 1998. This four and one half month delay in the grant award left the AML program without federal funding for this period of time. The operation of the program continued through loans by the Tribe for the four and one half month timeframe.

Corrective Actions: All delinquent reports and grant applications were submitted by the end of the evaluation period. Since report delinquencies have been a continual problem in the past, the Tribe must develop procedures where reports and grant application are submitted in a timely manner.

CROW TRIBE OF INDIANS AML PROGRAM

ENHANCEMENT AND PERFORMANCE REVIEW REPORT

EVALUATION YEAR 1998

Principles Being Evaluated: Programs should have systems in place to ensure accountability and responsibility for spending AML funds and a process to assure that such systems are working.

Subelement: Audits and Implementation of Audit Recommendations

Review Dates: Continuous

Personnel: Hugh White Clay (COR) and Orvel Gustafson (CFO)

Background: The Tribe is subject to an annual A-133 audit. OSM is responsible to resolve any findings in the audits that pertain to OSM programs. To assure that all findings are promptly resolved, OSM continuously reviews the A-133 process and resolves findings as they develop. All findings resulting from audits conducted in past evaluation years have been resolved.

Review Methodology: The Tribe self reported the ongoing status of the completed A-133 Audit for the timeframe 10/01/96 and 09/30/97. At completion of the audit, the Tribe provides the CFO with a copy of the report and the status of the resolution of findings contained in the report. The Tribe also informs CFO of the status of the upcoming A-133 Audit by 09/30/98. The Tribe's performance in this area was based on information provided by the Tribe and the contents of the audit report.

Population / Sample: The population consisted of all of the findings in the A-133 Audit completed for the period of October 1, 1996 through September 30, 1997. The sample was equal to the population.

Findings and Conclusions: The A-133 audit for the period ending September 30, 1995 contained a finding concerning the Tribe's AML program. The finding related to the late filing of financial reports for the AML Program as well as all other programs. All delinquent reports have been submitted by the Tribe (see the Enhancement and Performance Review Report for Timeliness of Applications and Reports).

Corrective Actions: Since report delinquencies have been a continual problem in the past, the Tribe must develop procedures where reports and grant application are submitted in a timely manner.

CROW TRIBE OF INDIANS AML PROGRAM

ENHANCEMENT AND PERFORMANCE REVIEW REPORT

EVALUATION YEAR 1998

Principles Being Evaluated: Programs should have systems in place to ensure accountability and responsibility for spending AML funds and a process to assure that such systems are working.

Subelement: Procurement and Management of Property and Services

Review Dates: September 29-October 2, 1998

Personnel: Elizabeth Other Medicine (COR) and Neal Jacquot (CFO)

Background: The COR must conduct procurement actions in accordance with Tribal procedures and manage and dispose of program property in accordance with Tribal procedures while complying with OSM's minimum requirements. Since these areas are high risk areas due to the high level of internal controls required, it is selected for review in every evaluation period. Weaknesses in inventory control which had been noted during the previous evaluation period led to a continued review of the property control process.

Review Methodology: Procurement: The evaluations conducted during the EY 96 and EY97 revealed that the COR had awarded work under an expired contract with a design engineering firm. Therefore, the review methodology was limited to a review of ongoing contracts to assure that they had not expired.

Management of Property and Services: The control of vehicle usage was determined through a review of vehicle logs. The review methodology used to determine the overall control of property consisted of (1) a review of vehicle usage logs and (2) a confirmation of property contained on the property records through a physical inventory of sampled items. This included a check of the property for inventory tags. The requirements of the Federal Common Rule and the policies of the Tribe were used in determining what property should be included in the property listing.

Population / Sample: The procurement population consisted of all ongoing contracts. The property review population consisted of all grant purchased property. The procurement sample consisted of two major ongoing contracts. The property sample consisted of a review of all vehicle logs for the evaluation year, one recently purchased item of property and ten randomly selected items .

Findings and Conclusions: Procurement: Internal Control weaknesses were noted involving the control of purchase orders (see the Enhancement and Performance Review Report for Accounting Procedures). It was also determined that the Tribe has taken corrective action where expenditures in previous years were being incurred under an expired contract with a design contractor. All contractual expenditures during this evaluation period had been incurred under current contracts.

Management of Property and Services: The Tribe has a system of vehicle usage logs to control the usage of vehicles and to establish controls for fuel and maintenance costs. It was apparent during the previous evaluation year that employees responsible for maintaining the logs for the vehicles were uncertain of the required information, the format for reporting and the timing established for submitting the data to the program administrative staff. The review for this evaluation year confirmed that the problem still exists and that no corrective action had been taken. Without accurate record of vehicle usage, the Tribe is unable to determine the appropriate use of the vehicles and verify the accuracy of fuel and maintenance costs. In addition to the vehicle usage logs for the administrative vehicle, the Tribe has established an sign in/sign out sheet for the one administrative vehicle. The purpose of this log is to determine who used the vehicle and the purpose for its use. This log appears to be accomplishing the purpose for which it was designed.

The review of the property records revealed that there were three instances out of the sample of eleven pieces of property where the property was not contained on the property records. There were discrepancies involving property recently purchased as well as property randomly selected. A property report must be submitted reflecting the grant property in existence at the end of the performance period for each grant when it is closed. Incomplete property records are resulting in a lack of property controls and inaccurate reporting of grant purchased property to OSM when grants are closed.

Corrective Actions: The Tribe must (1) provided adequate instruction to personnel responsible for maintaining vehicle logs and establish a procedure that utilizes the logs to verify the reasonableness of vehicle use and maintenance and fuel costs, (2) update property record to include all eligible grant purchased property and (3) establish appropriate controls that result in the maintenance of property records that are consistent with the actual program property.