Need for Effective Guidance of Navajo Tribe of Indians Management of Tribal Funds

The General Accounting Office has made a review of selected activities of the Bureau of Indian Affairs, Department of the Interior, relating to the management of trust funds advanced to the Navajo Indian Tribe. Our review was made as part of our continuing examination of Department and Bureau activities and was initiated after information was brought to our attention which indicated that tribal funds were being expended for improper purposes. The review was made pursuant to the Budget and Accounting Act, 1921 (31 U.S.C 53), and the Accounting and Auditing Act of 1950 (31 U.S.C. 67) and with the cooperation and assistance of the Chairman of the Navajo Tribal Council. Our examination, which generally pertained to transactions during the 4-year period ended with fiscal year 1965, was concerned primarily with the manner in which the Bureau was discharging its responsibilities relating to the management of trust funds advanced to the tribe and included a review of (1) applicable laws and regulations, (2) selected tribal programs and related financial transactions, and (3) Bureau supervision of tribal management of these selected programs. Our review was not performed for the purpose of making a determination of whether all tribal funds had been, or were being, expended in the most efficient and economical manner. As our review progressed, we limited our examination to those activities that appeared to involve significant weaknesses which, in our opinion, indicated a need for timely corrective action. Our review was made at the Bureau's Central Office, Washington, D.C.; its Gallup Area Office, Gallup, New Mexico; and its Navajo Agency Office, Window Rock, Arizona, which has immediate responsibility for the administration of the activities of the Bureau on the Navajo Indian Reservation. In addition, we reviewed certain Navajo tribal operations and records at Fort Defiance, Arizona, and at the seat of tribal government at Window Rock. In performing our review we interviewed officials of the Department, the Bureau, and the Navajo tribal government.

In our opinion, the Bureau, as trustee of the Indian estate, should provide effective and timely guidance to assist the Navajo Tribe in the financial management of certain tribal activities. Our review of selected tribal activities showed that in recent years a significant amount of tribal funds had been dissipated through (1) the unauthorized expenditure of funds for the expansion and continued operation of a heavy equipment pool which was operating at a deficit, (2) the unauthorized expenditure of funds for the establishment and liquidation of a commissary which was never opened for business, and (3) unsound purchasing practices.