Indian Affairs:

Actions Needed to Better Manage Indian School Construction Projects

GAO-17-447: Published: May 24, 2017. Publicly Released: May 24, 2017.

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What GAO Found

The Department of the Interior's (Interior) Office of the Assistant Secretary-Indian Affairs (Indian Affairs) does not have a comprehensive capital asset plan to guide the allocation of funding for school construction projects across its 185 Bureau of Indian Education (BIE) schools. Indian Affairs is in the process of replacing 3 schools and plans to replace 10 additional schools from a list of 54 schools that applied in 2015. However, Indian Affairs has not developed a comprehensive, long-term capital asset plan for the repair or replacement of the remaining schools in its portfolio, as required by Interior policy. Until Indian Affairs develops a capital asset plan, it risks using federal funds inefficiently and not prioritizing funds to schools with the most pressing needs.

Indian Affairs has not consistently used accountability measures or conducted sufficient oversight to ensure that BIE school construction projects are completed on time, within budget, and meet schools' needs. For instance, Indian Affairs does not always use accountability measures, such as warranties, to have builders replace defective parts or repair poor workmanship. Project managers, who are responsible for helping to ensure accountability, do not always understand how to use accountability measures because Indian Affairs has not provided guidance on when and how to use them to ensure successful completion of construction projects. In addition, Indian Affairs has not adequately overseen school projects managed by tribal organizations. Officials interviewed by GAO at three schools said Indian Affairs was not timely in reviewing new school designs, which resulted in project delays. For 49 construction projects completed from 2003 through 2016, the inconsistent use of accountability measures and inadequate oversight led to projects that took longer than expected, were sometimes over budget, or had to be scaled back to remain within their allotted budgets. For example, of the 49 projects:

  • 16 were 3 or more years behind schedule (see fig. 1).
  • 1 was almost 10 years behind schedule.
  • 10 were 20 percent or more over budget.

Further, the new projects did not always meet schools' needs, according to school officials. In one instance, Indian Affairs planned a dormitory to house 400 students while the school it planned could only accommodate 368 students. Until Indian Affairs develops and implements guidance for ensuring accountability throughout the school construction process and improves its oversight of these projects, it will have little assurance they are completed satisfactorily and meet the needs of students and staff.

Figure 1: Timeliness of Indian Affairs' School Replacement Projects Completed, Fiscal Years 2003-2016

Figure 1: Timeliness of Indian Affairs' School Replacement Projects Completed, Fiscal Years 2003-2016

Why GAO Did This Study

Indian Affairs is responsible for operating and maintaining 1,785 buildings at 185 K-12 BIE schools, including dormitory buildings for students, on or near reservations. These buildings had an estimated value of $4.5 billion in 2016. Many of these schools are in poor condition and have safety hazards. GAO was asked to review Indian Affairs' processes to fund and oversee the repair and replacement of schools.

GAO examined the extent to which Indian Affairs (1) has a comprehensive plan to maintain, repair, or replace schools and ensure the efficient use of funds, and (2) ensures accountability throughout the school construction process. GAO assessed agency data on the cost and timeliness of 49 school replacement projects completed from fiscal year 2003 through 2016, and reviewed contract and grant files for 10 school construction projects selected from schools that had recent or ongoing projects. GAO also assessed Indian Affairs' practices against its policies, design standards, and federal laws and regulations and interviewed agency and school officials.

What GAO Recommends

GAO is making six recommendations, including that Indian Affairs develop a capital asset plan for school facility construction and repair, develop and implement guidance on how to use accountability measures, and improve oversight of projects. Interior agreed with five of the recommendations and disagreed with one. GAO continues to believe its recommendation is valid, as discussed further in this report.

For more information, contact Melissa Emrey-Arras at (617) 788-0534 or emreyarrasm@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: Interior agreed with this recommendation. Interior stated that Indian Affairs is engaged with the Office of Management and Budget to develop a more robust and prioritized capital asset management plan for school infrastructure needs, which they expect to complete before the end of fiscal year 2017.

    Recommendation: To ensure accountability for BIE school facility funds, the Secretary of the Interior should direct the Assistant Secretary--Indian Affairs to develop a comprehensive long-term capital asset plan to inform its allocation of school facility funds. Such a plan should include a prioritized list of school repair and maintenance projects with the greatest need for funding.

    Agency Affected: Department of the Interior

  2. Status: Open

    Comments: Interior agreed with this recommendation. In May 2017, Interior stated that Indian Affairs is currently engaged in an effort to comprehensively review the budget justification process with the objective of improving the quality, format, and presentation of the President's annual budget submission to Congress and that it will work to provide more detailed information on proposed capital expenditures and updates on previous construction projects. In addition, the agency reported that Indian Affairs will ensure improvements to the budgeting process are made permanent through formal policy and procedure in order to ensure that the needs of BIE schools are accurately and regularly reported in its congressional budget justification.

    Recommendation: To ensure accountability for BIE school facility funds, the Secretary of the Interior should direct the Assistant Secretary--Indian Affairs to provide more details in Indian Affairs' annual congressional budget justifications on specific needs at BIE schools, including information on proposed capital expenditures, and updates on previous school construction projects.

    Agency Affected: Department of the Interior

  3. Status: Open

    Comments: Interior agreed with this recommendation. Interior indicated that the Acquisition office and the Division of Facilities Management and Construction are working together to create and implement guidance and were preparing and planning improvements for future construction contracts. In addition, the agency stated that Indian Affairs will develop a financial accountability workgroup with members from the Office of the Chief Financial Officer, BIA, BIE, and the Office of the Assistant Secretary--Indian Affairs to develop guidance and standards to ensure the effective use of accountability measures.

    Recommendation: To ensure accountability for BIE school facility funds, the Secretary of the Interior should direct the Assistant Secretary--Indian Affairs to develop and implement guidance for its project managers and contracting officers regarding effective use of accountability measures.

    Agency Affected: Department of the Interior

  4. Status: Open

    Comments: Interior disagreed with this recommendation, noting that it had revised its design handbook in 2017 and that the revised handbook includes a process to consider deviations that do not violate requisite codes, standards, or laws. Interior also stated that the handbook is not intended to describe every scenario where a deviation may be requested and that it is more efficient to allow designers, schools and other users to request deviations and exceptions as and when needs arise. However, we believe the revised handbook is still in draft and is being reviewed internally and has neither been finalized nor distributed: an updated design handbook that includes a process for deviations is critical. We agree with the agency that the handbook does not need to describe every scenario where a deviation may be requested. The draft 2017 handbook indicates that when conflicts or questions arise the designer is to formally notify the Interior project manager in writing to request a waiver. However, it does not provide an explanation of the process or how life cycle cost analysis might inform that process. We continue to believe that, in addition to a process, providing guidelines and an explanation about how life-cycle cost analysis should inform such decisions in the handbook before it is finalized would be useful and help to ensure that the choices designers make with regard to design are both cost-effective and practical.

    Recommendation: To ensure accountability for BIE school facility funds, the Secretary of the Interior should direct the Assistant Secretary--Indian Affairs to clarify Indian Affairs' design handbook requirements to explain when and how school designs can deviate from specific requirements--such as heating and cooling systems with complex features--when the life cycle cost analysis demonstrates the requirements are not cost-effective or practical given such factors as the technical capacity of school facility staff.

    Agency Affected: Department of the Interior

  5. Status: Open

    Comments: Interior agreed with this recommendation. Interior stated that its Division of Facilities Management and Construction will develop a "high-risk" project tracking and monitoring process. The Division will work with BIA and BIE facilities managers to develop an engagement plan to better inform tribes of the extensive requirements involving the management of capital projects replacing schools or facilities. For tribes that manage projects themselves, Indian Affairs will offer to provide them with technical assistance, particularly during key program phases.

    Recommendation: To ensure accountability for BIE school facility funds, the Secretary of the Interior should direct the Assistant Secretary--Indian Affairs to improve oversight and technical assistance to tribal organizations to enhance tribal capacity to manage major construction projects.

    Agency Affected: Department of the Interior

  6. Status: Open

    Comments: Interior agreed with this recommendation. Interior stated that Indian Affairs will develop, as part of its Financial Accountability Workgroup, guidance for maintaining all types of construction contract and grant files.

    Recommendation: To ensure accountability for BIE school facility funds, the Secretary of the Interior should direct the Assistant Secretary--Indian Affairs to develop and implement guidance for maintaining complete contract and grant files for all BIE school construction projects.

    Agency Affected: Department of the Interior

 

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