HUD leaves unanswered key questions regarding tribe’s use of federal funds

St. Croix Chippewa agree to fix grants review process

By DAVE DALEY | March 7, 2017

The St. Croix Chippewa tribe is making changes in how it manages federal housing funds in response to a 2015 audit critical of the tribe’s use of $2.3 million in federal housing grants.

The action comes following a Department of Housing and Urban Development review prompted by a Wisconsin Policy Research Institute investigation in 2016.

But the HUD review did not address two key audit findings — that tribal officials loaned themselves federal housing funds without proper oversight and that loan funds were not being repaid.

The audit found that the tribe’s Housing Authority awarded $308,000 to contractors without following rules on how vendors are selected and did not adequately check that tenants in subsidized tribal housing qualified for the rent assistance.

In a February letter, HUD reported that St. Croix officials were implementing policies to ensure that tribal members receiving housing help are eligible for that assistance and tightening its monitoring of how contractors are picked to build and repair tribal housing.

Among other changes, tribal workers underwent training on federal rules that regulate the procurement process and what wages must be paid to contractors under the federal Davis-Bacon Act, the HUD letter stated.

The HUD letter, however, did not address two other major negative findings in the audit — that top officials in the tribe’s Housing Authority were lending themselves monies, without proper oversight, from a loan fund designed to help the tribe’s poorest members and that more than $776,000 in back rent was owed the tribe.

Why the letter did not address these deficiencies was not immediately clear. But the loan fund is apparently money from a State of Wisconsin housing grant made 23 years ago and not subject to federal oversight. The HUD letter did state that the 2016 audit of the St. Croix Housing Authority found most of the deficiencies noted in the 2015 audit had been cleared up.

The 2016 audit, however, criticized the Housing Authority for not keeping minutes that record the decisions and actions taken by the Housing Authority as HUD requires — the third consecutive year that an audit found this deficiency.

HUD also set a deadline of May 31 for the St. Croix to implement a plan increasing the number of members on the Housing Authority and provide copies of the minutes of the authority’s board meetings for March and April of this year.

“HUD requires evidence that those responsible for governing the entity are regularly monitoring the operations of the entity and have financial oversight,” a top official in HUD’s Office of Native American Programs wrote.

In the story last year, WPRI reported that the St. Croix Chippewa tribe, with only about 1,000 members, live on a tiny reservation largely located in Burnett, Barron and Polk counties in northwestern Wisconsin.

There, the poorest members of the tribe live in ramshackle trailers, get meals at tribal nutrition centers and depend on monthly government checks and a meager $400 a month in casino payments to get by.

This despite the federal government providing millions of dollars in grants from HUD and other Washington, D.C., offices over the years to help impoverished tribe members.

Dave Daley was a longtime statehouse and federal courts reporter with the Milwaukee Journal and Milwaukee Journal Sentinel. He is the reporter for WPRI’s Project for 21st Century Federalism.