Uncovering Local Mismanagement of Federal and State Welfare Funds
Desert Sun (Palm Springs, Calif.) reporter Keith Matheny describes how he uncovered the mismanagement of millions of dollars intended for needy families from California's Native American tribes. The investigation included reviews of nearly a decade's worth of annual audits and thousands of pages of letters, reports, e-mails and other public documents obtained through multiple requests under the federal Freedom of Information Act and the California Public Records Act. The result was the series, Aid to Indian Country.
Our Torres-Martinez Tribal TANF investigation--which is still unfolding-- is a particularly satisfying one for me, because it didn't come from an editor's assignment or anybody's tip. It started by looking through reports on the Federal Audit Clearinghouse.
Operated on behalf of the U.S. Office of Management and Budget, the clearinghouse contains reports on the required annual audits for every non-federal entity that spends more than $500,000 in federal funds.
I had heard about the site at the Investigative Reporters and Editors 2008 computer-assisted reporting conference in Houston, where the presenters suggested taking a look at American Indian tribes, which tend to get numerous federal grants. We have a number of tribes in our area.
Fast forward several months. One day I was a little bored, had no good stories going and was looking for something interesting to write about. I went back through my notes from the IRE conference and was reminded of the Federal Audit Clearinghouse tip.
I began to search our local tribes at the clearinghouse, and nothing stood out. Then I reached the Torres-Martinez Desert Cahuilla Indians, a small tribe of about 400 members in our Coachella Valley.
Red flags abounded. For every year's audit report I searched, the tribe had serious, negative audit findings, known as significant deficiencies and, more seriously, material weaknesses, the term auditors use to describe a systemic flaw in financial processes that is significant enough that it could mean an entity's books are unreliable in determining how much cash it has on hand, how much it's spent and whether that spending followed federal laws and rules.
The Torres-Martinez's problems lay in the program for which it receives the most federal money, the Temporary Assistance for Needy Families (TANF) program. As an offshoot of Clinton-era welfare reform in the 1990s, tribes were allowed to choose to run their own federally funded welfare programs.
We were puzzled as to why this tiny tribe was receiving more than $14 million per year in federal funding most years for this program.
The Federal Audit Clearinghouse provides reports on annual audits—not the audits themselves, but a snapshot of basic information from them. To find out more about the problems uncovered by auditors required obtaining the actual documents. The paper made a series of records requests under the federal Freedom of Information Act and its counterpart in our state, the California Public Records Act, since the TANF program receives state matching funds as well.
When the records finally arrived, we learned that this very rural tribe somehow was granted permission to run TANF not only for itself but for other American Indian tribes throughout Riverside and Los Angeles counties. We also found out that it operated out of its own floor in an office building on Wilshire Boulevard in Los Angeles, some 130 miles from its home base on its reservation in Thermal, Calif.
Some of the auditor's findings were startling:
* The federal government in 2005 found that the program potentially
"misused" more than $6 million in taxpayer money in fiscal years 2002 and
2003.
Program officials were able to justify some of the spending, but agreed in 2007 to pay a penalty of more than $1.5 million as a result of misuse of welfare funds.
Yet, as of December 2008, the tribe was not in compliance with the terms of the agreement, the tribe's auditor stated in September 2009.
* Year after year, because of "inaccurate," "misstated" or incomplete financial records of the tribal program, it was impossible to verify how much money the program had on hand, how much it had spent or whether spending followed federal laws and program rules.
* Program administrated spent more than $50,000 in undocumented credit card expenditures, most carrying late fees and interest penalties.
* The Torres-Martinez tribal welfare program purchased 45 cars for use by 90 employees and then failed to track where the cars were or how they were being used.
* The program was formed in 2001 and its federal and state grants were based on an estimated monthly caseload of 5,200 families. But as recently as 2007 the program served fewer than 400 families. Today its caseloads are still only about a quarter of what was projected, yet its federal and state grants have never been changed.
Our chronicling of the long history of waste and mismanagement in the program has led our state and federal lawmakers to promise committee-level investigations of the Torres-Martinez Tribal TANF program. Our local member of Congress, Rep. Mary Bono Mack (R-Palm Springs), said she intends to work to remove oversight for the TANF program from the Torres-Martinez tribe.
I highly recommend the Federal Audit Clearinghouse, a site where you can learn revelatory information about agencies in your area, the money they receive from the government and what -- and how -- they're doing with it.
