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Audit gives decent marks to tribes

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WASHINGTON - Overall, tribes and their housing entities got better marks than the Department of Housing and Urban Development in HUD's own audit of the implementation of the landmark Native American Housing Assistance and Self-Determination Act.

HUD's Office of Inspector General gave passing marks to 15 of 17 tribal housing entities it studied, while telling HUD's Office of Native American Programs it has not properly allocated block grants from the act, overfunding some tribes and underfunding others.

The inspector general had nine recommendations for the office, which partially agreed with an advance draft of the report but vigorously contested many findings, including the funding allocation and recommendations to direct housing entities more closely on how to implement the rules.

In an interesting recognition of tribal sovereignty, the office rejected the inspector general's recommendations to be more hands on as being too "paternalistic" since the act clearly states tribes are accountable for the block grants. The office itself has been blasted by tribal housing officials as being too paternalistic, and 200 of them left a HUD Native summit last month to underline that conclusion.

The inspector general's office also red-flagged the practice of combining money under the act with other federal funding, such as the Affordable Housing Program of the Federal Home Loan Bank System, and the Low Income Housing Tax Credit program.

The problem is potential legal liability on the "low-income Indians-only" requirement of the act compared to other programs which make no reference to race and are required to abide by the Fair Housing Act, which prohibits discrimination. Although not spelled out, the report raises concerns about suits over "reverse discrimination" such as the ones that have raised a cloud in Hawaii in recent years over programs targeted for Native Hawaiians only.

However, the office sought an opinion on this from HUD's Office of General Counsel, which has concluded no violation of the Fair Housing Act occurs if the housing is on land over which the tribe exercises sovereignty.

On the funding allocation formulas to the more than 300 housing entities funded under the act, the HUD Inspector General said the office used incorrect formulas that didn't properly delete some housing units that have been removed from tribal housing stock through homeownership.

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The inspector general said four of the five housing entities it reviewed for this had discrepancies. In one case, it found 633 units counted that shouldn't have been, which would increase the amount of money that tribe received. It did not release the names of any of the 17 tribal housing entities it studied.

"The fact that we found discrepancies at four of the five indicates there is a significant problem nationwide," the report concludes. It recommends that the office should recover funds allocated incorrectly and re-allocate them to housing entities underfunded as a result.

It notes, however, that the office claims to have resolved the problem and objects to the characterization the allocations have been wrong throughout the five years the act has been in place.

Former office director Jacqueline Johnson's memorandum on the draft report details $1.6 million of over-allocations recouped this year.

The "reverse discrimination" warning is a troubling one because it raises the specter of tribes being unable to combine self-determination act money with other federal housing assistance, and dismantling any such deals that have already been struck. One of the stated goals was to leverage HUD American Indian housing assistance by combining it with other sources, so this outcome would seem to tribal housing officials to be completely opposite to what was intended.

Another red flag raised in the report has to do with "umbrella" housing entities that include more than one tribe. The report suggests the "controlling" tribe in the umbrella group may benefit unduly at the expense of other tribes, and recommends that the office clarify whether the controlling tribe needs to allocate the money proportionally.

As for tribes, the report found they were "generally" following the housing plans called for, and that 15 of 17 had the administrative capacity to carry out their plans.

But it noted numerous cases of noncompliance that it generally attributed to housing entities being unfamiliar with the law's requirements. These included conflict of interest requirements, where housing entity employees or family members apparently received preferential treatment for assistance.