BIE in Crisis: Underfunded Agency Can’t Do Its Job

Misappropriated funds, poor management and dodgy procurement practices are just a few of the problems that have plagued BIE schools for years.

Timothy Benally, acting superintendent of schools for the Navajo Nation Department of Diné Education, testified before the Senate Committee on Indian Affairs in May, “The state of Navajo student achievement in BIE-funded schools on the Navajo Nation is not very promising and has seen a steady decline. According to current data and reports, Navajo students attending BIE-funded schools also underperform relative to Navajo students attending public schools located on the Navajo Nation.”

Misappropriated funds, poor management and dodgy procurement practices are just a few of the problems that have plagued Bureau of Indian Education schools for years. These irregularities have been used to explain, in part, the dismal educational outcomes for most of the 41,000 students served by the 185 schools BIE oversees.

The National Indian Education Association writes, “In 2011, only 18 percent of Native fourth-graders were proficient or advanced in reading on the National Assessment of Educational Progress (NAEP), as compared with 42 percent of white fourth-graders… Only 17 percent of Native eighth-graders were proficient or advanced in math, and nearly half—46 percent—were below the basic level.” These stats refer to all American Indian/Alaska Native students in public, BIE and private schools.

According to 2011 NAEP results, American Indian fourth graders attending BIE schools had reading scores 22 points lower than AI/AN students in public schools. The gap for mathematics scores was 14 points. Reading scores for eighth graders were comparable.

The federal government has issued four recent reports detailing some of BIE’s difficulties and has made recommendations for improvement, but whether the recommendations can be implemented in any meaningful way given the government’s chronic underfunding for the agency is not clear.

Misappropriated Funds

A November 2014 report from the Government Accountability Office, “Bureau of Indian Education Needs to Improve Oversight of School Spending,” finds that of the $830 million the federal government provided to run BIE schools during the 2009-2010 school year, “external auditors identified $13.8 million in unallowable spending at 24 schools as of July 2014. Further, in March 2014, an audit found that one school lost about $1.2 million in federal funds that were improperly transferred to an off-shore account” and have not been recovered.

BIE schools run almost exclusively on federal dollars, with about 75 percent, or $622 million, coming from Interior and about 24 percent, or $197 million, from Education to support Title I and IDEA programs. The remaining 1 percent comes from other federal agencies, including USDA, which administers the National School Lunch Program and School Breakfast Program.

A significant factor contributing to misspending, GAO finds, is that federal budget cuts have reduced the number of full-time administrators who oversee BIE school expenditures from 22 people in 2011 to 13 in 2014, with the extra work picked up by the remaining administrators, who have additional responsibilities as well.

The administrators cited problems such as having oversight of geographically dispersed schools, sometimes in several states; difficulty obtaining documents, including mandatory audits; and lack of formal procedures for following up on audits and documenting whether problems have been resolved, or even addressed. However, perhaps the most severe problem is that “the administrators responsible for the three line offices we visited said that they did not have the financial expertise to understand the content of single audits.”

GAO finds that “average per-pupil expenditures for the 32 BIE-operated day schools were at least 56 percent higher than in public schools nationally in school year 2009-10… According to our analysis, BIE-operated day schools spent an estimated average of at least $15,391 per pupil, while public schools nationwide spent an estimated average of $9,896, excluding food service. When Recovery Act spending was excluded, per-pupil expenditures for these BIE-operated schools were at least 61 percent greater than at public schools.”

However, the higher per-pupil spending is not necessarily indicative of misspending because unique conditions on and near reservations increase costs. Those factors include “student demographics; high poverty, more special needs students; smaller enrollment; remote location; higher costs of instruction, transportation (remote locations and poor road conditions… facilities operations and maintenance, and administration.” Further, spending per pupil is calculated differently for BIE schools than for most public schools.

GAO recommends that BIE develop “a workforce plan to ensure that BIE has the staff to effectively oversee school spending and written procedures and a risk-based approach to guide BIE’s oversight of school spending. Indian Affairs generally agreed with GAO’s recommendations.”

However, with the exception of the $15 million cited above (less than 2 percent of the $830 million BIE schools received that year), it is not clear that BIE schools actually misspent any federal funds. What is clear is that the agency does not have the trained staff to figure out where the money is going. GAO’s recommendation to hire more administrators and train them better would put yet more pressure on a grossly underfunded agency and wouldn’t necessarily improve student outcomes. Further, GAO’s distress over the fact that “approximately 80 tribally-operated schools have retained a total of about $125 million in unspent funds that have accumulated over time” does not acknowledge that it was schools that had put some funds aside that had to cut fewest services and programs during the federal sequester in 2013.

Poor Management

GAO issued the report, “Better Management and Accountability Needed to Improve Indian Education,” in September 2013. This report is a follow-up to the March 2012 Bronner report, “U.S. Department of Interior–Indian Affairs Final Report: Examination, Evaluation, and Recommendations for the Support Functions,” which recommended significant changes to the how the BIA and BIE do business, ranging from budget formulation and financial procedures, acquisitions, property management (including the 68 high-risk BIE facilities), to hiring teachers with the proper credentials for their jobs to school safety. GAO was tasked with finding out how “student performance at BIE schools compares to that of public school students, what challenges BIE faces in assessing student performance and how BIE’s management practices impact its mission of educating American Indian students.

The management report found that AI/AN student performance in BIE schools is significantly lower than in public schools, that the assessment of AI/AN student achievement in BIE schools is inconsistent and that “communication between Indian Affairs leadership and BIE is poor, resulting in confusion about policies and procedures.”

Procurement Practices

Sloppy management and unclear procedures within BIE have inevitably led to problems. For example, DOI’s Office of Inspector General investigated a complaint about BIE’s procurement procedures and issued its report in December 2014. The report was sent to Kevin Washburn, assistant director – Indian Affairs “for whatever administrative action you deem appropriate.”

The “Investigative Report of Brian Drapeaux” found that Drapeaux, Yankton Sioux, had been instrumental in awarding an $840,000 contract to PerGroup, for which he had worked recently enough to create a conflict of interest. “We also found that the contract specialist’s efforts to mitigate that conflict, first through termination of the award and then through stipulations excluding PerGroup from participating at any level in a sole-source contract to a small, disadvantaged 8(a) company, resulted in the procurement action being transferred away from her and given to another contract specialist with limited experience and no warrant of authority.”

Nonetheless, and after extensive machinations, the contract was eventually awarded to an American Indian 8(a) company with PerGroup as a major subcontractor. Drapeaux and his boss, former BIE Director Keith Moore, Rosebud Sioux, have both left BIE.

Next: Overhauling BIE; President Obama unveils Generation Indigenous Initiative to improve educational opportunities for American Indian/Alaska Native youth.