Mni Wiconi cost overruns draw closer scrutiny

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RAPID CITY, S.D. - As if more bad news were needed, Oglala Lakota tribal officials have received stern warnings from the Bureau of Reclamation about the tribe's portion of the Mni Wiconi water project.

The water project involves the Oglala and Sicangu Lakota tribes in a cooperative effort with the federal government to bring Missouri River water to the Pine Ridge and Rosebud Indian Reservations. The tribe's portion of Mni Wiconi was the subject of a 1998 audit.

Bureau area manager Denny Breitzman began a June 7 meeting with members of the Oglala Sioux Tribal Council with an ominous statistic: "You have over $1.2 million in unsubstantiated cost," he told the council, "and there have been millions of dollars going into the tribe's general treasury. Some have been paid back, some haven't. It's enough so that we cannot turn our back on it."

Bureau officials claim the amount is part of the findings from the 1998 audit of the tribe's Oglala Sioux Rural Water Supply System.

Two hours after he announced his "grave concerns" and the press had been removed from the meeting (at the prompting of Pine Ridge Superintendent Bob Ecoffey), it was learned that Breitzman's grim assessment had substantially modified.

"I think the tribe is headed in the right direction as far as providing good answers to our questions," Breitzman said.

Tribal Councilman Floyd Brings Plenty said the reason for the change was not the the bureau's fault. "Apparently, over the last year (the bureau) sent several letters to President Salway asking for an explanation to the '98 audit. They never got a response. This is just more fallout from the political turmoil we've been having."

During the meeting, bureau officials pressed for an additional audit of the tribal rural water system for 1999. At one point, one tribal official said they were demanding a completed 1999 audit by the end of June. "We had to sit there and bring them up to speed on our whole political situation," he said, declining to be named.

John Donham, an accountant working with the tribe, convinced the bureau officials the tribal council had been working in good faith to resolve any discrepancies uncovered in the audit. Bureau officials later said they were unaware of the extent a recent takeover of the tribe's offices had compromised the tribe's ability to operate its financial systems.

Because of fiscal problems with other federal programs administered by the tribe, a memorandum of agreement was reached between the tribe and the BIA. It cites specific remedies and a timeline to re-certify the tribe's financial system.

In an interview after the meeting, Breitzman said the bureau would not press for an audit, and was interested in developing an agreement similar to that with the BIA.

Billed at one time as the largest engineering effort in the United States, the Mni Wiconi water project has been plagued with cost overruns in the tens of millions of dollars. Initial estimates projected costs for the project at $300 million. Those estimates have been revised to $380 million. Citing these cost overruns, South Dakota's congressional delegation asked for and received audits for portions of the program.