BOX ELDER, Mont. - A federally funded non-profit group that helps American Indians secure agricultural loans had to briefly close its national operation in January because of questions about internal financial problems.
In a Jan. 8 letter, the National Tribal Development Association (NTDA), headquartered here on the Rocky Boy's Indian Reservation, was told by the U.S. Department of Agriculture's Farm Service Agency (FSA) to immediately stop work done on the agency's behalf and to return $402,000 in recent funding because of alleged "financial irregularities" in the program.
NTDA officials, who initially alerted the agency to the problems, voiced vigorous opposition to the government's actions and argued that a full federal investigation should have been completed before such drastic decisions were made. Following further consultations, federal officials agreed to restore funding under an existing cooperative agreement, but only until Oct. 31, the end of the federal fiscal year, Tom Hofeller, FSA's director of business and program integration, said in a telephone interview.
"We're working together to resolve things and get back on track," Hofeller explained. "The cooperative agreement is back operating."
In the meantime, Hofeller added, there will be detailed discussions between the two parties in an effort to continue the financial relationship into the future.
"We're very happy with the project and we want to see it continue on," Hofeller said. "We're very eager to get people back to work and doing the good outreach they're doing."
NTDA was established in 1995 by a group of tribal leaders that wanted to expand economic opportunities for their communities. The outreach program, originally run as a pilot project on Montana's seven Indian reservations through the Chippewa-Cree Tribe's Stone Child College, later teamed up with NTDA and the National FSA American Indian Credit Outreach Initiative was created to serve several dozen member tribes across the country. In the years since, the outreach project has expanded to 19 states, said NTDA Program Administrator Billi Morsette.
Morsette explained that the group, which now has a total of 19 employees nationally, is hoping to soon expand to nine other states and add another seven employees. The organization's main function is to help Indian agricultural producers tap into federal loan programs and educate and counsel them about federal lending procedures. Along with the FSA, she said, the group also receives funding from the Agriculture Department's Animal and Plant Inspection Service.
Officials said that along with helping to spread the word about lending options, the program has helped to dramatically reduce the number of tribal producers who default on the federal loans.
According to documents distributed to members of the media by NTDA Chief Executive Officer John Sunchild, an unnamed former employee allegedly misused an undisclosed amount of program funds before leaving their job last July. Sunchild said he immediately notified FSA officials "of the suspicions and received direction and concurrence to commission a private consulting firm to conduct an internal review of the entire organization." The matter was also eventually referred internally to the department's Office of Inspector General, which is apparently still deciding whether more investigation is warranted.
"Therefore, it was not the FSA who had uncovered or discovered the possible financial irregularities, it was actually NTDA who had discovered a problem, informed the funding agency, informed local and federal authorities, sought FSA advice and direction, initiated FSA coordinated actions necessary to responsibly manage the situation, and continued to communicate and operate the project as directed by the FSA," Sunchild explained. "Basically, the USDA Farm Service Agency rendered a decision to essentially shut down a highly successful model outreach program targeted to American Indian farmers, ranchers and youth. This decision came with no warning, no appeal rights, and was to be effective" the same day the group was notified.
"I don't want to give anybody the idea they've been uncooperative at all," the FSA's Hofeller said. "All we really felt is that there were some indications of some accounting problems and some money might not be accounted for. We put a temporary hold on their finances for the protection of the government."
According to Morsette, the financial hold forced NTDA to temporarily lay off all but one of the group's employees. But as of Jan. 27, with a renewed agreement in place, "everybody is back to work," she said.