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U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Spending Taxpayer Dollars
Walker River Paiute Tribe
Needs to Improve Its
Internal Controls to Comply
With Federal Regulations
Report No. 15-2-0165
June 11, 2015

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Report Contributors:	David Kim
Leah Nikaidoh
Lei a Wong
Abbreviations
CFR	Code of Federal Regulations
EPA	U.S. Environmental Protection Agency
FFR	Federal Financial Report
GAP	General Assistance Program
OIG	Office of Inspector General
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More information at www.epa.gov/oiq/hotline.html.
EPA Office of Inspector General
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Washington, DC 20460
(202) 566-2391
www.epa.gov/oig
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*. U.S. Environmental Protection Agency	15-2-0165
June 11, 2015
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At a Glance
Why We Did This Review
The U.S. Environmental
Protection Agency's (EPA's)
Region 9 requested assistance
from the Office of Inspector
General (OIG) due to concerns
about the accounting system in
place at the Walker River
Paiute Tribe.
EPA Region 9 was also
concerned about the tribe's
indirect cost rate proposal for
2014 and outstanding
incomplete grant tasks under
EPA grant GA-96926201.
This report addresses the
following EPA goal or
cross-agency strategy:
• Working to make a visible
difference in communities.
Walker River Paiute Tribe Needs to Improve Its
Internal Controls to Comply With Federal Regulations
What We Found
Our audit determined that the Walker River Paiute
Tribe's accounting system and written policies and
procedures complied with federal regulations.
However, our testing disclosed multiple instances
where the tribe's actual practices did not comply
with federal regulations related to personnel costs,
indirect costs and in-kind contributions.
The Walker River Paiute
Tribe did not comply
with federal regulations,
resulting in $994,963 of
questioned costs.
Send all inquiries to our public
affairs office at (202) 566-2391
or visit www.epa.gov/oia.
Our audit also found incomplete grant tasks remaining from an EPA General
Assistance Program grant for fiscal years 2008 through 2012.
Recommendations
We recommend that the Region 9 Regional Administrator disallow and recover
unsupported costs of $841,477, unless the tribe can provide adequate support for
these costs. We also recommend that the Region 9 Regional Administrator:
•	Disallow and recover ineligible costs of $1,591.
•	Require the tribe to implement better internal controls to ensure
compliance with applicable federal regulations, grant conditions, and the
tribe's own policies and procedures.
In addition, we recommend that the Region 9 Regional Administrator disallow
and recover $151,895 in claimed costs associated with the remaining incomplete
tasks, unless the tribe can provide documents to substantiate completion of those
tasks. We also recommend that for future General Assistance Program grants,
the Region 9 Regional Administrator implement special grant conditions that
require completion of grant tasks before grant payments are made.
The tribe did not comment on recommendations relating to internal controls and
special grant conditions, but did concur with one recommendation and provided
additional documentation for the remainder of the recommendations. However,
the tribe's documentation did not meet federal requirements, so our positions on
the issues remain unchanged.
The full report is at:
www.epa.gov/oig/reports/2015/
20150611-15-2-0165.pdf

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
THE INSPECTOR GENERAL
June 11,2015
MEMORANDUM
SUBJECT: Walker River Paiute Tribe Needs to Improve Its Internal Controls to
Comply With Federal Regulations
Report No. 15-2-0165
FROM: Arthur A. Elkins Jr.
TO:
Jared Blumenfeld, Regional Administrator
Region 9
This is our report on the subject audit conducted by the Office of Inspector General (OIG) of the
U.S. Environmental Protection Agency (EPA). This report contains findings that describe problems the
OIG has identified and corrective actions the OIG recommends. This report represents the opinion of the
OIG and does not necessarily represent the final EPA position. In accordance with established audit-
resolution procedures, EPA managers will make final determinations on matters in this report.
Action Required
In accordance with EPA Manual 2750, you are required to provide us your proposed management
decision on the findings and recommendations contained in this report before you formally complete
resolution with the grant recipient. Your proposed management decision is due in 120 days, or on
October 13, 2015. To expedite the resolution process, please email an electronic version of your
proposed management decision to adachi.robert@epa.gov.
Your response will be posted on the OIG's public website, along with our memorandum commenting on
your response. Your response should be provided as an Adobe PDF file that complies with the
accessibility requirements of Section 508 or the Rehabilitation Act of 1973, as amended. The final
response should not contain data that you do not want to be released to the public; if your response
contains such data, you should identify the data for redaction or removal along with corresponding
justification.
This report will be available at http://www.epa.gov/oig.

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Walker River Paiute Tribe Needs to Improve Its
Internal Controls to Comply With Federal Regulations
15-2-0165
	Table of Contents
Chapters
1	Introduction	 1
Purpose	 1
Background	 1
Responsible Office	 2
Scope and Methodology	 2
2	Tribe Did Not Follow Accounting Policies and Procedures
Already in Place	 3
Personnel Costs Are Not Supported by Required Payroll Certifications	 3
Timekeeping Procedures Are Not Being Followed	 4
Indirect Costs for 2013 Are Not Charged Properly	 5
In-Kind Contributions Are Not Adequately Supported	 5
Recommendations	 7
Auditee Comments and OIG Evaluation	 7
3	Tribe Did Not Complete All Grant Tasks	 9
Recommendations	 9
Auditee Comments and OIG Evaluation	 10
Status of Recommendations and Potential Monetary Benefits	 11
Appendices
A Auditee Response to Draft Report and OIG Comments	 12
B Distribution	 19

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Chapter 1
Introduction
Purpose
We conducted this audit to determine whether the Walker River Paiute Tribe:
•	Has an accounting system that complies with applicable federal
regulations.
•	Prepared its 2014 indirect cost rate proposal in compliance with applicable
federal regulations.
•	Met its U.S. Environmental Protection Agency (EPA) grant objectives for
grant GA-9692620.
Background
On August 14, 2013, EPA Region 9's Communities and Ecosystems Division
requested assistance from the Office of Inspector General (OIG) due to concerns
about grants awarded to certain Indian tribes in Nevada, including the Walker
River Paiute Tribe.
The Walker River Paiute Tribe is a federally recognized Indian tribe located
within three counties in the midwestern part of Nevada. At the time of fieldwork,
the tribe had seven active EPA grants totaling $1,676,090, as outlined in Table 1.
Table 1: EPA grants awarded to the Walker River Paiute Tribe
Grant number
Total
project cost
amount
Total EPA
award
amount
Performance
period
Amount drawn as of
September 10, 2014
GA-00T95601
$272,600
$272,600
10/1/12-09/30/16
$206,000
1-99950312
521,640
493,560
10/1/11 -09/30/14
448,039
C9-99T02701
200,000
180,000
10/1/13-09/30/14
91,500
OS-83526301
350,000
350,000
10/1/12-09/30/14
69,650
OS-83466501
289,930
289,930
10/1/10-09/30/14
281,560
TX-99T01101
50,000
50,000
10/1/13-09/30/14
34,900
V-00T39701
40,000
40,000
10/1/10-09/30/15
5,553
Total
$1,724,170
$1,676,090

$1,137,202
Source: EPA grant files and EPA Compass Data Warehouse.
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Responsible Office
EPA Region 9's Communities and Ecosystems Division is the program office
responsible for the issues discussed in this report.
Scope and Methodology
We conducted this performance audit from March 10, 2014, through October 10,
2014, in accordance with generally accepted government auditing standards
issued by the Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain sufficient, appropriate evidence to
provide a reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
The following audit steps were performed to determine the adequacy of the
Walker River Paiute Tribe's accounting system, whether the tribe's 2014 indirect
cost rate complied with federal regulations, and the status of grant tasks that
remain incomplete under EPA grant GA-9692620. The audit team:
1.	Acquired an understanding of the tribe's accounting system and related
internal controls by performing walk-throughs of key cost elements.
2.	Performed reconciliations of cash draws made under awarded EPA grants
to the tribe's accounting records for three grants. The cash draws were
dated March 11, 2014.
3.	For the three grant cash draws sampled, reviewed documentation to
support costs related to these cash draws.
4.	Reviewed the 2014 indirect cost rate proposal and supporting
documentation for compliance with federal regulations.
5.	Requested and reviewed documentation provided by the tribe to support
progress on incomplete tasks under grant GA-9692620.
6.	Interviewed personnel responsible for accounting and grants management
functions at the tribe.
For any noncompliance issues identified, we quantified the financial impact of
such issues based on the tribe's accounting records.
We did not identify any prior audit reports issued on the Walker River Paiute Tribe.
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Chapter 2
The Tribe Did Not Follow Accounting
Policies and Procedures Already in Place
Our audit determined that the Walker River Paiute Tribe's accounting system and
written policies and procedures complied with federal regulations. However, our
testing disclosed multiple instances where the tribe's actual practices did not
comply with federal regulations due to a lack of adherence to policies and
procedures. Noncompliance issues we identified are reported in Table 2.
Table 2: Questioned costs related to noncompliance with federal regulations
Findings
Questioned
costs
Personnel costs are not supported by required payroll certifications
$391,443
Timekeeping procedures are not being followed
103,432
Indirect costs for 2013 are not calculated properly
1,591
In-kind contributions are not adequately supported
346,602
Total
$843,068
Source: OIG calculations.
We questioned $843,068 of the $1,137,202 (74 percent) drawn under the seven
active EPA grants awarded to the tribe.
Personnel Costs Are Not Supported by Required Payroll
Certifications
Tribal employees who work solely on one EPA grant do not have required payroll
certifications to support their personnel costs (payroll and related fringe benefits)
charged to the grant. The Code of Federal Regulations (CFR), through 2 CFR,
Part 225, Appendix B, 8.h.(3), states:
Where employees are expected to work solely on a single Federal
award or cost objective, charges for their salaries and wages will
be supported by periodic certifications that the employees worked
solely on that program for the period covered by the certification.
These certifications will be prepared at least semi-annually and
will be signed by the employee or supervisory official having
first hand knowledge of the work performed by the employee.
Furthermore, the tribe's payroll policy section 1001.8 requires the same
payroll certification for employees working on one federal award.
During our testing of personnel costs we found that the tribe did not have payroll
certifications for employees who worked solely on one EPA grant. Among the
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seven active EPA grants, we identified the following personnel costs and related
fringe-benefit costs as unsupported where the tribe did not have required payroll
certifications (Table 3).
Table 3: Questioned costs for payroll without required certifications
Grant number
Payroll costs
Fringe-Benefit costs
Total
GA-00T95601
$ 46,563
$11,751
$58,314
1-99950312
122,656
41,094
163,750
C9-99T02701
20,001
8,550
28,551
OS-83526301
5,319
2,548
7,867
OS-83466501
76,755
34,219
110,974
TX-99T01101
13,618
7,189
20,807
V-00T39701
$560
$620
1,180
Total


$391,443
Source: Walker River Paiute Tribe's accounting records.
Timekeeping Procedures Are Not Being Followed
The Tribal Environmental Director worked on multiple EPA grant awards
throughout the year, but charged all of his time to the EPA's General Assistance
Program (GAP) grant until funding for his salary from the GAP grant ran out.
Then he charged all of his time to the Environmental Exchange Network grant.
When funds for his time from that grant ran out, he charged his time to the
Superfund grant until the next fiscal year began. He then started charging the
GAP grant again for all of his time.
Title 2 CFR, Part 225, Appendix B, 8.h.(4) and (5), state that where employees
work on multiple activities or cost objectives, a distribution of their salaries or
wages will be supported by personnel activity reports that must reflect an after-
the-fact distribution of the actual activity of each employee. Furthermore, the
tribe's Financial Management Policy& Procedures Manual, Section 1001.9,
requires timesheets to support employees' payroll costs when employees work on
more than one federal award.
The Tribal Environmental Director did not prepare a timesheet or any other
equivalent personnel activity report that tracked his actual activity. He did not
have any other support for his time. For three active EPA grants, we identified
personnel and related fringe-benefit costs for the Tribal Environmental Director as
unsupported (Table 4).
Table 4: Questioned costs for noncompliant timekeeping procedures
Grant number
Personnel costs
Fringe-Benefit costs
Total
GA-00T95601
$68,755
$17,352
$86,107
OS-83466501
11,407
5,086
16,493
V-00T39701
749
83
832
Total


$103,432
Source: Walker River Paiute Tribe's accounting records.
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Indirect Costs for 2013 Are Not Charged Properly
The tribe inappropriately claimed indirect costs for 2013 by applying its approved
indirect cost rate to annual leave charges under various EPA grants. For 2013, the
tribe calculated indirect costs by multiplying the sum of salaries and annual leave
costs by the approved indirect cost rate of 20.51 percent. However, the 2013
indirect cost agreement between the tribe and the U.S. Department of the Interior1
identified the base as total direct salaries and wages, excluding fringe benefits
such as annual leave costs. The tribe is only allowed to claim indirect costs as
applied to direct salaries and wages. The tribe is not allowed to recover any
indirect costs applied to annual leave costs. As such, the tribe overcharged the
EPA for indirect costs related to annual leave.
We identified 2013 annual leave costs for each of the seven active EPA grants and
calculated the annual leave portion of indirect costs by multiplying the annual
leave costs by the negotiated indirect cost rate of 20.51 percent to determine the
ineligible portion of 2013 indirect costs (Table 5).
Table 5: Questioned costs for inappropriate 2013 indirect cost calculations
Grant number
2013 annual
leave costs
Calculated annual leave
portion of 2013 indirect costs
GA-00T95601
$2,090
$429
1-99950312
1,962
402
C9-99T02701
1,136
233
OS-83526301
-
-
OS-83466501
1,452
298
TX-99T01101
1,102
226
V-00T39701
13
3
Total

$1,591
Source: Walker River Paiute Tribe's accounting records.
We did not find similar issues in prior years because the tribe did not account for
annual leave costs until January 1, 2013, and did not include annual leave costs in
indirect cost calculations. In 2014, the tribe elected to include all direct costs,
including fringe-benefit costs, in indirect cost calculations. We determined that
the indirect cost rate proposal for 2014 was adequate.
In-Kind Contributions Are Not Adequately Supported
The tribe did not have adequate support for in-kind contributions claimed on
Federal Financial Reports (FFRs) for EPA grants 1-99950312 and C9-99T02701.
The tribal finance department, which maintains accounting records and prepares
FFRs for all federal grants awarded to the tribe, has not received any information
1 In accordance with 2 CFR, Part 225, Appendix E, Section D (l)(c), tribal indirect cost rate proposals are to be
submitted to the U.S. Department of the Interior, which is the cognizant agency for all federally recognized Indian
tribes.
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from the tribal environmental program office to substantiate any actual in-kind
contributions. The finance department entered budgeted, in-kind contribution
amounts into the FFRs.
Under 40 CFR, Part 31, Subpart C 31.24 (b)(6), the regulation states that costs
and third-party, in-kind contributions counting towards satisfying a cost-sharing
or matching requirement must be verifiable from the records of grantees and
subgrantees or cost-type contractors. These records must show how the value
placed on third-party, in-kind contributions was derived.
Because the grants are awarded on the basis that the tribe makes required in-kind
contributions without any such contributions, the entire award amount is also
unsupported. We identified as unsupported the total draw amount for the two
active EPA grants that require in-kind contributions (Table 6). Questioned costs
for unsupported in-kind contributions appear in Table 7.
Table 6: Total cash draw amounts
Grant number
Total cash draw amount
as of September 10, 2014
1-99950312
$448,039
C9-99T02701
91,500
Total
$539,539
Source: EPA grant files and EPA Compass Data Warehouse.
Table 7: Questioned costs for unsupported in-kind contributions
Grant
number
Amount drawn
as of
September 10,
2014
Less: previous questioned costs
Questioned
in-kind
contribution
costs
Labor
certifications
Labor
charging
practices
2013
indirect
costs
1-99950312
$448,039
$(163,750)
-
$(402)
$283,887
C9-99T02701
91,500
(28,551)
-
(233)
62,716
Total




$346,603
Source: EPA Compass Data Warehouse and OIG calculations.
To avoid questioning costs more than once, we subtracted amounts already
questioned under preceding findings from the total cash draw amounts for each
grant to arrive at the net questioned costs. If the tribe provides adequate
supporting documents for any of the questioned costs under the previously
reported findings, the entire amounts drawn for these two grants will still be
questioned under this finding, unless the tribe can also provide adequate
supporting documents.
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Recommendations
We recommend that the Region 9 Regional Administrator:
1.	Recover the unsupported amount of $391,443 for Walker River Paiute
tribal employees who charged their time to various EPA grants without
proper payroll certifications, unless the tribe can provide adequate
supporting documents.
2.	Recover the unsupported amount of $103,432 for noncompliant
timekeeping practices, unless the Walker River Paiute Tribe can provide
adequate supporting documents.
3.	Recover the ineligible amount of $1,591 from the Walker River Paiute
Tribe for inappropriate calculations of 2013 indirect costs.
4.	Recover the unsupported amount of $346,602 for the lack of support for
in-kind contributions, unless the Walker River Paiute Tribe can provide
adequate supporting documents. Furthermore, the recovery amount under
this recommendation should be increased by any recovery amount offset
by adequate supporting documents under Recommendations 1 and 2 above
for grants 1-99950312 and C9-99T02701.
5.	Require the Walker River Paiute Tribe to establish internal controls to
ensure compliance with federal regulations and tribal policies.
Auditee Comments and OIG Evaluation
The Walker River Paiute Tribe provided an email response dated March 26, 2015,
and followed up with a hard copy response and supporting documents on
March 30, 2015.
The tribe did not address Recommendation 5, but did concur with
Recommendation 3 concerning the recovery of excess indirect costs claimed. The
tribe adjusted its books to credit the appropriate grants for the excess indirect
costs claimed.
For Recommendations 1, 2 and 4, the tribe provided additional supporting
documents, which the tribe believes are adequate to address the issues raised in
the draft report. The tribe believes that since the additional documents address the
issues raised, the issues no longer qualify as findings. However, the documents
provided by the tribe for Recommendations 1, 2 and 4 do not meet federal
requirements.
Our position on the findings and recommendations remain unchanged.
Recommendation 3 will remain open until Region 9 verifies that the excess
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indirect costs claimed have been repaid to the EPA, such as a refund or credit in a
future cost claim.
The tribe's full response and our analysis are found in Appendix A of this report.
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Chapter 3
Tribe Did Not Complete All Grant Tasks
The tribe did not complete all grant tasks under the EPA's GA-9692620
GAP grant covering fiscal years 2008 through 2012. EPA Region 9 identified
tasks that remained incomplete and $160,145 worth of costs associated with the
tasks. EPA Region 9 issued a letter on March 20, 2014, requesting that the tribe
provide documents to substantiate completion of the grant tasks or return
$160,145 to the EPA for costs associated with incomplete tasks.
During fieldwork, we asked for any grant deliverables that may indicate
completion of grant tasks that had been identified as incomplete. The tribe did not
provide any deliverables at the time. Since our site fieldwork, the tribe has
provided, and EPA Region 9 has accepted, some grant deliverables. Through
discussions with the EPA Project Officer for the grant, we determined the amount
of $8,250 to be the cost associated with the accepted grant tasks. The remaining
incomplete tasks and costs are summarized in Table 8.
Table 8: Questioned costs for incomplete grant tasks

Questioned
costs
Costs associated with incomplete tasks as of March 20, 2014
$160,145
Less: costs associated with grant tasks accepted by the EPA
(8,250)
Total
$151,895
Source: EPA grant records and OIG calculations.
We also discussed the tribe's performance with EPA project officers for all seven
active EPA grants. The EPA project officers did not identify any further issues
with missing or incomplete grant tasks.
Recommendations
We recommend that the Region 9 Regional Administrator:
6.	Recover $ 151,895 for grant tasks that remain incomplete under EPA GAP
grant GA-9692620, unless the Walker River Paiute Tribe can provide
adequate documents to substantiate completion of grant tasks.
7.	Implement special grant conditions for future GAP grants awarded to the
Walker River Paiute Tribe, and require completion of grant tasks before
grant payments are made.
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Auditee Comments and OIG Evaluation
The Walker River Paiute Tribe did not comment on Recommendation 7 and
disagreed with Recommendation 6. The tribe said grant tasks have been
completed and verified by the EPA project officer. We discussed this with the
project officer and were advised that the region has not accepted any work since
the draft report. As a result, our position on the issue remains unchanged.
The tribe's full response and our analysis are found in Appendix A of this report.
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Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
POTENTIAL MONETARY
BENEFITS (In $000s)
Rec.
No.
No.
Subject
Status1
Action Official
Planned
Completion
Date
Recover the unsupported amount of $391,443 for
Walker River Paiute tribal employees who charged
their time to various EPA grants without proper
payroll certifications, unless the tribe can provide
adequate supporting documents.
Recover the unsupported amount of $103,432 for
noncompliant timekeeping practices, unless the
Walker River Paiute Tribe can provide adequate
supporting documents.
Recover the ineligible amount of $1,591 from the
Walker River Paiute Tribe for inappropriate
calculations of 2013 indirect costs.
Recover the unsupported amount of $346,602 for
the lack of support for in-kind contributions, unless
the Walker River Paiute Tribe can provide
adequate supporting documents. Furthermore,
the recovery amount under this recommendation
should be increased by any recovery amount
offset by adequate supporting documents under
Recommendations 1 and 2 above for grants
1-99950312 and C9-99T02701.
Require the Walker River Paiute Tribe to establish
internal controls to ensure compliance with federal
regulations and tribal policies.
Recover $151,895 for grant tasks that remain
incomplete under EPA GAP grant GA-9692620,
unless the Walker River Paiute Tribe can provide
adequate documents to substantiate completion of
grant tasks.
Implement special grant conditions for future GAP
grants awarded to the Walker River Paiute Tribe,
and require completion of grant tasks before grant
payments are made.
Region 9
Regional Administrator
Region 9
Regional Administrator
Region 9
Regional Administrator
Region 9
Regional Administrator
Claimed Agreed-To
Amount Amount
$391
$103
$2
$347
Region 9
Regional Administrator
Region 9
Regional Administrator
Region 9
Regional Administrator
$152
1 O = Recommendation is open with agreed-to corrective actions pending.
C = Recommendation is closed with all agreed-to actions completed.
U = Recommendation is unresolved with resolution efforts in progress.
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Appendix A
Auditee Response to Draft Report and OIG Comments
Ms. Leah Nikaidoh
EPA Office of Inspector General
26 West Martin Luther King Drive
Mail Code: NWD
Cincinnati, OH 45268
Dear Ms. Nikaidoh:
As per your request the following are relevant comments pertaining to the U.S.
Environmental Protection Agency Office of Inspector General Pertaining to
Project No.OA-FY14-0127 dated February 13,2015. Detail back up was
forwarded to you on March 24, 2015.
On the cover page there was noted concern about an incomplete grant tasks under
EPA grant GA- 96926201. Information was supplied identifies this Grant was
completed and closed in 2012 and this was verified with Veronica Swann.
OIG Response 1. EPA Region 9 advised us that it has not accepted any additional
work for 2014 and before. Therefore, our position on this issue remains unchanged.
On page 4 of the Daft Report the T ribes payroll policy section 1001.9 requires
timesheets to support employees employee payroll cost	This is reference
under the WRPT Financial Management Policy & Procedures Manual. This
policy has been followed as you can see from the detail time sheets and Action
Forms that were submitted to your office. The WRPT does not have a section
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1022 Hospital Road • P.O. Box 220 • Schurz, Nevada 89427
Telephone:(775) 773-2306
Fax: (775) 773-2585
Walker River Paiute Tribe
March 26, 2015

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1001.9 in the Personnel Policy. I have attached a copy of the correct section
which is 4.3 Hours of Work. The Auditor to my knowledge did not ask for a
copy of the Personnel Policy Manual.
OIG Response 2. We updated the report to reference th q Financial Management
Policy & Procedures Manual, instead of the payroll policy.	
Section "A": Personnel Costs Not supported bv Required Payroll Certifications
As noted on the bottom of the Certification for Work on Federal
Contract/Grant Programs it states; "Copies of this completed
form must be submitted to Payroll and Personnel on a semi-
annual orundatedasneededpursuantto A-l 33 Federal
Requirements". Human Resources has a separate filejust for
these Certifications and isto follow-up priorto the semi-annual
date with the appropriate programs to assure that the
information is up to date. These forms where available in both
Payroll and Human Resources and apparently the auditor did
not know howto obtain the forms. I was not asked about the
Forms while he was at the location.
I believe that the information supplied, verifies the information
requested and does not qualify as a finding.
OIG Response 3. The auditor raised concerns about payroll certification at a meeting
on March 14, 2014, while he was at the tribe. The Finance Director and the Tribal
Chairman were present at the meeting. We also raised the issue and explained the need
for payroll certifications during our field exit conference on February 13, 2015. The
tribe did not mention that it had the required certifications.
Our review of the certifications provided by the tribe as part of its response to the draft
report identified the following issues:
1)	Payroll certifications were not provided for grant GA-00T95601 and
V-00T39701.
2)	The certifications were signed in advance.
3)	Certifications were signed annually, biannually, and for as long as a 5-year
period; not at least semiannually as required under 2 CFR, Part 225
Appendix B, 8.h.(3).
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4)	Certifications do not match actual charge. The employee certified that he
worked on grant OS-83526301 for the 2-year period from October 1, 2012,
through September 30, 2014; but from October 1, 2012, through January 3,
2014, he actually charged grant OS-83466501.
5)	Certifications show that the employee worked on two grants (OS-83526301 and
OS-83466501) during the same time period (from October 1, 2012 through
September 30, 2014), even though the employee certified under each grant that
he only worked on a single grant.
The federal regulations under 2 CFR, Part 225, Appendix B, 8.h.(3), state:
Where employees are expected to work solely on a single Federal award
or cost objective, charges for their salaries and wages will be supported
by periodic certifications that the employees worked solely on that
program for the period covered by the certification. These certifications
will be prepared at least semi-annually and will be signed by the
employee or supervisory official having first hand knowledge of the
work performed by the employee.
Due to the issues noted above, the payroll certifications provided by the tribe do not
meet the requirements of 2 CFR, Part 225, Appendix B, 8.h.(3). As a result, we
continue to question $391,443 for lack of proper payroll certifications.
Section "B": Timekeeping Procedures are not BeingFollowed for noncompliant
timekeeping procedures.
There are Three (3) sections addressing these timekeeping procedures. Additionally, under The
WRPT Personnel Policy Manual Section 4.3 Time Sheets are required. (See Attached
Copy).The Time Sheets were available in Payroll and apparently the auditor did not know
how to obtain the T ime Sheets. I was not asked about the T ime Sheets and none of my staff
were asked, which includes Payroll.
OIG Response 4. The auditor raised concerns about noncompliance with timekeeping
policies at a meeting with the tribe on May 8, 2014. During our field exit conference on
February 13, 2015, we also explained the issue and the need for timesheets to show the
hours and the associated projects, if the employee worked on multiple grants. The tribe
mentioned that it has "punch-in and punch-out" timesheets. There was no mention of
timesheets showing the projects associated with the hours.	
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Section " B1"; Addresses Grant# GA-00T95601.
Included in the response under section B1 I have addressed the concerns by
including not only time sheets for the period but also Payroll Action F onns
indicating when the individual changed from one Fund to another Fund which
shows the dates which correspondents w ith the time card entries.
1 believe that the noncomplianttimekeepingprocedures are addressed in as
much as Weekly T irne Sheets and Payroll Action F orms are prepared on a
timely basis. T ime Cards and T ime Sheets are required by all employees if they
are 100% Grant charged or split between T ime Cards and T ime Sheets are
required by all employees if they are 100% Grant charged or spirt between
multi-function's, when individuals are working on more than one grant during
a pay period. This also applies to both exempt and non- exempt employees.
I believe that the information supplied, verifies the information requested and
does not qualify as a finding.
Section "B2"; Addresses Grant # OS-83466501.
Included in the response under section B2 I have addressed the concerns by
including not only Time Sheets for the period but also Payroll Action Forms
indicating when the individual changed from one Fund to another Fund which
shows the dates which corresponds with the time card entries. Also, included is
a Journal Entry indicating that the Environmental Director exceeded the hours
allowed to work under the TREX Program.
I believe that the noncompliant timekeeping procedures are addressed in as
much as weekly Time Sheets and Payroll Action Forms are prepared on a
timely basis. Time Cards and Time Sheets are required by all employees if they
are 100% Grant charged or split between multi-function's, when individuals are
working on more than one grant during a pay period. This also applies to
both exempt and non-exempt employees.
I believe that the information supplied, verifies the information requested and
does not qualify as a finding.
Section "B3"; Addresses Grant#V-00T39701
Included in the response under section B3 I have addressed the concerns by
including not only Time Sheets for the period but also Payroll Action Forms
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indicating when the individual changed from one Fund to another Fund which
shows the dates which correspondents with the time card entries. Also,
included is a Journal Entry indicating that the Environmental Director
exceeded the hours allowed to work under the TREX Program.
I believe that the noncompliant timekeeping procedures are addressed in as
much as Weekly Time Sheets and Payroll Action Forms are prepared on a
timely basis. Time Cards and Time Sheets are required by all employees if they
are 100% Grant charged or split between multi-function's, when individuals are
working on more than one grant during a pay period. This also applies to both
exempt and non-exempt employees.
I believe that the information supplied, verifies the information requested
and does not qualify as a finding.
OIG Response 5. Timesheets provided by the tribe only identified total hours worked,
not the specific jobs the employee worked on; therefore, the documents do not meet the
requirements for federal awards. According to 2 CFR, Part 225, Appendix B, 8.h.(4),
where employees work on multiple activities or cost objectives, a distribution of their
salaries or wages will be supported by personnel activity reports or equivalent
documentation that meets the following standards outlined in subsection 8.h.(5):
(a)	They must reflect an after-the-fact distribution of the actual activity of
each employee,
(b)	They must account for the total activity for which each employee is
compensated,
(c)	They must be prepared at least monthly and must coincide with one or
more pay periods, and
(d)	They must be signed by the employee.
The tribe attempted to use its Employee Action Notices to show the employee was
supposed to charge 100 percent to a single fund/project at all times, and the auditor
previously did confirm that the actual fund charges match the Employee Action
Notices. However, Employee Action Notices represent budgeted work, not actual work
performed by the employee. Using the budget in Employee Action Notices as the basis
for charging federal grants does not meet the requirements of 2 CFR, Part 225,
Appendix B, 8.h.(5), for after-the-fact distribution of the actual activity. Therefore, we
continue to question salary and fringe benefit costs of $103,432.
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Section "C", Address Indirect Costs not Charged Properly.
I agree with the finding and there was a Journal entry made on 9/3 0/2014 that
reversed the charges Indicated.
OIG Response 6. We acknowledge that the tribe made the journal entry. However, the
recommendation will remain open until Region 9 verifies that the credit has been
provided to the EPA, either as a refund or a credit in a future cost claim.	
Section "D", Addresses h-Kind Contributions Are Not Adequately
Supported.
There are Two (2) sections addressing these In-Kind Contributions.
Section "Dl" Address Grant# 1-99950312 Water Pollution.
I included within the response Cost Comparisons from Jim Chico of Desert
Engineering with costs of for In-Kind for the Area. This information was then
broken down for the usage by Water Pollution.
I believe that the information supplied verifies the information requested and does
not qualify as a finding.
Section "D2" Address Grant# C9-99T02701 Non-Point Source.
I included within the response Cost Comparisons from Jim Chico of Desert
Engineering with costs of for In-Kind for the Area. This information was then
broken down for the usage by Non-Point Source.
OIG Response 7. Documents provided by the tribe do not meet federal requirements for
in-kind contributions. According to 40 CFR, Part 31, Subpart C 31.24 (b)(6), costs and
third-party, in-kind contributions counting toward satisfying a cost-sharing or matching
requirement must be verifiable from the records of grantees and subgrantee or cost-type
contractors. Title 40 CFR, Part 31, Subpart C 31.24 (b)(7)(ii) further states that for third-
party, in-kind contributions in the form of goods and services that are normally indirect
costs, the grantee should only be given matching credit for such contributions if the
grantee has established, along with its regular indirect cost rate, a special rate for
allocating to individual projects or programs the value of the contributions.
Documents provided by the tribe show in-kind costs were estimates and not actual costs
verifiable to the tribe's records. The in-kind costs were for storage, office space, office
supplies, electricity and Internet service. These are normally indirect costs, but the
tribe's indirect cost rate agreements do not show a rate for allocation of in-kind
contributions. Since the in-kind cost documents do not meet federal requirements, we
continue to question the costs.	
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I believe that the information supplied, verifies the information requested and does
not qualify as a finding.
, Melick,
lance Director
Enclosure: Personnel Policy
Section 4.3
CC: Bobby D. Sanchez, Tribal Chairman
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Distribution
Regional Administrator, Region 9
Deputy Regional Administrator, Region 9
Agency Follow-Up Official (the CFO)
Agency Follow-Up Coordinator
Director, Grants and Interagency Agreements Management Division,
Office of Administration and Resources Management
Audit Follow-Up Coordinator, Region 9
Chairman, Walker River Paiute Tribe
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