^	U.S. Environmental Protection Agency	2007-4-00078
f JUL, \ Office of Inspector General	September 24,2007

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At a Glance
Catalyst for Improving the Environment
Why We Did This Review
We conducted this examination
to determine whether the
Cheyenne River Sioux Tribe
(Tribe): (1) complied with the
applicable laws, regulations,
and special conditions of the
agreements; and (2) achieved
the intended result of the
agreements. The U.S.
Environmental Protection
Agency (EPA) Region 8
requested this audit due to
financial management
problems it identified during an
onsite review.
Background
EPA awarded five agreements
to the Tribe to fund a variety
of environmental activities
authorized under the
Comprehensive Environmental
Response, Compensation, and
Liability Act Sections
104(d)(1) (Superfund) and
128(a) (Brownfields); the
Clean Water Act; and the
Appropriations Act of 1996.
For further information,
contact our Office of
Congressional and Public
Liaison at (202) 566-2391.
To view the full report,
click on the following link:
www.epa.aov/oia/reports/2007/
20070924-2007-4-00078.pdf
Cheyenne River Sioux Tribe Outlays Reported
Under Five EPA Assistance Agreements
What We Found
The Tribe did not comply with the financial and program management standards
under Title 40 Code of Federal Regulations Parts 31 and 35, and Office of
Management and Budget Circular A-87. We questioned $3,101,827 of the
$3,736,560 outlays reported because the Tribe did not:
•	Follow the labor cost documentation requirements for Federal grants;
•	Compete contracts, justify sole-source procurement, or perform cost analyses;
•	Demonstrate that fuel costs charged were equitably allocated;
•	Account for vehicle leases properly;
•	Comply with Federal procurement regulations and its internal policy when
purchasing equipment;
•	Compute and claim indirect costs in accordance with Federal cost principles,
indirect cost rate agreements, and grant conditions; and
•	Maintain documentation for recipient share of costs reported.
The Tribe's internal controls were not sufficient to ensure that outlays reported
complied with Federal cost principles, regulations, and grant conditions. In some
instances, the Tribe also was not able to demonstrate that it has completed all work
under the agreements and has achieved the intended results of the agreements.
What We Recommend
We recommend that EPA Region 8's Regional Administrator disallow and recover
the Federal share of ineligible costs of $64,765. The Region should require the
Tribe to provide sufficient documentation for the remaining $3,037,062 questioned,
and disallow and recover the Federal share of any outlays the Tribe cannot support.
The Region should require the Tribe to adjust its indirect costs claimed. The Region
should provide training to the Tribe on Federal regulations and grant requirements,
and review the Tribe's solicitations and contracts under EPA agreements until the
Tribe has adequate procedures in place. The Region should confirm that all work
under the agreements have been satisfactorily completed prior to agreement
closeout. The Region should maintain the Tribe's "high risk" designation until all
audit issues have been resolved.

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