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December 17, 1997
Mr. Jerome J. Subkow
Director, Office of Grant
and Contract Audits
Office of Inspector General
Washington, D.C. 20210
Dear Mr. Subkow:
Enclosed is our response to your draft report of the tentative findings to your audit of United Sioux Tribes of South Dakota Development Corporation (UST) JTPA Section 401 (Title IV-A and Title 11-B) program for the period of July 1, 1995 through June 30, 1997.
Introduction
We have reviewed the tentative findings of the audit. During the audit field work we responded to all inquiries presented by the auditors with the idea of trying to resolve the issues before they were incorporated in the draft report. We do not believe the responses provided by the Corporation were considered before the report was drafted. Consequently the questioned costs should not have been included in the
FINDING 1. Administrative expenses exceed
20 percent ceiling
($225,998 Questioned).
The auditors reclassified Training Assistance costs to administrative
costs. Due to this reclassification of costs, the administrative cost ceiling
of 20 percent was exceeded. The auditors did not indicate that the expenditures
were unallowable JTPA costs.
Host Agency Agreement determines the type of training the JTPA client receives from his period of training assistance under the JTPA program. The JTPA Program Administrator determines where he trains and how he receives training. Also, the type of cash assistance he receives during the training period.
The Executive Director is the Personnel Manager who determines the hiring and firing of all JTPA employees in the Personnel Policies and Procedures at United Sioux Tribes of South Dakota Development Corporation. The Program Administrator can only make a recommendation of who may be hired or fired as it relates to the program. The job duties of the Program Administrator are client job development, counseling and orientation before placing individuals with the Host Agency.
Administrative Secretary kept pace with the training needs and the type
of orientation the client received. The individual did intake on clients
as well as determined income information as needed for job development
services under the JTPA program. Administrative Secretary went out at different
times to do job development for
The purpose of having the Program Administrator and Administrative Secretary under Training Assistance category is that they were accomplishing job development, counseling, client intake, job search assistance, job referral and placement to meet the vocational exploration needs of the client. Even the Executive Director talks to potential employers as well as the Program Administrator and Administrative Secretary about the recurring employment for the Native American clients with the employers.
The Program Administrator and Administrative Secretary should have never been reclassified by the auditors as these two staff people under Training Assistance meet the qualifications of the JTPA program and the cost should not have been questioned. The questioned cost of the Training Assistance category was never questioned by the JTPA project representatives in the past as they determined the cost was legitimate since 1980.
Finding 2. JTPA Charged
with Costs Associated with United Sioux
Tribes and its Other Programs ($43,650 Questioned).
All activities of the JTPA field office was primarily functions of the program and any other functions offered by the state or BIA program were determined based on eligibility by our staff for referrals. We, United Sioux Tribes of South Dakota Development Corporation, determine by documentation filled out in the presence of the client to make his request for supportive service of cash payments to him. It is determined that the client cannot pay for those services, his request is legitimate as determined by the intake officer to continue training assistance to insure his supportive service needs are met.
Finding 4. Unallowable Payroll Costs ($10,901 Questioned).
As previously stated, the Executive Director serves at the pleasure of the Board of Directors at which time, he is on twenty-four hour call. The Executive Director in the Articles of Corporation papers state the Executive Director handles all Corporate activities for the Board of Directors. The Executive Director is the personnel manager for the Corporation and he enforces all personnel policies which includes the Board of Directors decisions that is delegated to him under their authority.
Since, the Board of Directors hires and fires the Executive Director
directly, he must take Corporate actions either before the Board or the
President of the Corporation for their approval. The accumulated leave
above the 240 hours for all other employees will be discontinued and they
will be placed on Use or Lose leave procedures.
The question of the individual, who was hired to collect and develop
a job development bank and also collect data to be analyzed for increasing
the JTPA program development. She was located in Lincoln, Nebraska and
told us she would be moving to Pierre, South Dakota. She did come and make
arrangements at Capitol Bell Apartments for living arrangements. The manager
of Capitol Bell apartments called our office for verification. Her office
was secured by the JTPA program administrator, who worked with this lady
developing the Job Development Bank and what data he wanted collected.
Over a two month period, she reported her activities to the program administrator
about the material she was working on. The
Closing
The staff at United Sioux Tribes of South Dakota Development Corporation
has been operating since May 19th of 1970., When the Corporation was first
incorporated under the laws of the State of South Dakota. In the same year
IRS issued the Corporation a 501 C)(3) a non-profit status to receive grants
and contracts for the Sioux Tribes in South Dakota who were not eligible
for programs and contracts because of their status under the Indian Reorganization
Act of 1934. In 1972, the Department of Labor requested United Sioux Tribes
of South Dakota Development Corporation to write 108 contracts for tribes
to receive manpower training act funds, which were Employment Training
Act Prime Sponsorship monies appropriated by Congress, United Sioux Tribes
of South Dakota testified before the Senate labor committee, Chairman Senator
Gaylor Nelson from Wisconsin
Dakota and we have over 18,000 Indian people from different Sioux Tribes
living in Rapid City alone. Also, we have over 3,800 homeless Indian people
in the Rapid City area and they are on the increase. United Sioux Tribes
of South Dakota Development Corporation is expected to take care of all
these Indian people coming off the Indian reservation into our urban areas
around the state. Now, disgruntled employees and unhappy clients always
seem to make an attempt to get even by trying to destroy the credibility
of the United Sioux Tribes of South Dakota Development Corporation and
the Executive Director. The auditors found no fraud, no ineligible client,
and no other item purchased or wrong doing by the Administration at United
Sioux Tribes of South Dakota Development Corporation. These were allegations
and the investigation held by the Office of Inspector General and found
nothing, We feel that with the year long investigation and audit that United
Sioux Tribes of South Dakota Development Corporation has been treated unfairly.
Also, the questioned costs has not concluded that the JTPA funds were spent
somewhere else. In other words, all the grant money awarded to the Untied
Sioux Tribes of South Dakota Development Corporation prime sponsorship
has been spent for JTPA purposes to this date.
Sincerely,
/
s /
/ s /
Mr. Clarence W. Skye
Michael Jandrea
Executive Director
Chairman
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