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Initial Observations of IHS Capacity to Manage Supplemental $3.5 Billion Appropriated to Sanitation Facilities Construction Projects


Congress appropriated $3.5 billion to the Indian Health Service (IHS) for Sanitation Facilities Construction (SFC) projects under the Infrastructure Investment and Jobs Act (IIJA). To ensure oversight of these funds, Congress allocated 0.5 percent of the supplemental SFC funding to OIG. Ensuring that IHS has the capacity to administer and oversee the $3.5 billion is critical for addressing sanitation needs and providing American Indian and Alaska Native homes and communities with essential water supply, sewage disposal, and solid waste disposal facilities.


OIG conducted preliminary research of IHS capacity to administer and oversee the $3.5 billion as part of a more comprehensive evaluation. We developed our observations from interviews with IHS officials and staff and related documents and data received in June and July 2022. We conducted 14 interviews with 81 key officials and staff in IHS headquarters and Area Offices involved in administering or overseeing use of the IIJA funds, as well as two representatives from a Tribal organization, which has a compact with IHS to deliver SFC services. We discussed IHS capacity to administer the funds, including administration mechanisms and oversight responsibilities; staffing; housing and office space; IHS plans and flexibilities to expand its capacity; and related challenges. We also requested documents and data from IHS about staffing rates and competencies; workload; and other related topics.


We identified three initial observations about IHS capacity to administer and oversee the funds. We observed that IHS quickly began preparations to increase capacity and administer the funds using existing, generally supported methods. However, to administer IIJA-funded projects and meet sanitation needs, we observed that the agency faces several significant challenges. The challenges relate to the sufficiency of the IIJA funds; difficulties recruiting and retaining qualified, experienced staff; adequacy of other agency resources, such as office and housing space; and new challenges associated with IHS efforts to increase capacity to administer projects despite limited staff. We also observed that, at the time of our review, plans were unclear for IHS assessment of the use of IIJA funds, strategies for future spending, and assisting Tribes with long-term operation of the IIJA-funded facilities.


Although IHS has quickly begun preparations to administer the $3.5 billion Congress appropriated for SFC projects under the IIJA, the agency faces considerable potential financial, capacity, and other challenges that warrant continued attention. To date, the strategies IHS outlined for addressing the potential challenges have some limitations and may call for additional action. Ensuring that IHS has the capacity to administer and oversee the $3.5 billion is critical for providing sanitation services to American Indians and Alaska Natives.