Report Materials
Why OIG Did This Audit
- The Infrastructure Investment and Jobs Act (IIJA) authorized the appropriation of $700 million each year from FYs 2022 to 2026 for a total of $3.5 billion for the Indian Health Service (IHS) Sanitation Facilities Construction (SFC) Program. The SFC Program provides essential water supply, sewage, and solid waste disposal facilities for American Indian and Alaska Native homes and communities.
- The Navajo Area IHS (NAIHS) administered IIJA funding totaling $269.8 million that the Navajo Nation received for 187 SFC Program projects that we reviewed for this audit. This amount represented the highest level of IIJA funding awarded to any Tribe.
- We performed this audit to determine whether the NAIHS implemented internal controls for awarding, monitoring, and reporting SFC Program projects funded under the IIJA in accordance with applicable Federal requirements.
What OIG Found
Although the NAIHS had internal controls in place for awarding, monitoring, and reporting SFC Program projects funded under the IIJA, it did not consistently follow those controls or its established procedures.
- For some projects the NAIHS did not follow required award controls because it did not update project cost estimates or prepare and review project summaries as required.
- The NAIHS did not follow its monitoring controls in several areas, including reviewing invoices before payment, reviewing and approving right-of-way easements, and amending Memorandums of Agreement when project scope changes occurred.
- Some of the reports prepared by the NAIHS did not accurately identify funding sources, did not track construction and design costs separately as required, and did not report updated milestones.
What OIG Recommends
We made four recommendations to the NAIHS to follow its internal controls and its established procedures for awarding, monitoring, and reporting SFC Program projects funded under the IIJA. The full recommendations are in the report.
The NAIHS concurred with all four of our recommendations.
26-A-07-105.01 to IHS - Open Unimplemented
Update expected on
03/09/2027
We recommend that the NAIHS follow its internal controls and its established procedures for awards of IIJA funds for SFC Program projects, to include controls regarding the proper review and updates of project cost estimates and the proper review and approval of project summaries.
26-A-07-105.02 to IHS - Open Unimplemented
Update expected on
03/09/2027
We recommend that the NAIHS revise local guidance in the NAIHS SDS Guideline so that it aligns with national guidance in the SFC Criteria to specify that project cost estimates include allowances for inflation.
26-A-07-105.03 to IHS - Open Unimplemented
Update expected on
03/09/2027
We recommend that the NAIHS follow its internal controls and its established procedures for the monitoring of SFC Program projects, to include: (1) strengthening project oversight activities, including of review and monitoring of invoices and documentation of construction cost controls; (2) following controls designed to ensure that MOAs are amended for project scope changes; and (3) following controls designed to ensure that construction costs do not exceed limits established in the MOAs.
26-A-07-105.04 to IHS - Open Unimplemented
Update expected on
03/09/2027
We recommend that the NAIHS follow its internal controls and its established procedures for the reporting of SFC Program projects, to include: (1) following controls regarding the identification and reporting of correct funding sources before payments are made, (2) following controls for tracking and reporting construction costs separately from A&E costs, and (3) following controls for timely updating and reporting of project milestones in the PDS.
View in Recommendation Tracker
Notice
This report may be subject to section 5274 of the National Defense Authorization Act Fiscal Year 2023, 117 Pub. L. 263.