The St. Stephens Indian School Educational Association, Inc., Needs To Improve Financial Accountability for Federal Funds

This report presents the results of our audit of Agreement Nos. A17AV00656, A16AV00812, and A15AV00702 between the Bureau of Indian Education (BIE) and St. Stephens Indian School Educational Association, Inc., which provided St. Stephens a total of $12.5 million to operate elementary and high school facilities owned by the Bureau of Indian Affairs (BIA) between July 2015 and June 2018. We conducted this audit to determine whether agreement expenses were allowable and St. Stephens complied with applicable laws and regulations, BIE and BIA guidelines, and agreement terms and conditions. We reviewed transactions charged to the agreements totaling $5.8 million. We found multiple instances in which St. Stephens did not use agreement funds for allowable activities and did not comply with applicable Federal regulations and agreement provisions, which led us to identify $442,632 in funds that could be put to better use and question $35,432 of St. Stephens’ claimed costs. In addition, we determined that the BIE did not consistently oversee St. Stephens agreements in accordance with applicable regulations and BIA policy. We make 11 recommendations to help the BIE and the BIA resolve questioned costs and provide better oversight to St. Stephens.