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We audited the Reno-Sparks Indian Colony based on a complaint alleging the misuse of U.S. Department of Housing and Urban Development (HUD) funds due to improper procurement activities.  The objective of the audit was to determine the validity of the complaint and whether the Colony used its Indian Housing Block Grant and Indian Community Development Block Grant funds in accordance with HUD requirements.

The complaint allegations had merit.  The Colony did not follow HUD’s or its own procurement requirements.  This condition occurred because the Colony was unaware of and overlooked HUD procurement regulations and its own procurement requirements.  As a result, it was unable to support that $6,000 awarded for plumbing services was fair and reasonable.

We recommend that the Administrator of the Southwest Office of Native American Programs require the Colony to (1) provide documentation showing that $6,000 in Indian Housing Block Grant funds spent on plumbing services was fair and reasonable or reimburse its program from non-Federal funds; (2) review its procurement history and trends and award competitive contracts for services on which it routinely uses noncompetitive awards,  such as plumbing services; (3) amend its legal contract to include all required clauses;  and (4) provide additional training to procurement and housing staff to ensure that its staff has the knowledge to perform all future procurements in accordance with HUD regulations.