DEPARTME  T OF HEALTH AND HUMAN SERVICES 
OFFICE OF INSPECTOR GENERAL 
WASHINGTON, DC  20201 
 
 
 
DATE:     September 26, 2022  
 
 
TO:   Roselyn Tso  
  Director  
  Indian Health Service  
 
 
FROM:   Suzanne Murrin  
Deputy Inspector  General  
   for  Evaluation  and  Inspections  
 
 
SUBJECT:   Initial  Observations of IHS  Capacity to Manage  Supplemental  $3.5 Billion 
Appropriated  to Sanitation Facilities Construction  Projects  (OEI-06-22-00320)  
 
 
The Office of Inspector General (OIG) is evaluating  the Indian Health Services (IHS)  capacity to 
administer and oversee the $3.5  billion that Congress appropriated  for  Sanitation Facilities  
Construction (SFC)  projects under the Infrastructure Investment and Jobs Act  (IIJA).1   Ensuring  
that IHS has the capacity to administer and oversee this  $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.  The purpose of this 
memorandum is to bring to your attention initial observations about IHS  capacity that we  
identified through the preliminary research for  our more comprehensive evaluation.  Our intent  
in sharing these observations now  is  to assist your agency as it  continues its planning for  how  to 
use and oversee the funds.  These initial observations cover IHS  early  preparations  to build  
capacity  and administer the funds as well  as  anticipated  challenges.   These  challenges relate  to  
the sufficiency of the funds; adequacy of  staffing  and other resources;  limitations  to IHS  
strategies for increasing capacity  to administer projects; and the need to further develop plans  
for future use and oversight of the funds.  
Scope of  Preliminary Inquiry  
This inquiry covers our preliminary observations of  IHS  current and expected capacity to  
administer the $3.5 billion.   Topics for the  inquiry included  general information about  
 
1  IIJA,  P.L. No.  117-58, Division  J, Title VI, 1411-1412 (November 15, 2021).   Page  2Roselyn Tso  
 
the  SFC  Program  and projects, including the contracts and agreements used to administer 
project funding, as well  as staffing and other resources; IHS  plans and flexibilities to  expand its 
capacity  to administer and oversee projects; and any challenges and lessons learned.   We  
developed  our  observations from interviews with IHS officials and staff and related documents 
and data received in June and July 2022.   
Thus far, we have conducted  14  interviews with 81  key IHS officials and staff  involved in 
administering or overseeing use of the IIJA funds.  We interviewed officials from the  Office of  
Finance and  Accounting; the Office of Environmental Health and Engineering  (OEHE), including  
its  Division  of Sanitation Facilities  Construction  (DSFC)  and  its  Division of Engineering Services  
(DES); the  Division of Acquisition Policy  (DAP); and  relevant leadership and program staff  in each 
of the 12 IHS Area Offices.  One Area Office interview  included  two representatives from a  Tribal  
organization  that has  a compact with IHS to deliver SFC services.  
In addition to conducting the interviews, we requested  and reviewed  documents and data from 
IHS.   We  reviewed  information regarding  staffing rates; examples of the different contracts and  
agreements used to administer the funding; documentation of current and expected projects 
administered using the different funding mechanisms; evidence of workload; and  
documentation supporting staff competencies. 
OIG has not  independently verified the information we received from IHS.    
We conducted this work in accordance with the Quality Standards for Inspection and Evaluation 
issued by the Council  of  the Inspectors General on Integrity and Efficiency.  
Summary of  Preliminary Observations  
IHS officials and staff described the IIJA funds as much  needed and 
quickly  began preparations  to increase capacity and administer the funds  
using  existing, generally supported methods   
Under the IIJA, Congress appropriated $700 million per year for fiscal years (FYs)  20222026  to 
IHS to  construct sanitation facilities.2   By  comparison, the  IHS FY 2022 budget includes  
$197.8 million for SFC projects.3   With  the additional  IIJA  funding,  IHS  total  annual  funding for 
SFC projects  is now  four times greater than in  previous years.   During  
interviews, IHS headquarters (HQ)  and Area Office leadership   4x greater  
described the rapid influx of  the IIJA funds as  necessary for 
total annual  funding  
improving  the health outcomes of American Indians  and Alaska 
than previous FYs  
Natives.  They also  viewed  administering  the funding  as  a welcome 
challenge  and  described  multiple strategies for  quickly building  
 
2  IIJA,  P.L. No.  117-58, Division J, Title VI, 1411-1412 (November 15, 2021).  
3  IHS, Justification of Estimates for Appropriations Committees, Fiscal Year 2023, p. CJ-12.  Accessed at  
https://www.ihs.gov/sites/budgetformulation/themes/responsive2017/display_objects/documents/FY2023BudgetJusti 
ficaton.pdf  on August 5, 2022.   Page  3Roselyn Tso  
 
capacity to administer the funds.  For example, they described  taking steps to  increase internal  
capacity  by bolstering recruitment efforts and centralizing hiring processes, and by developing  
plans to work with contractors and other partners.   
IHS HQ and  Area Offices  reported  consulting with Tribes about how to allocate the funding and  
chose  to use existing  methods  that were generally supported  by both IHS  staff and Tribes.  IHS 
collaborates  with Tribes to administer SFC projects  as authorized by Congress.4   Tribes may elect  
to enter into Memorandums of Agreement (MOAs)  authorized by P.L. No.  86-121 to  
cooperatively administer SFC projects.  Tribes  with existing Title I self-determination contracts or  
Title  V  compacts  may elect to  manage  SFC projects  themselves,  pursuant to  the Indian 
Self-Determination and Education Assistance Act  using a  Title I Construction Contract  or 
a  Title  V  Construction Project Agreement.5, 6   These two  types of  agreements  are less common 
and require a lower level of IHS  involvement than  projects  administered under MOAs.   Area  
Offices  said  that after  receiving the IIJA  funding,  they would  work  with Tribes to finalize these 
documents and  begin project administration  quickly.  They  believed  that most  Tribes would  
choose to use the same agreement and contract types  to administer the funding as  they 
typically use.  
To administer IIJA-funded projects  and  meet  sanitation needs, IHS faces  
financial, capacity, and other challenges  that warrant continued  attention  
Through our interviews, we identified  four  notable  challenges  that may warrant  ongoing  
attention as IHS  continues to plan for and administer the IIJA funding.   We  also highlight  
strategies that IHS planned or proposed  to address the challenges.  
Challenge 1:  Sufficiency  of  IIJA Funds.   IHS leadership  and Area Offices  reported that the  
$3.5  billion that Congress  appropriated for SFC projects will  likely  not be sufficient to  address all  
known sanitation needs in Indian Country, as originally intended.   This likely funding shortfall  is 
attributable  to  two factors.  The first is that costs for projects identified on the 2021 Sanitation 
Deficiency System List, which Congress used to appropriate the funding, are rising.   Officials  
attributed cost  increases  to inflation and difficulty  in  procuring materials and contractor 
serviceschallenges that  have worsened  during the pandemic.  One Area Office official 
described a project that  increased from $8 million to $15 million because of   
higher-than-normal contractor bids.  The second reason, officials explained,  is that the  
Sanitation Deficiency System  is a  living system in  which IHS is  continually identifying new  
 
4  The Indian Sanitation Facilities Act of 1959 (P.L. No.  86-121) authorized IHS to provide essential water supply,  
sewage, and solid waste disposal facilities for  American Indian and Alaska Native homes and communities.  Congress  
reaffirmed this  authority in the Indian Health Care Amendments of 1988 (P.L. No. 100-713), which amended the Indian 
Health Care Improvement Act (P.L. No.  94-437).  
5  Title I and Title V of The Indian Self-Determination and Education Assistance Act (codified at 25 U.S.C  5321-5332 
and 5381-5399).  
6  IHS Office of Environmental Health and  Engineering,  Technical Assistance  Guide Public Law 93-638 Construction, 
October 2017, Sections 1 D-2 and E.  Accessed at  
https://www.ihs.gov/sites/des/themes/responsive2017/display_objects/documents/TechnicalAssistanceGuide2017.pdf  
on August 5, 2022.     Page  4Roselyn Tso  
 
sanitation deficiencies  that will need to be addressed by SFC projects.  One  Area Office official  
said  that Tribes may seek to add  even more projects to the list this year in response to the IIJA  
funding.  
Planned IHS Strategies:  IHS officials  outlined  planned strategies  to cover the funding  
shortfalls  caused by inflation and  other factors.  For example, IHS officials  reported  plans to 
ensure that all projects are funded using annual  SFC project  appropriations and  to designate  
funding  in  future  IIJA  spend plans  to cover  increased costs for projects when  construction 
estimates are higher than anticipated due to inflation and  other factors.  Area Offices also 
described using  risk poolsmoney saved from previous projects that were completed  
under budgetto cover increased project costs.  In addition, DSFC and  Area Office  officials  
said they sometimes use funding from other  Federal  partners  to offset  increased costs.  
Given high project demands and  growing costs, shortfalls may continue as IHS administers  
IIJA  projects  and require additional  funding sources.   IHS previously  prioritized  funding for  
SFC projects  on the basis of  a number of scoring factors, including  health impact, Tribal  
priority, and severity of the sanitation deficiency, among  other factors.7   If IHS cannot  cover 
shortfalls to  fund all known projects, the agency may need to use its existing  processes  to 
fund  only  the highest priority level projects.  
Challenge 2: Recruiting and Retaining Qualified, Experienced Staff.   IHS officials  described  
recruiting and retaining staff  as a top challenge  to effectively  administering and overseeing the 
IIJA funds.   As of  April 2022, the SFC  Program faced a 27.4  percent  vacancy rate, 
and  some Areas had  vacancy rates up to 50 percent.   In addition to  these 
27.4%  
vacancies in permanent  positions  (143  vacancies), Area Offices estimate  a need  
vacancy  
for  344  term positions to  address the  IIJA  workload.   Some  officials and staff  
rate  
noted that supporting officessuch  as  OEHE, DES, DAP,  and Human 
Resourcesare  also facing or expecting  staffing  challenges.  A DSFC  official  said  
that  the agency  is  behind the eight ball  on filling positions, and  Area  Offices  described  
ongoing difficulties recruiting  due to  national engineer shortages; noncompetitive government  
pay rates; lengthy recruitment and onboarding processes; remote locations; and  other 
challenges.8   IHS officials  noted  that low pay  and  high workload were causing  turnover among  
existing  DSFC  and support office staff.9   Area  Offices also described competing for existing staff  
 
7  IHS, Sanitation Deficiency System (SDS): A Guide for Reporting Sanitation Deficiencies for American Indian and Alaska 
Native Homes and Communities, September  2019.  Accessed at 
https://www.ihs.gov/sites/dsfc/themes/responsive2017/display_objects/documents/Final_SDS_Guide_v2.pdf  on 
August 9, 2022.  
8  According to surveys conducted by Deloitte  and the Associated General Contractors of America, 52 percent of  
engineering and construction executives indicate  that  their  organizations are facing severe labor  and talent shortages,  
and 6  out of  10  firms are  experiencing project delays caused by workforce shortages.  See  Deloitte,  2022 Engineering  
and Construction Industry Outlook, p. 7.  Accessed at  
https://www2.deloitte.com/content/dam/Deloitte/us/Documents/energy-resources/us-2022-outlook-engineering-
and-construction.pdf  on July  18, 2022.  
9  The IHS workload will continue to increase  as  IHS  administers the IIJA funds.  IHS will fund 456 projects  with nearly        
$580 million in SFC-eligible costs using the first year of IIJA funds, in addition to its almost 2,200 existing active  
projects  totaling approximately $1.85 billion.   Page  5Roselyn Tso  
 
internally, which sometimes caused  staff to shift  across Areas rather than expanding the staffing  
pool.  
IHS leadership and  Area  Offices described challenges in  working with  
the U.S. Public Health Service (USPHS)  Commissioned Corps  on efforts   93 of 378   
related to both recruitment and retention.  Officials reported  that  occupied DSFC 
although IHS  previously relied on  the  USPHS Commissioned Officer  positions are filled  
Student Training and Extern Program  (COSTEP)  to recruit  students,  
by Commissioned  
changes to  application  requirements and  earlier deadlines  made it  
Corps officers  
difficult to continue to do so.  One Area Office  official  stated that 
changes to  the COSTEP  Program, including changes  to medical and  
background checks,  had  effectively put an end to  recruitment  efforts.   A  DSFC  official  said that  it  
will be difficult for IHS to perform adequately without  the Commissioned Corps  support  in  
filling  vacancies and  stated that IHS leadership will  discuss these challenges with  the 
Department  of Health and Human Services.   Area Offices also said that  the  Commissioned Corps  
reduced  promotion rates for IHS engineers, and that the reduction  in  promotions and pay raises 
has made it  harder  for  IHS  to retain experienced engineers.  
The  IIJA  set a  3-percent cap on using  appropriations for administrative and support costs,  
including staffing.10   IHS  leadership raised concerns that this level of  funding  will  not be 
sufficient to  address staffing concerns.   Further, the 3  percent cannot be used to support Tribal  
organizations  that contract or have a  compact  with IHS  to  administer SFC projects;  therefore, 
those organizations  cannot use the IIJA funding to expand their own staffing capacity.  
Additionally, although the  3  percent  can be used  to hire  for  IHS  term positions to administer  
and oversee  IIJA-funded projectsand such hiring would help address staffing concernsArea  
Offices reported  that they would  likely experience  the same  difficulties  in  filling term positions 
as they would  in  recruiting for permanent positions.  
If unaddressed, recruitment and retention  challenges will negatively impact both SFC Program 
operations and the IIJA-funded projects.  For example, Area Office  officials  described relying  
heavily on experienced staff to mentor new  staff, with one stating:  We have approximately   
12-14 staff that have at least 10 years experience working  in  [the]  IHS SFC program, which is a  
pretty good  number for being able to provide that bandwidth for mentoring new  staff...   It 
sometimes takes a few  years to get new engineers up to speed, to  get a grasp on the contracts 
and working with the Tribes.   Officials  explained that  it takes  time to teach  new staff  about  
cultural sensitivities and  self-determination, and  how to manage  SFC projects and  address 
climate-related  concerns  specific to  certain  geographic areas.  High turnover among  
experienced staff  may  result in fewer available mentors  at a time when the agency plans to  hire  
large numbers of new staff.  Additionally, SFC projects already take an average of  4  years to  
complete.   Area Offices  said  that  without adequate staffing  capacity, it may take even  longer to  
complete the  IIJA-funded  projects, therefore delaying necessary services.  
 
10  IIJA,  P.L. No.  117-58, Division J, Title  VI, 1411-1412 (November 15, 2021).   Page  6Roselyn Tso  
 
Planned and Proposed  IHS Strategies:  At the time  of our  interviews, IHS  leadership  was  
completing  a centralized hiring plan  and  exploring other ways  to bolster staffing.  Since  
then, IHS  has finalized the plan  and publicly stated  that  it  will  seek to  reduce 
recruitment-related  demands on Area  Office  staff;  ensure more  uniform application of  salary 
considerations and use of  hiring  incentives;  target recruitment  efforts;  and improve 
coordination with the USPHS Commissioned Corps, among other efficiencies.11   IHS 
leadership  described exploring opportunities to  increase the amount of  funding the agency  
can use for support costs, such as by using and requesting additional annual program 
appropriations, and to build scholarship and other recruitment tools.  During interviews, one  
Area Office requested improved communication from IHS HQ about  its  hiring efforts.   
Another was  unsure from  its  communication with IHS HQ  as to how much of the  IIJA funding  
it  would  get  for  hiring in its  Area.  
In addition to bolstering  hiring efforts,  IHS  plans  to boost  its  
You cannot just turn an  
training efforts.  If  IHS  can  fill existing vacancies and additional  
engineer quickly into a 
staffing needs, it may need to train approximately  500 new  staff  
quality IHS  engineer.  It  
across DSFC and supporting offices.  DSFC  plans  to bolster  its  
takes years to master.   formal, technical new employee training in Albuquerque, and  
   Area Office  official   could also consider bolstering  the  mentoring  of  new staff  about  
technical skills and cultural considerations.    
Challenge 3:  Adequacy  of Other Agency Resources.   IHS leadership  and Area Offices  
described challenges with  the adequacy of other agency resources affecting SFC projects, such 
as office space,  housing,  and  information technology (IT)  capabilities.   Some Area Offices 
reported  having  limited  office space for any  potential  additional  staff.   One official explained  
that the Department  of  Health and  Human Services  previously reduced  the square footage  of  
office space permitted per employee  and  is further reducing  it  because of increased  telework.   
Although  some  Area Offices reported using telework and other flexibilities  to help with staffing  
and reduce the need for physical office space, the official explained that project management  
requirementsincluding site visitsand  the need for mentoring sometimes make telework  
impractical.   Additionally,  Area Offices  reported that IT capabilities were generally satisfactory, 
but  remote field offices sometimes experienced  difficulty with IT support and broadband  
capability, which could  also limit  the effectiveness of telework.  One Area Office official  
described  difficulty  in  balancing rent and staffing costs, and others reported  that the  remote 
location of some offices  made it difficult  for existing or potential staff  to secure housing, which 
affected staffing.  One DSFC  official  explained that clinical staff receive priority  over  engineers 
for IHS-provided housing and office  space.  
Current  and  Proposed  Area Office  Strategies:  Area Offices reported that they used  a variety of  
strategies to address resource concerns, but  that  those strategies are limited.  Area Offices  
leased or considered  leasing  temporary office space, but  one office was  concerned  about the 
 
11  See IHS,  All Tribal and Urban Indian Organization Leaders Call, July 7, 2022.  Accessed at  
https://www.ihs.gov/sites/newsroom/themes/responsive2017/display_objects/documents/2022_Speeches/July-Tribal-
UIO-Leader-Call.pdf  on July 19, 2022.   Page  7Roselyn Tso  
 
ability  to  procure  space in a timely manner.  One  Area Office proposed using housing  
subsidies as a hiring incentive but  was  currently unable to do  so for engineers.  An  official in  
another  Area Office  reported working with its service units to expand housing but  said  that it 
needed additional funding.   Area Offices described  working  closely with IT teams and other 
groups to resolve issues and ensure that IT capabilities, software, and data systems perform  
sufficiently,  but  explained that  the vetting processes for new software and tools are  
sometimes slow.  
Challenge 4:  New Challenges Associated with IHS Efforts  To  Increase Capacity.   IHS has  
plans to increase its capacity  to administer projectsdespite limited staffby  contracting with 
outside firms  and working with other Federal partners.  Although those efforts may  help address 
capacity and funding concerns, they may also  introduce new challenges.  
IHS officials described  plans to  contract  with outside  
"I'm not  under the impression that there  
firms  to  plan and design  sanitation facilities  as  a 
useful way to expand capacity  and reduce demands  is a big growing engineering [work]  
on Area Office staff, but  using those contracts may  force when it comes to the availability  
have unforeseen  challenges.  For example, one Area   of engineering firms  to do this work."  
Office  official  noted that for smaller projects, the 
   Area Office  staff  
contracting of services  sometimes  presents more  
difficulties than completing designs in-house.   
Leadership and  staff in another Area Office  raised the  concern that, like IHS, potential  
contractors  may  not have enough availability or staff  to absorb the demand for work.   
One person stated:  I dont know that the consultant infrastructure can sustain what  we need it  
to.  [Im] not sure firms can absorb [the] demand.  One of the Area Office  officials  said that 
contractors may not have the same training and  experience that IHS staff have in  coordinating  
with Tribes about project design.   One  DSFC official  explained  that although Area Offices take 
great pride in providing design services  in-house, the dramatic increase in workload  makes 
using  contractor firms  necessary.  
IHS  has  current or planned partnerships with other Federal agencies, such as the Army Corps of  
Engineers and the Environmental Protection Agency  (EPA),  to  help increase capacity or  cover 
funding shortfalls.  However, according to a staff  member in one Area Office, having multiple 
partners increases SFC staffs  workload  because  staff  have to  meet the requirements of both IHS  
and the other agency.   Similarly, another Area Office stated that when EPA funds sanitation 
projects using interagency agreements with IHS, IHS staff are  required to  provide  deliverables  
to EPA  for use of  its  funds.   According to IHS guidance, deliverables could include providing  
construction documents and other supporting materials to EPA  or other stakeholders  for  
review.12  
 
12  See IHS, Project Management Guideline For the SFC Project  Management Program (PMPro), A Guide for Planning,  
Designing, and Constructing SFC Projects, Section  5.5, December 2019.  Accessed at  
https://www.ihs.gov/sites/dsfc/themes/responsive2017/display_objects/documents/SFC_PM_Guidelines_2-21-
2020_508_Compliant-v2-102521.pdf  on September  19, 2022.   Page  8Roselyn Tso  
 
Current and  Proposed  Area Office  Strategies  for Addressing Challenges and  Managing  
Increased  Workload:  Area Offices reported  using  strategies to address  partnership challenges  
and  also suggested ways to further improve  efficiencies and  manage  workload.  Two Area 
Offices described  working with  partners strategically by sometimes declining outside  
funding to prioritize their IHS workload.  Strategies  to otherwise manage workload  included  
sharing  or shifting  resources across offices  and locations, as needed,  and  specializing staff  to 
streamline tasks  (e.g., tasking  administrative staff  with  completing data entry and reports).   
In addition, officials and staff  described  usingor wanting to useadvanced equipment or 
tools, such as drones, to make work  more expedient.  One Area Office  official suggested that  
IHS use external staffing  resources such as Engineers Without  Borders, in much the same 
way that the agency used external medical staffing during the height of the pandemic.   The 
same official  requested  more robust  communication with IHS HQ about  strategic  
approaches  for completing the IIJA workload:  Communication needs to  be better and more 
robust and open to getting this work done...   It  [requires]  different thinking, but were 
encouraging them to be as strategic as possible, any way that we can get  these projects 
done so that families can have safe water and sewer.  
Plans are  as yet unclear for IHS  assessment of the use of IIJA funds,  
strategies for future spending, and assisting Tribes with long-term  
operation of  IIJA-funded facilities  
IHS has the following additional  responsibilities  that may warrant  further  attention as the agency  
moves forward with IIJA-funded facilities.  From  speaking with IHS officials, it appears that  IHS 
has not yet finalized  its plans to assess its use of the IIJA funds;  strategize for future IIJA  spend  
plans;  and assist Tribes with the long-term operation and maintenance of IIJA-funded facilities.  
   Assessing Use of the IIJA Funds:  Although IHS HQ reported  developing a  plan to assess 
the effectiveness of its use of the IIJA funds, most  Area Offices were unaware of any  formal  
assessment plans  or metrics.  They did, however, identify ideas that could  contribute to  such  
an  assessment.  Area Offices indicated  that existing performance metrics  and data points  for  
SFC projects, such as time to completion and number of homes served,  could  work well for  
assessing  IIJA use. One Area Office  official  suggested that, given  experience with prior 
supplemental appropriations, IHS  should  seek to limit the administrative burden that any 
additional data reporting would place on  Area Office staff.   Another suggested that  IHS  
increase efficiencies in its  existing SFC data-entry  processes.  Officials in other Area Offices 
described  encouraging staff to update  data  on projects and sanitation deficiencies  more 
frequently,  which may be useful as IHS HQ monitors the status of  sanitation  deficiencies and  
IIJA-funded  projects.   OEHE and  DSFC  officials  reported  that in fulfilling  OIGs data requests 
for this evaluation, they took steps to  gather additional information  about SFC projects  and  
ensure that Area Offices report data  accurately.  Although IHS took these steps for  OIG,  the 
improvements  may also  be useful for the agencys  own  data-tracking  efforts.  
   Communicating Plans for Future IIJA Spend Plans:  At the time of  our interviews, most 
Area Offices reported that they had not yet received any early detailed  communication from   Page  9Roselyn Tso  
 
IHS HQ about the FY  2023  IIJA  spend plan.  IHS officials  reported  that given  the  extended  
timelines  for submitting  Sanitation Deficiency System  data, the  FY 2023 spend  plan  will  likely  
not be finalized  until January or February of  2023.  Furthermore, both IHS leadership and  
Area Offices  described difficulty in  coordinating  use of the IIJA funds and annual  
appropriations, resulting in  delayed finalization  of  the  FY 2022  IIJA  spend plan.  One Area  
Office requested improved  guidance  about delineating between IIJA-funded  projects and  
projects funded using other appropriations.  
   Long-Term Operation and Maintenance of IIJA-Funded Facilities:  Area Offices described  
as successful  the  technical assistance  they provide  to Tribes for  the long-term operation and  
maintenance  of SFC facilities, and they reported  that they plan to continue providing  
technical assistance for IIJA-funded facilities.   However,  the need for those efforts  will likely  
grow substantially in the coming years given the large number of projects.   One  Area Office  
official  suggested  that IHS  could  request  appropriations  to  provide Tribes with  financial 
assistance for  maintaining  wastewater systems.  Others  indicated  that as allowed by IIJA, the 
IIJA  funding  could  be used to fund  lower-level  projects that  IHS had  not previously 
prioritized, but which  would  restore or update  existing sanitation facilities and therefore  
increase system efficiencies similarly to  operation and maintenance  improvements.  
Conclusion and  OIG  Contact  
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 that IHS  
has 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.    
As noted above,  OIGs oversight of IHS's capacity to administer and oversee the IIJA funding for 
SFC projects remains ongoing.  Our further work will  offer additional detail about  these and  
other management  challenges.   If  you have  questions about  this memorandum  or would like  to 
request  a briefing by the OIG team,  please contact me  or  one of your staff may contact  Jennifer 
Gist.   Please refer to  product number  OEI-06-22-00320  in  all correspondence.