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Walker River Paiute Tribe 

Needs to Improve Its 

Internal Controls to Comply

With Federal Regulations 

Report No. 15-2-0165 June 11, 2015

U.S. ENVIRONMENTAL PROTECTION AGENCY

OFFICE OF INSPECTOR GENERAL

Spending Taxpayer Dollars
Report Contributors: David Kim

Leah Nikaidoh

Lela Wong

Abbreviations

CFR Code of Federal Regulations

EPA U.S. Environmental Protection Agency

FFR Federal Financial Report

GAP General Assistance Program

OIG Office of Inspector General

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15-2-0165

June 11, 2015

Why We Did This Review

The U.S. Environmental 

Protection Agency’s (EPA’s)

Region 9 requested assistance 

from the Office of Inspector 

General (OIG) due to concerns 

about the accounting system in 

place at the Walker River 

Paiute Tribe. 

EPA Region 9 was also 

concerned about the tribe’s

indirect cost rate proposal for 

2014 and outstanding 

incomplete grant tasks under 

EPA grant GA-96926201. 

This report addresses the 

following EPA goal or 

cross-agency strategy:

 Working to make a visible 

difference in communities.

Send all inquiries to our public 

affairs office at (202) 566-2391

or visit www.epa.gov/oig.

The full report is at:

www.epa.gov/oig/reports/2015/ 

20150611-15-2-0165.pdf

Walker River Paiute Tribe Needs to Improve Its 

Internal Controls to Comply With Federal Regulations

 What We Found

Our audit determined that the Walker River Paiute 

Tribe’s accounting system and written policies and 

procedures complied with federal regulations.

However, our testing disclosed multiple instances 

where the tribe’s actual practices did not comply 

with federal regulations related to personnel costs, 

indirect costs and in-kind contributions. 

Our audit also found incomplete grant tasks remaining from an EPA General 

Assistance Program grant for fiscal years 2008 through 2012. 

 Recommendations

We recommend that the Region 9 Regional Administrator disallow and recover 

unsupported costs of $841,477, unless the tribe can provide adequate support for 

these costs. We also recommend that the Region 9 Regional Administrator: 

 Disallow and recover ineligible costs of $1,591. 

 Require the tribe to implement better internal controls to ensure 

compliance with applicable federal regulations, grant conditions, and the 

tribe’s own policies and procedures.

In addition, we recommend that the Region 9 Regional Administrator disallow 

and recover $151,895 in claimed costs associated with the remaining incomplete 

tasks, unless the tribe can provide documents to substantiate completion of those 

tasks. We also recommend that for future General Assistance Program grants, 

the Region 9 Regional Administrator implement special grant conditions that 

require completion of grant tasks before grant payments are made.

The tribe did not comment on recommendations relating to internal controls and 

special grant conditions, but did concur with one recommendation and provided 

additional documentation for the remainder of the recommendations. However, 

the tribe’s documentation did not meet federal requirements, so our positions on 

the issues remain unchanged.

U.S. Environmental Protection Agency

Office of Inspector General

At a Glance

The Walker River Paiute 

Tribe did not comply 

with federal regulations, 

resulting in $994,963 of 

questioned costs. 
June 11, 2015

MEMORANDUM

SUBJECT: Walker River Paiute Tribe Needs to Improve Its Internal Controls to 

Comply With Federal Regulations 

Report No. 15-2-0165

FROM: Arthur A. Elkins Jr.

TO: Jared Blumenfeld, Regional Administrator

Region 9

This is our report on the subject audit conducted by the Office of Inspector General (OIG) of the 

U.S. Environmental Protection Agency (EPA). This report contains findings that describe problems the 

OIG has identified and corrective actions the OIG recommends. This report represents the opinion of the 

OIG and does not necessarily represent the final EPA position. In accordance with established auditresolution procedures, EPA managers will make final determinations on matters in this report.

Action Required

In accordance with EPA Manual 2750, you are required to provide us your proposed management 

decision on the findings and recommendations contained in this report before you formally complete 

resolution with the grant recipient. Your proposed management decision is due in 120 days, or on

October 13, 2015. To expedite the resolution process, please email an electronic version of your 

proposed management decision to adachi.robert@epa.gov.

Your response will be posted on the OIG’s public website, along with our memorandum commenting on 

your response. Your response should be provided as an Adobe PDF file that complies with the 

accessibility requirements of Section 508 or the Rehabilitation Act of 1973, as amended. The final 

response should not contain data that you do not want to be released to the public; if your response 

contains such data, you should identify the data for redaction or removal along with corresponding 

justification. 

This report will be available at http://www.epa.gov/oig. 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

WASHINGTON, D.C. 20460

THE INSPECTOR GENERAL
Walker River Paiute Tribe Needs to Improve Its 15-2-0165

Internal Controls to Comply With Federal Regulations

Table of Contents

Chapters

1 Introduction ...................................................................................................... 1

Purpose ..................................................................................................... 1

Background................................................................................................ 1

Responsible Office..................................................................................... 2

Scope and Methodology ............................................................................ 2

2 Tribe Did Not Follow Accounting Policies and Procedures 

Already in Place................................................................................................ 3

Personnel Costs Are Not Supported by Required Payroll Certifications ..... 3

Timekeeping Procedures Are Not Being Followed ..................................... 4

Indirect Costs for 2013 Are Not Charged Properly ..................................... 5

In-Kind Contributions Are Not Adequately Supported................................. 5

Recommendations..................................................................................... 7

Auditee Comments and OIG Evaluation..................................................... 7

3 Tribe Did Not Complete All Grant Tasks......................................................... 9

Recommendations..................................................................................... 9

Auditee Comments and OIG Evaluation..................................................... 10

Status of Recommendations and Potential Monetary Benefits ............................. 11

Appendices

A Auditee Response to Draft Report and OIG Comments................................. 12

B Distribution ....................................................................................................... 19
15-2-0165

1

Chapter 1

Introduction

Purpose

We conducted this audit to determine whether the Walker River Paiute Tribe: 

 Has an accounting system that complies with applicable federal 

regulations.

 Prepared its 2014 indirect cost rate proposal in compliance with applicable 

federal regulations.

 Met its U.S. Environmental Protection Agency (EPA) grant objectives for 

grant GA-9692620.

Background

On August 14, 2013, EPA Region 9’s Communities and Ecosystems Division 

requested assistance from the Office of Inspector General (OIG) due to concerns 

about grants awarded to certain Indian tribes in Nevada, including the Walker 

River Paiute Tribe. 

The Walker River Paiute Tribe is a federally recognized Indian tribe located 

within three counties in the midwestern part of Nevada. At the time of fieldwork, 

the tribe had seven active EPA grants totaling $1,676,090, as outlined in Table 1.

Table 1: EPA grants awarded to the Walker River Paiute Tribe

Grant number

Total 

project cost 

amount

Total EPA 

award 

amount

Performance 

period

Amount drawn as of 

September 10, 2014

GA-00T95601 $272,600 $272,600 10/1/12 – 09/30/16 $206,000

I-99950312 521,640 493,560 10/1/11 – 09/30/14 448,039

C9-99T02701 200,000 180,000 10/1/13 – 09/30/14 91,500

OS-83526301 350,000 350,000 10/1/12 – 09/30/14 69,650

OS-83466501 289,930 289,930 10/1/10 – 09/30/14 281,560

TX-99T01101 50,000 50,000 10/1/13 – 09/30/14 34,900

V-00T39701 40,000 40,000 10/1/10 – 09/30/15 5,553

Total $1,724,170 $1,676,090 $1,137,202

Source: EPA grant files and EPA Compass Data Warehouse.
15-2-0165

2

Responsible Office

EPA Region 9’s Communities and Ecosystems Division is the program office 

responsible for the issues discussed in this report.

Scope and Methodology

We conducted this performance audit from March 10, 2014, through October 10, 

2014, in accordance with generally accepted government auditing standards

issued by the Comptroller General of the United States. Those standards require 

that we plan and perform the audit to obtain sufficient, appropriate evidence to 

provide a reasonable basis for our findings and conclusions based on our audit 

objectives. We believe that the evidence obtained provides a reasonable basis for 

our findings and conclusions based on our audit objectives. 

The following audit steps were performed to determine the adequacy of the 

Walker River Paiute Tribe’s accounting system, whether the tribe’s 2014 indirect 

cost rate complied with federal regulations, and the status of grant tasks that 

remain incomplete under EPA grant GA-9692620. The audit team: 

1. Acquired an understanding of the tribe’s accounting system and related 

internal controls by performing walk-throughs of key cost elements.

2. Performed reconciliations of cash draws made under awarded EPA grants 

to the tribe’s accounting records for three grants. The cash draws were 

dated March 11, 2014.

3. For the three grant cash draws sampled, reviewed documentation to 

support costs related to these cash draws.

4. Reviewed the 2014 indirect cost rate proposal and supporting 

documentation for compliance with federal regulations.

5. Requested and reviewed documentation provided by the tribe to support 

progress on incomplete tasks under grant GA-9692620.

6. Interviewed personnel responsible for accounting and grants management 

functions at the tribe.

For any noncompliance issues identified, we quantified the financial impact of 

such issues based on the tribe’s accounting records.

We did not identify any prior audit reports issued on the Walker River Paiute Tribe.
15-2-0165

3

Chapter 2

The Tribe Did Not Follow Accounting 

Policies and Procedures Already in Place

Our audit determined that the Walker River Paiute Tribe’s accounting system and 

written policies and procedures complied with federal regulations. However, our 

testing disclosed multiple instances where the tribe’s actual practices did not 

comply with federal regulations due to a lack of adherence to policies and 

procedures. Noncompliance issues we identified are reported in Table 2.

Table 2: Questioned costs related to noncompliance with federal regulations

Findings

Questioned 

costs

Personnel costs are not supported by required payroll certifications $391,443

Timekeeping procedures are not being followed 103,432

Indirect costs for 2013 are not calculated properly 1,591

In-kind contributions are not adequately supported 346,602

Total $843,068

Source: OIG calculations.

We questioned $843,068 of the $1,137,202 (74 percent) drawn under the seven 

active EPA grants awarded to the tribe.

Personnel Costs Are Not Supported by Required Payroll 

Certifications

Tribal employees who work solely on one EPA grant do not have required payroll 

certifications to support their personnel costs (payroll and related fringe benefits)

charged to the grant. The Code of Federal Regulations (CFR), through 2 CFR,

Part 225, Appendix B, 8.h.(3), states:

Where employees are expected to work solely on a single Federal 

award or cost objective, charges for their salaries and wages will 

be supported by periodic certifications that the employees worked 

solely on that program for the period covered by the certification. 

These certifications will be prepared at least semi-annually and 

will be signed by the employee or supervisory official having 

first hand knowledge of the work performed by the employee.

Furthermore, the tribe’s payroll policy section 1001.8 requires the same 

payroll certification for employees working on one federal award. 

During our testing of personnel costs we found that the tribe did not have payroll 

certifications for employees who worked solely on one EPA grant. Among the 
15-2-0165

4

seven active EPA grants, we identified the following personnel costs and related 

fringe-benefit costs as unsupported where the tribe did not have required payroll 

certifications (Table 3).

Table 3: Questioned costs for payroll without required certifications

Grant number Payroll costs Fringe-Benefit costs Total

GA-00T95601 $ 46,563 $11,751 $58,314

I-99950312 122,656 41,094 163,750

C9-99T02701 20,001 8,550 28,551

OS-83526301 5,319 2,548 7,867

OS-83466501 76,755 34,219 110,974

TX-99T01101 13,618 7,189 20,807

V-00T39701 $560 $620 1,180

Total $391,443

Source: Walker River Paiute Tribe’s accounting records.

Timekeeping Procedures Are Not Being Followed

The Tribal Environmental Director worked on multiple EPA grant awards 

throughout the year, but charged all of his time to the EPA’s General Assistance 

Program (GAP) grant until funding for his salary from the GAP grant ran out. 

Then he charged all of his time to the Environmental Exchange Network grant. 

When funds for his time from that grant ran out, he charged his time to the 

Superfund grant until the next fiscal year began. He then started charging the 

GAP grant again for all of his time. 

Title 2 CFR, Part 225, Appendix B, 8.h.(4) and (5), state that where employees 

work on multiple activities or cost objectives, a distribution of their salaries or 

wages will be supported by personnel activity reports that must reflect an afterthe-fact distribution of the actual activity of each employee. Furthermore, the 

tribe’s Financial ManagementPolicy& Procedures Manual, Section 1001.9,

requires timesheets to support employees’ payroll costs when employees work on 

more than one federal award. 

The Tribal Environmental Director did not prepare a timesheet or any other 

equivalent personnel activity report that tracked his actual activity. He did not 

have any other support for his time. For three active EPA grants, we identified 

personnel and related fringe-benefit costs for the Tribal Environmental Director as 

unsupported (Table 4).

Table 4: Questioned costs for noncompliant timekeeping procedures

Grant number Personnel costs Fringe-Benefit costs Total

GA-00T95601 $68,755 $17,352 $86,107

OS-83466501 11,407 5,086 16,493

V-00T39701 749 83 832

Total $103,432

Source: Walker River Paiute Tribe’s accounting records.
15-2-0165

5

Indirect Costs for 2013 Are Not Charged Properly

The tribe inappropriately claimed indirect costs for 2013 by applying its approved 

indirect cost rate to annual leave charges under various EPA grants. For 2013, the 

tribe calculated indirect costs by multiplying the sum of salaries and annual leave 

costs by the approved indirect cost rate of 20.51 percent. However, the 2013 

indirect cost agreement between the tribe and the U.S. Department of the Interior1

identified the base as total direct salaries and wages, excluding fringe benefits

such as annual leave costs. The tribe is only allowed to claim indirect costs as 

applied to direct salaries and wages. The tribe is not allowed to recover any 

indirect costs applied to annual leave costs. As such, the tribe overcharged the 

EPA for indirect costs related to annual leave.

We identified 2013 annual leave costs for each of the seven active EPA grants and 

calculated the annual leave portion of indirect costs by multiplying the annual 

leave costs by the negotiated indirect cost rate of 20.51 percent to determine the 

ineligible portion of 2013 indirect costs (Table 5).

Table 5: Questioned costs for inappropriate 2013 indirect cost calculations

Grant number

2013 annual 

leave costs

Calculated annual leave 

portion of 2013 indirect costs

GA-00T95601 $2,090 $429

I-99950312 1,962 402

C9-99T02701 1,136 233

OS-83526301 - -

OS-83466501 1,452 298

TX-99T01101 1,102 226

V-00T39701 13 3

Total $1,591

Source: Walker River Paiute Tribe’s accounting records.

We did not find similar issues in prior years because the tribe did not account for 

annual leave costs until January 1, 2013, and did not include annual leave costs in 

indirect cost calculations. In 2014, the tribe elected to include all direct costs, 

including fringe-benefit costs, in indirect cost calculations. We determined that 

the indirect cost rate proposal for 2014 was adequate.

In-Kind Contributions Are Not Adequately Supported

The tribe did not have adequate support for in-kind contributions claimed on

Federal Financial Reports (FFRs) for EPA grants I-99950312 and C9-99T02701. 

The tribal finance department, which maintains accounting records and prepares 

FFRs for all federal grants awarded to the tribe, has not received any information 

 

1

In accordance with 2 CFR, Part 225, Appendix E, Section D (1)(c), tribal indirect cost rate proposals are to be 

submitted to the U.S. Department of the Interior, which is the cognizant agency for all federally recognized Indian 

tribes.
15-2-0165

6

from the tribal environmental program office to substantiate any actual in-kind 

contributions. The finance department entered budgeted, in-kind contribution 

amounts into the FFRs. 

Under 40 CFR, Part 31, Subpart C 31.24 (b)(6), the regulation states that costs 

and third-party, in-kind contributions counting towards satisfying a cost-sharing 

or matching requirement must be verifiable from the records of grantees and 

subgrantees or cost-type contractors. These records must show how the value 

placed on third-party, in-kind contributions was derived. 

Because the grants are awarded on the basis that the tribe makes required in-kind

contributions without any such contributions, the entire award amount is also 

unsupported. We identified as unsupported the total draw amount for the two 

active EPA grants that require in-kind contributions (Table 6). Questioned costs 

for unsupported in-kind contributions appear in Table 7.

Table 6: Total cash draw amounts

Grant number

Total cash draw amount 

as of September 10, 2014

I-99950312 $448,039

C9-99T02701 91,500

Total $539,539

Source: EPA grant files and EPA Compass Data Warehouse.

Table 7: Questioned costs for unsupported in-kind contributions

Grant 

number

Amount drawn 

as of 

September 10, 

2014

Less: previous questioned costs Questioned 

in-kind 

contribution 

costs

Labor 

certifications

Labor 

charging 

practices

2013 

indirect 

costs

I-99950312 $448,039 $(163,750) - $(402) $283,887 

C9-99T02701 91,500 (28,551) -(233) 62,716 

Total $346,603 

Source: EPA Compass Data Warehouse and OIG calculations.

To avoid questioning costs more than once, we subtracted amounts already 

questioned under preceding findings from the total cash draw amounts for each 

grant to arrive at the net questioned costs. If the tribe provides adequate 

supporting documents for any of the questioned costs under the previously 

reported findings, the entire amounts drawn for these two grants will still be 

questioned under this finding, unless the tribe can also provide adequate 

supporting documents.
15-2-0165

7

Recommendations

We recommend that the Region 9 Regional Administrator:

1. Recover the unsupported amount of $391,443 for Walker River Paiute 

tribal employees who charged their time to various EPA grants without 

proper payroll certifications, unless the tribe can provide adequate 

supporting documents. 

2. Recover the unsupported amount of $103,432 for noncompliant 

timekeeping practices, unless the Walker River Paiute Tribe can provide 

adequate supporting documents.

3. Recover the ineligible amount of $1,591 from the Walker River Paiute 

Tribe for inappropriate calculations of 2013 indirect costs.

4. Recover the unsupported amount of $346,602 for the lack of support for 

in-kind contributions, unless the Walker River Paiute Tribe can provide 

adequate supporting documents. Furthermore, the recovery amount under 

this recommendation should be increased by any recovery amount offset 

by adequate supporting documents under Recommendations 1 and 2 above 

for grants I-99950312 and C9-99T02701.

5. Require the Walker River Paiute Tribe to establish internal controls to 

ensure compliance with federal regulations and tribal policies. 

Auditee Comments and OIG Evaluation

The Walker River Paiute Tribe provided an email response dated March 26, 2015, 

and followed up with a hard copy response and supporting documents on 

March 30, 2015. 

The tribe did not address Recommendation 5, but did concur with 

Recommendation 3 concerning the recovery of excess indirect costs claimed. The 

tribe adjusted its books to credit the appropriate grants for the excess indirect 

costs claimed. 

For Recommendations 1, 2 and 4, the tribe provided additional supporting 

documents, which the tribe believes are adequate to address the issues raised in 

the draft report. The tribe believes that since the additional documents address the 

issues raised, the issues no longer qualify as findings. However, the documents 

provided by the tribe for Recommendations 1, 2 and 4 do not meet federal 

requirements.

Our position on the findings and recommendations remain unchanged. 

Recommendation 3 will remain open until Region 9 verifies that the excess 
15-2-0165

8

indirect costs claimed have been repaid to the EPA, such as a refund or credit in a 

future cost claim. 

The tribe’s full response and our analysis are found in Appendix A of this report.
15-2-0165

9

Chapter 3

Tribe Did Not Complete All Grant Tasks

The tribe did not complete all grant tasks under the EPA’s GA-9692620 

GAP grant covering fiscal years 2008 through 2012. EPA Region 9 identified 

tasks that remained incomplete and $160,145 worth of costs associated with the 

tasks. EPA Region 9 issued a letter on March 20, 2014, requesting that the tribe 

provide documents to substantiate completion of the grant tasks or return 

$160,145 to the EPA for costs associated with incomplete tasks. 

During fieldwork, we asked for any grant deliverables that may indicate 

completion of grant tasks that had been identified as incomplete. The tribe did not 

provide any deliverables at the time. Since our site fieldwork, the tribe has 

provided, and EPA Region 9 has accepted, some grant deliverables. Through 

discussions with the EPA Project Officer for the grant, we determined the amount 

of $8,250 to be the cost associated with the accepted grant tasks. The remaining 

incomplete tasks and costs are summarized in Table 8.

Table 8: Questioned costs for incomplete grant tasks

Questioned 

costs

Costs associated with incomplete tasks as of March 20, 2014 $160,145

Less: costs associated with grant tasks accepted by the EPA (8,250)

 Total $151,895

Source: EPA grant records and OIG calculations.

We also discussed the tribe’s performance with EPA project officers for all seven

active EPA grants. The EPA project officers did not identify any further issues 

with missing or incomplete grant tasks. 

Recommendations

We recommend that the Region 9 Regional Administrator:

6. Recover $151,895 for grant tasks that remain incomplete under EPA GAP 

grant GA-9692620, unless the Walker River Paiute Tribe can provide 

adequate documents to substantiate completion of grant tasks.

7. Implement special grant conditions for future GAP grants awarded to the 

Walker River Paiute Tribe, and require completion of grant tasks before 

grant payments are made. 
15-2-0165

10

Auditee Comments and OIG Evaluation

The Walker River Paiute Tribe did not comment on Recommendation 7 and 

disagreed with Recommendation 6. The tribe said grant tasks have been 

completed and verified by the EPA project officer. We discussed this with the 

project officer and were advised that the region has not accepted any work since 

the draft report. As a result, our position on the issue remains unchanged.

The tribe’s full response and our analysis are found in Appendix A of this report.
15-2-0165 11

Status of Recommendations and 

Potential Monetary Benefits

RECOMMENDATIONS

POTENTIAL MONETARY 

BENEFITS (in $000s)

Rec. 

No.

Page 

No. Subject Status1 Action Official

Planned 

Completion 

Date

Claimed 

Amount

Agreed-To 

Amount

1 7 Recover the unsupported amount of $391,443 for 

Walker River Paiute tribal employees who charged 

their time to various EPA grants without proper 

payroll certifications, unless the tribe can provide 

adequate supporting documents.

U Region 9 

Regional Administrator

$391

2 7 Recover the unsupported amount of $103,432 for 

noncompliant timekeeping practices, unless the 

Walker River Paiute Tribe can provide adequate 

supporting documents.

U Region 9 

Regional Administrator

$103

3 7 Recover the ineligible amount of $1,591 from the 

Walker River Paiute Tribe for inappropriate 

calculations of 2013 indirect costs.

U Region 9 

Regional Administrator

 $2

4 7 Recover the unsupported amount of $346,602 for 

the lack of support for in-kind contributions, unless 

the Walker River Paiute Tribe can provide 

adequate supporting documents. Furthermore, 

the recovery amount under this recommendation 

should be increased by any recovery amount 

offset by adequate supporting documents under 

Recommendations 1 and 2 above for grants 

I-99950312 and C9-99T02701.

U Region 9 

Regional Administrator

$347

5 7 Require the Walker River Paiute Tribe to establish 

internal controls to ensure compliance with federal 

regulations and tribal policies.

U Region 9 

Regional Administrator

6 9 Recover $151,895 for grant tasks that remain 

incomplete under EPA GAP grant GA-9692620,

unless the Walker River Paiute Tribe can provide 

adequate documents to substantiate completion of 

grant tasks.

U Region 9 

Regional Administrator

$152

7 9 Implement special grant conditions for future GAP 

grants awarded to the Walker River Paiute Tribe, 

and require completion of grant tasks before grant

payments are made.

U Region 9 

Regional Administrator

1 O = Recommendation is open with agreed-to corrective actions pending.

 C = Recommendation is closed with all agreed-to actions completed. 

 U = Recommendation is unresolved with resolution efforts in progress.
15-2-0165 12

Appendix A

Auditee Response to Draft Report and OIG Comments

Walker River Paiute Tribe

1022 Hospital Road •P.O. Box 220 • Schurz, Nevada 89427

Telephone:(775) 773-2306

Fax: (775) 773-2585

March 26, 2015

Ms. Leah Nikaidoh

EPA Office of Inspector General

26 West Martin Luther King Drive

Mail Code: NWD

Cincinnati, OH 45268

Dear Ms. Nikaidoh:

As per your request the following are relevant comments pertaining to the U.S.

Environmental Protection Agency Office of Inspector General Pertaining to

Project No.OA-FY14-0127 dated February 13, 2015. Detail back up was

forwarded to you on March 24, 2015.

On the cover page there was noted concern about an incomplete grant tasks under 

EPA grant GA- 96926201. Information was supplied identifies this Grant was

completed and closed in 2012 and this was verified with Veronica Swann.

OIG Response 1. EPA Region 9 advised us that it has not accepted any additional 

work for 2014 and before. Therefore, our position on this issue remains unchanged. 

On page4 ofthe Daft Report the Tribes payroll policysection 1001.9 requires

timesheetsto support employees employee payroll cost.....Thisisreference

undertheWRPT FinancialManagement Policy& Procedures Manual. This

policy has beenfollowed asyou can see fromthe detailtime sheets andAction

Formsthatwere submittedto your office.The WRPT does not have a section
15-2-0165 13

1001.9 inthe Personnel Policy. I have attached a copy of the correct section

which is 4..3 Hours of Work. The Auditor to my knowledge did not ask for a

copy of the Personnel Policy Manual.

OIG Response 2. We updated the report to reference the Financial Management

Policy& Procedures Manual, instead of the payroll policy. 

Section "A": Personnel Costs Notsupported by Required Payroll Certifications.

As noted on the bottom oftheCertification for Work on Federal

Contract/Grant Programsit states; "Copies ofthis completed

form must be submitted to Payroll and Personnel on a semiannualorundatedasneededpursuanttoA-133 Federal

Requirements". HumanResourceshas a separate file just for

these Certifications and isto follow-up priorto the semi-annual 

date with the appropriate programsto assure that the

information is up to date. These forms where available in both

Payroll and Human Resources and apparently the auditor did

not know howto obtain the forms. I was not asked about the

Forms while he was at the location.

I believe that the information supplied, verifies the information

requested and does not qualify as a finding.

OIG Response 3. The auditor raised concerns about payroll certification at a meeting 

on March 14, 2014, while he was at the tribe. The Finance Director and the Tribal 

Chairman were present at the meeting. We also raised the issue and explained the need 

for payroll certifications during our field exit conference on February 13, 2015. The 

tribe did not mention that it had the required certifications.

Our review of the certifications provided by the tribe as part of its response to the draft 

report identified the following issues:

1) Payroll certifications were not provided for grant GA-00T95601 and 

V-00T39701. 

2) The certifications were signed in advance. 

3) Certifications were signed annually, biannually, and for as long as a 5-year 

period; not at least semiannually as required under 2 CFR, Part 225 

Appendix B, 8.h.(3).
15-2-0165 14

4) Certifications do not match actual charge. The employee certified that he 

worked on grant OS-83526301 for the 2-year period from October 1, 2012, 

through September 30, 2014; but from October 1, 2012, through January 3, 

2014, he actually charged grant OS-83466501. 

5) Certifications show that the employee worked on two grants (OS-83526301 and

OS-83466501) during the same time period (from October 1, 2012 through

September 30, 2014), even though the employee certified under each grant that 

he only worked on a single grant. 

The federal regulations under 2 CFR, Part 225, Appendix B, 8.h.(3), state:

Where employees are expected to work solely on a single Federal award 

or cost objective, charges for their salaries and wages will be supported 

by periodic certifications that the employees worked solely on that 

program for the period covered by the certification. These certifications 

will be prepared at least semi-annually and will be signed by the 

employee or supervisory official having first hand knowledge of the 

work performed by the employee. 

Due to the issues noted above, the payroll certifications provided by the tribe do not 

meet the requirements of 2 CFR, Part 225, Appendix B, 8.h.(3). As a result, we 

continue to question $391,443 for lack of proper payroll certifications.

Section "B": TimekeepingProcedures are not Being Followed for noncompliant

timekeeping procedures.

There are Three (3)sections addressingthese timekeeping procedures. Additionally, under The

WRPT Personnel Policy Manual Section 4.3 Time Sheets are required. (See Attached

Copy).The Time Sheets were available in Payroll and apparently the auditor did not know

how to obtainthe Time Sheets. I was not asked about theTimeSheets and none ofmystaff

were asked,which includes Payroll.

OIG Response 4. The auditor raised concerns about noncompliance with timekeeping 

policies at a meeting with the tribe on May 8, 2014. During our field exit conference on 

February 13, 2015, we also explained the issue and the need for timesheets to show the 

hours and the associated projects, if the employee worked on multiple grants. The tribe 

mentioned that it has “punch-in and punch-out” timesheets. There was no mention of 

timesheets showing the projects associated with the hours. 
15-2-0165 15

Section"Bl";AddressesGrant#GA-00T95601.

Included inthe response undersection Bl I have addressed the concerns by

including not only time sheetsfor the period but also Payroll Action Forms

indicatingwhen the individual changed from one Fundto another Fundwhich

showsthe dates which correspondents with the time card entries.

Ibelieve that the noncomplianttimekeepingprocedures are addressed in as

muchas WeeklyTime Sheets andPayrollActionFormsare prepared ona

timelybasis. Time Cards andTimeSheets are required byall employeesifthey

are 100%Grant charged or splitbetweenTimeCards andTimeSheets are

required by all employeesifthey are 100%Grant charged or spirt between

multi-function's, when individuals are workingon more than one grant during

a pay period. This also appliesto both exempt and non- exempt employees.

I believe that the information supplied, verifies the information requested and

does not qualify as a finding.

Section "B2"; Addresses Grant # OS-83466501.

Included in the response under section B2 I have addressed the concerns by

including not only Time Sheets for the period but also Payroll Action Forms

indicating when the individual changed from one Fund to another Fund which

shows the dates which corresponds with the time card entries. Also, included is

a Journal Entry indicating that the Environmental Director exceeded the hours

allowed to work under the TREX Program.

I believe that the noncompliant timekeeping procedures are addressed in as

much as weekly Time Sheets and Payroll Action Forms are prepared on a

timely basis. Time Cards and Time Sheets are required by all employees if they

are 100% Grant charged or split between multi-function's, when individuals are

working on more than one grant during a pay period. This also applies to

both exempt and non-exempt employees.

I believe that the information supplied, verifiesthe information requested and

does not qualify as a finding.

Section "B3";Addresses Grant#V-00T39701

Included in the response under section B3 I have addressed the concerns by

including not only Time Sheets for the period but also Payroll Action Forms
15-2-0165 16

indicating when the individual changed from one Fund to another Fund which

shows the dates which correspondents with the time card entries. Also,

included is a Journal Entry indicating that the Environmental Director

exceeded the hoursallowed towork undertheTREX Program.

I believe that the noncompliant timekeeping procedures are addressed inas

much as Weekly Time Sheets and Payroll Action Forms are prepared on a

timely basis. Time Cards and Time Sheets are required by all employees if they

are 100% Grant charged or split between multi-function's, when individuals are

working on more than one grant during a pay period. This also appliesto both

exempt and non-exempt employees.

I believe that the information supplied, verifies the information requested

and does not qualify as a finding.

OIG Response 5. Timesheets provided by the tribe only identified total hours worked, 

not the specific jobs the employee worked on; therefore, the documents do not meet the 

requirements for federal awards. According to 2 CFR, Part 225, Appendix B, 8.h.(4), 

where employees work on multiple activities or cost objectives, a distribution of their 

salaries or wages will be supported by personnel activity reports or equivalent 

documentation that meets the following standards outlined in subsection 8.h.(5): 

(a) They must reflect an after-the-fact distribution of the actual activity of 

each employee,

(b) They must account for the total activity for which each employee is 

compensated, 

(c) They must be prepared at least monthly and must coincide with one or 

more pay periods, and

(d) They must be signed by the employee.

The tribe attempted to use its Employee Action Notices to show the employee was 

supposed to charge 100 percent to a single fund/project at all times, and the auditor 

previously did confirm that the actual fund charges match the Employee Action 

Notices. However, Employee Action Notices represent budgeted work, not actual work 

performed by the employee. Using the budget in Employee Action Notices as the basis 

for charging federal grants does not meet the requirements of 2 CFR, Part 225, 

Appendix B, 8.h.(5), for after-the-fact distribution of the actual activity. Therefore, we 

continue to question salary and fringe benefit costs of $103,432.
15-2-0165 17

Section "C", Address Indirect Costs not Charged Properly.

I agree with the finding and there was a Journal entry made on 9/30/2014 that

reversed the charges Indicated.

OIG Response 6. We acknowledge that the tribe made the journal entry. However, the 

recommendation will remain open until Region 9 verifies that the credit has been 

provided to the EPA, either as a refund or a credit in a future cost claim.

Section"D", Addresses In-KindContributionsAreNotAdequately

Supported.

There are Two (2)sections addressingthese In-KindContributions.

Section"D1"Address Grant# 1-99950312Water Pollution.

I included within the response Cost Comparisons from Jim Chico of Desert

Engineering with costs offor In-Kind for the Area. This information was then

broken down for the usagebyWaterPollution.

Ibelieve that the information supplied verifies the information requested and does

not qualify as a finding.

Section "D2" Address Grant # C9-99T02701 Non-Point Source.

I includedwithinthe responseCostComparisonsfromJimChicoofDesert

Engineering with costs of for In-Kind for the Area. Thisinformation was then

broken down for the usage by Non-Point Source.

OIG Response 7. Documents provided by the tribe do not meet federal requirements for 

in-kind contributions. According to 40 CFR, Part 31, Subpart C 31.24 (b)(6), costs and 

third-party, in-kind contributions counting toward satisfying a cost-sharing or matching 

requirement must be verifiable from the records of grantees and subgrantee or cost-type 

contractors. Title 40 CFR, Part 31, Subpart C 31.24 (b)(7)(ii) further states that for thirdparty, in-kind contributions in the form of goods and services that are normally indirect 

costs, the grantee should only be given matching credit for such contributions if the 

grantee has established, along with its regular indirect cost rate, a special rate for 

allocating to individual projects or programs the value of the contributions.

Documents provided by the tribe show in-kind costs were estimates and not actual costs 

verifiable to the tribe’s records. The in-kind costs were for storage, office space, office 

supplies, electricity and Internet service. These are normally indirect costs, but the 

tribe’s indirect cost rate agreements do not show a rate for allocation of in-kind 

contributions. Since the in-kind cost documents do not meet federal requirements, we 

continue to question the costs.
15-2-0165 18

I believe that the information supplied, verifies the information requested and does

not qualify as a finding.

S ection 4. 3

CC: BobbyD.Sanchez,TribalChairman
15-2-0165 19

Appendix B

Distribution

Regional Administrator, Region 9 

Deputy Regional Administrator, Region 9 

Agency Follow-Up Official (the CFO) 

Agency Follow-Up Coordinator 

Director, Grants and Interagency Agreements Management Division, 

Office of Administration and Resources Management 

Audit Follow-Up Coordinator, Region 9 

Chairman, Walker River Paiute Tribe