Chemawa Indian School, Oregon’s only off-reservation boarding school, mismanaged hundreds of thousands of dollars in federal and donated funds, a federal audit released July 17 found.
The Office of the Inspector General of the Department of the Interior conducted the report after Oregon’s Democratic Senators Ron Wyden and Jeff Merkley requested an audit in 2021 after “continued complaints of financial mismanagement.”
The report found Chemawa Indian School, or CIS, which has lacked a functioning school board since 2019, mismanaged a student and family-funded bank account and spent over $590,000 on “inappropriate purchases.” Federal lawmakers who called for the audit say it confirms their worst fears about the quality of education for tribal students at CIS.
CIS, which opened in 1880, is the oldest continuously operating off-reservation boarding school in the U.S. The Bureau of Indian Education operates CIS.
At its inception, its purpose was to forcibly assimilate Native American children into white, European-American culture. Initially located in Forest Grove and called Forest Grove Indian School, it moved to Salem in 1885.
The school serves students grades nine through 12 on its roughly 40-acre campus in Salem, located just east of Interstate 5.
Newest report
In response to a request by Wyden and Merkley, the DOI OIG investigated CIS between December 2021 and August 2022.
The report found a multitude of issues related to CIS and BIE’s financial practices.
“We found that the CIS does not have strong internal controls in place to ensure that it is appropriately accounting for financial resources and property,” the report concluded. “The BIE does not have adequate policies and procedures to appropriately oversee the CIS’ use of financial resources.”
A major issue uncovered in the report is CIS’ alleged mishandling of its Student Enterprise account, a bank account that includes students’ personal money; student organizations’ fundraising money; donations to the school and money raised at the student store, coffee shop and snack bar. The account averaged just under $600,000 at any given time.
Families and community members have long questioned the school’s management of the Student Enterprise account, and the OIG report confirmed concerns about the mismanagement of the funds.
The audit found accounting discrepancies it was unable to reconcile.
The audit found a 2019 discrepancy between the school’s records of the account and the bank’s records of the account, which must match. The school reported the account held $319,188, but the bank reported it held just $219,582.
“The difference of nearly $100,000 between the accounting records and the bank account could indicate poor recordkeeping practices, misappropriation, or both,” the report said.
The report found further discrepancies related to the account, including several instances where the daily records of cash on hand were lower than what was reported the previous day.
The report says CIS officials were unable to provide answers to explain the many discrepancies.
The report found a lack of accountability for the mismanagement — the BIE did not “appropriately oversee” the Student Enterprise account at CIS, despite federal regulations requiring an annual audit of accounts with student contributions.
Inappropriate purchases
CIS spends roughly $10 million annually. The OIG report took a closer look at a slice of CIS’s expenses, $2.2 million, and determined more than 25% of its purchases were “inappropriate.”
The report says CIS made $593,367 of “inappropriate” purchases with federal funds.
The funds in question include $249,261 related to purchases using “BIE – Operations and Maintenance” funds and $344,106 in purchases using the Indian School Equalization Program and Department of Education funds.
Among the purchases questioned in the report are $213,520 spent on excavating equipment and $35,741 for maintenance vehicles the report says CIS purchased without performing a required “lease or buy” analysis.
The report says CIS’ infrequent use, one documented time in five years, of such equipment shows a purchase was unreasonable over a lease.
CIS also spent $334,107 to construct a pole barn and spent $9,999 on a horse trailer for its 4-H program. The report found CIS did not obtain approval for the purchases, and concluded the funding sources it used to make the purchases were inappropriate for the type of purchase.
Unaccounted for business leases
CIS leases portions of its large campus alongside Interstate 5 to outside entities to gain revenue for the school. Among the leasees are billboards, a cellphone tower and a Christmas tree farm — however, the report found just one written lease documenting business done with CIS.
The report states CIS earned approximately $172,000 between fiscal years 2019 and 2021 from six separate business entities but was only able to obtain one of the six leases.
“In the single instance where the CIS did enter into a lease agreement, it did not properly manage the agreement,” the report found.
The audit was unable to verify accurate payments for the accounts and found discrepancies in the one lease it did have access to, which was for three billboards placed on CIS land. Documented payments for the lease did not always adhere to the provisions of the written agreements.
The report further found CIS failed to account for and maintain inventory of many purchases of items under $5,000.
Recommendations
The OIG report makes 26 recommendations for CIS and BIE to follow to improve financial transparency.
In its response to the report, BIE agreed with 25 of the 26 recommendations but disagreed with one, which remains unresolved.
The BIE took issue with the report’s characterization of $593,367 in purchases by CIS as inappropriate. It says its students needs assessment showed the pole barn and horse trailer were needed and that it engaged in a competitive bidding process for its construction and purchase.
“CIS uses the animals housed in the pole barn to provide trauma-based and social emotional therapy to students with and without disabilities,” the BIE said in its response.
In response to the audit results, Wyden called for CIS and the BIE to adhere to the audit's recommendations.
“This new report confirms the worst fears of anybody advocating for Tribal students at the Chemawa School to be well educated and well cared for by the adults entrusted with these young lives,” Wyden said in a July 17 statement. “The evaluation I requested with Senator Merkley shines a troubling spotlight on how the deep failures of financial accounting and oversight translated into reduced opportunities and poorer outcomes for Tribal children.
“I will keep pressing both the school and its federal regulators to make the fixes long needed to help these kids succeed in the classroom and life.”
Merkley echoed Wyden’s concerns and call to action.
“I have called for greater oversight and transparency into the financial practices of Chemawa Indian School for years, including requesting this OIG report with Senator Wyden,” Merkley told Street Roots. “The report details a disturbing pattern of inappropriate spending at the school, and a failure of BIE to do its due diligence and provide proper financial oversight. This unacceptable accounting is at the expense of Tribal students and families who entrust their education and well-being to Chemawa.
“I strongly encourage the school and BIE to adhere to the Inspector General’s recommendations for improved financial management.”
The report says with the exception of the recommendation the BIE contested and one still in the implementation phase; the recommendations have been “resolved.”
In a statement to Street Roots, the BIE said it will continue working to implement the report’s recommendations.
“The Bureau of Indian Education is committed to accountability and efficiency regarding the financial resources that support our mission of providing students with a culturally relevant, high-quality education,” a BIE spokesperson, who refused to be named, said. “We appreciate the recommendations from the Office of the Inspector General in strengthening the financial accountability and oversight practices at the Chemawa Indian School. Chemawa Indian School and the Bureau of Indian Education worked with the Office Inspector General to provide information for this audit and provided their concurrence to the majority of the recommendations as they work to improve operations.
“This open and ongoing dialogue allowed Chemawa staff to begin addressing recommendations immediately. Several policy and procedural changes have already been implemented, and we will continue to work with OIG to address the remaining recommendations."
Whether the report ushers in a new era of transparency and collaboration between CIS, BIE and lawmakers remains to be seen.
Background on audit
Numerous issues plagued the school in recent years. Despite efforts by state and tribal leaders, there’s been little success in increasing transparency and accountability at the school.
The audit is the third report the DOI’s Office of the Inspector General generated on CIS in the past 10 years. The other two reports, released in July 2015, examined academic success and violence prevention at CIS.
The academic achievement report examined how CIS sought to improve student success, graduation rates and achievement gaps, like in standardized testing.
To do this, the OIG sought to determine if CIS offered a comprehensive “needs assessment” for its students and whether it incorporated cultural awareness and language assessment in its educational programs.
A needs assessment generally determines what a student needs to reach an outcome of academic success.
Ultimately, the report found that CIS “was not properly assessing the academic needs of its students.”
The audit determined CIS’ needs assessment did not address six of the eight “critical” areas related to strengths and did not address seven of the eight “critical” areas related to the needs and priorities of its students.
The report on violence prevention at CIS found that the school’s measures to prevent violence were “adequate.”
The reports did little to improve transparency or accountability at the school. In 2017, Oregon Public Broadcasting published an investigative series on issues at CIS, including four students who died shortly after being “blackballed” by the school.
Seemingly basic requests aimed at improving transparency at the school failed to materialize. In 2019, Wyden, Merkley and U.S Congressional representatives from Oregon, Susan Bonamici and Kurt Schrader, sought to obtain a map of the sprawling CIS campus, which is considered federal property.
The quest for an accurate map of the Chemawa campus proved far more complicated than expected. The lawmakers’ quest for a map culminated in a July 2019 letter to the Assistant Secretary of Indian Affairs at the DOI requesting the document.
In the letter, the lawmakers say they have been working with CIS to discuss issues at the school and possible improvements.
“However, the lack of certain basic information makes it difficult to have a productive conversation about how to address the challenges the school faces,” the letter said. “An accurate map is essential to tracking the money made on external business ventures, maintaining the facilities and cemetery which have fallen into disrepair, determining long term solutions for (the) school and its students.”
Merkley then expressed great skepticism the school or BIE would comply with the requests.
“I will fall over if we actually get these documents when we come back,” Merkley said. “Because there’s just no record of the Bureau responding to the issues that we’ve raised and the information we’ve asked for.”
The OPB investigative series, combined with the ongoing concerns about transparency at CIS, culminated in a U.S. Congressional hearing.
The House Natural Resources Subcommittee on Indigenous Peoples of the United States held a hearing on "Investigating the Health and Safety Risks of Native Children at BIE Boarding Schools," on May 5, 2019.
Those speaking included Beatrice Willis, the mother of Marshall Friday, an 18-year-old Northern Arapaho man who died from complications of drug use at his family’s home in Tualatin just two weeks after he graduated from CIS.
According to his mother's testimony, Friday, whose story was featured in OPB’s series, suffered from multiple mental health conditions that CIS did not disclose to his family. His mother believes he was using drugs to lessen the effects of his mental health conditions.
“Ryan Cox of the school told me on one occasion that when a parent allows their child to attend Chemawa they basically make their child a ward of the court and the school becomes parentis ad litem or the child’s guardian while attending the school,” Willis testified. “All other schools in the nation, besides those run by BIE, are required to inform parents of their children’s mental or behavioral health issues if they are known by the school but unknown to the parents.”
Still, issues at the school persisted.
In 2021, Sen. Merkley and Sen. Wyden called for an audit of the school’s finances, citing the school’s opacity and their past unsuccessful efforts to glean information about the school and its finances.
In a letter, the Oregon senators asked the DOI’s Office of the Inspector General, the same entity that investigated it in 2015, to investigate again, saying they continued to receive reports of financial mismanagement and other persisting issues at CIS.
“Our Congressional delegation has worked in good faith with school officials and BIE to obtain answers as to how the school is addressing these issues,” the letter read. “However, after several years, we remain deeply concerned that we cannot receive satisfactory answers to the most basic questions related to the school’s accounting practices.”
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