Cherokee Nation’s lumber write-off falls under unallowable cost fund
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| Cherokee Nation Self-Help Housing Director Charley Barr shows pieces of lumber he said should not be used in building Self-Help homes. PHOTO BY JAMI CUSTER |
By JAMI CUSTER
Reporter
TAHLEQUAH, Okla. – The reason why Self-Help Housing workers almost burned approximately $44,000 worth of lumber originally paid for with federal funds is because the tribe wrote off the materials with its unallowable cost fund.
The tribe’s administration created the fund in the Cherokee Nation budget so that if a federal agency audited the tribe and found a cost using federal funds that had to be written off, such as the lumber, the unallowable cost fund would cover it. The fund also covers costs the tribe may have paid for with federal grant monies that it shouldn’t have.
“What it is intended to do is if we have an agency that declares something as unallowable, that would allow us to move those expenditures from the (federal) grant over to (tribe’s) Gen (General) Fund,” CN Treasurer Callie Catcher said.
In the case of the lumber, it didn’t meet federal standards and was deemed unusable for building homes and had to be written off by the tribe. Catcher said incidents such as this do not happen often and haven’t occurred in nearly six years.
“One example of this was related to a HUD review. There were some costs related to a cultural activity. It was about $35,000, and we provided all the backup and they still come back and said it was unallowable,” she said.
Catcher said, although unfortunate, the lumber write-off amount was small when compared to the full tribal budget that’s administered.
“To put it in perspective, we administer about $300 million a year in federal funds and this $44,000 was the first write off in the last five or six years,” she said. “It’s a small amount compared to the funds we administer, but it is there just in case.”
The tribe put $50,000 in the unallowable cost fund, and Catcher said the administration is requesting the same amount for fiscal year 2011.
Without the line item, she said she would have to report unallowable costs to the council’s Executive and Finance Committee and request a budget modification to cover them.
She said if the unallowable cost funds are not utilized, they go back in the overall budget to be reallocated in the next budget cycle.
jami-custer@cherokee.org • (918) 453-5560