Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
SUBJECT: The Kickapoo Tribe of Oklahoma
DATE: September 23, 1994
Docket No. A-94-97
Audit Control No. A-06-93-25590
Decision No. 1496
DECISION
The Kickapoo Tribe of Oklahoma (the Tribe) appealed a determination by
the Administration for Children and Families (ACF) disallowing $2,510 in
grant funds received under a grant from the Administration for Native
Americans (ANA). Based on a report by the Tribe's independent auditor
for the Tribe's expenditures for the year ended September 30, 1991, ACF
disallowed the funds on the ground that the Tribe failed to maintain
adequate supporting documentation for travel expenses, utilities, and
office supplies charged to the grant. In the course of its appeal, the
Tribe supplied additional documentation for some of the questioned
costs. ACF accepted the recommendation of the Tribe's auditor regarding
the sufficiency of the documentation for these particular items and
reduced the amount of the disallowance to $968.
The disallowance remaining at issue concerns $900 in travel costs and a
$68 expenditure for office supplies. The issue presented is whether the
Tribe has produced adequate documentation for these expenditures. For
the reasons discussed below, we find that the Tribe's documentation for
the questioned travel costs and office supplies is inadequate.
Accordingly, we sustain the disallowance in the amount of $968.
Applicable authority
Requirements for the administration of grants awarded to Indian tribal
governments are set forth at 45 C.F.R. Part 92. 1/ Standards for the
financial management systems of grantees, set forth at 45 C.F.R.
92.20(b), include:
(2) Accounting records. Grantees and subgrantees must maintain
records which adequately identify the source and application of
funds provided for financially-assisted activities. These records
must contain information pertaining to grant or subgrant awards and
authorizations, obligations, unobligated balances, assets,
liabilities, outlays or expenditures, and income.
(6) Source documentation. Accounting records must be supported by
such source documentation as cancelled checks, paid bills,
payrolls, time and attendance records, contract and subcontract
award documents, etc.
In prior decisions, the Board has held, based on these financial
management standards, that costs charged to federal funds must be
adequately documented in order to be allowable. See, e.g., Tuntuliak
Traditional Council, DAB No. 1356 (1992). The Board has further held
that the grantee bears the burden of providing this documentation. See,
e.g., Nisqually Indian Tribe, DAB No. 1210 (1991).
Analysis
The Tribe admitted that, concerning the items in dispute, it did not
have the type of documentation it customarily retained. The Tribe
stated that some documentation may have been misplaced in its move to
another building. The Tribe nevertheless contended that it complied
with the requirements of Part 92 and that it had produced sufficient
documentation to support a finding that the questioned costs were
expended in a proper and reasonable manner.
Below we discuss the documentation submitted by the Tribe in support of
the questioned costs. A. Travel Costs
The $900 in disputed travel costs concerns two travel advances of $450
each given to two of the Tribe's employees to attend the 1991
Reservation Economic Summit in Seattle, Washington, on May 7-9, 1991.
ACF did not dispute that travel to this event would have been an
allowable cost had it been properly documented.
In support of the allowability of these travel costs the Tribe offered
the following documentation:
-- a directive, dated May 2, 1991, to pay $450 as a "Travel Advance
- Seattle, WA" for each employee; -- an Official Travel Order
for each of the employees, stating that the purpose of the travel
was to attend the 1991 Reservation Economic Summit in Seattle;
-- a Request for Advance Travel Funds for each of the employees to
travel to Seattle; -- an itinerary for each of the employees,
giving their flights to and from Seattle, along with their hotel
reservations in Seattle; -- blank registration forms for the
1991 Reservation Economic Summit, along with a program of
conference activities; -- a payment order, dated May 2, 1991,
for $790 for the registration of the two employees at the
conference; -- a payment order, dated May 13, 1991, to the
Shawnee Travel Shoppe, Inc., for $1752 for the air tickets for
the two employees to go to Seattle, along with an invoice from
the travel agency and an air travel itinerary; -- a completed
registration form for the 1991 Reservation Economic Summit; and --
a request from one of the employees for compensatory time for
"delayed travel from Seattle" and the employee's Leave &
Earnings Statement.
All of this rather extensive documentation concerns the intention of the
Tribe's employees to attend the conference in Seattle. There is no
documentation, however, that the Tribe's two employees actually attended
the conference in Seattle. The Tribe has not produced the airplane
tickets, hotel or restaurant receipts, sworn statements from the
employees that they attended the conference, or anything else that
established that the employees were in fact in Seattle for the
conference, so that travel costs were actually incurred. The
regulations are clear in requiring source documentation for grant
expenditures. None of the documentation offered by the Tribe meets that
requirement. Instead, for the most part the documentation merely shows
that plans to attend the conference were made. The request for
compensatory time associated with the alleged travel also is not direct
evidence that travel costs were incurred.
The Tribe admitted during a telephone conference call that its policies
require employees to submit documentation, such as hotel receipts, once
they return to substantiate the travel advances given them, but that any
such documents for the travel costs at issue here were missing from the
Tribe's files. Accordingly, we uphold the disallowance of the $900 in
travel costs.
B. Office Supplies
The Tribe's sole documentation for the questioned costs for office
supplies was a cancelled check for $68 made out to the Office Depot in
Oklahoma City. This documentation clearly establishes that office
supplies were purchased, but does not indicate whether the cost of the
supplies was allocable to the grant.
In the telephone conference the Presiding Board Member asked the Tribe
whether the office supplies could have been used for activities
unrelated to the grant. The Tribe responded that it had many checking
accounts for various projects, but that the $68 check was drawn on an
account for the Tribe's Economic Development Department whose sole
function was to administer the ANA grant. Thus, according to the Tribe,
there was no possibility that the office supplies were used by other
departments of the Tribe.
This does not establish, however, that the office supplies were used for
grant purposes. The Tribe has not produced any records of what the
supplies were, such as an invoice, or how the supplies were used.
Absent any additional documentation, there is no guarantee that the
office supplies were used solely for grant purposes rather than for
other Tribe activities. Due to this lack of any supporting
documentation, we sustain the disallowance of the $68 for office
supplies.
Conclusion
For the reasons discussed above, we sustain the disallowance of $968 in
travel costs and office supplies.
________________________ Donald F.
Garrett
_________________________ Norval D.
(John) Settle
_________________________ M. Terry
Johnson Presiding Board Member
1. Neither party has asserted that the Tribe is not an Indian tribal
government within the meaning of Part 92. We note that if the Tribe
were not considered to be such an Indian tribal government, the
provisions of 45 C.F.R. Part 74 would apply to the Tribe's grant at
issue here. The financial documentation and reporting provisions of the
applicable sections of Parts 74 and 92 are substantially similar, so it
is not material which of the two parts is