State officials have known for years the Navajo Trust Fund has been fraught with mismanagement. And now Utah lawmakers want to know the extent of the problem.
State lawmakers announced a full audit of the Navajo Trust Fund, the Division of Indian Affairs, the Utah Navajo Development Council, Utah Navajo Industries and all businesses created by the now-bankrupt UNI with oil royalty monies."It will be a top-to-bottom audit of the whole thing," said Rep. David Adams, R-Monticello. "We want to see where every dollar was spent."
In addition to the audit, Gov. Norm Bangerter wants legislation creating an all-Navajo board that will administer the Navajo Trust Fund in the future with the help of people providing legal and financial expertise.
Currently, the state has a fiduciary responsibility to administer the Navajo Trust Fund, which is funded by oil royalty money from the Navajo Reservation. The share due Utah amounts to 37 1/2 percent of all royalty money paid by oil companies on the reservation.
The money is disbursed through the Division of Indian Affairs and Indian Affairs Board to the non-profit Utah Navajo Development Council, which is supposed to spend the money on education, housing and other improvements on the reservation.
The UNDC created Utah Navajo Industries, a for-profit corporation designed to start Navajo businesses that would employ Navajos and make a profit for the trust fund. It never did.
"The audit will address the efficiency of receiving and handling the funds, the provision of services we are required by law to provide and an examination of allegations of fraud and mismanagement," Adams said. "It will also look at reported agreements between oil companies and the Navajo tribe that appear to circumvent the royalty payments to Utah."
There is currently about $10 million in the Navajo Trust Fund, but millions have been lost in recent years. At the time UNI declared bankruptcy last fall, it showed a $4.5 million loss.
At one time, UNI was creating Navajo jobs at a cost of $1,500 per year per job, Adams said. Just prior to the bankruptcy, it was costing $16,000 per year per job.
"The audit will help the Legislature determine the best way to clean up the mess," Adams said.
Adams would like the current system left in place until the audit is completed. But Bangerter wants to proceed with a new Navajo board to administer the funds.
Navajos have criticized state officials because the funds from the Navajo Reservation have not been administered by Navajos; rather they have been administered by the Indian Affairs Board that is responsible for all Indian issues across the state.
"It's a legitimate question," said Bud Scruggs, Bangerter's chief of staff. "Why should non-Navajos have a say in how Navajo funds are being spent? And the current Indian Affairs Board just doesn't have the time or expertise to manage the Navajo monies on top of everything else they have to do."
The legislation Bangerter would like to see passed would create a board composed of Navajos to administer the funds, make sure the board has access to legal and financial expertise, and relieve the Division of Indian Affairs and the Indian Affairs Board of responsibility for the Navajo Trust Fund, Scruggs said.
He adds that the Navajo funds have been, for the most part, mismanaged by Navajos. "We need to make sure they have access to the expertise they need to manage the fund properly."