HOLLISTER — A mistake, according to State Auditor’s report, cost the Haliwa-Saponi Tribe a $316,000 Golden LEAF grant and possibly a much-needed multipurpose building at the tribal school.
“It was a serious mistake,” said Dennis Patterson, spokesperson for the State Auditor’s office.
The audit, prompted by a citizen’s complaint, alleged false information was included on the tribe’s grant application to Golden LEAF for the project.
It found the tribe misrepresented itself in saying it had tribal council review and approval for the grant, an approved loan for $700,000 and a $600,000 HUD grant for matching funds, because “HUD does not permit the use of its Indian Housing Block Grant funds for projects that have been rejected by a tribe.”
The audit said the tribe has been working since 2004 to add a multipurpose building at the tribal school.
Some council members expressed concern about the scope of the project. Later, the tribal people and council voted to discontinue the project and that termination was reported to HUD in the Tribe’s Annual Performance Report for the year that ended June 30, 2009.
The audit report said the chief and former economic development officer said they did not believe the vote discontinued the project because the tribe never stopped looking for funding for the project and discussed it regularly.
According to the audit, in January 2010 the tribe applied to Golden LEAF for $1 million for the building construction through the Community Initiative Assistance Grant. The estimated construction cost was close to $2.5 million.
Golden Leaf agreed to provide $316,000 in assistance if the tribe provided evidence of approval and support from the tribal council and school board and evidence of a financing plan, showing secured sources.
Further, Golden Leaf would not release any money until the State finished its audit.
Haliwa-Saponi tribe Chief Ron Richardson said in an exclusive interview with The Daily Herald his statements in this interview were in no way designed to refute the State Auditor’s finding, but serve as his attempt to explain what happened.
According to Richardson, the tribe had a loan with RBC Centura for $700,000 and $600,000 with HUD alongside for the building project. He said the tribal council provided a resolution to get the loan, and it was approved in September 2008. The tribe had the agreement extended several times, but the agreement was never signed by the council.
He said in November 2010 the bank let the tribe know if they updated the financial information, things could move forward.
“While the statement of auditor is true — that most recent extension had expired — we never represented the extension had not expired and the commitment from the bank had not expired with updated financials,” Richardson said. “We did not misrepresent. This is a misunderstanding.
“I’ve been Chief about 10 years and our audits have been impeccable. This is first time we’ve had any problem. I respect the work of the auditors and the job that they did. At no time did we ever willfully or intentionally misrepresent anything.This grant, as with any grant we’ve submitted, was believed to be accurate and complete at the time it was submitted.”
The state recommended the tribe “implement controls to ensure that all grant applications receive a thorough review for accuracy and completeness before any tribal representative certifies and affixes his signature to those applications.”
The tribe responded those controls are now in place to provide grant review and oversight in the future.
They said processes were addressed to responsible internal parties to ensure the highest level of integrity and compliance.
Richardson said the tribe is also using a professional consultant to provide training for grant process and internal controls.
Golden LEAF President Dan Gerlach said he wants to be sure people understand no money ever passed to the tribe in this transaction.
He said when the Foundation is funding things like building projects, certain conditions have to be met. The tribe did not meet those conditions so the grant was rescinded.
“Because of the conditions we have, the money is protected,” he said “Golden Leaf money was never at risk.”
Gerlach said the audit would not prevent Golden Leaf from funding the tribe in the future, adding it would depend on the project.
He said there is an obvious need at the school, but Golden Leaf will be careful to be good stewards.
“We rescinded the grant and that’s where we’re leaving this,” Gerlach said.