1). Indian Affairs’ Funding for Building Replacement and Repair

Indian Affairs distributes funding for the repair and replacement of school  facilities through a variety of programs ranging from those focused on  daily operations and maintenance to the replacement of entire school  buildings and campuses. 3). Indian Affairs Does Not Have a Capital Asset Plan to Guide the Efficient Allocation of Construction Funds and Has Not Provided Detailed Information to Policymakers

		Indian Affairs Does Not Have a Comprehensive Capital Asset Plan to Allocate Funds to Maintain, Repair, and Replace Schools

Indian Affairs does not have a comprehensive capital asset plan to  maintain, repair, or replace all the BIE schools in its portfolio. While Indian  Affairs has determined which 10 schools it plans to replace next, it does  not have a long-term capital asset plan for the remaining 175 schools. About one-third of these schools are in poor condition, according to Indian  Affairs data, resulting in thousands of students being educated or housed  in unsafe facilities. Indian Affairs Has Not Consistently Ensured Accountability for Either Federally or Tribally Managed School Construction Projects

		For Federally Managed Projects, Indian Affairs Has Not Used All Available Accountability Measures to Ensure Projects Are on Time, Within Budget, and Meet Schools’ Needs

Indian Affairs has not consistently used accountability measures included  in its contracts for federally managed BIE school construction projects. Correspondingly, the 19 federally managed BIE school construction  projects completed from fiscal year 2003 through 2016 often took longer  than expected, and were sometimes over budget or had to be scaled  back, such as by decreasing square footage, to remain within budget. Further, according to school officials, these projects did not always meet  schools’ needs. One school we visited in Arizona took 14 years to  complete, which was almost 10 years over schedule. For example, an official at a school in Oklahoma  told us that when Indian Affairs managed a project to replace a high  school building and dormitories, Indian Affairs planned a dormitory to  house 400 students and a school that could only accommodate 368  students. In particular, in  interviews with Indian Affairs and school officials and our review of  contract files for recent school construction projects, we found Indian  Affairs officials responsible for working with the contracting officer did not  always understand how to use accountability measures. As a result, Indian  Affairs could risk spending millions of dollars on new schools that do not  meet the needs of students and staff in terms of their size, quality of  construction, or sustainability over time. For Tribally Managed Projects, Indian Affairs Has Not Provided Sufficient Oversight and Technical Assistance to Ensure Projects Are on Time, Within Budget, and Meet Schools’ Needs

For school construction projects managed by tribal organizations under  grants or self-determination contracts, Indian Affairs also has not provided  sufficient oversight and technical assistance to the tribal organizations. Eight of the 30 tribally managed school  replacement projects completed since 2003 were completed three or  more years after the estimated completion date. Three of the 30 projects  were 20 percent or more over budget, and one was more than 60 percent  over budget (see fig. 5). They said this does not always  occur. This is particularly important now as Indian  Affairs is in the process of building three BIE schools from its 2004  replacement list and will soon begin replacing 10 additional schools  selected for replacement in April 2016. It is critical that Indian Affairs develop and implement clear, specific  guidance for project managers and contracting officers on the effective  use of accountability measures to ensure that federally managed projects  are on time, within budget, and meet schools’ needs. 2. 3. Develop and implement guidance for its project managers and  contracting officers regarding effective use of accountability  measures. 4. In its written comments, reproduced in appendix I, Interior agreed with  five of our recommendations and disagreed with one recommendation. In addition, Interior stated that Indian Affairs will develop a  financial accountability workgroup with members from the Office of the  Chief Financial Officer, BIA, BIE, and the Office of the Assistant  Secretary—Indian Affairs to develop guidance and standards to ensure  the effective use of accountability measures.
Why GAO Did This Study

Indian Affairs is responsible for operating and maintaining 1,785 buildings at 185 K-12 BIE schools, including dormitory buildings for students, on or near reservations. These buildings had an estimated value of $4.5 billion in 2016. Many of these schools are in poor condition and have safety hazards. GAO was asked to review Indian Affairs' processes to fund and oversee the repair and replacement of schools.
GAO examined the extent to which Indian Affairs (1) has a comprehensive plan to maintain, repair, or replace schools and ensure the efficient use of funds, and (2) ensures accountability throughout the school construction process. GAO assessed agency data on the cost and timeliness of 49 school replacement projects completed from fiscal year 2003 through 2016, and reviewed contract and grant files for 10 school construction projects selected from schools that had recent or ongoing projects. GAO also assessed Indian Affairs' practices against its policies, design standards, and federal laws and regulations and interviewed agency and school officials.

What GAO Found

The Department of the Interior's (Interior) Office of the Assistant Secretary-Indian Affairs (Indian Affairs) does not have a comprehensive capital asset plan to guide the allocation of funding for school construction projects across its 185 Bureau of Indian Education (BIE) schools. Indian Affairs is in the process of replacing 3 schools and plans to replace 10 additional schools from a list of 54 schools that applied in 2015. However, Indian Affairs has not developed a comprehensive, long-term capital asset plan for the repair or replacement of the remaining schools in its portfolio, as required by Interior policy. Until Indian Affairs develops a capital asset plan, it risks using federal funds inefficiently and not prioritizing funds to schools with the most pressing needs.
Indian Affairs has not consistently used accountability measures or conducted sufficient oversight to ensure that BIE school construction projects are completed on time, within budget, and meet schools' needs. For instance, Indian Affairs does not always use accountability measures, such as warranties, to have builders replace defective parts or repair poor workmanship. Project managers, who are responsible for helping to ensure accountability, do not always understand how to use accountability measures because Indian Affairs has not provided guidance on when and how to use them to ensure successful completion of construction projects. In addition, Indian Affairs has not adequately overseen school projects managed by tribal organizations. Officials interviewed by GAO at three schools said Indian Affairs was not timely in reviewing new school designs, which resulted in project delays. For 49 construction projects completed from 2003 through 2016, the inconsistent use of accountability measures and inadequate oversight led to projects that took longer than expected, were sometimes over budget, or had to be scaled back to remain within their allotted budgets. For example, of the 49 projects:
16 were 3 or more years behind schedule (see fig. 1).
1 was almost 10 years behind schedule.
10 were 20 percent or more over budget.
Further, the new projects did not always meet schools' needs, according to school officials. In one instance, Indian Affairs planned a dormitory to house 400 students while the school it planned could only accommodate 368 students. Until Indian Affairs develops and implements guidance for ensuring accountability throughout the school construction process and improves its oversight of these projects, it will have little assurance they are completed satisfactorily and meet the needs of students and staff.
Figure 1: Timeliness of Indian Affairs' School Replacement Projects Completed, Fiscal Years 2003-2016

What GAO Recommends

GAO is making six recommendations, including that Indian Affairs develop a capital asset plan for school facility construction and repair, develop and implement guidance on how to use accountability measures, and improve oversight of projects. Interior agreed with five of the recommendations and disagreed with one. GAO continues to believe its recommendation is valid, as discussed further in this report.