The San Carlos Apache Tribe's housing agency has been ordered to return millions of dollars to a federal account and may face other sanctions after a federal audit uncovered mismanagement, credit card abuse, conflicts of interest and favoritism in providing homes for needy families.
Ronald Boni, longtime director of the tribal Housing Authority, resigned in October after U.S. Department of Housing and Urban Development inspectors reported numerous violations of federal law and regulations.
A draft review, obtained by The Arizona Republic, shows the Apache agency, which has received $200 million in federal grant funds since 1998, lacked accountability and provided scant evidence that tax dollars were spent on homes for low-income families.
The draft review is harshly critical of operations at the agency:
"The observed state of the housing stock maintained by SCAHA does not reflect the roughly $6 million in (federal) funds awarded annually," wrote inspectors.
"Much of SCAHA's managed housing stock is in deplorable, sometimes uninhabitable, condition. ... New construction projects were observed standing vacant due to a lack of water and sewer infrastructure, and rehabilitation projects were found to be incomplete, contrary to (tribal) reporting."
On July 30, HUD's Southwest Office of Native American Programs determined the Housing Authority was in "substantial noncompliance" with federal requirements.
HUD rescinded the tribe's authority to invest grant funds and gave a 30-day deadline for the return of all investment monies withdrawn from a federal account. That deadline was not met, according to HUD records.
Eduardo Cabrera, a HUD spokesman, declined comment on the draft review and would not say how much money the tribe must return to federal coffers.
Cabrera said a final report will list reforms the Housing Authority must carry out to avoid enforcement actions.
Tribal member Gerri Nash of Apaches for Fair Housing, said some residents received notices this year that their monthly rents were quadrupling to about $800 despite deteriorating conditions and unfair treatment.
"That's just not right, what they're doing," Nash said. "And a lot of the homes are cracked, and they (residents) are paying an arm and a leg. ... People are all stressed out. And we have a lot of homeless here."
Boni, who became the Housing Authority's executive director in 2000, did not respond to interview requests.
Boni also is the pastor of Freedom Holiness Church in San Carlos and chairman of the tribe's Gaming Commission. Officials at the San Carlos Apache Department of Gaming declined to comment on Boni's status with the commission, which oversees the tribe's two casinos.
John Antonio Jr., a Tribal Council member, became interim director of the Housing Authority after Boni's suspension. Antonio said HUD's review involves "internal" issues — not for public disclosure — and the tribe is preparing a response that may include "correcting HUD's misstatements."
Antonio declined to discuss alleged violations, the impact on members of the tribe, or whether any reforms are underway.
Asked whether tribal members and taxpayers can trust that federal housing funds are being spent properly, Antonio said, "We believe in transparency and accountability."
The San Carlos Apache nation, about 100 miles east of Phoenix, sprawls over 1.8 million acres of high desert and mountain forests — an area larger than Delaware. The reservation has a population of just over 10,000.
Antonio said 93 percent of tribal members are low income, and nearly 4 in 10 residences are considered substandard. In 2016, according to congressional testimony, 1,652 families were on a waiting list for subsidized homes.
The Housing Authority is sustained almost entirely by U.S. tax dollars based on a formula that provides about $6.3 million in grants each year. It is unclear how HUD's regulatory moves may affect the tribe's services and operations.
Inspectors who visited the reservation this summer listed 15 major violations of federal statutes and regulations.
Auditors couldn't determine from the Housing Authority's financial records what transactions occurred, who authorized them, whether purchases were lawful, where receipts went or what happened to purchased items.
Perhaps the most serious issue involved Indian Housing Block Grant funds, which are distributed to tribes annually. Funds typically remain in a federal account until tribes need cash for specific projects. But native housing agencies, which sometimes stockpile the money, may ask to withdraw and invest their portion so they can earn interest.
Auditors found that in June of 2015 the San Carlos Apache Housing Authority sought approval to invest $7.7 million in grant dollars. In fact, the agency already had withdrawn and invested that sum a month before the request, according to the report.
Investigators said tribal leaders "could not substantiate the status of this investment," and it was impossible to determine whether the money was being spent on housing, as required.
"The investment records were incomplete, some accounts lacking any documentation," auditors noted. "This was reportedly due to the executive director, Ronald Boni, being the sole SCAHA personnel authorized on some of the investment accounts."
Boni was suspended amid the review, then quit, temporarily leaving other Housing Authority leaders with no access to the tribal accounts.
Other key HUD findings allege:
The San Carlos agency is not alone in struggling to handle the billions of tax dollars provided for Indian housing since Congress enacted the Native American Housing Assistance and Self-Determination Act in 1998.
That legislation was intended to meet the United States' trust obligations to provide public safety, education, housing, health care and other services to Indians on reservations. At the same time, it was designed to empower self-governance and enhance tribal sovereignty.
But, in some cases, those goals have been undercut by mismanagement and corruption.
In a 2016 series, The Republic described how the Navajo Housing Authority squandered more than $100 million on new housing that was never occupied and stockpiled more than $250 million despite a desperate need for tribal homes.
Two years earlier, the White Mountain Apache Housing Authority was threatened with receivership after HUD uncovered misappropriations involving two-thirds of the nation's housing funds. Several employees and board members were convicted of embezzlement in tribal court.