[Advisory Report on Survey of Construction Costs for Chief
Leschi School, Constructed by the Puyallup Tribe Under
Bureau of Indian Affairs Replacement School Construction Program]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. 01-I-237

Title: Advisory Report on Survey of Construction Costs for Chief
       Leschi School, Constructed by the Puyallup Tribe Under
       Bureau of Indian Affairs Replacement School Construction
       Program

 
  Date:  March 5, 2001

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  U.S. Department of the Interior

  Office of Inspector General

  New Chief Leschi School
  Photo Courtesy Puyallup Tribe
                                                               
                                                               
  Construction Costs for Chief Leschi School
  Puyallup Tribe, Puyallup, Washington
  Bureau of Indian Affairs
                                                               
                                                               
                                                               
  Report No. 01-I-237
  March 2001

  United States Department of the Interior
                              
  Office of Inspector General
  Western Region
  Federal Building
  2800 Cottage Way, Suite E-2712
  Sacramento, California 95825
   
  March 5, 2001

  Advisory Report
  
  Memorandum
  
  To:  Assistant Secretary for Indian Affairs
  
  From:  Michael P. Colombo
  Regional Audit Manager, Western Region
  
  Subject:  Advisory Report on Survey of Construction Costs for Chief Leschi School,
  Constructed by the Puyallup Tribe Under Bureau of Indian Affairs Replacement School
  Construction Program (No. 01-I-237)
  
  Following are the results of our survey of the costs of the Chief Leschi School,
  constructed near Puyallup, Washington, by the Puyallup Tribe under the Bureau of Indian
  Affairs (BIA) Replacement School Construction Program.  The objective of our survey
  was to determine whether the school was constructed in accordance with applicable BIA
  guidelines.  
                                 
  Background and ScopeConstruction of the Chief Leschi School was
  necessitated after the Assistant Secretary for Indian
  Affairs condemned the middle/high school portion of
  the old school in 1991 as "an immediate hazard to
  health and safety" and ordered it vacated.  Construction of the new school began in
  May 1995 and was substantially completed in November 1996.  Students, however,
  began occupying the school in September 1996.  From May 1995 to September 1996, the
  middle and high school students were temporarily housed in leased facilities.  Projected
  enrollment for the new school was 1,077 students, ranging from Pre-Kindergarten
  through Grade 12.  
  
  We selected the Chief Leschi School for review because the $28.9 million appropriated
  for school construction represented 25 percent of the $117.4 million appropriated for
  replacement school construction from fiscal years 1991 to 1997.  We conducted our
  survey at the Chief Leschi School and at BIA's Facilities Management and Construction
  Center (FMCC) in Albuquerque, New Mexico, and Office of Indian Education Programs
  in Portland, Oregon.  To accomplish our objective, we reviewed laws, regulations,
  policies, and guidelines governing the construction of replacement schools; BIA
  processes for approving and monitoring school construction; the single audit reports for
  the Chief Leschi School for fiscal years 1994 through 1998; and the certified public
  accountant's working papers for fiscal years 1996 and 1997. 
  
  Our review was made in accordance with the "Government Auditing Standards," issued
  by the Comptroller General of the United States.  Accordingly, we included such tests of
  records and other procedures that were considered necessary to accomplish our objective. 
  As part of our survey, we reviewed the Departmental Reports on Accountability, which
  included information required by the Federal Managers' Financial Integrity Act, and
  BIA's annual assurance statements on management controls for fiscal years 1996, 1997,
  and 1998.  Based on those reviews, we determined that no material weaknesses were
  reported that directly related to the objective and scope of our survey.
  
  Results of SurveyWe found that although the Chief Leschi School was constructed within the 
  $28.9 million of contract and grant monies provided by BIA, the FMCC did not
  (1) sufficiently monitor construction planning to identify variances between the Program of 
  Requirements (POR) prepared for the School and the construction design specifications or (2) 
  remove the old Chief Leschi School buildings from the data base used to track buildings 
  eligible to receive BIA operation and maintenance funds, as follows.
  
  Under BIA's process for planning and approving construction of school facilities, the FMCC 
  prepares the POR and uses it to monitor construction
  planning and ensure that design specifications comply with the size and nature of
  the facilities provided for in the POR.  The POR for the Chief Leschi School
  stated that the school was not to exceed a maximum of 175,924 square feet and
  provided for construction of athletic fields.  The school design submitted to
  FMCC, however, totaled 181,427 square feet, or 5,530 square feet more than
  established in the POR, and did not include athletic fields.  The FMCC either did
  not detect or did not question the difference between the design specification
  submitted and the POR.  As a consequence, the school, as constructed by the
  Tribe's contractor, was larger than specified in the POR, resulting in additional
  costs of about $666,000 and the need to rent facilities for outdoor sports
  activities at a cost of about $10,000 a year.
  
  During construction of the new Chief Leschi School, elementary students
  continued to be housed in the elementary portion of the old school, which was in
  serviceable condition, and middle/high school students were housed in leased
  facilities.  During this time, BIA appropriately paid to maintain the portion of the
  old school that was being used and the leased facilities.  With the occupation of
  the new school buildings in September 1996, however, BIA did not remove the
  old school facilities from its data base.  As a result, BIA erroneously paid the
  Puyallup School Board $815,557 to maintain 97,639 square feet of the old Chief
  Leschi school buildings from October 1996 through September 2000 (see
  Appendix 1) and has not attempted to recover the erroneous payments from the
  School.  BIA later recalculated the amount to $785,310.
  
  RecommendationsWe recommend that you ensure that appropriate BIA
  officials: 
  
  
  1.  Monitor construction planning to ensure that the design
  specifications of schools comply with the POR.  
  
  2.  Make a final determination on the allowability of the $785,310
  erroneously paid for operation and maintenance for fiscal years 1997 through 2000 and
  recover the amounts determined to be unallowable.    
  
  Agency Response  In your December 8, 2000 response (Appendix 2), you concurred with our 
  recommendations and stated that BIA had recalculated the amount erroneously paid for
  operation and maintenance for fiscal years 1997 through 2000 to be $785,310.  We accept that 
  calculation as the amount that will be recovered and adjusted the amount in Recommendation 2 
  accordingly.  You subsequently designated the responsible official for implementing the 
  recommendations as the Education Line Officer for the Portland Area Office and the target date 
  for action as March 30, 2001.  Based on your response, we consider the two recommendations 
  resolved and are referring them to the Assistant Secretary for Policy, Management and Budget 
  for tracking of  implementation.  Accordingly, no further response to our office is necessary
  (Appendix 3).  
  
  The legislation, as amended, creating the Office of Inspector General, requires
  semiannual reporting to Congress on all audit reports issued, actions taken to implement
  audit recommendations, and identification of each significant recommendation on which
  corrective action has not been taken. 
  
  If you have any questions regarding this report, please call me at (916) 978-5653 or
  Mr. Andrew P. Rosenberger, Senior Auditor, Western Region, at (916) 978-5624.
  
  
  
  
     
  Appendix 1
   Appendix 2
  Assistant Secretary for Indian Affairs Response
      Appendix 3
  Status of Recommendations