Office of Navajo and Hopi Indian Relocation: Executive Branch and Legislative Action Needed for Closure and Transfer of Activities

In 1974, the Settlement Act was intended to provide for the final settlement of a land dispute between the Navajo and Hopi tribes that originated nearly a century ago. The act created ONHIR to carry out the relocation of Navajo and Hopi Indians off land partitioned to the other tribe. ONHIR's relocation efforts were scheduled to end by 1986. However, those efforts continue today.

GAO was asked to review ONHIR's operations. Among other things, this report discusses (1) ONHIR's management and the status of relocation activities and (2) executive branch and legislative actions that may be needed for ONHIR to close and transfer remaining activities. GAO reviewed documentation; interviewed officials at ONHIR and other federal agencies, as well as from the Navajo Nation and Hopi Tribe; and conducted two site visits to ONHIR's offices and the Navajo reservation in Arizona.

As of December 2017, the Office of Navajo and Hopi Indian Relocation, and its predecessor agency (collectively, ONHIR), has relocated 3,660 Navajo and 27 Hopi families off disputed lands that were partitioned to the two tribes and provided new houses for them. Although the Navajo-Hopi Settlement Act of 1974 (Settlement Act) intended for ONHIR to complete its activities 5 years after its relocation plan went into effect, the agency has continued to carry out its responsibilities for over three decades beyond the original deadline and the potential remains for relocation activities to continue into the future. For example, GAO found that by the end of fiscal year 2018

at least 240 households whose relocation applications were previously denied could still file for appeals in federal court and if the court rules in their favor these households could become eligible for relocation benefits under the Settlement Act, and

ONHIR is still responsible for helping homeowners who might request repairs for 52 relocation homes that remain under warranty.

ONHIR believes that it has substantially completed its responsibilities under the Settlement Act and has stated its intent to close by September 2018. However, ONHIR does not have the authority to close its operations and has not yet taken the steps necessary to facilitate such a closure. GAO identified a number of areas where either executive branch or congressional actions would be needed to affect a closure of ONHIR, as shown in these examples:

The Settlement Act states that ONHIR will cease to exist when the President determines that its functions have been fully discharged. ONHIR, however, has not requested a determination nor provided specific information to the President that could facilitate such a decision.

ONHIR has prepared a transition plan and identified potential successor agencies that could assume its remaining activities. However, officials at these agencies said they currently do not have authority under the Settlement Act to undertake ONHIR's activities. Without congressional authorization these agencies would not be able to succeed ONHIR.

ONHIR has prepared an implementation plan to guide its closure but has not yet taken necessary steps to ensure that all the key information about its activities has been compiled. For example, ONHIR's database for tracking warranty requests is missing information, such as the date of warranty repairs and other contractor information. Similarly, ONHIR has not prepared complete information from its files on the remaining denied households who could file for federal appeals. Federal internal control standards state that agencies should identify and respond to risks and use quality information. By not preparing complete information on the relocation activities it has been engaged in, ONHIR places an effective transition of its functions to another agency at risk. This is because any successor agency authorized to continue these activities will not have the complete information needed to effectively fulfill these functions.

GAO is making four matters for congressional consideration; including that Congress provide successor agencies necessary authority to continue ONHIR's remaining activities if it closes. GAO is also making five recommendations to ONHIR, including that it request a closure determination from the President and prepare necessary information to facilitate the transfer of its activities to a successor. ONHIR neither agreed nor disagreed with the five recommendations and stated it had either already taken steps or planned to once a successor is identified. GAO continues to believe the recommendations are valid, as discussed in the report.

The Office of Navajo and Hopi Indian Relocation (ONHIR), an  independent entity within the executive branch, was created as a result of  the passage of the Navajo-Hopi Settlement Act of 1974 (Settlement Act).  This act authorized the partition of disputed lands between the Navajo  and Hopi tribes originally set aside by the federal government for a  reservation in 1882. Members of one tribe who were living on land  designated to the other tribe were to be relocated and provided new  homes and cash bonuses. As of December 2017, ONHIR had relocated  more than 3,600 Navajo and Hopi families, consisting of about 16,700  individuals, and had expended around $600 million since it was  established, according to ONHIR officials.

ONHIR’s relocation process was originally scheduled to end in July 1986,  but the process is ongoing and ONHIR continues to operate. ONHIR  requested nearly $15 million for fiscal year 2018, more than double the  amount it had received prior to fiscal year 2016, to facilitate and expedite  relocation activities. ONHIR officials have said that the relocation  activities ONHIR was charged to administer—certifying applicants as  eligible for relocation, reviewing appeals, and providing relocation  homes—would be completed by the end of fiscal year 2018. As of  December 2017, ONHIR’s remaining activities included relocating 20  certified families, resolving 25 active administrative appeals cases, and  managing other activities, including a cattle ranch and land held in trust  by the federal government for the benefit of the Navajo Nation. ONHIR  officials have recognized that some remaining activities and continued  responsibilities would need to be transferred to another agency or entity  in the event of ONHIR’s closure.

You asked us to review issues related to ONHIR and its ongoing  activities. This report examines (1) ONHIR’s management of the eligibility  and appeals processes and the status of these activities; (2) ONHIR’s  management of the home-building process and the status of these  activities; (3) executive branch or legislative actions that may be  necessary to terminate ONHIR in an orderly manner and transition  remaining relocation activities; (4) ONHIR’s management of Navajo trust  lands and related transition activities; and (5) legislative actions that may  be necessary to address other Settlement Act provisions.

To address these objectives, we reviewed our prior related reports and  other studies and analyzed relevant laws and regulations. We reviewed  policies and procedures for relocation activities—the eligibility and  appeals process and home-building activities—and for other key  activities, as well as related documentation, including home-building  contracts and lease agreements. We interviewed ONHIR officials about  relocation and other key activities, and we interviewed ONHIR’s hearing  officer to better understand his role in the appeals process. We also  interviewed federal officials from the Department of the Interior’s (Interior)  Bureau of Indian Affairs (BIA), Office of Inspector General, and Bureau of  Land Management (BLM); Department of Housing and Urban  Development (HUD); Department of the Treasury (Treasury); and Indian  Health Service, within the Department of Health and Human Services. We  also conducted interviews with officials from the Navajo Nation and the  Hopi Tribe, as well as tribal entities including the Navajo-Hopi Legal  Services Program, the Navajo-Hopi Land Commission Office, and the  Navajo Nation Human Rights Commission. We conducted two visits to  ONHIR’s offices and the Navajo region in August 2017, where we  interviewed ONHIR staff, observed a transition meeting, took two  separate tours of homes (one with ONHIR officials and the other with  Navajo Nation officials) and observed rangeland management activities,  and attended presentations at three Navajo Nation chapters. Additional  information on our methodology is provided in appendix I.

We conducted this performance audit from March 2017 to April 2018 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

The Settlement Act, enacted on December 22, 1974, was intended to  provide for the final settlement of a land dispute between the Navajo and  Hopi tribes that originated nearly a century ago. The 1882 Executive  Order, signed by President Chester Arthur, set aside approximately 2.5  million acres of land for the Hopi and “such other Indians as the Secretary  of the Interior may see fit to settle thereon.” Since that time, the Navajo  and Hopi tribes have disputed the rights and occupancy of the lands. In a  1962 court case, Healing v Jones, the Hopi tribe claimed exclusive rights  to the entire reservation, and the Navajo claimed exclusive rights to about  80 percent of the reservation. In 1963, the U.S. Supreme Court affirmed  an Arizona District Court decision that set aside about 631,000 acres of  the land—known as District Six—as exclusively Hopi and designated the  remaining about 1.9 million acres as a joint use area, to be managed and  used jointly by the two tribes. The two tribes legally co-owned the joint  use area, but the use of the land remained a source of disputes between  the two tribes. The Settlement Act authorized the partitioning of the  surface of the joint use area and directed that it generally be split evenly  between the tribes. It required Navajo households residing on lands  partitioned to the Hopi Tribe (Hopi Partitioned Lands) to relocate and,  similarly, Hopi households residing on lands partitioned to the Navajo  Nation (Navajo Partitioned Lands) to relocate. Figure 1 illustrates the  current Navajo and Hopi reservations.

Figure 2 illustrates the portion of the reservation near Tuba City, Arizona,  that was subject to the land dispute, the area that was designated as  exclusively Hopi (District Six), and the partitioned lands.

Selected Settlement Act Provisions and ONHIR’s Responsibilities and Structure

The Settlement Act and its subsequent amendments contain several key  provisions for relocation and other activities.

Relocation. The Settlement Act mandated that ONHIR submit a  report, including a detailed plan, to Congress concerning the  relocation of households and members of each tribe from lands  partitioned to the other tribe. ONHIR stated that it has no authority to  require any person to leave the land that was awarded to the other  tribe. The act instructed that the relocation process be completed 5  years after the relocation plan took effect. The report and plan, which  ONHIR transmitted to Congress in April 1981, provided details on  relocation of households and their members, including generating  names of those residing on the partitioned lands and identifying sites  for relocation, among other things. The relocation was scheduled to  be completed by July 1986. Specifically, the relocation benefits  include $130,000, adjusted to current construction and housing  development costs, for a household of three or fewer and $136,000  for a household of four or more to obtain a decent, safe, and sanitary  replacement home, in addition to moving expenses and, within the  first few years, bonus payments provided within the first years  following the relocation plan. Because there were far fewer Hopi  households residing on lands partitioned to the Navajo Nation, almost  all of the households relocated (about 99 percent) have been for  Navajo families.

Resettlement land taken into trust for the Navajo Nation. The  Settlement Act as amended authorizes and directs the Secretary of  the Interior to take certain lands into trust for the Navajo Nation, which  would become part of the Navajo Reservation. The 1980 amendments  to the Settlement Act required the border of any parcel taken into trust  to be within 18 miles of the Navajo reservation’s then boundary. Most  of the lands taken into trust in Arizona pursuant to the Settlement Act  as amended are known as the New Lands. Navajos living on Hopi  Partitioned Lands could choose to relocate to the New Lands, as well  as other areas on the Navajo reservation or off-reservation.

Administration and use of acquired trust land. Pursuant to the  Settlement Act as amended, ONHIR administers these lands taken  into trust for the Navajo Nation until relocation is complete. In contrast,  Interior administers other land the federal government holds in trust  for Indian tribes, including the Navajo Nation. In addition, the  Settlement Act as amended requires the lands taken into trust for the  Navajo Nation to be used solely for the benefit of Navajo families— known as relocatees—that at the time of the Settlement Act’s  enactment had been residing on lands partitioned to the Hopi.

Leasing of acquired trust land. The Navajo and Hopi Indian  Relocation Amendments of 1988 transferred responsibility for issuing  leases and rights-of-way for housing and related facilities on the New  Lands from Interior to ONHIR. In July 1990, ONHIR issued  procedures for the leasing of New Lands, including homesite and  business leases, in section 1810 of its management manual.  ONHIR’s regulations specify that the agency’s operation is to be  governed by a management manual.

Navajo Rehabilitation Trust Fund. The 1988 amendments to the  Settlement Act established the Navajo Rehabilitation Trust Fund in the  U.S. Treasury. The Trust Fund consists of appropriations made for the  fund, deposits of income from certain trust assets, and any interest or  investment income accrued. The Trust Fund is essentially a loan from  the federal government to the Navajo Nation to be repaid from  revenues derived from leases of the lands and minerals taken into  trust in New Mexico pursuant to the Settlement Act as amended. The  tribe assumed responsibility for managing the Trust Fund pursuant to  the American Indian Trust Fund Management Reform Act of 1994,  according to Interior officials. Under this act, neither Interior, ONHIR,  nor Treasury has a role in managing or overseeing the Trust Fund  once a tribe has assumed responsibility for managing it.

Aside from administering the relocation activities and the lands taken into  trust pursuant to the Settlement Act as amended, ONHIR also operates  the Padres Mesa Demonstration Ranch. The ranch was established in  fiscal year 2009 on the New Lands and teaches sustainable cattle  ranching and modern livestock marketing to the Navajo. According to  ONHIR officials, the ranch is on approximately 60,000 acres of trust land  acquired pursuant to the Settlement Act as amended. The purpose of the  ranch is to teach relocatees methods to maximize income from cattle- raising operations and be good stewards of the land. In addition to  purchasing cattle, ONHIR hired an employee to manage the ranch’s  operations and contract cowboys to work on the ranch. ONHIR sells the  cattle raised on the ranch and uses the proceeds to help pay for ranch  operations. According to ONHIR documents, from fiscal years 2009  through 2016, ONHIR obligated approximately $1.8 million for the ranch’s  operation from a mixture of appropriations and cattle sale revenue. Over  the same period, cattle sales generated over $1.4 million, according to  ONHIR documents.

The Settlement Act established a three-member commission, the Navajo  and Hopi Indian Relocation Commission, to administer the relocation  program. The 1988 amendment abolished the three-member Relocation  Commission and established in its place ONHIR as an independent entity  of the executive branch under the authority of a single Commissioner.  ONHIR has not had a Commissioner since 1994 and has been under the leadership of its Executive Director. As of December 2017, ONHIR said  that they had 31 employees among its three offices in Flagstaff, Sanders,  and Chambers, Arizona.

ONHIR was not designed to be a permanent agency, but a specific  closing date has not been determined. ONHIR previously developed  plans to close out its activities in 2008, according to ONHIR officials, but  has continued to operate. The Settlement Act states that ONHIR will  cease to exist when the President of the United States determines that its  functions have been fully discharged. During a testimony at a  congressional hearing in February 2016, ONHIR’s Executive Director said  that ONHIR was working toward completing its work so the office can  close by the end of fiscal year 2018. ONHIR has developed a draft  transition plan, dated March 2017, that identifies, among other things, four  areas of activity that would need to be transferred to another entity in the  event of its closure in September 2018: (1) appeals and eligibility; (2)  housing; (3) administration of the New Lands; and (4) the Padres Mesa  Demonstration Ranch. In the draft transition plan, ONHIR primarily  identified offices within Interior—including BIA, the Office of Hearings and  Appeals, and the Office of the Solicitor—to take over several key  activities, as well as other entities including the Department of Justice and  the Navajo Nation government. In October 2017, ONHIR supplemented  the draft transition plan with an implementation plan to outline the transfer  of these four areas, among other things.

Other Federal Agencies and Tribal Entities with Responsibilities in Indian Country

BIA is generally responsible for the administration and management of  land held in trust by the United States for Indians and Indian tribes. BIA  provides services to 573 federally recognized tribes and about 1.9 million  individual American Indians and Alaska Natives. BIA’s responsibilities  include regulating grazing on trust land, leasing trust land, and  maintaining roads in Indian country, among other things. BIA administers  the vast majority of land held in trust for Indian tribes and has issued  regulations governing leasing of and grazing on trust land that it  administers, including the Hopi Partitioned Lands and the portions of the  Navajo reservation that are not administered by ONHIR. BIA’s  regulations do not apply to the lands acquired pursuant to the Settlement  Act as amended because under the act, ONHIR is responsible for  administering those lands. BIA also administers a Housing Improvement  Program that funds rehabilitation of housing units.

Other federal agencies, such as HUD and the Indian Health Service,  provide housing assistance and infrastructure in Indian country and tribal  entities, such as the Navajo Tribal Utility Authority, provide services on  the Navajo reservation. HUD, through its Office of Native American  Programs, awards block grants (known as the Indian Housing Block  Grant program) to tribally designated housing entities, such as the Navajo  Housing Authority. These grants can be used to provide housing  assistance for tribal members, such as constructing homes. The Indian  Health Service is authorized to provide drinking water and sanitation  services to Indian homes and communities, among other things. ONHIR  and the Indian Health Service have an interagency agreement to share  the cost of connecting relocation homes on the reservation to water and  sewer lines. Most of the electricity, water, and wastewater on the Navajo  reservation are operated by the Navajo Tribal Utility Authority, an  enterprise of the Navajo Nation government. Similarly, ONHIR and the  Navajo Tribal Utility Authority have an interagency agreement for the  construction of electrical power lines and related services for relocation  homes.

The Navajo Nation government makes decisions about allocation of  resources, including federal grants it receives. The Navajo Nation Council  hosts 24 council delegates representing 110 Navajo Nation chapters. The  chapters are political subdivisions of the Navajo Nation with delegated  authority to address local issues pertaining to the land and health status  of their respective chapter populations. In a March 2014 report, we found  each chapter could have different development priorities and approval  processes for housing programs and services. In its comments on a  draft of this report, ONHIR stated that more than 400 families have moved  to the New Lands, and over 1,200 families have moved to locations  outside the Navajo Nation. The New Lands are part of the Nahata Dziil  Chapter.

We have previously found that American Indians have historically faced  worse housing conditions than other socioeconomic groups. They  disproportionately experience socioeconomic challenges, including high  unemployment and extreme poverty, which affect housing conditions on  Indian reservations and in Indian communities. Overcrowding,  substandard housing, and homelessness are far more common in  American Indian communities. For example, a 2017 Urban Institute report  prepared for HUD found that 5.6 percent of American Indian households  had problems with plumbing, 6.6 percent had problems with the kitchen,  and 12 percent had problems with heating. In comparison, 1.3 percent of  households in the United States had problems with plumbing, 1.7 percent  had problems with the kitchen, and 0.1 percent had problems with  heating.

As we have previously found, common housing challenges in Indian  communities are largely related to remoteness and other geographical  factors, lack of adequate infrastructure, land use regulation, and other  factors. Some remote areas where Indian tribes are located can present  unique logistical challenges, including a lack of buildable land and limited  supply of building materials. In some regions, tribes face challenges  related to a lack of adequate infrastructure, such as roads, water, and  sewer systems. According to Navajo Nation officials, traditionally, tribes  lived a lifestyle that was connected to their traditional and ancestral lands,  with homes and other structures built from natural materials and  constructed in communities with extended families. For example, many of  the Navajo who were on the Hopi Partitioned Lands were self-sufficient  and lived in traditional homes called hogans, which are made of wooden  poles, tree bark, and mud. See figure 3 for an example of a traditional  home.

ONHIR Has Changed Relocation Eligibility Requirements and Application Deadlines for Various Reasons, and Additional Applicants Could Still File Court Appeals

ONHIR Developed an Eligibility Certification Process, and Denied Applicants Can Appeal Their Eligibility Determination

ONHIR’s process for certifying applicants’ eligibility to receive relocation  benefits has generally been consistent over time since ONHIR began  accepting applications. All applicants must apply through ONHIR for  relocation benefits and demonstrate that they meet eligibility criteria,  discussed later in this report. Based on eligibility criteria, in general, a  certifying officer determines whether an applicant is certified or denied. If  an applicant is certified, the applicant becomes an ONHIR client for  relocation. If an applicant is denied, the applicant is eligible to file for  appeals—first, an administrative appeal, then an appeal with the U.S.  District Court for the District of Arizona, if the administrative appeal  upholds the denial decision. Figure 4 illustrates this process.

If an applicant is denied, he or she can obtain assistance from the  Navajo-Hopi Legal Services Program, an entity established in 1983 within  the Navajo Nation’s Department of Justice to assist individual members of  the Navajo and Hopi tribes who were affected by the Settlement Act.  Applicants’ denial letters indicate that the applicant can seek counsel  through this program; however, not all applicants are represented by  counsel for the administrative hearing. As of July 2017, ONHIR had spent  about $1.5 million on legal services and over $1.2 million on the hearing  officer who adjudicates the administrative appeals. In addition, about  $285,000 was spent for an attorney salary at the Navajo-Hopi Legal  Services Program from 2009 through 2011 and, according to ONHIR  officials, about $418,000 was spent on attorney fees for applicants whose  eligibility for relocation benefits was reversed in the U.S. District Court.

As of December 2017, ONHIR had certified more than 3,800 households  since the agency began reviewing its first applicants in 1977. The  certification process on average has taken about 979 days for those who  were certified without a need to file for an appeal and 3,301 days for  those who were certified through the appeals process (that is, those who  had their denied application reversed through the appeals process).  Figure 5 illustrates these time frames.

ONHIR Has Extended Application Periods and Changed Eligibility Requirements for Varying Reasons

For various reasons, ONHIR provided three additional application periods  after the first application period deadline in 1986, which were not included  in the plan ONHIR submitted to Congress. After the original deadline,  ONHIR provided a second application period from April 1997 through  March 2000 after the enactment of a new law, which ratified a formal  agreement under which the Hopi tribe agreed to allow traditional Navajo  residents to remain living on Hopi Partitioned Lands for 75 years. In  conjunction, the formal agreement provided that ONHIR relocate all  eligible Navajo residents on Hopi Partitioned Lands who (1) did not sign  an individual agreement to remain on the land, or (2) signed but then  surrendered their signed individual agreement before the February 2000  deadline.

ONHIR accepted applications again from May 2005 through June 2006  (third application period) based on language in a 2005 Senate bill to  provide a last chance for Navajos living on Hopi Partitioned Lands to  relocate, which passed the Senate but was not enacted, according to  ONHIR officials. ONHIR was not required to reopen its application process, but it chose to do so. Even though ONHIR issued relocation  notices in newspapers and at chapter facilities at the time of the original  application period, ONHIR officials said that the additional application  periods were in recognition that not all Navajo residing on the Hopi  Partitioned Lands had moved, an outcome that was not considered in the  original plans.

ONHIR also accepted applications from February 2008 through  September 2010 (fourth application period) in response to a federal court  decision that concluded that ONHIR had not provided personal notice to a  potentially eligible applicant before July 7, 1986 (the deadline for the initial  application process) to enable him to apply for relocation benefits.  According to ONHIR officials, in consultation with the Department of  Justice in Washington, D.C. and the U.S. Attorney’s Office in Arizona,  ONHIR reopened the process for applications to help ensure that  everyone who might be eligible for benefits was given the opportunity to  apply, rather than litigating a series of similar cases. ONHIR officials said  they worked closely with the Navajo Nation to send out letters of  notification to potential eligible applicants, even though they were not  required to reopen the application process.

These three additional application periods have resulted in more  applicants and time required for ONHIR to review applications. The  numbers of applicants and outcomes across the different application  periods are summarized in table 1. The attempts to prompt more Navajos  to relocate in the second and third application periods resulted in a limited number of applications, 129 and 167 applicants, respectively. However,  ONHIR received nearly 2,300 applicants during the fourth application  period.

Throughout the multiple application periods, applicants demonstrated two  key eligibility criteria: (1) head of household status and (2) residency on  the lands partitioned to the other tribe. However, ONHIR chose and  applied varying eligibility rules related to residency status over the  different application periods.

Original application period. Under the original residency status  criterion, applicants had to demonstrate that they were residents of  the partitioned lands on December 22, 1974 (the date the Settlement  Act was passed) and had not moved there within the previous year.

Second and third application periods. During the second and third  application periods, ONHIR used provisions for late applicants— persons who had not applied for relocation benefits before the original  deadline—that were established in 1986 amendments to ONHIR’s  regulations and that revised the residency status eligibility criterion.  Unlike the original residency criterion, the agency guidance applicable  to applicants during the second and third application period stated that  applicants must demonstrate continuous residence on the partitioned  lands from December 22, 1974, to July 7, 1986 (the original deadline)  and until eligibility determination is rendered. There were exceptions  for demonstrating continuous residency as set out in the agency  guidelines interpreting the regulations, including for those who were  temporarily away for school, prison, medical treatment, and military  service.

Fourth application period. During the fourth application period,  ONHIR decided to apply the original criterion, without the continuous  residency requirement implemented in the guidelines for the second  and third application periods, for all applicants. ONHIR officials said  they made this decision in response to a federal court decision,  discussed previously, that concluded that ONHIR had not provided  personal notice to a potentially eligible applicant before the original  July 1986 deadline; the U.S. District Court District of Arizona applied  the original criterion in this decision.

The applicant has the burden of proof for providing evidence to meet the  eligibility criteria. Demonstrating head of household or residency status  has been difficult for residents for several reasons, according to a Navajo-Hopi Legal Services Program representative and Navajo Nation chapter  officials we interviewed. For example, Navajo is an oral culture that  historically existed mostly on a livestock or cash economy in which  transactions were not documented, making it difficult to document the  source of income or head of household status. In its comments on a draft  of this report, ONHIR stated that the legal residence determination was  complicated because many Navajos performed seasonal work and lived  outside the Hopi Partitioned Lands for extended periods. According to  Navajo Nation officials, oral evidence has not been allowed by the ONHIR  Hearings Officer, and language and cultural barriers have also been  obstacles. Some Navajos have limited English proficiency, although  ONHIR offers translators for Navajo speakers. In its comments on a draft  of this report, ONHIR stated that oral evidence has always been allowed  but has sometimes been found not to be credible. Another unique  characteristic of the Navajo is the use of shared mailboxes at trading  posts—a place in the community for people to meet and receive their  mail—making it difficult to ensure that ONHIR denial letters or other  notifications reach individual applicants. For example, in one appeals  case a court found that applicants who did not personally sign for the  receipt of a denial letter must be notified of the court’s decision to allow  those applicants to file a waiver of the appeal deadline. ONHIR also  stated that it offered administrative appeals to Navajos for whom ONHIR  could not show actual receipt of denial letters.

Although ONHIR Officials Believe That Most Eligible Applicants Have Been Processed, the Potential for Future Court Appeals Remains

While ONHIR officials said that eligibility determination has been  completed, the potential exists for further federal court appeals,  potentially resulting in the need for additional eligibility determinations. As  of January 2018, ONHIR officials said that 24 of the remaining 25  households that were denied eligibility benefits have gone through the  hearing process and are awaiting their decisions, which officials said  should be completed in early 2018. Households whose denials are  upheld will be eligible to file for an appeal with the U.S. District Court for  the District of Arizona. Additionally, any households that have been  denied and are within the 6-year statute of limitations are still eligible to  file for appeals in federal court. Eleven cases were pending in the federal  district courts and four in federal appeals court as of March 2018, and  according to ONHIR officials, at least 240 households that were denied  eligibility benefits and whose decisions were upheld by the hearing officer  (and are within the 6-year statute of limitation) could potentially file for  appeals in federal court before the end of fiscal year 2018.

Any additional court appeals could result in the need for additional  eligibility determinations in the future. For example, a federal court  recently remanded a case to ONHIR to review the applicant’s income  information and reevaluate the eligibility determination. According to  ONHIR officials, they are taking steps to review the applicant’s case file,  investigate the evidence of the applicant’s income to demonstrate the  head of household status, and share the findings with the applicant’s  attorney. ONHIR officials stated that due to the unique situation of each  applicant, they review the information in the applicant’s case file to  comply with the court’s order on eligibility determination.

ONHIR Has Nearly Completed Home Building but Provided Limited Contractor Oversight, and Outstanding Warranties Remain in Effect

ONHIR Developed Policies and Procedures for the Home-Building Process

ONHIR’s policies and procedures are intended to provide certified  applicants who are eligible for relocation benefits with decent, safe, and  sanitary homes, as mandated in the Settlement Act. For example,  ONHIR’s management manual includes policies that require ONHIR to  provide counseling on the home-building process and home maintenance  training for relocatees. Figure 6 shows an example of a relocation home.  Prior to moving to relocation homes, many families lived in one-room  houses that they constructed themselves with no basic infrastructure,  such as electricity, water, or plumbing facilities, and some families were  unfamiliar with the features of a modern home. Families lived a spiritual  and religious lifestyle that was connected to their traditional culture and  ancestral lands, with homes constructed in communities with extended  families.

ONHIR’s management manual also includes policies that require  employees to work with clients on the home acquisition process starting  from the time clients are certified and continue until 2 years after the client  has been relocated, including assisting clients with finding contractors,  signing home-building contracts, understanding home maintenance, and  requesting warranty repairs. ONHIR works with families after they have  moved into their relocation home by providing assistance with warranty  issues; assistance in adjusting to their new community; and referrals to  agencies in the new community that provide health care, supplemental  nutrition, financial assistance, behavioral health, employment, and other  social services. Relocation homes are the property of the client, and  ONHIR has no responsibility for relocation homes after a 2-year warranty  period on each home expires. ONHIR wrote a standard template of a  contract that clients and contractors must sign, but ONHIR is not a  signatory of the home-building contract. However, ONHIR is a signatory  to the 2-year home warranty contract, along with the client and the  contractor. Additional policies and procedures required by ONHIR’s  management manual are summarized in table 2.

ONHIR’s management manual also includes policies for overseeing  contractor performance. ONHIR officials provide clients with a list of home-building contractors, but clients may choose any licensed  contractor in the jurisdiction where the home is built. ONHIR officials  estimate that more than 95 percent of relocation homes have been built  by contractors from its list. ONHIR officials said that contractors on the list  ONHIR provides to clients must demonstrate good standing and must be  licensed by the state of Arizona, as stated in its policy. In addition,  ONHIR’s policy states that ONHIR may take action against contractors  whose work results in an excessive number of warranty complaints.

Most Building Is Complete, but Weaknesses in Oversight Allowed Poor Performing Contractors to Build Homes

The majority of ONHIR’s home-building work is now complete. As of  December 2017, according to officials, ONHIR had relocated 3,687  families into new homes, and ONHIR officials said they expect  construction on the remaining 20 homes to be completed by September  2018.

Although most home-building activities are complete, we found that  ONHIR has historically allowed contractors with a history of performance  issues to build relocation homes. For example, ONHIR provided us with  a report generated from its contractor performance database that shows a  contractor who had failed 42 percent of final inspections during a 11-year  period—from January 2006 through September 2017—continued to  receive home-building contracts. Similarly, we identified homes with  multiple warranty complaints in ONHIR’s warranty database. Specifically,  one home in the warranty file database had 17 warranty defect  complaints attributed to the contractor. ONHIR officials said that they do  not track complaints by contractor in a database nor do they have a defined number of complaints for removing contractors. ONHIR officials  said that they have not removed a contractor involuntarily from their list  since the 1990s.

ONHIR officials explained that these contractors continued building  homes because it is difficult to find contractors who want to work on the  reservation due to the isolated nature of homesites. Moreover, in recent  years they said they did not track complaints by contractor because they  would be aware of complaints about a contractor due to the smaller  number of relocation homes that have been built. As a result, according to  ONHIR officials, they have not needed to take actions to remove  contractors from their list since the 1990s or to generate reports on  contractor performance. In addition, ONHIR officials said some warranty  complaints were trivial, such as peeling paint or visible carpet seams, and  thus terminating contractors for such issues was unnecessary. ONHIR  officials also noted that all homes eventually passed their final inspections  and any failed inspection items were corrected and reinspected before  contractors received payments.

Some Tribal Government Officials and Relocatees Said ONHIR Has Not Discharged Its Responsibilities because of Construction, Societal, and Infrastructure Concerns

Although ONHIR said it has nearly completed its relocation obligations,  some relocatees, the Hopi tribe, and Navajo Nation government officials  said that it has not completed its work. Specifically, Navajo Nation  officials and some relocatees said the office should remain open to  address various concerns with relocation homes and the societal effects  of relocation. Moreover, according to some relocatees and Navajo Nation  government officials, these concerns include homes that were built with  faulty materials and with unfinished infrastructure, such as electricity. As  previously mentioned, ONHIR has no responsibility over relocation homes  after the 2-year warranty period on each home expires. However, an  official from the Navajo-Hopi Legal Services Program said that  homeowners had concerns with their homes beyond the 2-year warranty  period. While ONHIR has attributed such issues to a lack of homeowner  maintenance, relocatees have attributed these issues to ONHIR’s lack of  oversight of the home-building process. Concerns some relocatees and  tribal government officials described include the following:  Construction. Navajo Nation officials from three separate chapters told  us that relocation homes were not built properly. The President of the  Navajo Nation said that homes frequently have construction issues  related to cheap materials or poor workmanship, while another official  said that ONHIR does not properly oversee contractors. Another official  told us that the windows fall out of homes when it gets too windy. One  official said that some families have left their relocation homes behind  because of structural issues. Hopi tribe officials said relocatees from their  tribe were provided the cheapest homes available and that the conditions  of mobile homes are substandard. See figure 7 for examples of homes  with cracked foundations and broken windows.

ONHIR officials said they inspect all complaints on relocation homes,  even after the warranty period has expired. If the investigation reveals an  issue that is a result of a construction defect, ONHIR officials said they  will fix the issue, whereas they will not fix issues they deem are the result  of poor homeowner maintenance.

Soil settling. Navajo Nation officials from two chapters told us that  ONHIR did not conduct soil tests on homesites and others said that some  homes have experienced foundation issues. For example, one relocatee  said her relocation home has cracks in the walls and the floors. ONHIR  helps clients to apply for homesite leases, and according to ONHIR  officials, they assigned engineering technicians to conduct feasibility  studies to assess the condition of the soil for all on-reservation homesites,  as required by ONHIR policy. However, ONHIR officials also  acknowledged that expansion and contraction of soil over time in Arizona  is common and that shifting soil can lead to cracks in the foundation or  walls of homes. As reported by the Interior Inspector General in 2016, 5  relocatee homes on the Navajo reservation experienced cracks and other  visible signs of damage due to soil settling and have consequently been  replaced by ONHIR. ONHIR officials acknowledged that they have  demolished and replaced an additional 9 homes due to foundation issues  related to soil expansion and other issues, such as leaks in utility lines  and septic tanks. For the homes experiencing foundation issues outside  of the 14 homes ONHIR has replaced, ONHIR attributed continued soil  collapse to homeowners not maintaining the proper degree of slope  around their home to allow for drainage. In addition, they said that homes  may now be occupied by three generations of families. According to a  2016 Interior Inspector General report, ONHIR officials said this leads to  increased water use inside the homes which, in their opinion, exacerbates  the soil-settling issue.

Societal effects. Relocated families expressed that relocation has  contributed to societal ills such as depression; alcoholism; drug abuse;  and suicide due to substandard living conditions and homesites away  from their family and previous sources of livelihood. The Navajo Nation  stated that relocatees experienced hardships adjusting to a new way of  life and felt a loss of connection with their culture moving away from their  ancestral lands and traditional way of life. According to a report issued by  the Navajo Nation Human Rights Commission, relocatees were promised  by the federal government, the Hopi Tribe, and the Navajo Nation that  relocation would offer a better life that did not materialize. ONHIR  officials noted that both the Navajo Nation and the Hopi Tribe have  requested extended counseling beyond the warranty period; however,  according to the March 2017 transition plan, ONHIR does not believe  providing it is within their statutory authority.

Connections to utility infrastructure. According to Navajo Nation  officials, some homes are not properly connected to utility infrastructure,  such as electricity and water. For example, they stated that a number of  relocation homes in the Navajo area do not have electricity. In its  comments on a draft of this report, ONHIR stated that some relocatees  chose to relocate to remote areas and signed a form to affirm that they  wanted solar or cistern rather than grid utilities. A representative from the  Hopi Tribe told us that in one home, contractors installed plumbing  systems that were subsequently covered in concrete, which made repairs  difficult. Another chapter official said that a septic tank in one relocation  home continually overflowed because the tank was smaller than the  specifications. ONHIR officials said all homes are built to code at the time  of construction and have proper connections to infrastructure in terms of  water and electricity. They said they verify that homes pass necessary  inspections, including framing; mechanical; plumbing; and insulation, prior  to disbursing payments to the contractors.

Community infrastructure. Some Navajo Nation chapter members and  ONHIR officials disagree as to whether ONHIR had an obligation to  provide additional community infrastructure under the Settlement Act.  Some chapter members said that ONHIR should not close because it has  not met its responsibilities to provide infrastructure projects, such as  paved roads and running water. The Navajo Nation Human Rights  Commission report states that relocatees were told they would be  provided with running water and the ability to raise livestock, among other  things. Provisions in the Settlement Act directed ONHIR to create a  report with a plan to ensure that infrastructure such as water, sewers, and  roads would be available at their relocation sites. ONHIR published a  report to meet the provision in 1981. This provision was repealed in  November 1988. ONHIR officials acknowledged that relocatees have  expressed the need for additional infrastructure, but said it is not within  ONHIR’s statutory responsibility to provide it. The Settlement Act as  amended does not require ONHIR to provide infrastructure for the New  Lands.

Warranty Commitments on Homes Already Built and Homes for Newly Eligible Applicants Are Activities That May Continue into the Future

Although ONHIR’s home building for certified applicants is nearly  complete, responsibilities remain for existing homes under warranty and  any additional homes built for newly certified applicants. As previously  discussed, relocation homes are under warranty for 2 years, starting at  the time when the house passes final inspection. During this 2-year  period, ONHIR is responsible for helping homeowners, who are located  on-reservation, request warranty repairs. After September 2018, 52  relocation homes will remain under the 2-year warranty period, according  to ONHIR officials. In addition, as previously discussed, ONHIR officials  told us that at least 240 denied applicants could still file for appeals in the  federal court and become eligible for relocation benefits, which would  necessitate the construction of additional homes. A 2-year warranty  period would then begin after these houses pass final inspection.

Executive Branch or Congressional Action May Be Needed to Terminate ONHIR and Effectively Transfer Remaining Relocation Activities

ONHIR Has Not Yet Requested a Presidential Determination for Closure

As previously mentioned, ONHIR was not designed to be a permanent  agency. The Settlement Act states that ONHIR will cease to exist when  the President of the United States determines that its functions have been  fully discharged. Although ONHIR officials have said they are working  toward completing their tasks so the office can close by the end of fiscal  year 2018, they acknowledge that not all activities will be complete by that  time. Federal internal control standards state that management should  externally communicate the necessary quality information to achieve the  entity’s objectives. For example, information necessary to communicate  to an agency’s oversight body includes significant matters related to risks  or changes. However, according to ONHIR officials, they have not  specifically communicated with the President about the determination on  whether the agency has fully discharged its functions and whether the  office should close.

Instead of directly requesting that the President make a determination for  ONHIR to cease operations, ONHIR has been making plans to close  through other means and transition remaining activities. Specifically,  ONHIR officials told us that they anticipate that closure of the office will  need to occur through a legislative change or through the termination of  program funds through the budget and appropriations process. As  stated in the March 2017 transition plan, the plan was developed in  response to direction from the Office of Management and Budget and the  Senate and House Appropriations Committees that ONHIR should wind  down its activities. Further, in its comments on a draft of this report,  ONHIR stated that it has had regular communications with executive and  legislative branch offices on completing its work and closing. However,  neither the draft transition plan nor the October 2017 implementation plan  indicates how ONHIR would request a determination from the President  that ONHIR has fully discharged its responsibilities and can be  terminated. Without such a presidential determination, ONHIR has not  met the explicit requirements for being permitted to cease operation  under the Settlement Act.

ONHIR Has Not Developed Complete Information on Its Remaining Activities

Although ONHIR officials anticipate that the agency will close by  September 2018, they have not ensured that complete information related  to its relocation activities can be made available to other successor  agencies. This lack of planning and information could hamper the efforts  of a successor agency or agencies to effectively take over these  activities.

Eligibility and appeals. As previously mentioned, there is the possibility  for 240 or more denied households to appeal their eligibility decision in  the future, and the paper case files and client database contain important  information regarding eligibility for the continuation of ONHIR’s relocation  activities. Specifically, paper case files contain comprehensive  information on each applicant from the time he or she applied for  relocation benefits, including documents submitted to prove head of  household or residency status for eligibility determination. In addition, the  client database tracks decisions and dates related to the eligibility  determination process and is necessary to identify applicants’ status.

In its March 2017 transition plan and October 2017 implementation plan,  ONHIR has not developed detailed information on how it plans to identify  and prepare information in the paper case files and client database for the  240 or more denied households that could file for federal appeals. ONHIR  officials said that they have not prepared eligibility determination and  appeals information for transfer because they expect eligibility  determinations to be completed by the time the office plans to close. In  the event that such transfers are needed, they said the transfer of these  records will be through an agreement between ONHIR, the National  Archives and Records Administration, and BIA. However, such an  agreement has not yet been developed, and discussions on the transfer  of records—such as during monthly transition meetings—are high-level  and mostly unrelated to information needed for potential eligibility  determination responsibilities. In addition, officials said that information  about appeals filed in the future in the federal court could be obtained  from an online federal database.

Federal internal control standards state that management should use  quality information to achieve the entity’s objectives. Additionally, the  standards state that management should identify, analyze, and respond  to risks related to achieving the defined objectives. If ONHIR does not  take the steps to ensure that complete information for the 240 or more  denied households eligible to appeal their eligibility decision is available  to a successor agency, a successor agency could face difficulty in  administering eligibility determinations and remaining appeals in the  future.

Warranties and contractor performance. As previously discussed,  ONHIR’s remaining home-building responsibilities include managing the  52 remaining 2-year warranty agreements and assisting in the  construction of homes for any newly certified applicants. To fulfill these  responsibilities, complete information on home warranties and contractor  performance is critical. ONHIR’s warranty database has data fields to  track relevant information on concerns reported to ONHIR—including  warranty expiration date, date warranty complaint received, type of  complaint (possible warranty defect or homeowner maintenance issue).  However, the database is incomplete. For example, our review found that  about 98 percent of warranty complaints in the warranty database have  no record of the date of warranty repairs. Moreover, ONHIR does not list  the names of contractors in its database. ONHIR officials said the  information is not recorded because they rely on memory and paper files  to supplement the information in the warranty database about contractors.  ONHIR officials also said they do not regularly use the database to  monitor contractors’ performance because it became too cumbersome to  track electronically. However, in its comments on a draft of this report,  ONHIR stated that it has the capability in its electronic data system to  search for warranty complaints.

In its October 2017 implementation plan, ONHIR suggested BIA’s  contract office as a potential successor agency for administering the  remaining warranty provisions in the event that it closes before these  home-building responsibilities are fully discharged. With regard to any  newly certified applicants deemed eligible for benefits through the  appeals process, the October 2017 implementation plan suggests that  these applicants be given the cash equivalent of a relocation home  instead of building new homes. However, the Settlement Act provides for  no authority to issue cash payments and Congress has not otherwise  authorized cash payments, and any future home-building activities may  need to be assumed by a successor agency. Because OHNIR does not  have complete information on existing warranties and contractor  performance, another successor agency could be hampered in its ability  to assume ONHIR’s remaining home-building responsibilities. Federal  internal control standards state that management should identify, analyze,  and respond to risks related to achieving the defined objectives.  Additionally, the standards state that management should use quality  information to achieve the entity’s objectives. Without complete warranty  and contractor information, a successor agency may have difficulty  understanding what warranty issues have already been addressed or  have difficulty overseeing contractors to help ensure that newly certified  applicants secure decent, safe, and sanitary relocation homes.

The Settlement Act Does Not Include Provisions for Transferring Remaining Relocation Activities to Successor Agencies

In its transition and implementation plans, ONHIR has identified a number  of potential successor agencies that could be selected to take over  ONHIR’s remaining activities in different areas. However, officials at these  agencies said they currently do not have the authority to undertake these  activities under the Settlement Act.

Appeals and eligibility. Should ONHIR close before the 6-year statute of  limitations has expired for all denied applicants, another agency or  agencies would need statutory authority for coordinating eligibility  determinations and home-building for any newly certified applicants. As  previously discussed, at least 240 households that had been denied  relocation benefits as of September 2017 may choose to contest their  denial in federal court, according to ONHIR officials. ONHIR’s March  2017 transition plan states that the Department of Justice will continue to  represent the government on behalf of ONHIR in any federal court  hearings, and ONHIR has also identified Interior’s Office of Hearing and  Appeals to hear any matter remanded to the agency by the federal court  for a further hearing.

Home-building. Another entity would need authority to assume  remaining home-building activities. Alternatively, ONHIR’s October 2017  implementation plan suggests that newly certified applicants be given the  cash equivalent of a relocation home. However, as previously  mentioned, cash payments are not currently authorized under the  Settlement Act and legislation would be needed to provide such  payments. Moreover, Navajo Nation officials said they do not approve of  using cash payments in place of providing relocatees with a home. In  November 2017, ONHIR officials said that, as an alternative to cash  payments, they discussed with the Navajo Nation the potential for the  Navajo Housing Authority—a recipient of the HUD Indian Housing Block  Grant Program—to administer remaining home-building activities. They  did not make a decision, however, because the Navajo Nation wanted to  inquire about the capacity of the Navajo Housing Authority to assume  these activities. Although ONHIR has not identified HUD as an agency  with a potential role, such as assuming or providing oversight of Navajo  Housing Authority administration of remaining home-building activities,  HUD officials told us that HUD would not be able to assume ONHIR  housing functions. This is due to the nature of its block grant program,  restricted oversight mechanisms, and limited capacity in terms of staff  resources and technical skills to supervise construction. In addition,  HUD officials said that their current oversight is limited to reviewing a  sample of Indian Housing Block Grant program grantees’ policies,  procedures, and implementation of procurement and environmental  regulations, which may not be consistent with the oversight or authority  needed should the Navajo Housing Authority administer the remaining  ONHIR home-building activities.

Warranties. Should ONHIR close before 2-year home warranties expire  on the remaining homes constructed under ONHIR’s oversight, another  agency would need statutory authority to oversee these home warranties.  As previously mentioned, ONHIR is currently a signatory to the warranty  along with the contractor and the client, and more than 52 homes will  have warranties in effect after ONHIR’s proposed closure date of  September 2018, according to ONHIR officials. In its draft transition plan,  ONHIR suggests transferring warranty-related activities to the BIA  Contract Office. However, according to BIA officials, BIA does not  currently have the authority to conduct these activities, and BIA is not  equipped to implement warranties.

Post-move counseling. Another agency would need statutory authority  to provide post-move counseling to the 52 clients who will remain under  warranty after ONHIR’s proposed closure date of September 2018.  Currently, ONHIR provides relocatees with post-move counseling during  the 2-year warranty period. According to ONHIR’s management manual,  the purpose of post-move counseling is to assist families in adjusting to  their new house, connect families to local service agencies, and gain  understanding about the client’s familial and employment situation.  ONHIR’s March 2017 transition plan suggested that the post-move  counseling program could be transitioned to BIA. However, BIA officials  said BIA currently does not have the authority to conduct these  activities. In November 2017, ONHIR officials said the program would  discontinue for any newly certified applicants if cash settlements for  relocation benefits were authorized, but they did not address what would  happen to the 52 clients that will remain within the 2-year warranty period  after September 2018.

The Settlement Act does not include provisions on the transfer of  activities after ONHIR’s closure, and as described above several activities  will remain past ONHIR’s planned closure date. Without legal direction to  authorize the transfer of ONHIR’s remaining activities to other federal  entities, the future of these activities remains uncertain and may  adversely affect those in the process of relocating.

ONHIR Has Not Always Managed Navajo Trust Land in Accordance with Its Policies

ONHIR Has Entered Into Lease and Other Agreements for Navajo Trust Land but Has Not Properly Managed Them

ONHIR is statutorily required to administer the land taken into trust for the  Navajo Nation pursuant to the Settlement Act as amended until relocation  is complete. The act also authorizes ONHIR to issue leases for housing  and other related facilities on the New Lands. ONHIR’s management  manual, which governs its operations, states that it will grant appropriate  requests for leases of the New Lands—both developed and undeveloped  land—for homesites, businesses, and community services facilities,  among other things. According to the manual, entities that want to lease  property in the New Lands are to submit an application form and  supporting documents to ONHIR. Since the 1980s, ONHIR has received  applications from and granted leases to various businesses, the New  Lands chapter, and other tribal entities. The leases give the lessee  permission to occupy and use the land, including, in the case of  developed land, any structures on it, for terms varying from 2 to 99 years.  In addition, ONHIR has entered into or administered surface use  agreements for the New Lands.

Unlike ONHIR’s eligibility determinations and home-building activities,  which were intended to have a finite end, the Navajo trust land will need  to be managed in perpetuity so long as it is held in trust by the federal  government. ONHIR’s draft transition and implementation plans identify BIA and the Navajo Nation as entities that could assume responsibility for  managing the trust land once ONHIR terminates. However, ONHIR does  not have the authority to transition management of the trust land it  administers to another entity. Moreover, we identified a number of  concerns with how ONHIR has maintained information or established  controls for proper administration of leases and agreements for the New  Lands, which could further hinder an eventual transition of these  responsibilities to another entity.

ONHIR Does Not Have a Complete Inventory of Leased or Occupied Land

ONHIR does not have a comprehensive inventory of leased and vacant  properties on or surface use and other agreements for Navajo trust land it  administers. ONHIR officials identified 23 properties on trust land they  administer through documentation and in interviews. Of these  23 properties, ONHIR possessed the current lease for 15 properties.  ONHIR officials also identified 5 surface use agreements for Navajo trust  land they administer, 3 of which are listed as active on their transition  website. ONHIR officials said they have not maintained a comprehensive  inventory because they had a long tenure with the agency and are  cognizant of what properties and agreements exist.

Federal internal control standards state that management should design  control activities to achieve objectives and respond to risk. For example,  as part of control activities, management clearly documents all  transactions and other significant events in a manner that allows the  documentation to be readily available for examination. Without developing  a comprehensive inventory of leased and vacant properties on Navajo  trust land that ONHIR administers, the entity which assumes  responsibility for leasing the land will not have the information it needs to  carry out that responsibility.

As of December 2017, ONHIR Does Not Have Written Leases for Some Occupied Lands

ONHIR has occupied or has allowed others to occupy Navajo trust land it  administers without a written lease or agreement, which is inconsistent  with ONHIR’s management manual. Specifically, of the 23 existing  properties on trust land ONHIR officials identified, 7 were in use as of  December 2017 but did not have a written lease, as required, for various  reasons:

ONHIR issued a permit for the use of one property in 2000 that was  valid through 2005 and then, according to ONHIR officials, had an oral  agreement to indefinitely extend the permit. The officials also said  they had an oral agreement to lease another property.

ONHIR itself occupies and uses 4 properties without leases, including  a headquarters and New Lands office and two structures on the  Padres Mesa Demonstration Ranch, discussed below.

A lease for 1 property expired in 2011 but it has not been renewed  and does not include an option to extend the lease beyond its initial  termination date. The Navajo Nation is currently working to renew the  lease because it has assumed responsibility from BIA for leasing its  trust land. In its comments on a draft of this report, ONHIR stated  that in the meantime the federal agency using the property has  continued to pay rent to ONHIR while a new lease is negotiated.

ONHIR officials said some of these properties do not have written leases  because the agency deferred to the tribe’s wishes. However, not having  written leases for these properties on trust land is inconsistent with  ONHIR’s management manual, which calls for written leases and land  use approvals for the New Lands. Without written leases for these  properties, the entity which assumes responsibility for leasing the Navajo  land that ONHIR has been administering will not know the status of these  properties because they are being used without written leases.

For Most of the Leases, ONHIR Is the Lessor Rather than the Tribe and No Successor Has Been Identified

There are at least two parties to every lease of land, the lessor and the  lessee. The lessor is generally the landowner, and the lessee is the party  to whom the lease grants permission to use or occupy the land. However,  the New Lands are held in trust by the federal government for the Navajo  Nation, and federal law provides that trust lands may be leased by the  Indian owners with the approval of the Secretary of the Interior. ONHIR is  the lessor for 20 of the 22 leases that we reviewed. ONHIR officials said  the leases were done this way because its management manual called  for ONHIR to serve as the lessor. However, ONHIR changed its  management manual in 2011 to say the Navajo Nation should serve as  the lessor for business; commercial; industrial; and mineral leases unless  the tribe requests ONHIR to be the lessor. ONHIR did not revise the  leases in effect in 2011 to reflect this change. After the 2011 changes to  the management manual, ONHIR became the lessor for the one business  lease entered into for the New Lands. ONHIR did not provide  documentation that the tribe requested ONHIR to serve as lessor for this  lease. Navajo Nation officials said ONHIR informs the tribe about leases  out of courtesy and does not seek the tribe’s permission to lease Navajo  trust land. Moreover, the Navajo Nation Department of Justice has taken  the position that ONHIR does not have the authority to lease Navajo trust  land.

In addition to these leases, ONHIR identified 5 surface use agreements  for Navajo trust land it administers. In 3 of 5 of these agreements,  ONHIR, not the tribe, is the party granting the right to access and use the  Navajo trust land. However, ONHIR is not the landowner and this is also  inconsistent with BIA’s leasing practices.

In addition, of the current leases of New Lands with ONHIR as the lessor,  2 leases specify what is to happen should ONHIR close. None of the  surface use agreements specify what is to happen should ONHIR close.  ONHIR officials said that they have not updated or amended the other  leases and agreements because there is no need to do so yet. ONHIR’s  transition and implementation plans also do not identify which leases and  agreements need to be amended or assigned upon ONHIR’s closure. In  its March 2017 transition plan, ONHIR identified BIA as the successor  agency for managing leases on the Navajo trust land ONHIR is currently  administering. However, this is inconsistent with the Navajo Nation’s  assumption of responsibility for leasing its trust land from BIA.

Federal internal control standards state that management should design  control activities to achieve objectives and respond to risk, for example, to  ensure that transactions such as leases are properly executed. In  addition, federal internal control standards state that management should  design control activities to identify, analyze, and respond to change,  including changes to the entity’s activities. Without ONHIR identifying  which leases and other agreements need to be amended or assigned  because they identify ONHIR as the lessor, any entity that assumes  responsibility for leasing these trust lands in the event that OHNIR closes  will not be able to effectively manage these properties.

ONHIR Has Collected and Retained Revenues from These Lands

Half of the 22 leases we reviewed required the lessee to pay a non- nominal amount (i.e., more than $1 a year) of annual rent to ONHIR. In  addition, annual payments for 3 of 5 surface use agreements are made to  ONHIR, according to ONHIR officials. According to agency documents,  since the 1990s, ONHIR has collected and retained over $1 million in  revenue from these leases of and surface use agreements for Navajo  trust land it administers. ONHIR deposits the lease revenue into ONHIR’s  Treasury account. ONHIR officials said they have used the revenue to  aid relocation efforts by renovating facilities located on Navajo trust land  ONHIR administers, providing grants to Navajo chapters, and funding  other activities to benefit the relocatees. However, the Settlement Act as  amended does not state that ONHIR may collect, retain, and use revenue  from leases of Navajo trust land, and ONHIR officials have not identified  another statute authorizing the agency to do so. ONHIR officials said the  agency retained this revenue to ensure that all net revenues from these  trust lands are used exclusively for the benefit of relocatees because the  Settlement Act as amended requires the trust lands be administered for  the benefit of relocatees. However, this statutory provision does not  authorize ONHIR to receive lease revenues.

ONHIR Is Operating the Padres Mesa Demonstration Ranch without a Land Use Agreement and Grazing Permit

ONHIR is operating the Padres Mesa Demonstration ranch on Navajo  trust land, but has not leased the land, which is inconsistent with ONHIR’s  management manual. As mentioned previously, ONHIR’s management  manual calls for written leases for and land use approvals of the New  Lands. According to ONHIR officials, there is no requirement for them to  have a lease or obtain permission from the tribe to occupy the structures  on the ranch, including a range office, or operate a ranch on Navajo trust  land.

In addition, ONHIR’s grazing of the ranch’s cattle on the New Lands  without a grazing permit is inconsistent with ONHIR’s regulations.  ONHIR’s grazing regulations require a grazing permit for all livestock  grazed on the New Lands, but ONHIR does not have a grazing permit for  the cattle on the ranch because ONHIR officials decided it was not  necessary to issue a permit to itself. Moreover, ONHIR is not eligible for a  grazing permit under its regulations because it is a federal entity and only  enrolled Navajo tribal members are eligible for permits. We are examining  ONHIR’s use of appropriations to establish and operate a cattle ranch in a  separate legal opinion.

ONHIR has identified two different entities to assume operation of the  ranch in the event of its closure. ONHIR’s March 2017 transition plan  identified BIA as the entity to oversee the continued operation of the  Padres Mesa Demonstration Ranch. However, BIA officials said the  agency does not have the statutory authority to operate a for-profit ranch.  Moreover, these officials said they are not interested in doing so because  it is a role for the tribe and would be a conflict of interest for the agency  since BIA regulates grazing on trust land. In addition, ONHIR’s October  2017 implementation plan indicates that the Navajo Nation would assume  responsibility for the ranch after ONHIR’s closure and after negotiating an  agreement with the chapter. Because the ranch is located on Navajo  Nation trust land, the tribe could choose to continue its operation after  ONHIR closes. Navajo officials said they are interested in operating the  ranch but they have not determined how the for-profit ranch would be  managed if the tribe also regulated grazing on the New Lands, which it is  also interested in doing.

Congressional Action May also Be Needed to Address Other Provisions in the Settlement Act as Amended

Congressional action may also be needed to address other provisions in  the Settlement Act as amended regarding (1) the use of the acquired trust  lands, (2) trust acquisition, and (3) the Navajo Rehabilitation Trust Fund.

Use of Acquired Trust Lands to Benefit Relocatees and Regulation of Grazing

Trust land is generally held in trust for the benefit of an Indian tribe or  individual Indian. However, the Settlement Act as amended requires the  land taken into trust pursuant to the Settlement Act, including the New  Lands, to be used solely for the benefit of relocatees. The New Lands  chapter government wants this restriction to continue if and when ONHIR  terminates. However, without congressional action to continue this  restriction, it is likely the trust lands acquired in Arizona pursuant to the  Settlement Act as amended would be administered for the benefit of the  tribe as a whole rather than to solely benefit the relocatees.

In addition, as part of its administration of the New Lands, ONHIR’s  regulations governing grazing of livestock on the New Lands are different  from how grazing is regulated by BIA for other Indian trust land. The  purpose of ONHIR’s regulations was to aid in the resettlement of Navajo  Indians residing on Hopi Partitioned Lands to the New Lands and to  preserve the New Lands’ forage, land, and water resources. Under these  regulations, grazing permit holders must be permanent residents of the  New Lands. In contrast, under BIA’s regulations that apply to the portions  of the Navajo reservation not under ONHIR’s administration, any Navajo  tribal member is eligible for a grazing permit. Navajo Nation and chapter  officials told us they would like ONHIR’s grazing regulations to continue if  ONHIR were to close.

ONHIR’s implementation plan identifies BIA as the entity to regulate  grazing on the New Lands after ONHIR closes. ONHIR’s implementation  plan also says BIA officials have agreed to regulate grazing on the New  Lands in accordance with ONHIR’s regulations. However, BIA officials  said Interior currently does not have the authority to regulate grazing on  the New Lands, so they cannot make any decisions on how to do so. In  addition, Navajo Nation officials said they want to assume responsibility  for regulating grazing on the New Lands and prefer to have ONHIR’s  grazing regulations, which are stricter than BIA’s, remain in place at least  at the Padres Mesa Demonstration Ranch. Should ONHIR close,  Congress will need to consider addressing how grazing on the New  Lands will be regulated after ONHIR’s closure.

Mandatory Trust Acquisition Provision for the Navajo Nation

The Settlement Act as amended provides for two categories of land to be  taken into trust for the Navajo Nation: (1) up to 250,000 acres of BLM  land in Arizona and New Mexico that is transferred to the tribe (category  1) and (2) up to 150,000 acres of land held in fee by the Navajo Nation  (category 2). No more than 35,000 of the 400,000 acres selected could  be in New Mexico. The tribe was authorized to select the lands in both  categories for 3 years after the 1980 amendments’ enactment, and then  ONHIR was authorized to select the lands after consultation with the  Navajo Nation. Once the lands are selected, the Settlement Act as  amended provides for the mandatory acquisition of these selected lands  as land held in trust by the federal government for the Navajo Nation.  Mandatory trust acquisitions are not subject to BIA’s regulatory  requirements for discretionary trust acquisitions under the Indian  Reorganization Act.

As of December 2017, about 12,000 of the 400,000 acres had yet to be  selected, and about 24,000 acres that had been selected had yet to be  taken into trust (see table 3).

The over 11,000 acres of category 1 land selected but not yet taken into  trust are located in New Mexico. These lands have not been taken into  trust because of unprocessed coal preference right lease applications.

Congress will need to determine whether the Navajo Nation should be  able to select the entire 400,000 acres and have that land taken into trust  as a mandatory trust acquisition, as provided for in the Settlement Act as  amended. Without congressional action, any additional land the tribe  acquired and wanted taken into trust would be a discretionary trust  acquisition subject to BIA’s regulations.

Furthermore, the Navajo Nation has raised two additional issues  regarding the trust acquisition provision that Congress may also need to  address.

Deselection and reselection. The Navajo Nation would like to make  changes to some of the land it has selected and make new selections,  but the Settlement Act as amended does not authorize deselection of  land the tribe previously selected to be taken into trust pursuant to the  act’s mandatory trust acquisition provision. Deselection had not  occurred as of January 2018, but bills have been introduced in  Congress that would cancel some of the tribe’s land selections and  authorize the tribe to replace those with new selections. Without  statutory authorization, the Navajo Nation cannot deselect these lands  and make new selections to reach the 400,000 acres provided for in  the Settlement Act as amended.

Trust status versus restricted fee status. The Navajo Nation has  indicated that it is interested in having a statutory option for the  selected land to be held in restricted fee status rather than held in  trust. In 2016, a law was enacted that mandated a trust acquisition  for certain parcels of land unassociated with the Settlement Act unless  the Navajo Nation elected to have the land conveyed to it in restricted  fee status. The President of the Navajo Nation has testified before  Congress that the tribe is interested in having this option in future  legislation involving the Settlement Act. Without statutory  authorization, the land not yet selected pursuant to the Settlement Act  as amended could not be held in restricted fee status if the tribe so  chooses. However, without congressional action this cannot be  changed.

Established in the U.S. Treasury by the 1988 amendments to the  Settlement Act, the Navajo Rehabilitation Trust Fund is essentially a loan  from the federal government to the Navajo Nation to be paid back from  revenues derived from leases of the lands and minerals taken into trust in  New Mexico pursuant to the Settlement Act as amended. From fiscal  years 1990 through 1995, Congress appropriated approximately $16  million to the Trust Fund. The Settlement Act as amended requires all  net income derived by the Navajo Nation from the surface and mineral  estates of lands in New Mexico taken into trust pursuant to the act to be  deposited into the Trust Fund. Moreover, the net income is required to be  used to reimburse the general fund of the Treasury for the amounts  originally appropriated to the Trust Fund. According to leasing and other  documents from the Navajo Nation and BLM, several of these parcels  have been generating modest income since at least the 1990s.  Specifically, BLM identified several parcels of the New Mexico trust land  with grazing allotments or oil and gas leases. In addition to these sources  of revenue, the tribe entered into an agreement for use of a parcel of the  New Mexico trust land that requires, beginning in 2015, annual rent  payments of $25,000 to be paid to the Trust Fund.

The Navajo Nation has not reimbursed the general fund of the Treasury  for the approximately $16 million appropriated to the fund, contrary to the  statutory requirement to do so. While the Navajo Nation acknowledges its  legal obligation to repay the Treasury, the tribe is seeking loan  forgiveness because the Trust Fund’s purpose was to aid the relocatees  and the tribe views such aid as an unfulfilled federal obligation, according  to tribal officials. Further, these officials said repaying the Treasury would  eliminate any benefit the relocatees received from the land because the  revenue generated from the New Mexico trust lands and minerals has not  been sufficient to justify partial payment.

Because much of the land the Navajo Nation selected in New Mexico has  not been taken into trust and the land that has been taken into trust is  generating modest income, Congress will need to consider whether to  continue the statutory repayment requirement or repeal it. If Congress  decides to repeal the repayment requirement, it will need to consider  specifying whether revenues from the trust lands acquired in New Mexico  pursuant to the Settlement Act as amended are to be used by the tribe  exclusively for the benefit of relocatees.

The relocation of Navajo and Hopi families has taken more time than  originally anticipated when the Settlement Act was enacted in 1974,  extending ONHIR operations more than 30 years beyond the original  estimates. ONHIR has proposed to close by the end of fiscal year 2018  and initiated steps to identify agencies to handle the remaining activities.  However, the Settlement Act does not give other agencies the authority to  undertake various ONHIR responsibilities. Therefore, if ONHIR closes  without congressional actions, any potential successor agency will not  have the appropriate authority to administer any remaining activities. As a  result, newly certified applicants and clients who remain under the 2-year  warranty period will not have an entity to assist with securing decent,  safe, and sanitary relocation homes, as intended in the Settlement Act.  Further, several other provisions in the Settlement Act as amended may  need congressional action. These include (1) the requirement for the trust  lands acquired in Arizona pursuant to the Settlement Act as amended to  be used solely for the benefit of relocatees and whether grazing on the  New Lands should be regulated consistent with ONHIR’s current  regulations; (2) the mandatory trust acquisition provision for the Navajo  Nation; and (3) the requirement for the Navajo Nation to repay the U.S.  Treasury for appropriations made to the Navajo Rehabilitation Trust Fund.

In addition, although ONHIR believes it has completed most of its  responsibilities under the act and believes it can close by September  2018, it does not have the authority to make this decision. Rather, the  Settlement Act states that ONHIR will cease to exist when the President  of the United States determines that its functions have been fully  discharged. However, ONHIR has yet to request that the President make  this determination. Moreover, OHNIR has not prepared complete  information about its various activities, such as eligibility determinations,  appeals, and home building, which increases the risk that successor  agencies will not be able to effectively assume ONHIR’s activities.

Finally, ONHIR has not appropriately managed leases and other  agreements for Navajo trust land it administers or identified changes that  would need to be made in leases in the event that it closes. Because the  land ONHIR administers is held in trust by the federal government,  another entity will need to assume these responsibilities if ONHIR closes.  However, OHNIR does not maintain a complete inventory of leased or  occupied land and does not have written agreements for some occupied  land. Further, ONHIR has not identified which leases will need to be  amended to identify the appropriate lessor and the entity to receive the  lease revenue. Without these actions, the entity that assumes  responsibility for leasing the New Lands will not have the information it  needs to effectively manage the properties.

We are making the following four matters for congressional consideration  for when ONHIR closes:  Congress should consider providing necessary authority for other  agencies to continue remaining activities when ONHIR closes. (Matter for  Consideration 1)

Congress should consider determining (1) whether the requirement for  the land acquired pursuant to the Settlement Act as amended to be used  solely for the benefit of relocatees should continue and (2) how grazing  on the New Lands should be regulated. (Matter for Consideration 2)

Congress should consider addressing the mandatory trust acquisition  provision for the Navajo Nation in the Settlement Act as amended. (Matter  for Consideration 3)

Congress should consider whether the requirement for the Navajo Nation  to repay the U.S. Treasury for appropriations made to the Navajo  Rehabilitation Trust Fund should continue. (Matter for Consideration 4)

We are making the following five recommendations to ONHIR.

The Executive Director of ONHIR should request a presidential  determination as to whether ONHIR has fully discharged its  responsibilities and whether it should close. (Recommendation 1)

The Executive Director of ONHIR should prepare complete information on  the remaining denied households who could still file for federal appeals.  Such information could include paper case files and information in  ONHIR’s client database for those households. (Recommendation 2)

The Executive Director of ONHIR should prepare complete information on  warranties and contractors. Such preparation should include linking  warranty complaints to the relevant contractor, completing missing  warranty information, and completing information on contractors’ past  performance. (Recommendation 3)

The Executive Director of ONHIR should establish a comprehensive  inventory of (1) properties located on trust land it administers, (2) leases  of those properties, and (3) surface use and other use agreements for  trust land it administers. (Recommendation 4)

The Executive Director of ONHIR should identify which leases and other  agreements need to be amended or assigned because (1) ONHIR is the  lessor, (2) the lease or agreement provides for annual payments to be  made to ONHIR, and/or (3) the lease or agreement terminates upon  ONHIR’s closure. (Recommendation 5)

We provided a draft of this report to the Office of Navajo and Hopi Indian  Relocation (ONHIR); Department of the Interior; Department of Justice;  Department of Housing and Urban Development (HUD); Department of  Health and Human Services; Department of the Treasury; the Navajo  Nation; and the Hopi Tribe for review and comment. The Department of  Justice, Department of the Treasury, and the Hopi Tribe did not provide  comments. The Department of the Interior and the Department of Health  and Human Services provided technical comments that we incorporated  as appropriate.

We received comments via e-mail from HUD’s Acting Director of Grants  Evaluation in the Office of Native American Programs. In this e-mail, the  Acting Director stated that HUD believes the report should clearly state  that HUD would not be an appropriate agency to continue ONHIR’s  housing functions, because it does not provide direct services to tribes,  review or approve actions or transactions, or have the technical capacity  to assume ONHIR housing functions. We have acknowledged this in the  report and our objective was to identify legislative actions that may be  necessary to transition remaining relocation activities. Therefore, our  focus was on whether or not additional authorities might be needed if  ONHIR were to close. Although we present background information about  other federal agencies and tribal entities with responsibilities in Indian  Country as well as perspectives from various agencies on the transition  and remaining activities, we did not independently evaluate these  agencies’ authorities or capacity and do not draw conclusions about  which agencies and tribal entities including HUD should be provided the  necessary authority by Congress to continue ONHIR’s remaining  activities.

In ONHIR’s comments, which are summarized below and reproduced in  appendix II, ONHIR did not explicitly agree or disagree with our five  recommendations but stated that it had either already taken steps or had  plans to once a successor is identified.

With regard to the draft report’s first recommendation to request a  presidential determination as to whether ONHIR has fully  discharged its responsibilities and whether it should close, ONHIR  stated that it has worked for decades with the Office of  Management and Budget within the Executive Office of the  President on completing its work. While this may be the case, our  review found that no presidential determination for ONHIR to  cease operation has been requested, and no such decision has  been communicated, therefore we believe our recommendation is  valid.

With regard to the second recommendation to prepare complete  information on the remaining denied households that could still file  for federal appeals, ONHIR stated that it has a solid grasp of  potential appeals. Specifically, ONHIR said that case files have  been identified and all needed information already exists in the  case files and in its database. ONHIR stated that it will provide  potential successor agencies with any information they request.  However, because it is unclear when ONHIR will close and which  agency will assume ONHIR’s remaining eligibility and appeals  activities at that time, a successor agency will not have the  institutional knowledge to follow and connect the information  needed for determining eligibility and providing support for cases  for which appeals were filed in federal court. Therefore, we  maintain that ONHIR should proactively prepare the necessary  information associated with these appeals for any successor  agency. Preparing complete and readily available information  could minimize the challenges the successor agency may  encounter in administering future appeals and eligibility  determinations.

With regard to the third recommendation to prepare complete  information on warranties and contractors, ONHIR stated that up- to-date and complete information on warranty status appears in  the existing case files. We maintain our concern about the  accuracy of ONHIR’s warranty database because in its comment  letter ONHIR acknowledged that some complaints were entered  multiple times due to data entry issues. Moreover, ONHIR states  that its staff know which relocatee homes will still be under  warranty as of September 30, 2018, and have compiled a list of  such homes. However, preparing the case file and list of such  homes does not address the deficiencies that we found in the  warranty database. While we revised the report by including  ONHIR’s statement that its system has the capability to search  warranty complaints, we continue to believe that the information  available through searches will be incomplete for a successor  agency because the information is disconnected. Without linking  warranty complaints to the relevant contractor, completing missing  warranty information, and completing information on contractors’  past performance, any successor agency may have difficulty  understanding what warranty issues have already been addressed  or have difficulty overseeing contractors to help ensure that newly  certified applicants secure decent, safe, and sanitary relocation  homes.

With regard to the fourth recommendation to establish a  comprehensive inventory of (1) properties located on trust land it  administers, (2) leases of those properties, and (3) surface use  and other use agreements for trust land it administers, ONHIR  stated that such documentation exists and is maintained and  updated. However, this statement is inconsistent with what we  found during our review. We reviewed information provided by  ONHIR from various sources as part of our review, and the  information available did not include a comprehensive inventory of  leased and vacant properties on or surface use and other  agreements for Navajo trust land ONHIR administers. We  continue to believe that without developing a comprehensive  inventory of leased and vacant properties on Navajo trust land that  ONHIR administers and leases and agreements for those  properties, the entity that assumes responsibility for leasing the  land will not have the information it needs to carry out that  responsibility.

With regard to the fifth recommendation to identify which leases  and other agreements need to be amended or assigned because  (1) ONHIR is the lessor; (2) the lease or agreement provides for  annual payments to be made to ONHIR, and/or (3) the lease or  agreement terminates upon ONHIR’s closure, ONHIR stated that  it will move forward with specific transition activities after a  successor entity is identified. We believe that such an approach is  risky because it assumes that ONHIR staff will be available to  work closely with staff from a new successor entity to personally  transfer their knowledge to the new staff. However, there is no  guarantee that ONHIR will continue operating or that its many  retirement-eligible employees will be available to assist any  successor entities during a transition period. We, therefore,  maintain that the Executive Director of ONHIR should identify  which leases and other agreements need to be amended or  assigned.

ONHIR also made other comments in its letter, which we have responded  to in appendix II.

The Navajo Nation and the Navajo Nation Human Rights Commission  also submitted comments on a draft of this report, which are reproduced  in appendix III and IV.

We are sending copies of this report to the appropriate committees and  the Office of Navajo and Hopi Indian Relocation, Department of the  Interior, Department of Justice, Department of Housing and Urban  Development, Department of Health and Human Services, Department of  the Treasury, the Navajo Nation, and the Hopi Tribe. In addition, the  report is available at no charge on the GAO website at  http://www.gao.gov.

If you or your staff have any questions about this report, please contact  us at (202) 512-8678 or shearw@gao.gov or (202) 512-3841 or  fennella@gao.gov. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this report.  GAO staff who made key contributions to this report are listed in appendix  V.

Appendix I: Objectives, Scope, and Methodology

This report examines (1) ONHIR’s management of the eligibility and  appeals processes and the status of these activities; (2) ONHIR’s  management of the home-building process and the status of these  activities; (3) executive branch or legislative actions that may be  necessary to terminate ONHIR in an orderly manner and transition  remaining relocation activities; (4) ONHIR’s management of Navajo trust  lands and related transition activities; and (5) legislative actions that may  be necessary to address other Settlement Act provisions.

To address these objectives, we reviewed our prior related reports and  other studies and analyzed relevant laws and regulations. We  interviewed ONHIR officials on relocation and other key activities, and we  interviewed ONHIR’s hearing officer to better understand his role in the  appeals process. We also interviewed federal officials from the  Department of the Interior’s (Interior) Bureau of Indian Affairs (BIA), Office  of Inspector General, and Bureau of Land Management (BLM);  Department of Housing and Urban Development (HUD); Department of  the Treasury (Treasury); and Indian Health Services within the  Department of Health and Human Services. We also conducted  interviews with tribal government officials from the Navajo Nation and the  Hopi Tribe including officials from the Navajo-Hopi Legal Services  Program, the Navajo-Hopi Land Commission Office, and the Navajo  Nation Human Rights Commission. Additionally, we conducted two visits  in August 2017 to ONHIR’s offices in Flagstaff and Sanders, Arizona, and  the Navajo region where we interviewed ONHIR staff, observed a  transition meeting, took two separate tours of homes (one with ONHIR  officials and the other with Navajo Nation officials) and observed  rangeland management activities, and attended presentations in three  Navajo Nation chapters.

Additionally, to address the first, second, and third objectives, we  reviewed ONHIR’s management manual, policy memorandums, the 1981  Report and Plan, and the 1990 Plan Update on relocation activities,  including the eligibility and appeals processes, and home-building  activities. We obtained two data files as of June 2017 from ONHIR’s  Client Database—Client Master and Hearing File—to analyze the time  frame for becoming certified for relocation benefits and relocating to the  house provided by ONHIR. Using the case numbers in the Hearing File,  we identified those applicants that were certified for relocation benefits  through the administrative appeals process. We assessed the reliability of  ONHIR’s data files by conducting a file review of a random sample of 30  case numbers, which we selected based on the distribution of two factors:  (1) application date, and (2) type of determination. We recorded the  relevant information in the paper files— such as date applied, date of  determination, determination code, and date relocated—and compared it  to the data fields in the electronic files. We determined that ONHIR’s data  files were sufficiently reliable for the purpose of our report. We also  reviewed home-building-related documentation, including contractor lists,  contracts, warranty information, and contractor performance reports, to  understand ONHIR’s oversight of home-building activities. In addition, we  reviewed ONHIR’s transition-related documentation including transition  guiding principles, the draft transition plan, and the draft “From Transition  Plan to Transition Implementation” document to understand ONHIR’s  planned closure. We also reviewed and assessed the original statute to  determine the extent to which ONHIR has the authority to transfer those  activities. We interviewed ONHIR and Interior officials to identify any  opportunities for modifying or continuing other Settlement Act provisions.

To address the fourth and last objectives, we obtained from ONHIR  copies of all leases and use agreements for Navajo trust land it  administers pursuant to the Settlement Act as amended from the 1980s to  the present. We reviewed the terms of the leases and agreements  provided to identify specific elements, such as the identity of the lessor,  lessee, and any concurring parties; start and end dates; required rental  payments, if any; and any provisions on the leases’ continuation or  termination in the event that ONHIR closes. We compared the leases to  ONHIR’s list of properties on Navajo trust land it administers to determine  if all of the properties were covered by leases. We also reviewed  information, such as summary spreadsheets, on sources of revenue  ONHIR collects, retains, and uses, including documentation of Treasury  accounts where such revenue is deposited. We cross-checked the  revenue information ONHIR provided with information from Treasury  about deposits into ONHIR’s Treasury account and we interviewed  ONHIR officials regarding discrepancies. Revenues from the Padres  Mesa Demonstration Ranch were included as part of the revenue  information and ONHIR provided a separate accounting of the  obligations, expenditures, and revenues for the ranch. We reviewed  ONHIR’s regulations and management manual for policies and  procedures on leasing and grazing on the New Lands and compared  them to the agency’s practices. We also reviewed BIA’s regulations on  leasing and grazing on Indian trust lands under the agency’s  administration to identify comparable grazing and leasing policies and  procedures. Furthermore, we interviewed ONHIR, Interior, BLM,  Treasury, and Navajo Nation officials and reviewed documents from the  agencies and tribe to identify any opportunities for modifying or continuing  other Settlement Act provisions.

We conducted this performance audit from March 2017 to April 2018 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Appendix II: Comments from the Office of Navajo and Hopi Indian Relocation

1.  We revised the report to state that ONHIR has no authority to require  any person to leave the land that was awarded to the other tribe.   2.  We disagree with the Office of Navajo and Hopi Indian Relocation’s  (ONHIR) characterization of our report and did not make a change  based on this comment. Our report focuses on ONHIR’s management  of the home building process and the status of these activities. To  appropriately address our audit objective on the home building  process, we included the experiences of the population that was being  served by ONHIR. While ONHIR states that the information included  in our report is unsubstantiated, we do not assert that the views on  home building from those we attributed—tribal government officials  and relocatees—are accurate or draw conclusions about the reasons  for the condition of the homes. Further, we presented ONHIR’s  counterargument to the concerns raised by the relocatees to provide  context and balance, with additional details explained in footnotes.  Throughout our report, we ensured a balanced presentation with an  objective tone, consistent with generally accepted government  auditing standards and our quality assurance framework. We believe  that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives. Moreover, our  description of Navajo Nation chapters was reviewed and verified by  the Navajo Nation, therefore we believe it accurately states the views  of Navajo Nation officials.   3.  We revised the report to indicate the attorney fees reported were over  a 35-year period.  4.  We revised the report to state that, for the third application period, the  requirement was for applicants to maintain legal residency until their  contact with ONHIR.   5.  We made revisions to the report to include ONHIR’s efforts related to  eligibility determination, such offering administrative appeals to  Navajos for whom ONHIR could not show actual receipt of denial  letters and using restricted delivery certified mail for almost 30 years.  6.  We made revisions to the report to include ONHIR’s perspective on  the difficulties in determining residency because of the nature of  Navajos’ employment opportunities.  7.  Our report does not evaluate the reasons that have affected the  length of the appeal process because it is not pertinent to our  objectives. Therefore, we did not make a change to the report in  response to this comment.  8.  Although this is new information that was not presented to us during  our review, it does not materially affect our findings, therefore we did  not make a change in the report.   9.  We clarified the report to state that ONHIR consulted with the  Department of Justice in Washington, D.C, and the U.S. Attorney’s  Office in Arizona.  10. We clarified the report to indicate that, in response to the Herbert  decision, ONHIR was required to provide notices to “potentially”  eligible applicants.  11. Our report focuses on actions that may be necessary to terminate  ONHIR in an orderly manner and transition remaining relocation  activities. We did not make a change in the report in response to  ONHIR’s comment because ONHIR had not identified and compiled  the case files during our review that would be necessary or easily  accessible for a successor agency. While ONHIR states in its letter  that case files have been identified and all needed information already  exists in the case files and in its database, because these activities  may have occurred subsequent to our review, we cannot confirm the  accuracy of this comment. We maintain our concerns about ONHIR’s  database given its admission of data entry issues as stated in the  comment letter.   12. We revised the headings of two report sections to emphasize the  distinction between administrative appeals and appeals to the federal  court.   13. We revised the report to include ONHIR’s perspective on allowing oral  evidence.   14. We revised the report to incorporate information ONHIR provided  related to the communities to which relocatees have moved.  15. We clarified the report to state that relocatees with existing Navajo  homesite leases can have their relocation home built on the homesite  lease site if it meets feasibility requirements.   16. We revised the report to incorporate information ONHIR provided on  relocatees who chose to relocate to remote areas.   17. Our report focuses on ONHIR’s management of the home building  process. We did not make a change to the report in response to  ONHIR’s comment because we already describe several procedures  related to home building, including contractor licensing requirements  and feasibility studies. The report also acknowledges that houses  have passed final inspection.    18. As described in comment 2, we disagree with ONHIR’s  characterization of our methodology. We did not make a change in the  report because we maintain that including the experiences of the  population served by ONHIR is appropriate for balance.  19. We disagree with ONHIR’s characterization of our report and did not  make a change to the report based on this comment. Throughout the  body of the report, we have included ONHIR’s policies, its  implementation of activities, as well as the statements of officials  related to relocatees’ home-building concerns.  20. We have made revisions to clarify the figure title.  The two  photographed houses are on the Navajo reservation, shown to us  during our site visit. Because one of the houses was shown to us by  ONHIR officials, we believe the home was built by ONHIR. The other  home was from a separate tour with Navajo Nation officials. The  Navajo Nation officials indicated that the home was built by ONHIR.    21. As described in comment 2, we disagree with ONHIR’s  characterization of our methodology. We did not make a change in the  report because we maintain that including the experiences of the  population served by ONHIR is appropriate for balance.   22. As described in comment 2, we disagree with ONHIR’s  characterization of our methodology. Throughout the report, we  specifically attribute all the views on home building to those we  interviewed—tribal government officials and relocatees. We also do  not draw conclusions about the reasons for the condition of the  homes. We did not make a change in the report because we maintain  that including the experiences of the population served by ONHIR is  appropriate for balance.   23. We revised the report to include ONHIR’s statement about the search  capability of its electronic data system.    24. During our review, ONHIR officials did not identify contracting for post- move counseling services as an option that they have considered nor  did we find any such reference in transition documents we reviewed.  Therefore we have not made any changes to the report based on this  comment.  25. We disagree with ONHIR’s characterization of our report. We  reviewed information provided by ONHIR from various sources, and  accurately reported that ONHIR does not have a comprehensive  inventory of leased and vacant properties or surface use and other  agreements for Navajo trust land it administers. Therefore, we made  no changes in response to this comment.  26. We disagree with ONHIR’s characterization of our report and did not  make a change in the report based on this comment. ONHIR’s  management manual calls for written leases and land use approvals  for the New Lands, whether or not the Navajo Nation requests these.  It is not the responsibility of the trust beneficiary to request a written  lease. The trustee has a duty to maintain clear, complete, and  accurate books and records regarding trust property.  27. We disagree with ONHIR’s statement that it will wait until a successor  is identified to inform it of the leases. Moving forward with specific  transition activities only after a successor entity is identified is a risky  approach because it assumes that ONHIR staff will be available to  work with staff from a successor entity to transfer their knowledge to  the new staff. However, there is no guarantee that ONHIR will  continue to be operating at that time or that its many retirement- eligible employees will be available to assist any successor entities  during a transition period. ONHIR has proposed closing on September  30, 2018. As of March 2018, no successor entities have been  designated or authorized to assume any ONHIR activities. As we  recommended, clearly documenting what needs to happen as part of  the transition will help ensure a smoother transition in the event that  there is not a transition period between ONHIR and a new successor  entity.  28. We revised the report to indicate that, according to ONHIR, Federal  Aviation Administration has continued to pay rent to ONHIR while a  new lease is negotiated.  29. We disagree with ONHIR’s characterization of the report and did not  make a change based on this comment. As we reported, the  Settlement Act as amended does not specifically authorize ONHIR to  collect, retain, and use revenues from leases of Navajo trust land it  administers. The Settlement Act as amended also does not specify  whether ONHIR, the Navajo Nation, or the relocatees should receive  lease revenues. However, as we reported, under BIA’s regulations for  trust land it administers, revenue from leases is to be either paid  directly to the tribe whose trust land is being leased or to BIA, which  deposits the revenue in the tribe’s trust account that generally earns  interest. BIA officials told us leases of trust land that provide for BIA to  retain lease revenue would not be consistent with the agency’s trust  responsibility.  30. We recognize that ONHIR is not, and has never been, part of BIA. As  we note in the report, the comparison to BIA is instructive because  BIA administers the vast majority of Indian trust land. In addition,  ONHIR in its comments and draft transition plan identify BIA as a  possible successor entity for some activities.  31. As described in comment 29, we disagree with ONHIR’s  characterization of its duties and powers as a trustee and did not  make a change to the report. The Settlement Act as amended does  not specifically authorize ONHIR to collect, retain, and use revenues  from leases of Navajo trust land it administers. Moreover, BIA officials  told us leases of trust land that provide for BIA to retain lease revenue  would not be consistent with the agency’s trust responsibility.  32. We disagree with ONHIR’s characterization of the realities of leasing  Navajo trust land and did not make a change to the report. ONHIR did  not provide documentation of requests from the Navajo Nation for  ONHIR to serve as the lessor on some commercial leases. When  ONHIR served as the lessor, ONHIR provided the Navajo Nation with  some leases for “technical review” or for “review and comment”.  However, only one of the leases we reviewed includes the Navajo  Nation President’s signature when the tribe, or a tribal entity, is not the  lessee. Moreover, as we reported, the Navajo Nation Department of  Justice repeatedly informed ONHIR that it lacked the authority to  lease Navajo trust land.  33. As described in comment 27, we disagree with ONHIR’s planned  approach to wait until a successor is identified and did not make a  change in the report. Moving forward with specific transition activities  only after a successor entity is identified is a risky approach because  it assumes that ONHIR staff will be available to work with staff from a  successor entity to transfer their knowledge to the new staff. However,  there is no guarantee that ONHIR will continue operating or that its  many retirement-eligible employees will be available to assist any  successor entities during a transition period.  34. We clarified the report to note that another entity is needed to assume  remaining home building activities.  35. We clarified the report to include ONHIR’s statement that it has had  regular communications with executive and legislative branch offices  on completing its work and closing.   36. We disagree with ONHIR’s comments that the report is misleading  related to a presidential determination. Although we included ONHIR’s  statement on its communications about closure in the report, we  maintain that without a presidential determination, ONHIR has not met  the explicit requirements for being permitted to cease operations  under the Settlement Act.  37. As described in comment 11, during the course of our review, ONHIR  did not have complete information readily available for use by a  successor agency. We cannot assure that any efforts ONHIR has  taken subsequently to compile this information as stated in its  comment letter are accurate. We continue to believe that ONHIR  should proactively compile necessary information rather than waiting  for a successor to request it. Moreover, we maintain our concerns  about ONHIR’s database given its admission of data entry issues in  its comment letter. Therefore, we did not make a change in the report  based on this comment.

Appendix III: Comments from the Navajo Nation

Appendix IV: Comments from the Navajo Nation Human Rights Commission

Appendix V: GAO Contacts and Staff Acknowledgments

In addition to the contact named above, Jill Naamane and Jeffrey  Malcolm (Assistant Directors), Chir-Jen Huang (Analyst in Charge),  Susan Baker, William Chatlos, Brad Dobbins, Justin Fisher, Randi Hall,  Erik Kjeldgaard, Ellie Klein, Jessica Sandler, Jennifer Schwartz, Jena  Sinkfield, and Jeanette Soares made key contributions to this report.

A 1974 law divided land used by the Navajo and Hopi tribes into two regions, requiring families to move. Eligible families could receive relocation expenses.

Lawmakers anticipated 1,000 families would relocate in under 5 years, but decades later, over 3,600 families have relocated and the Office of Navajo and Hopi Indian Relocation—created to carry out the relocation—continues to operate. The office stated its intent to close by September 2018.

We recommend that the office take steps to help ensure that its uncompleted relocation activities can be transferred to other agencies if it closes.