HELENA, Mont. (AP) – The Fort Belknap Indian Community isn’t properly administering housing funds, including failing to collect $1 million in rent from 2006 to 2008, the U.S. Department of Housing and Urban Development found in a recent audit.

HUD’s Office of Inspector General audited the Fort Belknap Housing Department in Harlem after the agency’s Northern Plains Office of Native American Programs received information questioning how the funds were being managed. The tribe disputes the allegations, but sent a letter to HUD saying it was willing to correct some accounting deficiencies.

The block grant program provides a range of affordable housing options. Fort Belknap had 246 low-rent housing units and 118 mutual help housing units as of Sept. 30, 2008.

Among the criticisms was that the Fort Belknap Housing Department did not pursue collection of past due rent and did not have written policies in place for collecting the money. As a result, the audit said, the department was not able to serve as many people.

In a written response, the housing department said many tenants are the “lowest of the low” income under HUD standards, so collecting rent and house payments is an ongoing challenge.

The housing department has begun efforts to collect back rent, both the department and HUD agreed, but the audit noted the outstanding balance as of Sept. 30, 2008 was over $1 million.

The department said it will seek advice on the handling of bookkeeping of accounts which appear to be uncollectable.

The audit also found the housing department spent $183,000 in renovation work not listed in its HUD-accepted Indian housing plans, paid $32,000 in unallowable costs with HUD money, transferred $300,000 from an account that was to be used to pay for housing repairs and used it for daily operating expenses, and failed to submit its audited financial statements on time.

The housing department said it believes the renovation work was provided to low income individuals and therefore allowable. The department said if it wasn’t allowable, the tribe would amend its housing plan so that work would have been allowable. But the agency said housing plans cannot be amended after all the money has been spent.

The audit said the tribe charged $32,000 in unallowable costs to HUD accounts, including $13,000 in bank overdraft fees, $1,600 in penalties and interest and $2,600 in burial fees for nine tribal members.

The housing department argued that it spent money other than HUD block grant money on housing and the bank fees were paid with those funds. It also said: “There were no burial services provided by any housing funds, whether grant funds or otherwise.”

However, the audit reviewed 18 Housing Department work orders with the names of eight individuals and information provided by the tribe on a ninth. The majority of the work orders stated they were for building cabinets for people who had recently died. One was for building a rough box and another work order was for delivering cabinets to a funeral home in Chinook

“We also verified with Housing Department officials that housing funds were used for burial services,” the audit said.

The housing department said HUD approved the $300,000 transfer, which was repaid, but HUD is seeking an accounting of how the money was spent and repayment of any that was misspent.

The audit recommends that the Northern Plains Office provide training to Fort Belknap tribal officials on the proper administration of block grant funds. Fort Belknap received $2.8 million in block grant money in 2008.

The Northern Plains Office said it is also reviewing the way the housing department spent federal stimulus money.