THERMAL — The Torres-Martinez Desert Cahuilla Indians tribe is approximately $500,000 behind in payments on a federal penalty for misusing taxpayer-provided tribal welfare funds, according to federal officials.

Making the penalty payments will bankrupt the financially strapped tribe, tribal chairwoman Mary Resvaloso told federal officials in a letter Aug.12.

Resvaloso asked for “forgiveness” of a $1.54 million penalty levied by the Administration for Children and Families, a request denied by the federal agency.

Torres-Martinez officials did not respond to messages seeking comment.

The tribe and its Temporary Assistance for Needy Families program continue to face heightened scrutiny after a January Desert Sun investigation in which a review of seven years of tribal audits and other documents showed a long history of waste, mismanagement and missing financial accountability for taxpayer funds in the tribe's welfare program.

The program provides cash assistance, job training and family preservation services for impoverished Native American families throughout much of Riverside County and all of Los Angeles County.

The tribe's penalty came after the Administration for Children and Families, a division of the federal Department of Health and Human Services, found the Torres-Martinez welfare program misused federal funds in fiscal years 2002 and 2003.

“The hardship is such that if the tribe continues to make payments, it will become bankrupt,” Resvaloso said in an Aug. 12 letter to Sidonie Squier, a director with the Administration for Children and Families.

Agency officials responded to the tribe on Dec. 22, stating they do not have the authority to forgive a penalty once it is levied, but that they would be willing to work with the tribe on a different repayment schedule, Administration for Children and Families spokesman Kenneth Wolfe said in an e-mail response to The Desert Sun.

Other request for help

It's the second time the agency has worked with the tribe on reducing its penalty payments. Torres-Martinez officials in January 2008 sought and received a temporary reduction to the amount of the tribe's scheduled payments, after citing the tribe's financial hardship, Wolfe said.

The payment was reduced to $25,000 every three months, to cover both the 2002 and 2003 penalties, Wolfe said.

However, “as of December 2008 the tribe is not in compliance with the terms of the agreement,” the tribe's auditor stated in the Torres-Martinez's fiscal year 2008 audit, issued in September 2009.

The tribe receives more than $20million per year in federal and state matching funds for its Temporary Assistance for Needy Families program.

About 73 percent of the tribe's total revenue comes from federal and state grants for the tribal welfare program, according to its most recent audit. But the tribe is not allowed to use those funds to pay its federal penalty, Wolfe said.

Under a plan agreed upon by tribal and federal officials, the Torres-Martinez were to pay a $625,380 penalty for misuse of welfare funds in fiscal year 2002.

The agreement called for the tribe to pay escalating quarterly installments starting at $25,000 in September 2006, with the full penalty paid by Sept. 30, 2009.

A $912,500 penalty for welfare fund misuse in 2003 was to be paid in escalating quarterly installments starting in March 2008 and paid in full by Dec. 21, 2011.

In her Aug. 12, 2009, letter to Squier, Resvaloso said the tribe had “diligently made payments, in good faith, for a total of $250,000 to date.”

But Wolfe said the tribe has made one payment for both penalties, for $275,000, on Sept. 22, 2009 — more than a month after Resvaloso's letter, and three years after payments were supposed to start.

“Years later, penalties assessed to the program still have not been resolved,” Rep. Mary Bono Mack said in a Congressional committee hearing Thursday, as she asked Secretary of Health and Human Services Kathleen Sebelius to further investigate the Torres-Martinez program.

Bono Mack has called for removing administration of the welfare program from the Torres-Martinez and placing it with another willing area tribe. She's also suggested the Department of Health and Human Services stop awarding funds to the program and administer it themselves until questions are resolved.

State Assemblyman Brian Nestande, R-Palm Desert, has also requested that the Assembly Accountability and Administrative Review Committee look into the Torres-Martinez tribal welfare program.

Additional Facts

Audits show waste, mismanagement in tribal program

The Torres-Martinez Tribal Temporary Assistance for Needy Families program's required audits have outlined serious negative findings each year since 2002, with many of the same issues persisting for years despite tribal assurances that fixes were in place or on the way.

A January Desert Sun investigation that analyzed the audits and other documents obtained through the Federal Freedom of Information Act and California Public Records Act revealed:

• The federal government in 2005 found that the program potentially “misused” more than $6 million in taxpayer money in fiscal years 2002 and 2003.

Program officials were able to justify some of the spending, but agreed in 2007 to pay a penalty of more than $1.5 million as a result of misuse of welfare funds.

“As of December 2008 the tribe is not in compliance with the terms of the agreement,” the tribe's auditor stated in September 2009.

• Year after year, how much money the program has on hand, how much it has spent or whether spending followed federal laws and program rules often could not be verified because of the “inaccurate,” “misstated” or incomplete financial records of the tribal program.

• More than $50,000 in undocumented credit card expenditures by program administrators, most carrying late fees and interest penalties.

• The tribal program's federal and state funding is based on a projected monthly caseload of more than 5,200 families. But as recently as 2007 the program was serving fewer than 400 families, and today its caseloads are still only about one-fourth of what was projected. Its funding levels have not changed.

• The Torres-Martinez tribal welfare program purchased 45 cars for use by 90 employees and then failed to track where the cars were or how they were being used.