A local tribal welfare program continued to struggle with accountability for federal and state taxpayer money last year, a review of the program's most recent audit showed.

 While state officials had positive reviews for the Torres-Martinez Temporary Assistance for Needy Families program's progress, a forensic accountant who reviewed its most recent audit raised warning flags.

The tribe's audit for fiscal year ending Sept. 30, 2009 identified a variety of internal control problems, including:

Employee time cards missing, unsigned and incorrectly apportioned between various federal programs.

Balance sheets reconciled more than a half-year after auditors said they should be reconciled monthly or quarterly — a problem that has persisted in the tribe's audits since fiscal year 2006.

Undocumented travel expenses.

Taking more than $2.5 million in federal funds for recovery of incurred, indirect costs based on an estimated formula, rather than waiting for an approved formula from the federal government.

The tribal program is funded by more than $20 million per year in federal and state grants. It is intended to provide cash assistance, job training and family counseling for American Indians in Riverside and Los Angeles counties.

The ongoing questions regarding tribal welfare program's transparency and accountability with federal and state grant funds are not just a concern for taxpayers providing the money.

The issues also potentially impact the effectiveness of the program's assistance to the poorest of the poor, American Indians on the Torres-Martinez reservation near Thermal and elsewhere in the two counties.

Tribal welfare program Director Columba Quintero, tribal Administrator Rodney Bonner and tribal Chairwoman Mary L. Resvaloso did not return multiple messages left by The Desert Sun this week.

The tribe's auditor, Midwest Professionals of Gaylord, Mich., found three areas considered “material weaknesses,” a severe accounting finding indicating significant bookkeeping inaccuracies or noncompliance with federal and state program requirements may not be prevented or detected.

It's the eighth straight year the tribe's audit has included material weakness findings related to its welfare program.

The California Department of Social Services, which in recent years has provided $13 million to $18.6 million in annual matching funds to the Torres-Martinez program, expressed satisfaction with the tribe's progress in fiscal accountability.

“The Torres-Martinez Tribal TANF program continues to make significant progress toward a findings-free audit,” said Department of Social Services spokeswoman Lizelda Lopez.

“We are encouraged that with each audit, the program proposes numerous corrective actions and works diligently to follow through to ensure proper implementation.”

But a forensic accountant who reviewed the Torres-Martinez audit at The Desert Sun's request found reasons for concern.

“The control weaknesses noted in the most recent audit, if not corrected, could lead to incidences of fraud or waste and the potential failure to comply with federal program requirements,” said Michael Spindler, executive director for litigation and forensics at Capstone Advisory Group LLC in Los Angeles.

Spindler's more than 30 years of experience includes government audits and fraud investigations. He's also lectured on fraud for the National Indian Gaming Association.

Speaking generally, Spindler said repeated failures by an entity to correct weaknesses noted in prior audits “is often considered to be a red flag of potential fraud.” It can be a result of management that “prefers a weaker control environment, since that provides them with a greater opportunity to commit fraud.

“It could otherwise indicate an inability to hire individuals with the requisite skill sets, which results in a weak control environment in which fraud could occur.”

The audit did contain some good news for the tribe.

Three findings from past Torres-Martinez audits are considered resolved in its most recent report, including an issue involving employees' timecards, the tribe's unauthorized accrual of interest on unspent federal grant money and the timeliness of its annual audit.

And the current audit findings question the spending of just over $28,000 of the nearly $24 million the program received in federal and state funds during the fiscal year — far from the millions questioned in the Torres-Martinez tribal welfare program's troubled past.

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

The tribe worked with federal officials to justify some of the expenses, but agreed in February 2007 to pay in installments more than $1.5 million in penalties.

In April, the federal Administration for Children and Families, a division of the U.S. Department of Health and Human Services that oversees tribal welfare programs agreed to the Torres-Martinez's proposal to pay the remaining unpaid portion of the penalty — almost $1.2 million — through reductions in the tribal welfare program's $20 million annual Tribal Family Assistance Grant, along with an additional 2 percent penalty applied to the grant.

This essentially means the tribe will pay a penalty for misusing taxpayer funds with taxpayer funds.

Questions about the tribe's most recent audit directed to the Administration for Children and Families were responded to with an e-mailed statement from spokesman Kenneth Wolfe: “We take allegations of waste, fraud and abuse very seriously. It is important for the tribe to correct the deficiencies found in its audits, and we're working with them to help them do so.”

In its corrective action plans included with the audit, Torres-Martinez officials cite the hiring of “additional, competent staff” in its financial department and revised finance and personnel policies, among other measures.

“Human resources is reviewing the causes of high employee turnover,” the tribe states in the corrective action plan.

A January Desert Sun investigation of the Torres-Martinez Temporary Assistance for Needy Families program — including a review of seven years of tribal audits and other documents — revealed a long history of waste, mismanagement and missing financial accountability for taxpayer funds in the tribe's welfare program.

Following the investigation, Rep. Mary Bono Mack called for removal of administrative control for the tribal welfare program from the Torres-Martinez and place it with another tribe, and called on the Department of Health and Human Services' Office of Inspector General to investigate the program.

Bono Mack's chief of staff, Frank Cullen, did not return messages left by The Desert Sun.