Navajo Nation President Cites Unspent Chapter Funds, Uncertain Revenue Projections and Accountability in Line-item Veto Action

President Jonathan Nez – Navajo Times photo

Published March 5, 2019

WINDOW ROCK — Citing accountability to the Navajo people, uncertainty of revenue projections, and unspent chapter funds, Navajo Nation President Jonathan Nez used the authority granted by the Navajo people in 2010 to line-item veto an appropriation request of $3 million for Navajo chapters to use for emergency response efforts.

The appropriation was approved by the Navajo Nation Council through Resolution CF-04-19 on Feb. 26, despite reports from the Auditor General and the Division of Community Development clearly showing unspent emergency funds totaling well over $2.4 million for the Navajo Nation’s 110 chapters. Overall unspent funds by chapters may exceed well over $70 million.

In a memorandum addressed to Speaker Seth Damon, President Nez and Vice President Myron Lizer stated that in addition to unspent chapter funds, the Nation is faced with the real possibility of a major revenue decrease due to the uncertainty of the continuation of some of the Nation’s largest revenue sources.

“We must be responsible and remember the lessons we were taught by our elders on how to manage our resources during such uncertain times. Over the past few years the government has spent money on projects with no proper planning and reducing our funds that could be used for our future. This unthoughtful spending must stop,” they stated.

The Office of the Controller has reported that the Undesignated, Unreserved Fund Balance account has only $47,555 and with this proposed appropriation of $3 million, the UUFB would be well into negative dollar amounts. The Navajo Nation’s Appropriations Act requires that the Minimum Fund Balance shall be maintained at a level equal to the amount required to operate the government for six months based upon the operating budget for the prior fiscal year.

The memorandum states that waiving the Appropriations Act to invade the Minimum Fund Balance is not good stewardship of the People’s money. This type of spending would harm the financial integrity of the Nation by jeopardizing our credit rating by overspending without knowing the true and accurate balance of the UUFB and Minimum Fund Balance.

“Our Nation’s leaders need to consider the long-term financial future by preserving the UUFB and the Minimum Fund Balance in anticipation of possible revenue shortfalls in the tens of millions of dollars. If approved, this appropriation would be comparable to an individual spending more money than what is in their bank account. As a business person for over 30 years, this is not financially responsible,” stated President Vice President Lizer.

Since the emergency declaration issued on Feb. 19, President Nez, Vice President Lizer, and emergency responders have remained proactive in monitoring the impacts of the snowfall and providing needed resources for the elderly, disabled, and those at high risk.

“We’ve been on the ground in various communities delivering resources and talking with volunteers and chapter officials to assess their needs and emergency funds and most have indicated that they are not in need of additional funding,” said President Nez.

Initial reports from the Division of Community Development indicate that emergency response expenses, at the chapter level alone, will exceed the $250,000 threshold required for 75-percent reimbursement from FEMA. This does not include the emergency response expenses from the Department of Emergency Management, Division of Transportation, Division of Public Safety, Department of Health, and other entities.

“This means there is a strong likelihood that chapters will be reimbursed for up to 75-percent of the expenses they incurred while responding to the emergency, as long as they maintain proper documentation and receipts as we’ve been instructing them to do,” President Nez added. “The reimbursement of funds can be used by the chapters to address future emergencies if needed.”

In addition to the concerns, the legislation was initiated and treated as an emergency bill without the proper review and input of the Office of the Controller, Office of Management and Budget, Department of Justice, and without the five-day comment period that allows for input from the Navajo people and the 110 chapters.

“In the last election, there was a large changeover in leadership overall. The Navajo people want our Nation to move away from the spending patterns of the past, and be more responsible – they want a new direction rooted in financial accountability and financial prudency. For the reasons stated and for the best interest of the Navajo People’s money, I must exercise the authority granted to the President by the 2010 Initiative to exercise the line item veto on Resolution No. CF-04-19,” President Nez and Vice President Lizer concluded.

The line-item veto action is not subject to override by the Navajo Nation Council, in accordance with Navajo Nation law.