The Bureau of Indian Affairs (BIA) has issued a new draft policy for determining tribes’ contract support costs (CSCs) under self-determination contracts and self-governance funding agreements and has requested comments by July 29.
The draft policy, issued via a Federal Register notice on March 25, 2016, was proposed in response to the Supreme Court ruling in Salazar v. Ramah Navajo Chapter, which stated “the Government must pay each tribe’s contract support costs in full” and “the Government’s obligation to pay contract support costs should be treated as an ordinary contract promise.”
The draft policy seems to simplify the BIA’s approach and makes some changes that appear favorable to many tribes. These changes relate to the calculation of direct and indirect CSCs. The proposed policy:
Tribes now have an opportunity to provide feedback to the BIA on the above policy changes, which impact how the BIA will fund and calculate CSCs going forward.
The draft policy can be found on the BIA’s Web site, and written comments are due by July 29, 2016. Additionally, the BIA will host four live consultation sessions, also detailed on its Web site, to discuss the draft policy.
The federal government’s 2016 omnibus spending bill, passed in December 2015, includes language that prohibits tribes from rebudgeting CSCs received under the Indian Self-Determination and Education Assistance Act to other program areas. It also requires that all CSC funds not expended by the tribe for the current year be applied to CSCs otherwise due for subsequent fiscal years. This will make it very important for tribes to track unspent (carryover) BIA indirect CSC funds separately from other (direct) funds.
Moss Adams will issue another Alert when the Department of Health and Human Services’ Indian Health Services releases its proposed CSC policy changes. In the meantime, contact your Moss Adams professional for questions on how these proposed changes may impact your tribe.