Feds probe $9M Blackfeet children's program

HELENA — A federal investigation is underway into allegations of mismanagement and misspending by the managers of a now-defunct Blackfeet tribal program for troubled youth that received $9.6 million in federal grants over six years.

The investigation was prompted by a Blackfeet Tribal Business Council resolution asking federal authorities to look into allegations of the misuse of federal grant money, credit cards, property procured for the program and the direct or in-kind contributions the tribe was supposed to make to the Po'Ka Project.

Francis Onstad and Delyle "Shanny" Augare, the director and assistant director of the Po'Ka Project ("po'ka" means "child") were suspended by the council after the investigation began last year.

The March 15, 2012, resolution calling for the investigation said the document was to remain confidential. The Associated Press recently obtained a copy of the resolution as well as the excerpts from the closed June 7, 2012, council meeting suspending Onstad and Augare.

A number listed for Onstad was disconnected. Calls to Augare and to his son, councilman and state Sen. Shannon Augare, who himself is facing misdemeanor charges over allegations that he fled a law-enforcement officer who stopped him for drunken driving, were not returned.

The Po'Ka Project was developed in 2004 as a program to help troubled and at-risk Blackfeet children along with their families. There was a need for services on the reservation to help children and families reunite through tribal traditions, Onstad said in a 2011 video produced by the Centers for Medicare and Medicaid Services' Tribal Affairs Group and Medicare.

The project received $9.6 million in funding from 2005 through 2011 through the federal Substance Abuse and Mental Health Services Administration. The project was supposed to grow into self-sufficiency, but it closed after the federal money dried up and the management issues surfaced.

Assistant U.S. Attorney Jessica Fehr declined to comment on the investigation.

Tribal chairman Willie Sharp Jr. did not return a call for comment. Tribal attorney Sandra Watts acknowledged there was an investigation, but declined to comment on it.

Former tribal councilman Jay St. Goddard said he pressed for the federal investigation while he was still on the governing body so as to avoid the potential conflict of interest of an intra-tribal probe. St. Goddard has since been removed from the council and earlier this year was convicted with two others of holding illegal big-game hunts on the reservation for country musicians participating in an outdoors television show.

St. Goddard worked for the Po'Ka Project for its first two years as a contractor running a horse program for the children on the ranch, and said he observed mismanagement from the beginning of what was otherwise a good program.

"When it was running, there were needs being met. After school, kids were getting a meal before going home," he said. "It was heading in the right direction, but it was just defunct because of the spending."

The tribal resolution did not detail specific allegations of misuse of the funds. St. Goddard said the problems he saw included new office equipment purchased and returned, with the reimbursement check going to a non-tribal bank account.

In addition, he said project credit cards were being charged for personal uses and that accounts of in-kind donations to the tribe were being inflated.

Joe Gervais, the tribe's treasurer from 1999 until 2007, corroborated St. Goddard's account. Additionally, Gervais said he found it odd that the program managers had broad discretion in whom they hired, and property the Po'Ka Project used was purchased in the name of a nonprofit organization started by Onstad and Augare, not the tribe.

"They never seemed to have to follow the law, or the tribe's policies and procedures," he said.

A federal audit of all of the Blackfeet tribe's programs for 2011, the last year of federal funding for Po'Ka Project, found the tribe's documentation for in-kind donations lacked the proper backing evidence. Those donations were required by the tribe as a condition of the federal funding, and amounted to $2 million for that year.

The program was not maintaining adequate records of contributions or evidence to back up the value of what was being reported, the audit found.

The tribe responded in writing that it did fail to meet the matching requirement for the Po'Ka grant, but it disagreed that the cause was inadequate controls over in-kind contributions. Rather, the Po'Ka leaders failed to generate enough fees to offset the declining federal money, the tribe said.