Summary

  • Indian Health Service area officials reported spending more than 80 hours helping one Tribe apply for and monitor an $8,000 grant, then more hours after the award. They were filling a gap created when part of a water project fell outside IHS's funding definition.
  • In a separate Utah project, two nontribal-owned homes rented to tribal members were ineligible under IHS's interpretation. An area official expected the administrative work of obtaining another agency's contribution to cost more than connecting those homes; individual contributions could be as little as $800.
  • Congress can define which homes and community buildings the Indian Sanitation Facilities Act covers and authorize a narrow cost-based exception. That would let IHS spend scarce staff time on water projects rather than on funding detours.

The grant was small. The route around the rule was not.

More than 80 hours. That is the time an Indian Health Service area office said it spent helping one Tribe apply for and monitor an $8,000 grant. Officials reported additional hours helping manage the grant after it arrived, including expenditure reporting. The Government Accountability Office's September 2026 report gives no payroll cost for those hours, and this episode is one example, not a national average. It is enough to show an administrative route that can become absurdly long relative to the funding sought.

The underlying water project runs through a community; the funding categories do not. The Indian Sanitation Facilities Act authorizes IHS to build essential sanitation facilities for “Indian homes, communities, and lands” without defining that phrase. IHS has interpreted its authority to pay only for costs attributable to eligible American Indian and Alaska Native individuals. Its policy can exclude a home where a Tribal member lives if the owner is a spouse or grandparent who is not a Tribal member. Certain Tribally owned rentals and existing community buildings also fall outside ordinary funding.

Engineers and Tribal governments then have to find another pot of money for a slice of the same pipe before work can start.

The 80-hour example should not be blended with a second case in Utah. That project included two homes owned by nonmembers and rented to Tribal members. An IHS area official said the agency's administrative cost of obtaining and managing another federal contribution would likely exceed the capital cost of serving those homes. The office had pursued contributions as small as $800. GAO also records that this imbalance is not universal: when excluded properties make up a larger part of a project, or remote construction is expensive, the cost of serving them can exceed the administrative effort.

The useful test is project-specific, not a slogan that every exception saves money.

A community building meets a 1985 ceiling

The rules have another old seam. IHS generally cannot use its regular funds for an existing community building such as a gathering space or Head Start school. Under narrow conditions, it can use special-project money for an incidental connection costing no more than $10,000. That cap has stood since 1985. GAO calculates that $10,000 then would be about $30,000 in fiscal 2025 dollars. Of roughly 800 Tribal water projects IHS funded in fiscal 2023 and 2024, only two used this special route for existing community buildings.

The cap may be discouraging applications as well as limiting awards: Tribal and consortium officials said it did not cover even basic infrastructure in their circumstances.

Federal agencies do not all operate under the same mandate. EPA and the Department of Agriculture can fund some property costs that IHS excludes, but their application and accounting processes differ. The extra grant can take time on both sides of the counter. In Alaska, a Tribal health consortium estimated almost $100,000 of additional administrative cost per project when it used funding sources without a standard interagency agreement with IHS, versus roughly $15,000 for EPA-funded projects with one. These are the consortium's estimates for its projects, not a federal average.

The difference shows why a joint project can still punish the applicant for the government's internal division of labor.

GAO estimated that $6 billion was needed as of November 2025 to ensure all Tribal communities have access to safe water. That system-wide need is not the cost of the 80-hour case. Scarce engineering time is therefore an important resource in its own right. A staff member hunting a second grant is a staff member not designing or finishing another connection.

Congress has a direct lever. GAO asks it to define “Indian homes, communities, and lands” and to authorize IHS, in consultation with Tribes, to cover otherwise ineligible properties when the cost of securing separate funds would likely exceed the capital cost of serving them. IHS should also reexamine the 1985 community-building cap. These are prospective changes. Today the agency says its interpretation and the statute limit what it can pay for; improvising a new eligibility category in an office would not give a Tribe a durable entitlement.

The same report describes a separate statutory obstacle: annual appropriations prohibit IHS from using its water funds for new homes built with certain HUD housing grants. HUD consulted Tribes about that prohibition but had not communicated how it used their input or any result. IHS issued its own report; HUD said it had not made a policy decision. That is another decision Congress must be able to see clearly, rather than a question lost between housing and water agencies.

GAO put three matters before Congress and made twelve agency recommendations. The government already knows how to count grants. Its next measure should be how much public work it buys with the hours spent pursuing them.

Sources