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Tribal Economic Development: Action is Needed to Better Understand the Extent of Federal Support

GAO-22-105215 Published: Aug 30, 2022. Publicly Released: Aug 30, 2022.
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Fast Facts

Historically, tribal communities have had higher rates of unemployment and poverty than other communities. The federal government administers multiple programs that can support economic development in these communities.

We identified 22 programs at 7 agencies that provide economic development assistance—e.g., grants or loans—to tribal governments and businesses. But these programs might be hard to identify or access, leaving tribal entities to miss out on valuable support.

Also, federal assistance totals for tribal entities are unknown because agencies don't analyze or report data for some programs.

Our recommendations address these issues.

Map of the United States showing tribal lands

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Highlights

What GAO Found

Federal efforts to support economic development among tribal entities (such as tribal governments and businesses) show evidence of fragmentation and some overlap. Programs are fragmented across seven agencies: the U.S. Departments of Agriculture (USDA), Commerce, Energy, Health and Human Services, Housing and Urban Development, and the Interior, and the Small Business Administration (SBA). Tribal organizations GAO spoke with said many tribes have limited capacity to identify and access programs and may not be aware of the federal assistance available. The Secretary of Commerce is required by law to assist tribes and other eligible entities with identifying and taking advantage of business development opportunities; however, the department does not maintain information on federal economic development programs across agencies available to tribal entities. Without information on available programs, tribal entities may not access programs that could provide valuable benefits to tribal communities. GAO did not find evidence of duplication.

Fragmentation among Economic Development Programs Available to Tribal Entities, Fiscal Year 2021

Fragmentation among Economic Development Programs Available to Tribal Entities, Fiscal Year 2021

GAO identified eight programs that are specifically for tribal entities and provided over $930 million in grants and loan guarantees in fiscal years 2017–2021. An additional 14 programs have a wider range of eligible recipients, such as small businesses or local governments, as well as tribal entities. The total amount of assistance provided by these 14 programs to tribal entities is unknown because two agencies—SBA's Office of Capital Access and USDA's Farm Service Agency—do not analyze data to estimate obligations provided to tribal entities. Estimating and reporting the amount of program obligations provided to tribal communities would allow federal agencies and decision makers, such as Congress, to better understand the reach of these programs and identify areas where tribal entities may need additional support.

GAO identified several tax incentives that can contribute to economic development in tribal communities. However, data to evaluate whether tribal entities use these incentives are limited. In the absence of more specific data, location data can be used to estimate the extent to which some tax incentives have reached tribal communities. For example, using location data for the New Markets Tax Credit, GAO estimated that from 2004 through 2019, tribal communities (defined as individuals and businesses on or near reservations, trust land, or Oklahoma Tribal and Alaska Native Village Statistical Areas) received between $734 million and $891 million of investment (1.3 to 1.6 percent of the total dollars invested via the credit).

Why GAO Did This Study

Historically, tribal communities have experienced higher rates of unemployment and poverty than nontribal communities. Tribal economic development may help address these challenges and also provides benefits to tribes and surrounding areas. The federal government administers programs to facilitate this development.

The Indian Community Economic Enhancement Act of 2020 includes a provision that GAO conduct a study on Indian economic development. This report examines economic development programs available to tribal entities and the extent of fragmentation, overlap, and duplication among these programs; analyzes available data on obligations to tribal entities for these programs; and describes selected tax incentives available to tribes and related data, among other objectives. GAO reviewed program information, analyzed obligations data, and interviewed tribal entities, agency officials, and Native Community Development Financial Institutions.

Recommendations

GAO is making five recommendations, including that Commerce maintain information on economic development programs available to tribal entities across the federal government and that SBA and USDA establish plans to periodically analyze and report the amount of economic development assistance provided to tribal entities. Commerce, SBA, and USDA agreed with our recommendations.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Commerce The Secretary of Commerce should establish an organizational structure and assign responsibilities for the Office of Native American Business Development. (Recommendation 1)
Closed – Implemented
In December 2022, the Commerce Secretary announced a new Director of the Office of Native American Business Development. According to Commerce, the office sits within the Office of the Secretary and is the primary contact for all Native American issues. Additionally, the Office advises the Secretary on policy that impacts tribes and Native Americans. Further, the Office of Native American Business Development serves as the focal point in the Department of Commerce; conducts outreach on major policy and program issues; and through the management and direction of a subordinate staff, provides information, assistance and consultation with the American Indian, Alaska Native and Native Hawaiian business communities. The actions by the Commerce Secretary to create an office and appoint a new director with specified duties meet the intent of the recommendation.
Department of Commerce The Director of Commerce's Office of Native American Business Development, in coordination with other relevant federal agencies and entities, should create, maintain, and share a repository of information on economic development programs across federal agencies that tribal entities can access, and should assist tribal entities in identifying programs best suited to their needs. (Recommendation 2)
Closed – Implemented
In December 2023, the White House announced a new tribal Executive Order and a new one-stop-shop for federal funding available to Tribes. The new one-stop-shop is known as Tribal Access to Capital and is found on the Bureau of Indian Affairs website. The website notes it is a multi-agency effort to improve awareness of, access to, and utilization of federal funding resources for Tribal governments, tribal enterprises, Native entrepreneurs, and Native Community Development Financial Institutions. This multi-agency action and website meets the intent of this recommendation.
Department of Commerce The Director of Commerce's Office of Native American Business Development, in coordination with tribes, should establish a plan for periodically publicly reporting the amount of economic development assistance provided by Commerce to tribal entities and using that information to identify opportunities to improve assistance to tribal entities. (Recommendation 3)
Open
The Department of Commerce agreed with this recommendation. When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Agriculture The Director of USDA's Office of Tribal Relations, in coordination with tribes, should establish a plan for periodically analyzing and publicly reporting the amount of economic development assistance provided to tribal entities by USDA and using that analysis to identify opportunities to improve assistance to tribal entities. This could include leveraging methods already used by specific USDA program offices such as Rural Development (Recommendation 4)
Open – Partially Addressed
USDA has taken steps to address the recommendation. For example, in May 2023, USDA's Office of Tribal Relations produced an action plan in response to the recommendation. Additionally, for FY2022 and FY2023, USDA's Office of Tribal Relations analyzed data and publicly reported on tribal obligations for relevant USDA Farm Service and Rural Development programs. In order to fully implement the recommendation, USDA's Office of Tribal Services should work closely with and inquire about the steps the Farm Service Agency has taken to explore additional data analysis methods beyond self-reported data to understand the reach of that agency's programs/funding in tribal communities.
Small Business Administration The Assistant Administrator of SBA's Office of Native American Affairs, in coordination with tribes, should establish a plan for periodically analyzing and publicly reporting the amount of economic development assistance provided by SBA to tribal entities and using that analysis to identify opportunities to improve assistance to tribal entities. (Recommendation 5)
Open
As of June 2023, SBA is taking several steps to address this recommendation. For example, according to SBA officials, the Office of Native American Affairs has identified barriers to access for underserved Native American communities to SBA's lending services and produced recommendations to help support equitable access. Further, in 2024, the Office of Native American Affairs plans to hold a formal tribal consultation on the findings and share analysis on its website regarding program usage data. In order to fully implement this recommendation, the Office of Native American Affairs should follow through on these steps and publicly report out on their findings.

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Topics

CensusCommunitiesCommunity developmentDevelopment assistanceEconomic developmentGrant programsLoan guaranteesNative AmericansNew markets tax creditSmall businessTax creditTax incentivesTribal governments