Nonprofit Receives $23.6 Million in Federal Funds Amid Repeated Accounting Weaknesses

The National Council of Urban Indian Health, a nonprofit serving health programs for urban American Indians and Native Alaskans, was awarded $23.6 million in federal funding across four years while an auditor reported material weaknesses— the most severe internal-control flaw—in its finances for 2022 and 2023 and flagged accounting problems in three of the four years examined. In 2022 the council received $200,000 before it could document qualifying expenses and subsequently sought additional funds without accounting for the prior payment; the following year it recorded a promised contribution as revenue before meeting the required conditions, forcing a $200,000 correction.

The council attributed the deficiencies to high staff turnover and a period of rapid growth, noting that its finance team shrank from five to two people. A new finance director implemented updated accounting software that resolved the latest revenue-recognition issue, and the 2024 audit found no repeat of that problem. Nevertheless, staffing challenges persist, and the organization’s federal funding has fluctuated, peaking at $8.3 million in 2023 before decreasing after the COVID-19 emergency ended.