Override vote could shift oversight of ARPA funds

WINDOW ROCK

With roughly eight months left to spend its remaining share of $1.86 billion in federal pandemic recovery funds, the 25th Navajo Nation Council opens its Spring Session Monday with a vote that could reshape who signs off on those expenditures.

Delegates are set to consider whether to override President Buu Nygren’s veto of an emergency resolution, Council Resolution CMA-16-26, that would remove Navajo Nation Fiscal Recovery Fund oversight from the Division of Community Development. The measure requires a two-thirds vote to take effect.

All NNFRF funds had to be obligated by Dec. 31, 2024, and must be fully spent by Dec. 31, 2026, or any unspent money will revert to the federal government.

Spending deadline looms

In a November 2025 interview, Controller Sean McCabe warned that the Navajo Nation remained far behind in spending hundreds of millions of dollars in federal pandemic relief funds. He said the Nation’s bureaucracy, delayed projects, rising costs and compliance risks had left only a narrow path to meet the federal deadline.

McCabe said at the time that the Nation had about 13 months left to spend roughly $370 million in ARPA funds, not including money already advanced to programs or entities that had not yet been spent.

To avoid returning money to the federal government, McCabe said the Nation would need to spend between $30 million and $35 million a month through the Dec. 31, 2026, deadline. A previous estimate placed the required spending pace at about $20 million a month, but that number increased after spending lagged during the prior quarter.

“There’s only two ways we’re going to give money back to the federal government,” McCabe said. “Either we’re not going to spend it on time by the December 31, 2026, deadline or we’re going to spend it out of compliance. And right now, there’s reason to believe that both of those things are a concern.”

The Office of the Controller and other offices have not made public how much NNFRF money has been spent, and recent ARPA discussions have largely taken place in executive session.

McCabe said the Nation had narrowed its remaining ARPA work to about seven major areas after reallocations approved in summer 2025, but several continued to lag.

“Housing has been kind of an ongoing concern of mine,” McCabe said, citing issues involving ZenniHome-related work and what he described as sluggish spending and output tied to housing allocations, including Community Housing and Infrastructure Department, veterans housing and the Navajo-Hopi Land Commission.

McCabe said in November that NTUA projects appeared to be moving, but some non-NTUA water projects under Water Resources were behind schedule. He also raised concerns about compliance issues and slow spending involving the Navajo Engineering and Construction Authority, and said broadband projects needed more updates.

McCabe said the underlying problem was not only the size of the remaining ARPA balance, but the way the Navajo government processes spending, approvals and project documentation. He said the Nation’s system was not designed for quick deployment of resources.

“Simple transactions have to go through five, six, seven, eight, sometimes 10 different approval processes,” McCabe said.

Many delays, McCabe said, were caused by issues outside the accounting system, including right-of-way problems, internal laws and policies, tariffs, rising costs and supply chain shortages affecting projects on the Navajo Nation.

McCabe said the Nation may need another reallocation plan to increase the chances of spending the money before the federal deadline, which could include a substantial hardship component.

Override would shift oversight

The Nation already had one close call with the federal obligation deadline. In December 2024, facing $5.6 million in still-unobligated funds, the Council passed Resolution CD-54-24, an emergency measure that approved a comprehensive interagency agreement to move the remaining money into place before the Treasury cutoff.

That same resolution transferred NNFRF administrative oversight from the Office of the President and Vice President to the controller’s office. CMA-16-26 now seeks to amend that process again.

CMA-16-26 began as Legislation 0036-26, emergency legislation introduced by Delegate Shawna Ann Claw on Feb. 17. Its central move is threefold. It removes the Division of Community Development from administrative oversight of all NNFRF projects, including subrecipient agreements, makes the controller’s office and the NNFRF office the sole administrative oversight authorities for those projects, and authorizes the controller to move money between NNFRF projects that are “substantially similar,” as long as the original public purpose is preserved.

Section 5 of the resolution separately clarifies that the president retains authority to execute new contracts on NNFRF projects.

The Council passed CMA-16-26 during a March 5 special session by a vote of 16 in favor and one opposed, moving it as part of a consent agenda. The resolution was certified March 12 and sent to the OPVP.

Nygren cites separation of powers

Nygren vetoed it March 22, telling Speaker Crystalyne Curley and the Council that the measure raised legal, administrative and operational concerns.

Nygren’s veto letter argues that portions of CMA-16-26 intrude on Executive Branch authority by attempting to modify subrecipient agreements entered into by the Executive Branch and executed by the president. He wrote that while the Council can amend its legislation to identify a new administrative oversight authority, it cannot amend or modify Executive Branch agreements.

Nygren also objected to language directing the controller’s office and the Office of Management and Budget to prepare and execute amendments to contracts or subrecipient agreements to accomplish reallocations of fiscal recovery funds. He said that conflicts with the president’s authority under Title 2 to execute contracts for the Executive Branch.

“Council cannot designate OOC and OMB to execute contract amendments, as that is the sole purview of the President,” Nygren wrote.

Nygren also objected to Section 6, which waives inconsistent provisions in prior Council and standing committee resolutions, as well as executive orders issued by the president, to the extent necessary to carry out the legislation.

“While Council can waive provisions of the laws it passes, only the President can waive executive orders,” Nygren wrote. “This is another example of how the legislation violates the separation of powers between the Legislative and Executive Branch.”

Nygren also argued that CMA-16-26 would narrow flexibility previously given to the controller under CD-54-24 by limiting movement of money between NNFRF projects that are “substantially similar.” He wrote that Treasury guidance does not limit reallocations only to similar projects and that the restriction could hinder the Nation’s ability to respond to changing priorities and meet the Dec. 31, 2026, expenditure deadline.

Nygren further said Section 5 was misleading because it suggested the president could execute new fiscal recovery fund contracts despite federal limits after the Dec. 31, 2024, obligation deadline. He wrote that new obligations are not allowed after that deadline except in limited circumstances, such as replacement contracts carrying out the same scope of work.

He also criticized Section 6 as too broad and difficult to implement. Nygren said the provision could leave too much discretion over what is “necessary” and create more confusion and delay in spending fiscal recovery funds.

The findings attached to Legislation 0069-26 describe centralizing oversight under the controller and the NNFRF Office as reasonably related to improving accountability, consistency and efficiency in the remaining spend-down.

The authority to shift funds between substantially similar projects, the findings argue, is the kind of administrative flexibility needed to prevent delays, project failure or outright reversion of federal money.

The Council also responds to two of Nygren’s objections. CMA-16-26, the findings state, does not take away Nygren’s contract-execution authority for the Executive Branch. The findings also state that Section 5 does not create new substantive authority or authorize any action contrary to federal law or Treasury guidance.

Delegates explicitly reject any reading of the measure that would require or authorize unlawful obligations or expenditures of the NNFRF.

If the override succeeds, CMA-16-26 would take effect upon certification by Curley and the Division of Community Development would immediately lose its NNFRF oversight role. If the Council falls short of 16 votes, the DCD will keep its current role and the Nation’s NNFRF administration would continue its current path as the December 2026 spending deadline approaches.

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