5 ways for tribal governments to prepare for 2024
Tribal government funding is largely reliant on the political environment — which means uncertainty abounds.
The federal government is funded through January 2024, but then things could get shaky again. And the presidential election cycle will keep everyone on their toes. Tribes need to stay tuned in to state and national trends and predict how those trends will affect members and citizens at the local level.
Money related to the COVID-19 pandemic is winding down, so tribes need to make sure they can withstand delays if government programs are shut down or grant allocations change. They need budgeting and financial management tools to weather changing economic conditions, such as inflation. And they need to conservatively plan for the future to maximize the services and resources they offer citizens.
Tax credits are available to help tribes fund initiatives, like expanding broadband access and to help retain more of the revenue they bring in (e.g., from geothermal and green power stations).
2024 priorities for tribal governments
Tribes need to work closely with their community members to determine the most pressing needs to pay for today — and how to invest for future generations. In addition, tribes can focus on five areas that will help them navigate the upcoming year:
1. The political environment
The most recent federal budgets included increases for some tribal funding and introduced new programs for tribal communities. But everything is tentative until a new spending bill is approved.
Tribal leaders need to pay attention to the presidential election and what each candidate proposes for future funding. The outcome of the election could affect short- and long-term budgeting plans, so tribal leaders should create contingency plans to stay a step ahead.
Dedicated time and energy to building strong relationships with groups representing tribal needs in Washington is a good idea. The political atmosphere has an enormous impact on federal funding and grants tribes rely on. Leaders need to understand the current sentiment, proposed changes and their probable impacts.
2. Inflation
Inflation is projected to fall in 2024, but that doesn’t mean economic conditions will resolve entirely. Some pockets of the country will be slower to recover than others because of geography, industry ties and other factors.
Tribal leaders need to monitor the local conditions since they have the biggest impact on labor and service availability. Plan conservatively, as though inflation were to remain high, but hold onto hope for a better 2024. Tribes that budget and plan conservatively will have more flexibility and be able to fund more programming toward the end of the year.
3. Talent
More baby boomers are retiring every year, and there are fewer employees entering the workforce. That means the war for talent continues — and will get tougher every year.
Tribal leaders need to create succession plans for key roles to help ensure continuity and stability. Succession plans should consider the future needs of the tribe, in addition to positions that exist today. They may need to develop talent and succession plans in new areas to address emerging needs.
Tribal governments need to distinguish themselves as an “employer of choice.” They can create competitive working hours, flexibility, benefits packages and advancement opportunities to attract candidates and fill vacancies.
Outsourcing is another avenue to fill critical talent gaps. Tribes may need to look outside the community to fill roles in IT, accounting, payroll and human resources, among others. Outsourcing can fill temporary gaps or give tribal governments access to specialized skills they don’t currently have.
4. Technology
. That creates a disadvantage for tribal governments that haven’t pursued high-speed internet or cloud-based software, especially if they operate in remote areas where it’s challenging to recruit employees.
Many tribal governments could expand their talent pool by enabling remote work. Upfront, that requires investment in high-speed internet and cloud-based software — but there may be grant funding or tax credits available to soften the expense.
Because the talent shortage is a long-term problem, some industries are responding with longer-term investments, such as artificial intelligence (AI). As AI technology matures over the next few years, tribal governments should evaluate whether some functions or tasks could be eliminated or automated.
5. Proposed changes to Uniform Guidance
There are several proposed changes to the Uniform Guidance that affect administrative requirements, cost principles and audit requirements for federal awards.
The biggest impact to tribal governments is allowing tribes to follow their own procurement policies and procedures. The proposal removes the prohibition on geographical preferences and removes the requirement that tribal governments must publicly open sealed bids.
Other proposed changes include increasing the de minimis indirect cost rate from 10% to 15%, increasing the subaward exclusion from $25,000 to $50,000 and raising the audit threshold from $750,000 to $1,000,000 in total expenditures.
Once the guidance is final, take note so you stay compliant with new rules when they become applicable.
How Wipfli can help
For over 30 years, Wipfli has helped tribes grow and retain revenue and enhance the services they offer members. We have the accounting, business advisory and technology consulting resources you need now — and to prepare for future generations. To learn more, contact us today.
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