A sign at the entrance to Haskell Indian Nations University is shown Friday, Aug. 5, 2016.

A foundation that raises funds for Haskell Indian Nations University is under investigation after government officials discovered it lacked a written agreement regarding its relationship with the university, which could lead to legal violations.

The Haskell Foundation, located in Navarre Hall on the Haskell campus, needs some type of an agreement stating whether its rent is an in-kind donation or is actually paid, said Nancy DiPaolo, external affairs director for the Interior Department’s Office of Inspector General in Washington, D.C.

The investigation, originally prompted by allegations of nepotism and mismanagement, also discovered the not-for-profit foundation was operating as a fiscal agent on various Haskell grants not meant for the foundation.

“This arrangement allows foundation employees to manage federal grants and complete draw-downs of grant funds despite (the fact that the) grants are not specifically allowing for foundation involvement,” DiPaola said in a telephone interview with the Journal-World.

According to the management advisory issued by the inspector general, which the Lawrence Journal-World obtained, this kind of arrangement creates significant risks to the proper accounting of the grant funds and payment of any foundation compensation.

No details into the allegations of nepotism and mismanagement were included in the advisory, which was issued on Oct. 15. A report of the investigation findings by the Office of Inspector General will be made public Nov.16.

“We post all our investigation findings. We believe strongly in the transparency of government,” DiPaolo said.

Meanwhile, the newest executive director of the Haskell Foundation, Aaron Hove, has been on the job only since Sept. 24. He told the Journal-World that he wanted to rectify the issue.

“I found out recently there may not be a written document between the foundation and the university. I would say we welcome the opportunity to clarify and update as necessary the ongoing working relationship between Haskell Indian Nations University and Haskell Foundation,” Hove said.

The foundation was formed as a nonprofit corporation in 1984, with bylaws stating that its mission is to seek, encourage, receive and manage gifts, grants and bequests for the benefit of Haskell.

As previously reported, the foundation ran into problems in the late 1990s when its former executive director Gerry Burd admitted to stealing $100,000 from the foundation.

Burd resigned in 1999 amid reports that student and staff paychecks were bouncing, and trustees learned the foundation was more than $1 million in debt. An FBI investigation led to Burd’s conviction for stealing. Burd’s death in 2005 was ruled a suicide.

In 2014, the foundation was reactivated after Haskell President Venida Chenault took office. At the time Chenault told the Journal-World that “the foundation was working on building the infrastructure to properly manage incoming grants and determine staffing and procedures so as not to repeat history.”

Stephen Prue, a spokesman for Chenault, said the university had no comment regarding the current advisory.

The Haskell Foundation’s board of directors issued a news release Tuesday afternoon stating that plans were underway to solidify a new partnership agreement with the university.

“The Haskell Foundation welcomes the opportunity to clarify, and update, the on-going working relationship between Haskell Indian Nations University and the Haskell Foundation, a 501(c)(3) tax-exempt charitable organization,” Joe Clote, president of the Haskell Foundation board, stated in the release.

Hove said the foundation was more than happy to work with the Office of the Inspector General to establish the necessary boundaries.