Farmington — Despite the looming start of fiscal year 2014, Navajo Nation President Ben Shelly is continuing to review the $587.4 million budget the tribal council has submitted.

Shelly has until Sunday to sign it, veto it or use his line-item veto authority.

If he does not take any action, the budget will automatically go into effect on Tuesday, Oct. 1, which is by tribal law the first day of the new fiscal year.

"We're expecting him to take action," said Shelly's spokesman Erny Zah.

The president has been carefully reviewing the budget after Navajo Nation Council Speaker Johnny Naize signed the correct version on Sept. 18 and submitted it the next day to Shelly's office, Zah said.

The first version was delivered Sept. 10 but did not contain numbers that reflected the council authorizing $7.9 million in supplemental funding requests from the Unreserved, Undesignated Fund Balance and using $6.3 million from the Personnel Savings Fund.

Although the updated budget was submitted Sept. 19, Shelly is concerned about the supplemental requests and their effects on the UUFB, Zah said. The council uses the UUFB as a "rainy day fund" to cover unexpected expenses.

When the council convened to discuss the budget earlier in the month, they passed the supplemental requests, totaling $7,959,165.

Those requests are divided as the following:

• $150,000 as a grant to Northern Arizona University

• $3 million for waterlines, power lines and housing in the former Bennett Freeze Area and Navajo Partitioned Land in Arizona

• $32,750 for Diné Land Senior Rodeo Association

• $500,000 for mileage and fuel costs for vehicles used by law enforcement, first responders, senior citizens centers and community health representatives

• $44,415 to complete the remediation process of the Kayenta District Court building

• $3 million to fund the Public Employment Program at the 110 chapters

• $1,232,000 for chapter house repairs and renovations in Chichiltah, NM, and Chilchinbeto, Lupton and Teec Nos Pos, Ariz., and Oljato, Utah.

The UUFB was at $7,959,272 as of Sept. 12, according to a memorandum from the Office of the Controller.

If Shelly approves the council's action, it would drain the money for appropriation in the UUFB to $107.

The president is concerned about the UUFB dropping that low, Zah said, because by tribal law it needs to have a minimum fund balance equal to 10 percent of the prior fiscal year's operating budget.

That means that $17.3 million needs to remain in the fund, because the 2012 fiscal year operating budget was $173 million. The controller's office reported that the minimum fund balance remains at $17.3 million in the UUFB.

But Shelly is concerned that UUFB will have only a little more than $100 left for appropriation, Zah said.

The council also approved using a portion of the Personnel Savings Fund to fund various divisions, programs and departments that are facing shortfalls.

The Personnel Savings Fund was established to cover cost of living increases or wage adjustments for tribal employees. The fund receives money from salaries left from vacant positions each fiscal year are carried into the next fiscal year.

But, in 2011, the new 24-member council amended the fund to allow any remaining balance in the fund to be spent on other projects.

The 2014 budget allocates $2.9 million from the fund for a 3 percent general wage adjustment for employees and $3.4 million for divisions, departments, chapters and fairs.

Shelly understands the need to fund programs and projects, Zah said, but the president is continuing to review each supplemental request to make sure procedures and protocols were followed.

In an October 2011 executive order to divisions and programs housed in the executive branch, Shelly stressed the need for fiscal responsibility.

"The Navajo Nation has more unmet needs than funding available. Because the nation cannot meet the entire financial need, it is necessary to prioritize and limit programs' supplemental budget requests," the order stated.

It also set standards for not approving supplemental requests. Requests should be denied, the order stated, if programs did not exercise proper spending or if they faced outstanding audit findings or deficiencies.

Shelly is continuing to adhere to that order as he reviews the budget, Zah said.

Noel Lyn Smith covers the Navajo Nation for The Daily Times. She can be reached at 505-564-4636 and nsmith@daily-times.com. Follow him on Twitter @nsmithdt on Twitter.