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Albuquerque, , N.M. • The findings of an investigation initiated by a U.S. senator into the spending of federal housing grants on the nation's largest American Indian reservation suggest mismanagement resulted in cost overruns and delays.

Top Navajo Nation officials in a statement issued late Thursday detailed the findings along with numerous recommendations made by Republican Sen. John McCain of Arizona.

The recommendations include reducing the federal government's allocation to the tribe for new homes, streamlining land acquisition and permitting processes and increasing site visits by federal inspectors.

McCain's office also is recommending that the Navajo Housing Authority and the U.S. Department of Housing and Urban Development provide annual performance reports that include clear data on how many houses have been built or modernized and how many of those are rental units or turned over to owners.

According to the findings, the housing authority over 10 years received more than $803 million in federal block grant funding and built only 1,110 homes. There were also concerns about board members misusing income generated by rental properties.

McCain said the authority's lack of progress can't be reconciled with the fact that the agency is supported by 350 employees and spends about 15 percent of its annual allocation under the grant program on planning and administration.

The poor administration of grant funds by the authority "has exposed the program to an excessive risk of waste, fraud and abuse," the senator said.

Navajo President Russell Begaye acknowledged that the housing authority has been put under the microscope by both the federal government and the Navajo people.

"We take the report and the issues raised very seriously," he said. "Our number one concern has always been that the Navajo people receive adequate housing."

However, Begaye and other tribal leaders criticized the suggestion that Congress cap or reduce the federal government's allocation for new homes on the Navajo Nation, which spans parts of Arizona, northwestern New Mexico and southeastern Utah.