OST Estimates that Almost All of Its Key Trust Reforms Will Be Completed by November 2007, but Has Yet to Prepare a Timetable for Completing Its Remaining Reforms

OST has implemented several key trust fund management reforms, but  OST has not prepared a timetable for completing its remaining trust  reform activities or identified a date for its termination under the 1994 Act. OST estimates that almost all of the key reforms needed to develop an  integrated trust management system and to provide improved trust  services will be completed by November 2007, but OST believes some  additional improvements are important to make. In particular, once the  validation of BIA’s new trust asset and accounting management system  (TAAMS) leasing information for Indian lands with recurring income is  completed, BIA and OST plan to validate the leasing information for Indian  lands that do not have recurring income. The Special Trustee expects  these validation activities will be completed by December 2009. Trust Funds Receivable. However, the Special Trustee has yet to provide the  Congress with a timetable for completing the remaining trust reform  activities and a date for OST’s termination, even though OST’s most recent  strategic plan—the Comprehensive Trust Management Plan—issued in  March 2003, stated that OST would be able to forecast a date for  termination within the next 14 months. If OST is terminated, it is unclear where OST responsibilities—including  trust fund management and accounting operations, beneficiary services,  trust records management, and land appraisals—will be transferred. OST has not developed a workforce plan that reexamines the expenditures  and staffing levels needed for trust fund operations—including managing  and accounting for trust funds, providing trust services, maintaining trust  records, and conducting land appraisals—once trust reforms are  completed. OST Has Relied on Contractors to Implement Many of Its Trust Reform Activities

Since its inception, OST has relied on contractors to perform many of its  trust reform activities as a way to minimize the size of its permanent staff. In fiscal years 2004 and 2005, OST obligated nearly 21 percent of its  appropriated funds to contracting. About 66 percent of contracting dollars from fiscal  years 2004 and 2005 went to 2 firms. Most of the contracting with CNI, an  Indian-owned 8(a) small business, was based on an indefinite delivery,  indefinite quantity contract. For example, OST’s fiscal year 2007 budget  request proposed to reduce funding by about $4.9 million as a result of the  completion of certain contract efforts, including the following reductions:    $1,400,000 from the Office of Trust Accountability for contract costs  related to defining, developing, facilitating, and delivering trust training  programs;   $1,050,000 from the Office of Trust Accountability for contract costs  related to the development of policies and procedures and upgrades of  systems for the reengineering of trust processes;   $885,000 from the Office of Trust Accountability for contract costs related  to the modeling of business practices for the purposes of risk  management;   $675,000 from the Office of Trust Review and Audit for contract costs  related to the development of the Indian Trust Examiner certification; and    $425,000 and $450,000 from the Offices of Field Operations and Trust  Services, respectively, for contractors that were providing accounting  services, such as data cleanup and encoding. Conclusions

OST is in the final stages of implementing the trust fund management  reforms that the 1994 Act required. However, the Special Trustee has not  provided the Congress with a timetable for completing these reforms, as  required by the act. We reviewed the 47 reform efforts on Interior’s list and, while  they are important activities for the implementation of OST’s trust  reforms, we believe they are not key components of OST’s integrated  information system that interfaces the trust funds accounting system with  BIA’s land title records and asset management systems for Indian lands.
Why GAO Did This Study

The American Indian Trust Fund Management Reform Act of 1994 established the Office of the Special Trustee for American Indians (OST), within the Department of the Interior, to oversee the implementation of management reforms for funds--derived primarily from Interior's leasing of Indian lands--that Interior holds in trust for many Indian tribes and individuals. Specifically, the act directs that an integrated information system be developed that interfaces the trust fund accounting system with the land title records and asset management systems maintained by Interior's Bureau of Indian Affairs (BIA). GAO examined (1) OST's progress in implementing the trust fund management reforms and (2) the extent to which OST has used contractors in implementing these reforms. GAO reviewed OST's strategic plans and contracting documents and interviewed OST and BIA managers.

What GAO Found

OST has implemented several key trust fund management reforms, but has not prepared a timetable for completing its remaining trust reform activities and a date for OST's termination, as required by the 1994 Act. OST estimates that almost all key reforms needed to develop an integrated trust management system and to provide improved trust services will be completed by November 2007. Specifically, OST implemented a new trust funds accounting system for processing trust account funds, and BIA and OST are currently validating data for the trust asset and accounting management system for managing Indian land title records and leases for land with recurring income. However, the Special Trustee estimates that data verification for leasing activities will not be completed for all Indian lands until December 2009. OST's most recent strategic plan, issued in 2003, did not include a timetable for implementing trust reforms or a date for OST's termination. The Special Trustee notes that many OST functions, including trust fund operations, trust records management, and appraisal services, need to be performed after reforms are completed. If OST is terminated, these responsibilities would have to be transferred to another Interior office. OST plans to reduce expenditures primarily by terminating contracts once trust reforms are completed. However, OST has not yet developed a workforce plan that reexamines the expenditures and staffing levels needed for trust fund operations once trust reforms are completed. OST has used contractors to perform many of its trust reform activities as a way to minimize the size of its permanent staff. In fiscal years 2004 and 2005, OST allocated $89.7 million, or nearly 21 percent, of its appropriated funds to contracting. About 66 percent of contracting dollars from these 2 fiscal years went to two firms. Over $31 million during this period went to the largest contractor, an Indian-owned 8(a) small business, by adding task orders through an existing contract. OST has primarily relied on Interior's National Business Center to award and manage contracts.