As you requested, we also assessed Interior’s trust fund management improvement initiatives. BIA provided a report package to each tribe on its reconciliation results in January, 1996. In addition, BIA’s reconciliation report package did not disclose known limitations in the scope and methodology used for the reconciliation process. Secretary’s Report on Reconciliation Results

The American Indian Trust Fund Management Reform Act of 1994 required that the Secretary of the Interior report to the House Committee on Resources and the Senate Committee on Indian Affairs by May 31, 1996, including a description of the methodology used in reconciling trust fund accounts and the tribes’ conclusions as to whether the reconciliation represents as full and complete an accounting of their funds as possible. According to the Secretary’s May 31, 1996, report
3 tribes, including 2 tribes for which additional pilot reconciliation procedures were performed, have disputed their reconciled account balances;
2 tribes with nominal balances have accepted their reconciled account
275 tribes, including 3 tribes that had additional pilot reconciliation procedures performed, have not yet decided whether to accept or dispute their account balances. BIA has not yet developed a comprehensive set of policies and procedures for trust fund management. Further, BIA and OTFM have not yet performed an adequate user needs assessment; explored the costs and benefits of systems options and alternatives; or developed a systems architecture as a framework for integrating trust fund accounting, land and lease ownership, and other trust fund and asset management systems. Because it is planned that LRIS will provide a BIA link to Interior’s core Automated Land Records Management System (ALMRS), a comprehensive strategic plan would need to consider the merits of LRIS in determining how trust ownership and accounting information needs can best be addressed. A legislated settlement process could be used to resolve questions about tribal account balances.
Why GAO Did This Study

GAO discussed the Department of the Interior's management of Indian trust funds.

What GAO Found

GAO noted that: (1) the Bureau of Indian Affairs (BIA) has completed its reconciliation of trust fund accounts, but the accounts could not be fully reconciled due to missing records and the lack of an audit trail; (2) the January 1996 BIA report to the tribes did not explain limitations in scope and methodologies used for the reconciliation process; (3) two tribes have accepted their reconciliation results, three tribes are disputing their results, and the remaining 275 tribes have not yet decided whether to accept or dispute their reconciliation results; (4) if Interior cannot resolve the tribes' concerns, the disputes can be resolved through a legislated settlement process; (5) Interior's trust fund management improvements will take several years to complete; (6) although BIA is replacing its inadequate management and accounting systems, it has not developed systems requirements to ensure that the new systems provide accurate information; (7) Interior has appointed a special trustee for Native Americans who has developed an outline of needed trust fund management improvements, but this outline needs to include various departmentwide options and alternatives and their associated costs and benefits to become a comprehensive strategic plan; and (8) resource constraints have limited Interior's ability to make trust fund management improvements.