As you requested, we also assessed Interior’s trust fund management improvement initiatives. However, despite over 5 years of effort and about $21 million in contracting fees, a total of $2.4 billion for 32,901 receipt and disbursement transactions recorded in the general ledger could not be traced to supporting documentation due to missing records. Further, BIA did not disclose that the universe of leases was unknown or the extent to which substitutions were made to the lease sample originally selected for reconciliation. The American Indian Trust Fund Management Reform Act of 1994 required that the Secretary of the Interior report to congressional committees 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. Legislated Settlement Process

If Interior is not able to reach agreement with tribes on the reconciliation results, a legislated settlement process would prove useful in resolving disputes about account balances. The draft legislation would provide for a mediation process and, if mediation does not resolve disputes, a binding arbitration process. Since 1991, our testimonies and reports on BIA’s efforts to reconcile trust fund accounts have called for a comprehensive strategic plan to guide future trust fund management and ensure that trust fund accounts are accurately maintained in the future. These initiatives were planned for implementation in fiscal year 1995. A legislated settlement process could be used to resolve questions about tribal account balances. Three major factors—lack of comprehensive planning, lack of management commitment across the organization, and limited resources—have impeded Interior’s progress in correcting long-standing trust fund management problems. Additional copies are $2 each.
Why GAO Did This Study

GAO discussed the Department of the Interior's efforts to reconcile Indian trust fund accounts, focusing on: (1) its efforts to implement trust fund management improvements; and (2) the usefulness of a legislated settlement process for resolving unsettled account balances.

What GAO Found

GAO noted that: (1) $2.4 billion in receipt and disbursement transactions could not be traced to supporting documentation at the end of fiscal year 1995; (2) Interior did not disclose the methodology used in the reconciliation process in its reconciliation report, or discuss the extent to which substitutions were made to lease samples; (3) 2 tribes have accepted their account reconciliations, 3 tribes are disputing their reconciliation results, and the remaining 275 tribes are undecided; (4) a legislated settlement process could be used to resolve disputes concerning tribal account balances; (5) this legislation would include a mediation process, and if needed, binding arbitration; (6) Interior's trust fund management, and accounting systems controls do not ensure accurate trust fund accounting and asset management; (7) Interior will face costly reconciliations and settlements in the future if it does not correct its trust fund management problems; and (8) Interior needs comprehensive planning, management commitment across all Indian trust program offices, and additional resources to resolve trust fund management problems.