Financial Management: Focused Leadership and Comprehensive Planning Can Improve Interior's Management of Indian Trust Funds

GAO discussed the Department of the Interior's management of Indian trust funds, focusing on: (1) how Interior could improve its trust fund management; and (2) the Bureau of Indian Affairs' (BIA) efforts to reconcile Indian trust fund accounts, develop a trust fund loss policy, and restore lost funds to account holders. GAO noted that: (1) Interior's trust fund management problems are long-standing and permeate all facets of its financial management business functions; (2) although initiatives are underway that could help Interior improve its management of Indian trust funds, many initiatives will not be completed for several years; (3) Interior lacks a comprehensive strategic plan to address the full range of its management problems and help tribes assume greater responsibility for managing their assets; (4) pending trust fund legislation would establish a special trustee to develop a strategic plan, provide oversight of Indian trust fund reform efforts, and coordinate trust responsibilities; (5) long-standing management problems have impeded BIA ability to maintain proper control and accountability over individual Indian trust funds accounts; (6) in May 1994, BIA finalized its Indian trust fund account loss policy; (7) BIA has made progress in restoring lost funds to trust account holders and has resolved most of the $2 million in claims related to the mass cancellation of uncashed checks; and (8) Interior needs a comprehensive plan, focused leadership, and management commitment to implement needed improvements.