Financial Management:

Indian Trust Fund Accounts Cannot Be Fully Reconciled

T-AIMD-95-94: Published: Mar 8, 1995. Publicly Released: Mar 8, 1995.

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GAO discussed the Bureau of Indian Affairs' (BIA) efforts to reconcile Indian trust fund accounts and make needed management improvements to ensure the accounts' future accuracy. GAO noted that: (1) BIA has spent 4 years and $16 million to reconcile Indian trust fund accounts, which it has not fully reconciled; (2) BIA is requesting $6.8 million for fiscal year 1996 to continue the detailed reconciliation; (3) even with additional funding, BIA will not be able to provide reasonable assurance that the account balances are accurate due to missing lease and accounting records, the inability to verify that all earned revenues were collected and posted and disbursed correctly, and the lack of accurate, up-to-date ownership information; (4) BIA has made some improvements in its management of the trust funds, such as acquiring better accounting systems and developing written policies and procedures; and (5) further actions are needed to ensure accurate lease and ownership information, which is the basis for posting most trust fund receipts and disbursements.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: In response to GAO's testimony, the Appropriations Committee's Conference Report reduced the Bureau of Indian Affairs' fiscal year 1996 appropriation by $6.2 million and called for BIA to complete the trust fund reconciliation in fall 1995. The Senate Committee on Indian Affairs, with the support of the House Committee on Resources, Subcommittee on Native American and Insular Affairs, called for BIA to issue reports to tribes on the results of the reconciliation in early 1996 and report to the committees by May 31, 1996, on the results of the reconciliation. The Senate Committee on Indian Affairs and the House Resources Subcommittee asked GAO to prepare, for discussion purposes, draft settlement legislation to resolve tribal disputes of reconciled account balances. On September 29, 1995, GAO issued a legislated settlement proposal--Financial Management: Indian Trust Fund Settlement Legislation (GAO/AIMD/OGC-95-237R).

    Matter: Because the Indian Trust Fund accounts cannot be fully reconciled, Congress should consider legislating a settlement process in lieu of continuing to fund the BIA reconciliation effort.

 

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