Inappropriate Use of an Indian Trust Fund To Subsidize BIA Activities

FGMSD-80-78: Published: Oct 7, 1980. Publicly Released: Oct 7, 1980.

Additional Materials:


John F. Simonette
(202) 275-1581


Office of Public Affairs
(202) 512-4800

The Indian Moneys, Proceeds of Labor Trust Fund is supposed to finance the Bureau of Indian Affairs' (BIA) operation of Indian schools and agencies which should generate the trust fund's revenue. However, BIA uses the fund to support other administrative activities that are funded directly by appropriations. Contrary to law, trust fund revenue is generated from sources unrelated to authorized trust fund activities.

Although the fund should not finance BIA operating expenses, it was used for such purposes. It was also used as a revolving fund to finance activities that support BIA operations, other federal agencies, and/or private organizations. BIA officials told GAO that the trust fund was used for administrative expenses when appropriated funds ran out. By doing so, BIA used the fund to circumvent attempts by Congress to reduce BIA administrative costs. BIA appropriations accounting structure has procedures for handling reimbursements for goods and services. The trust fund is no longer needed to account for expenses and revenue of Indian agencies and schools operated by BIA.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: When we determine what steps the Congress has taken, we will provide updated information.

    Matter: Congress should repeal legislation which authorizes the trust fund known as "Indian Moneys, Proceeds of Labor" and then, in consultation with BIA, it should transfer moneys to appropriate sources such as other Indian trust funds, or to the Treasury as miscellaneous receipts.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: BIA has not revised its accounting system as promised. GAO has made essentially the same recommendation in a September 8, 1982 report (AFMD-82-71).

    Recommendation: The Secretary of the Interior should make certain the BIA revised accounting system is submitted to GAO for approval and include adequate fund controls to keep its organizational costs within amounts budgeted.

    Agency Affected: Department of the Interior

  2. Status: Closed - Not Implemented

    Comments: The law eliminating the fund specified how the money in the fund should be divided among other appropriations. BIA currently discloses amounts in the other funds to Congress.

    Recommendation: The Secretary of the Interior should require BIA to follow applicable laws and regulations to manage the types of revenue that have been placed in the trust fund and make sure the amounts of revenues from such sources are fully disclosed to Congress.

    Agency Affected: Department of the Interior


Explore the full database of GAO's Open Recommendations »

Nov 16, 2020

Nov 10, 2020

Nov 9, 2020

Nov 6, 2020

Oct 13, 2020

Sep 30, 2020

Sep 9, 2020

Looking for more? Browse all our products here