[Bureau of Indian Affairs Questions on Payments to Indians]

The Indian Service Special Disbursing Agent requested a decision as to whether he: (1) should overdraft the Individual Indian Money (IIM) accounts to refund the overpayments and accrued interest resulting from the recovery of erroneous Indian probate proceeding distributions; and (2) would be granted relief from liability for the payments. GAO found that: (1) an administrative law judge had erroneously ordered the distribution of trust funds arising from sale of lands to two Indians whose monies were placed in their IIM accounts; and (2) one Indian had been paid from her account. GAO held that: (1) overpayments, including accrued interest, which were withdrawn in good faith by an Indian and recovered by the Department of the Interior from the monies deposited in the IIM account from an unrelated proceeding, may be returned to the overpaid Indian; (2) overpayments, including accrued interest, which Interior recovered from monies in the IIM account attributable to the same proceeding may not be returned to the overpaid Indian; (3) the government cannot be charged interest on monies it pays to an Indian, notwithstanding the fact that it breached its trust responsibility; and (4) there was no need for the disbursing agent to request relief since the repayment was not improper or incorrect. Accordingly, the disbursing agent may refund the overpayments which have been improperly recovered.