Indian Programs: BIA Should Streamline Its Processes for Estimating Land Rental Values

RCED-99-165 Published: Jun 30, 1999. Publicly Released: Jun 30, 1999.
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Highlights

Pursuant to a legislative requirement, GAO reviewed the Bureau of Indian Affairs' methods of establishing the lease value of Indian land, focusing on: (1) how the Bureau uses appraisals and other methods to establish the lease value of Indian land; (2) how its appraisal methods compare to those of other federal and state agencies and of private appraisers and what other methods are used to value federal, state, and private leases; (3) what impediments to leasing Indian trust land have been identified; (4) what alternatives to appraisals could be used to establish the lease value of Indian land, including any changes in federal laws and regulations that would be required; and (5) what efforts the Bureau has made to improve its appraisal methods.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of the Interior In addition to concurring with the Department of the Interior's ongoing efforts to review and revise the Bureau's appraisal program, The Secretary of the Interior should direct the Commissioner of the Bureau of Indian Affairs to develop a clear policy on how fair annual rental can be estimated using other methods in addition to appraisals, such as market surveys, fee schedules, and formulas, where appropriate.
Closed – Implemented
The Bureau of Indian Affairs issued regulations on January 22, 2001, that clarify that the Bureau will determine fair annual rental value for leases on Indian lands by appraisal, advertisement, competitive bidding, or any other appropriate valuation method.
Department of the Interior In addition to concurring with the Department of the Interior's ongoing efforts to review and revise the Bureau's appraisal program, The Secretary of the Interior should direct the Commissioner of the Bureau of Indian Affairs to establish consistent standards and guidelines for applying lease valuation methods.
Closed – Not Implemented
In its initial response to this recommendation, the Bureau indicated that the appraisal chapter of the Indian Affairs Manual for Real Estate Services would be updated, and that the Chief Appraiser would revise the appraisal handbook as needed to reflect changes in the program and to clarify specific appraisal standards and processes. However, the Manual update is still not complete because in June 2002, pursuant to Secretarial Order 3240, the appraisal function was moved from the Bureau's Office of Real Estate Services to the Office of the Special Trustee. According to the Bureau's Chief Appraiser, drafting of the revised handbook has not occurred because of the Department of the Interior's pending consolidation of its appraisal function under the Secretary of the Interior.
Department of the Interior In addition to concurring with the Department of the Interior's ongoing efforts to review and revise the Bureau's appraisal program, The Secretary of the Interior should direct the Commissioner of the Bureau of Indian Affairs to review the area offices' appraisal tracking data and ensure that the data are consistent and complete so that the Bureau can monitor and make the most effective use of its appraisal resources.
Closed – Not Implemented
In June 2002, Secretarial Order 3240 transferred the Bureau's appraisal function to the Department of the Interior's Office of the Special Trustee. Meanwhile, trust reform has delayed the development of the appraisal tracking system, and the Department has issued a contract with EDS to develop an automated system for trust fund management. The completion date is not yet known. According to the Bureau of Indian Affairs' Chief Appraiser, as of August 2003, development of the tracking system continues to be delayed because of ongoing litigation.

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