Bureau of Indian Affairs' Efforts to Reconcile, Audit, and Manage the Indian Trust Funds

GAO discussed the status of the Bureau of Indian Affairs' (BIA) efforts to implement a congressionally mandated Indian trust fund reconciliation and audit project and improve financial management. GAO noted that: (1) BIA divided the project into two phases; (2) the first phase will cover over 500 tribal accounts belonging to 37 of 254 tribes; (3) the first phase will also cover 17,000 individual Indian money accounts; (4) the phase I contractor will submit a phase II plan to cover the remaining 1,500 tribal and approximately 283,000 individual Indian money accounts; (5) BIA made progress in starting the project, but it needed to ensure effective management, accounting, and reporting; (6) BIA still had not finalized its phase I reconciliation management plan; (7) BIA will have to reconstruct old accounts before it can determine an accurate balance; (8) despite the significant potential for incomplete records and the resulting problems due to the outdated accounts, BIA believed that reconciliation work will adequately disclose overpayments and inconsistent investments that resulted in lost interest; and (9) BIA lacked an adequate long-term strategy for keeping the accounts balanced.