Financial Management: Focused Leadership and Comprehensive Planning Can
Improve Interior's Management of Indian Trust Funds (Letter Report,
09/22/94, GAO/AIMD-94-185).

For years, the Interior Department has been unable to correct many
serious financial management problems affecting the Indian trust funds,
including (1) backlogs in land title and beneficial ownership
determinations and recordkeeping, (2) inadequate management of natural
resource assets to ensure that all earned revenues derived from natural
resources are collected, (3) improper accounting practices, and (4)
limited trust fund investment options. In addition to recent management
initiatives to implement needed improvements, additional options would
more fully address trust fund management problems. Further, more focused
leadership, management commitment, and a comprehensive strategic plan
would help Interior to effectively address all of its trust fund
management responsibilities.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD-94-185
     TITLE:  Financial Management: Focused Leadership and Comprehensive 
             Planning Can Improve Interior's Management of
             Indian Trust Funds
      DATE:  09/22/94
   SUBJECT:  Native Americans
             Indian lands
             Land management
             Federal agency accounting systems
             Financial management
             Funds management
             Trust funds
             Accounting procedures
             Renewable natural resources
             Internal controls
IDENTIFIER:  Indian Trust Fund
             6-Point Trust Fund
             Dept. of the Interior Trust Asset Management Reform Plan
             BIA Land Records Information System
             BLM Automated Fluid Minerals Management System
             MMS Production Accounting and Auditing System
             Dept. of the Interior 6-Point Reform Plan
             Federal Thrift Savings Plan
             
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on Environment, Energy, and
Natural Resources, Committee on Government Operations, House of
Representatives

September 1994

FINANCIAL MANAGEMENT - FOCUSED
LEADERSHIP AND COMPREHENSIVE
PLANNING CAN IMPROVE INTERIOR'S
MANAGEMENT OF INDIAN TRUST FUNDS

GAO/AIMD-94-185

Indian Trust Funds


Abbreviations
=============================================================== ABBREV

  AFMMS - Automated Fluid Minerals Management System
  AFS - Accounting and Financial System
  ALMRS - Automated Land and Mineral Records System
  BIA - Bureau of Indian Affairs
  BLM - Bureau of Land Management
  CERT - Council of Energy Resource Tribes
  FMS - Financial Management Service
  FOGRMA - Federal Oil and Gas Royalty Management Act
  GDSC - Geographic Data Service Center
  GIS - Geographic Information System
  IIM - Individual Indian Money
  IRMS - Integrated Resources Management System
  LRIS - Land Records Information System
  LTRO - Land Title Records Office
  NASD - National Association of Securities Dealers
  NIOGEMS - National Indian Oil and Gas Evaluation and Management
     System
  MMS - Minerals Management Service
  OIG - Office of Inspector General
  OTFM - Office of Trust Funds Management
  OTR - Office of Trust Responsibilities
  PAAS - Production Accounting and Audit System

Letter
=============================================================== LETTER


B-247216

September 22, 1994

The Honorable Mike Synar
Chairman, Subcommittee on Environment,
 Energy, and Natural Resources
Committee on Government Operations
House of Representatives

Dear Mr.  Chairman: 

In April 1992, the House Committee on Government Operations concluded
its investigation of the management of the Indian trust funds and
published its report.\1 The report expressed concern over the limited
progress that the Bureau of Indian Affairs (BIA) and, in some cases,
the Bureau of Land Management (BLM) and the Minerals Management
Service (MMS) had made in resolving persistent trust fund management
problems. 

Because the Department of the Interior, which oversees these
agencies, had not taken action on recommendations in the Committee's
report, in March 1993, you asked us to identify options for improving
Indian trust fund management, including ways to address related
problems in managing fractionated ownerships and natural resource
assets.  In response to your request, this report (1) provides an
update on continuing trust fund management problems, (2) assesses
ongoing BIA, BLM, and MMS efforts to correct some of those problems,
(3) discusses several options that Interior could consider to make
further needed improvements, and (4) identifies major obstacles to
trust fund management improvements. 


--------------------
\1 Misplaced Trust:  The Bureau of Indian Affairs' Mismanagement of
the Indian Trust Fund (House Report 102-499, April 22, 1992). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Interior's Indian trust fund management problems are long-standing
and permeate all facets of the trust fund management business cycle. 
They include (1) the lack of accurate, up-to-date information on
ownerships to ensure that revenue is distributed to the correct
account and the increasing workload associated with fractionated
ownerships, (2) inadequate management of natural resource assets to
ensure that all earned revenues are collected, (3) weaknesses in
trust fund management systems and internal controls and policies and
procedures that do not ensure the accuracy of trust fund balances,
and (4) the failure to consistently and prudently invest trust funds
and pay interest to account holders. 

Interior has management and systems initiatives planned or under way
which, if implemented effectively, could help to improve services to
tribes and Indians and also help to improve ownership, resource
management, and accounting systems.  However, many of the initiatives
are in the early stages and a number of them will not be completed
for several years.  Further, the Secretary's 6-Point Trust Funds and
Trust Asset Management Reform Plan, issued in June 1994, does not
provide the comprehensive approach needed to address the full range
of trust fund and asset management problems that Interior continues
to face. 

We identified several options that could help Interior make
additional improvements in managing the Indian trust funds.  These
include (1) providing additional resources to eliminate backlogs in
land title and beneficial ownership determinations and recordkeeping,
(2) obtaining state-of-the-art natural resource asset management
systems and services and providing training and assistance to tribes
who wish to assume responsibility for managing their natural
resources under self-determination initiatives, (3) obtaining
reliable trust fund accounting systems and contracting for banking
services to ensure that accounts are properly maintained, reports are
timely and reliable, and account holders receive comprehensive trust
account statements, and (4) contracting for investment advisors and a
custodian to settle trades, safeguard securities, and track
investments, and also consider establishing an index investment fund
option for tribes. 

A sustained commitment will be needed to carry through on needed
improvements.  In the past, Interior has not demonstrated the
leadership or management commitment needed and many previous
corrective action efforts have failed outright or resulted in only
incremental improvements.  Interior must comprehensively examine its
mission and the way it does business to determine how and by whom
Indian trust funds can best be managed.  It also must develop a
comprehensive strategic plan to address the full range of problems
needing corrective action, as we recommended in our June 1992
report.\2


--------------------
\2 Financial Management:  BIA Has Made Limited Progress in
Reconciling Trust Accounts and Developing a Strategic Plan
(GAO/AIMD-92-38, June 18, 1992). 


   BACKGROUND
------------------------------------------------------------ Letter :2

As trustee for tribes and Indians, the Secretary of the Interior is
responsible for maintaining official Indian land title and beneficial
ownership records and managing natural resource assets, funds, and
investments to maximize, within the authority of the law, the
benefits to the trust holders.  BIA performs a number of activities
related to these functions.  BIA's Office of Trust Responsibilities
(OTR) is responsible for determining and certifying Indian land
titles and ownerships and maintaining official ownership records. 
OTR also manages along with BIA's Agency Offices all Indian forestry,
agriculture, and mineral leasing activities. 

BIA's Office of Trust Funds Management (OTFM) is responsible for
ensuring proper control and accountability over each trust account. 
OTFM maintains tribal and general ledger accounts, reconciles account
and system balances, and prepares reports for management and account
holders.  OTFM also invests trust fund balances in Treasury
securities or their derivatives, certificates of deposit at federally
insured financial institutions, and Treasury overnight deposits. 

BIA's 12 Area Offices and 85 Agency Offices, which are located on or
near reservations, support OTR and OTFM by (1) preparing
documentation, such as wills and death certificates, to execute
conveyances of ownership and providing this documentation to
administrative law judges for probate decisions, (2) conducting all
preleasing activities, such as valuing resources to determine bidding
prices, advertising the bids, and negotiating leases and land use
agreements, and (3) collecting and accounting for revenues derived
from natural resource assets. 

BLM and MMS have responsibility for Indian natural resource assets. 
BLM inspects and enforces the terms of Indian mineral leases and
agreements.  MMS collects Indian royalties, monitors payments and
production, and performs compliance audits. 

In May 1991, BIA undertook, for the first time, an effort to
reconcile the Indian trust fund accounts.  The objective of this
reconciliation project was to identify, to the extent practical,
correct account balances for tribal and individual Indian accounts by
using source documents to reconstruct trust account transactions to
give account holders as accurate an accounting as possible. 

In March 1992, BIA decided not to proceed with reconciliations of
Individual Indian Money (IIM) accounts, based on its contractor's
report that reconciliations of these accounts were not feasible due
to the lack of supporting documentation and the level of effort and
associated cost to review millions of transaction documents.  In
January 1993, BIA created a Work Group to study IIM account
reconciliation alternatives.  By the end of March 1994, the IIM Work
Group had developed alternatives and policy questions for
presentation to Interior and BIA management.  The Work Group plans to
obtain IIM account holder input as a basis for selecting IIM
reconciliation approaches or alternatives. 

BIA also decided to reconcile tribal accounts for the 20-year period
from 1992 back to 1973 and is performing reconciliations between its
various trust fund accounting systems and between its general ledger
system and Treasury balances. 

Our June 1992 report\3 identified a number of trust fund management
weaknesses and stated that BIA had not developed a truly
comprehensive plan for improving trust fund management.  We also
stated that BIA's plans had not addressed fundamental problems in
BIA's trust accounting operation (such as continued fractionated
ownership interests), which have resulted in the need to maintain an
increasing number of trust fund accounts, and the need for
improvements in MMS' Indian oil and gas royalty accounting systems. 
We recommended that BIA assess OTFM's mission and comprehensively
review the entire trust fund operation, including those trust-related
activities outside the control and responsibility of OTFM and BIA, in
order to determine how and by whom Indian trust funds can best be
managed. 

At the end of fiscal year 1993, BIA reported that Indian trust fund
balances totaled $2.1 billion, including $1.7 billion for 1,800
tribes and $390 million for nearly 337,000 IIM accounts.  Fiscal year
1993 reported receipts totaled $870 million and disbursements totaled
over $562 million.  The balances in the trust fund accounts have
accumulated primarily from payments of claims; oil, gas, and coal
royalties; land use agreements; and investment income.  (Appendix I
contains additional background.)


--------------------
\3 See footnote 2. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :3

We identified Interior's trust fund management business functions,
including ownership determinations and recordkeeping, natural
resource asset management, accounting, and investment functions
performed by BIA, BLM, and MMS.  We surveyed federal entities that
perform related functions and judgmentally selected 12 private sector
trust systems and service providers and 6 natural resource management
companies to determine the capabilities of these entities to provide
systems support or services related to trust management functions
performed by BLM, MMS, and BIA.  In addition, we met with 15 tribes
and Indian groups to obtain their views. 

We conducted our review from April 1993 through August 1994 in
accordance with generally accepted government auditing standards.  We
performed our review at the Interior Department, BIA headquarters,
and BIA's Office of Trust Responsibilities in Washington, D.C.; BIA's
Office of Trust Funds Management in Albuquerque, New Mexico, and
various BIA field locations; BLM's headquarters in Washington, D.C.,
and its Enforcement and Inspection Offices in five states; and MMS'
headquarters in Washington, D.C., and its Royalty Management Program
Office in Lakewood, Colorado.  (Appendix II provides details of our
scope and methodology.)

In accordance with your wishes, we did not obtain agency comments on
a draft of this report.  However, at the end of our field work, we
discussed the results of our work with Interior, BIA, BLM, and MMS
officials and have incorporated their views where appropriate. 


   TRUST OWNERSHIP, ASSET, AND
   FUND MANAGEMENT PROBLEMS
   REQUIRING CORRECTIVE ACTION
------------------------------------------------------------ Letter :4

Interior has numerous, long-standing trust fund financial management
problems.\4 These include (1) serious backlogs in land title
ownership determinations and recordkeeping, (2) BIA's inadequate
management of Indian land and resources, BLM's failure to adequately
inspect and enforce Indian leases and ensure that mineral production
reports are accurate, and MMS' failure to adequately enforce
regulations governing Indian mineral royalty payments, (3) serious
weaknesses in BIA's Indian trust fund accounting and MMS' inability
to ensure that royalty payments are accurate, and (4) BIA's
inconsistent investment of trust funds and its limited investment
program.  While BIA, BLM, and MMS have initiatives under way to
address many of these problems, progress has been slow and much
remains to be done.  The following discussion highlights major
weaknesses in each of Interior's trust fund management business
functions. 


--------------------
\4 Related GAO products that discuss these problems and other related
issues are listed at the end of this report. 


      TITLE AND OWNERSHIP
      RECORDKEEPING BACKLOGS
---------------------------------------------------------- Letter :4.1

In 1988, OTR undertook an effort to eliminate the backlog of
unrecorded title documents held in BIA's Agency Offices.  However,
since 1989, funding for the Land Title Records Program has not kept
pace with increasing workloads and new backlogs have resulted. 

For example, our analysis of staff hours expended and remaining
backlogs at four of the five Land Title Records Offices (LTROs)\5
showed that BIA would need to double its current resources for up to
2 years to eliminate the backlogs in land title and beneficial
ownership determinations and certifications and the backlog in
documents to be recorded in the Land Records Information System
(LRIS). 

While our analysis did not include the Land Title Service Centers,
OTR officials said that their data show that backlogs are as great at
some Service Centers.  OTR officials said that while they recognize
the need to supplement current staff until LRIS improvements are
implemented, they lack the resources to do so. 

In addition, according to OTR officials, Agency Office staff do not
always forward requests for ownership changes to probate courts
because they believe that the information would become obsolete
before being officially recorded due to the extensive probate court
and BIA backlogs.  We did not identify the number of unsubmitted
change requests; however, OTR officials told us that additional
workload associated with these changes could be significant.  OTR
officials also said that although Agency Office staff do not always
request ownership changes due to large backlogs, they sometimes
record the preliminary information on ownership changes in BIA's
trust fund accounting system.  However, without administrative review
and final determination and certification of ownerships, there is no
assurance that the ownership information in BIA's accounting system
is accurate. 


--------------------
\5 BIA maintains LTROs at 5 of its 12 Area Offices, including
Aberdeen, which services the Aberdeen and Minneapolis areas;
Albuquerque, which services the Albuquerque, Navajo, and Phoenix
areas; Billings, which services the Billings area; and Portland,
which services the Portland area.  In addition, there are 4 Land
Title Service Centers in the Eastern, Juneau, Muskogee, and
Sacramento Area Offices. 


      PROBLEMS IN NATURAL RESOURCE
      ASSET MANAGEMENT
---------------------------------------------------------- Letter :4.2

BIA, BLM, and MMS have not adequately managed Indian natural resource
assets (which are vital to Indian economic development) to ensure
that maximum revenue is generated for tribal and individual Indian
trust beneficiaries.  For example, one tribe told us that in the
past, some of their land was destroyed due to poor BIA land
management.  Another tribe told us that BIA's Billings Area Office
had a backlog of about 300 appraisals, which are needed to support
lease negotiations, at the end of August l994.  The tribe also told
us that BIA has done some appraisals without visiting the land and
that this has adversely impacted the tribe's ability to get a fair
price on their leases. 

In addition, GAO and Interior Office of Inspector General (OIG)
reports have disclosed weaknesses in BIA's forest management.  In
March 1991, we reported\6 that BIA's 1977 data on backlogs\7 in
forest development needs were incomplete, imprecise, and out-of-date. 
In March 1992, Interior's OIG reported\8 that due to inadequate BIA
management of timber harvests and sales, a number of tribes and
Indian allottees had lost potential income of $143 million and
potential timber growth valued at $5 million to $8 million from 1980
to 1991.  The OIG also reported increases in new forest development
backlogs. 

Another tribe told us that BLM has not inspected many of its leases
because BLM has only two inspectors to cover a large geographical
area in that state.  Tribes are also concerned that MMS has not
adequately enforced regulations to ensure that maximum revenues are
collected.  For example, tribes claim that MMS has not consistently
enforced penalties and interest for improper reporting or late
payments. 

Further, BIA, BLM, and MMS do not have adequate systems to manage
natural resources and to ensure that payments are proper.  For
example, existing BIA, BLM, and MMS lease inspection, production, and
payment systems information is not integrated and the full range of
management information on a lease or well is not readily available. 

While mineral revenues and energy development are vital to Indian
social and economic development, many Indian resource owners do not
have the technology to explore and replace resources.  In addition,
very few tribes have the training or expertise necessary to assume
inspection and enforcement responsibility from BLM or royalty
collection, accounting, and compliance audit responsibility from MMS. 
BIA and BLM lack the necessary resources to manage Indian leases and
to respond to many tribal requests for training and technical and
financial assistance. 


--------------------
\6 Indian Programs:  Use of Forest Development Funds Should Be Based
on Current Priorities (GAO/RCED-91-53, March 7, 1991). 

\7 In 1977, BIA identified a backlog of about 1 million acres in
needed forest development.  By the end of fiscal year 1989, BIA
reported that it had reduced the identified backlogs by about half. 

\8 Selected Forestry Operations, Bureau of Indian Affairs (Report No. 
92-I-670, March 31, 1992). 


      TRUST FUND ACCOUNTING
      PROBLEMS
---------------------------------------------------------- Letter :4.3

BIA continues to have serious trust fund accounting, control, and
system weaknesses.  BIA initiated actions during 1994 to provide
increased staffing, an interim trust accounting system, and
investment expertise for OTFM.  In addition, BIA has recently
undertaken plans to replace BIA's trust fund subsidiary and IIM
accounting system.  However, BIA has not yet addressed improper
accounting practices by its field office staff or their failure to
maintain leases and other contractual documents to support billing
and collections functions and trust fund account reconciliations. 

As we stated in April 1994 testimony,\9 BIA lacks consistent, written
trust fund management policies and procedures.  In addition, field
staff in BIA's 12 Area Offices and 85 Agency Offices (who perform
most detailed trust fund accounting functions) lack adequate
financial management training and supervision.  As a result, field
staff follow different, and often improper, accounting practices. 
For example, BIA's field offices follow different procedures to post
receipts and calculate and distribute revenue to account holders. 
Some lease income distributions are accounted for as transfers, while
others are posted as collections.  This distorts transaction activity
data and account balances and hinders reconciliation efforts. 

In addition, BIA's field staff, who perform trust fund accounting,
report to their respective office heads (who are not trained
financial managers) rather than the OTFM Director.  No one office or
individual manager is accountable for BIA's trust fund accounting
operations.  This lack of accountability creates numerous
opportunities for accounting errors and is a major control weakness. 

BIA's field offices have not maintained copies of leases and other
beneficial ownership records to support the billing and collection of
revenues and ensure distribution of revenue to the correct account. 
BIA's efforts to reconcile tribal trust fund accounts have shown that
many lease documents are not available.  For example, under BIA's
ongoing trust fund reconciliation project, 28 percent of the lease
documents could not be found for one of the five tribes participating
in pilot reconciliations of their trust fund accounts.  Without these
documents, BIA cannot ensure that all earned revenues have been
billed and collected or support reconciliations of these data to the
trust fund general ledger.  In addition, ownership and lease
information in BIA's subsidiary and IIM accounting system (which is
used to distribute income to trust fund account holders) has never
been validated to ensure that revenues are posted to the correct
account.  Finally, MMS' systems do not provide adequate assurance
that all earned mineral revenues are collected. 


--------------------
\9 Financial Management:  Status of BIA's Efforts to Reconcile Indian
Trust Fund Accounts and Implement Management Improvements
(GAO/T-AIMD-94-99, April 12, 1994). 


      TRUST FUND INVESTMENT
      PROBLEMS
---------------------------------------------------------- Letter :4.4

BIA has not always consistently and prudently invested trust funds
and paid interest to account holders.  For example, in the past, BIA
invested trust funds in excess of insurance ceilings at federally
insured financial institutions that subsequently failed.  In
addition, tribes have stated that BIA's trust fund investment program
does not provide them with the opportunity to maximize the return on
their investments because trust fund investments are currently
limited to government securities or insured or collateralized
accounts. 


   MANAGEMENT IMPROVEMENT
   INITIATIVES UNDER WAY
------------------------------------------------------------ Letter :5

Interior has acknowledged the range of problems discussed above and
has management improvement initiatives under way in BIA, BLM, and MMS
to address some of these problems.  These initiatives include (1)
land records system improvements and efforts to reduce fractionated
ownerships, (2) development and enhancement of natural resource asset
management systems, (3) establishment of field offices to provide
assistance to tribes and Indians allottees (lessors), and (4)
contracting for an interim core trust accounting and investment
system until a comprehensive system plan is developed. 

However, progress has been slow.  Many of the initiatives are in the
early stages and a number of them will not be completed for several
years.  In the past, Interior has not always demonstrated the
management commitment to ensure that sustained actions needed to
correct its serious, long-standing weaknesses are completed. 


      LAND RECORDS INFORMATION
      SYSTEM IMPROVEMENTS
---------------------------------------------------------- Letter :5.1

The ever-increasing number of fractionated ownerships, which result
from inheritances, continues to increase BIA's title and lease
ownership recordkeeping and trust fund accounting workloads.  In
1992, BIA created a Land Records Management Work Group to plan land
records system improvements.  In January 1993, BIA's OTR began
developing enhancements for LRIS.  According to OTR officials, these
systems improvements will provide for automated chain-of-title
information and electronic certification of ownerships, which should
help BIA to eliminate backlogs and maintain more accurate, up-to-date
land title and beneficial ownership information.  OTR officials said
that when these improvements are fully implemented, BIA will be able
to handle changes in ownerships without significant overtime,
additional resources, or contractor services.  However, because the
system enhancements are not targeted for full implementation until
the year 2000, BIA needs to take interim action, such as shifting
existing resources, hiring temporary employees, or contracting for
services, to ensure that ownership information is accurate and
up-to-date. 


      REDUCING FRACTIONATED
      OWNERSHIPS
---------------------------------------------------------- Letter :5.2

In 1992, BIA created an Heirship Task Force to identify effective
ways of handling fractionated ownerships.  The Heirship Task Force
plans to obtain comments from tribes and Indian allottees in the fall
of 1994 and BIA plans to propose legislation to reduce fractionation
in January 1995. 

In addition, the First Nations Development Institute\10 has made
several recommendations to BIA that called for systems improvements;
meaningful reports on accounting for land and lease revenues;
staffing to ensure accurate, up-to-date land records; and BIA policy
directives and legislation to reduce fractionation. 


--------------------
\10 The First Nations Development Institute is a national Indian
economic advocacy group created in 1979 to enhance tribal services
and operations by using small-scale economic and enterprise
development techniques. 


      NATURAL RESOURCE ASSET
      MANAGEMENT IMPROVEMENTS
---------------------------------------------------------- Letter :5.3

Interior has a number of initiatives under way at BIA, BLM, and MMS
to help tribes and Indian allottees manage their natural resources. 
These initiatives are directed at increasing technical assistance and
services to tribes and Indian allottees and improving resource
management systems. 

In 1992, MMS began implementing system modules to help ensure greater
accuracy in Indian royalty payments.  Also, in 1992, BLM and MMS
began establishing Indian field offices to improve services to tribes
and Indian allottees.  While some of these Indian field offices
appear to be working well, others are not functioning as intended. 
For example, the Four Corners Office, in Farmington, New Mexico, is
intended to be a central location where tribes can get complete
information on their land and minerals management, royalty collection
and compliance audits, and royalty receipts deposited in their trust
fund accounts.  However, this office is not yet functioning as the
seamless organization that Interior envisions, largely because
although BIA, BLM, and MMS staff are co-located, they are not yet
fully coordinating their work. 

In 1993, MMS began efforts, with tribal study group participation, to
streamline regulations and reporting.  Tribal representatives told us
that they had difficulty reaching agreement with MMS on proposed
draft changes in gas valuation regulations and that they continue to
be concerned about whether and how MMS will use their input in
drafting proposed changes to regulations on allowances.\11 MMS
officials said the difficulty in reaching agreement on proposed
changes to regulations involves balancing the need to maximize
revenues to Indians under Interior's trust responsibility with the
need to be fair to industry. 

Finally, Interior has a number of efforts under way to improve BIA,
BLM, and MMS natural resource management systems, including efforts
to develop (1) a BIA National Indian Oil and Gas Evaluation and
Management System to help tribes perform production verification, (2)
a BLM Automated Fluid Minerals Management System to record a complete
history of well and inspection activity, and (3) an enhanced MMS
Production Accounting and Auditing System and client-server
technology to facilitate user access to MMS' data.  However, while
Interior officials said that these systems are to be interdependent,
the details of their relationships have not yet been fully worked
out. 


--------------------
\11 Allowances are deductions that companies may take for certain
costs, such as transportation expenses to a point of sale or delivery
off the lease. 


      TRUST FUND ACCOUNTING
      INITIATIVES
---------------------------------------------------------- Letter :5.4

OTFM is in the process of implementing some staffing and systems
initiatives to improve trust fund management.  On April 4, 1994,
Interior approved OTFM's staffing and organization plan.  This plan
was supported by the results of a workload and staffing analysis that
we recommended in our June 1992 report.  Under the plan, OTFM will
increase its staff by 43 positions to a total of 107 positions.  OTFM
is in the process of filling an initial 20 positions by September 30,
1994, and plans to fill the remaining 23 positions during fiscal year
1995. 

In December 1993, we briefed Interior officials on the preliminary
results of our review.  We stated that commercially available trust
accounting systems could meet OTFM's accounting needs.  In March
1994, Interior approved an OTFM proposal to contract for an interim
trust fund accounting and investment system.  OTFM officials told us
that they expect to award a contract in September 1994.  The core
system will replace OTFM's general ledger and investment systems but
will not address OTFM's subsidiary and IIM accounting system needs. 

During the summer of 1994, BIA initiated an IIM system planning
effort.  OTR and OTFM are participating in the effort to determine an
approach for trust fund subsidiary and IIM accounting.  The plan,
which is to be completed in the summer of 1995, is to address how the
IIM system will link to ownership information in OTR's LRIS.  BIA
officials said that an additional 1-1/2 to 2 years would be needed to
develop a system once the plan is completed. 

Until BIA corrects its field office accounting problems and obtains a
reliable subsidiary and IIM accounting system, it cannot ensure that
(1) all earned revenues are collected, (2) revenues are posted to the
correct accounts, and (3) trust fund account balances are accurate. 
Timely implementation of a subsidiary and IIM system will be an
important step toward providing these assurances. 


      TRUST FUND INVESTMENT
      INITIATIVES
---------------------------------------------------------- Letter :5.5

Our December 1993 briefing to Interior officials also covered options
to improve trust fund investments by contracting for services.  In
March 1994, Interior approved BIA's initiatives to contract for
investment advisors and a custodian for OTFM to address account
holder concerns about BIA's ability to maximize returns on investment
of trust fund balances.  Interior's June 1994 6-Point Reform Plan
called for OTFM to contract for these services by June 30, 1995. 

However, in August 1994, Interior officials stated that they had
determined that trust fund investments could be better handled under
a single investment fund option managed by Treasury.  This option
would be a government securities investment fund, similar to the
Thrift Savings Plan G Fund, which provides for investment of federal
employees' retirement contributions in government securities.  Under
this option, Interior officials said that OTFM would not need to
contract for investment advisors and a custodian.  However, Interior
and Treasury officials have not reached a final decision on this
option. 


   IMPROVEMENT OPTIONS
------------------------------------------------------------ Letter :6

In addition to Interior's management initiatives, we identified
several options that could help improve Interior's trust fund
business management functions.  While a few of these options exist in
the federal sector, private sector systems and services provide a
wide range of possible options to improve Indian land title and
beneficial ownership determinations and recordkeeping, natural
resource asset management, trust fund accounting, and investment. 
Functions being performed under Indian self-determination initiatives
provide useful examples of trust management responsibilities that
tribes can assume. 


      TITLE AND OWNERSHIP AND
      RECORDKEEPING OPTIONS
---------------------------------------------------------- Letter :6.1

To identify possible land title and beneficial ownership
determination and recordkeeping improvement options, we judgmentally
selected and contacted two private sector companies that perform
title ownership and mapping services.  These companies use automated
land ownership and mapping features that greatly facilitate timely
and accurate services.  We believe that BIA could benefit from
exploring private sector innovations as part of its continued efforts
to enhance OTR's land title and records and geographic data systems. 
As stated earlier, we also believe that it is important for BIA to
take interim action to eliminate backlogs in land title and
beneficial ownership determinations and recordkeeping until systems
improvements are fully implemented.  Appendix III presents a detailed
description of land title and beneficial ownership determination and
recordkeeping improvement options. 


      NATURAL RESOURCE ASSET
      MANAGEMENT OPTIONS
---------------------------------------------------------- Letter :6.2

While no single private sector entity performs the full range of
natural resource management functions currently performed by
Interior, we identified several existing management services and
systems related to specific resources, such as oil and gas, coal, and
timber, that could provide Interior with opportunities to improve its
current management of this function.  These include private sector
market analysis and management systems and services.  In addition,
the Department of Agriculture's Soil Conservation Service provides
services, such as engineering and planning, to Interior agencies and
tribes.  Interior could explore these and other possible
opportunities for expanded soil conservation services.  Also,
Agriculture's Forest Service and the Department of Energy, which
coordinate with Interior to project timber harvests and value energy
resources, offer additional opportunities which Interior could
explore.  Further, natural resource asset management efforts by
several tribes under self-determination initiatives indicate
increasing tribal capabilities in this area.  Appendix IV describes
natural resource asset management improvement options in greater
detail. 


      TRUST FUND ACCOUNTING
      IMPROVEMENT OPTIONS
---------------------------------------------------------- Letter :6.3

We found that most federal entities or agencies did not have the
systems capability to handle BIA's trust fund accounting and
investments.  Further, although the Secretary can contract for
assistance in managing the trust funds, the Secretary's trust fund
accounting and related financial management functions (particularly
the exercise of judgment and decision-making) are a fiduciary
responsibility that cannot be transferred to another party or
delegated to a contractor.  Therefore, we focused on improvements
that could be accomplished by contracting for systems or services,
making in-house operational improvements, or making greater use of
Indian self-determination initiatives.  Potential opportunities that
we identified include the following: 

  Obtaining Reliable Systems.  We do not believe that either
     upgrading BIA's current accounting systems or developing an
     in-house trust accounting system is the best option for
     obtaining reliable systems.  Systems modifications already
     implemented have not addressed the fundamental need for an
     integrated trust fund accounting system.  We believe that
     developing an in-house system is not feasible given the cost of
     such an effort, the time required, the lack of in-house trust
     systems and information resource management expertise, and
     continuing changes in systems technology and software. 

While we did not identify any federal systems capable of meeting
BIA's trust fund accounting and investment systems needs, a number of
representatives at banks, brokerage firms, and systems and software
companies told us that their systems could handle BIA's trust fund
accounting needs.  As stated earlier, BIA plans to contract for an
interim trust accounting system in September 1994 and has initiated
planning efforts for a subsidiary and IIM trust accounting system. 
BIA could also consider contracting for a subsidiary and IIM
accounting system. 

  Contracting for Banking Services.  Maintaining trust fund cash
     balances in a bank or other financial institution could help BIA
     to provide its account holders with comprehensive trust account
     statements, automatic interest accruals, and reporting of
     taxable interest earnings to the Internal Revenue Service.  If
     BIA decides to maintain Indian trust funds in financial
     institutions, it would need to provide instructions, in
     accordance with its fiduciary responsibility, to the financial
     institutions on how the accounts are to be managed.  OTFM
     officials told us that they are considering this option. 

Appendix V presents trust fund accounting improvement options in
greater detail. 


      TRUST FUND INVESTMENT
      IMPROVEMENT OPTIONS
---------------------------------------------------------- Letter :6.4

Tribes have called for expanded trust fund investment opportunities. 
Pending trust fund legislation would provide for demonstration
programs to allow tribes and Indians to direct the investment of
their trust funds or to withdraw their funds and manage their own
investments. 

With regard to tribally directed investments of trust funds, Interior
and BIA could consider providing tribes with a variety of additional
options.  For example, BIA could consider seeking legislative
authority to establish investment fund options for the Indian trust
funds modeled after the federal employees' Thrift Savings Plan's
investment fund options.  In addition, under proposed legislation,
tribes would have the opportunity to direct their trust fund
investments in a manner that they consider to be more responsive to
their financial needs. 

Further, investment services are available in the private sector and
in the Indian community to assist tribes who wish to withdraw their
funds and assume responsibility for investing their own money. 
Appendix V presents investment options in greater detail. 


   MAJOR OBSTACLES TO ACHIEVING
   RELIABLE TRUST FUND AND ASSET
   MANAGEMENT
------------------------------------------------------------ Letter :7

Interior has not demonstrated the leadership or the management
commitment to ensure that corrective actions for many long-standing
problems were effectively implemented.  In addition, Interior
continues to lack a comprehensive strategic plan for effectively
carrying out the Secretary's trust responsibilities.  These two
long-standing obstacles continue to impede achievement of needed
improvements. 


      LACK OF FOCUSED LEADERSHIP
      AND MANAGEMENT COMMITMENT
---------------------------------------------------------- Letter :7.1

Interior does not have a single manager or office with overall
responsibility for Indian trust programs.  Such an office could
provide high-level, focused leadership for trust responsibilities
being carried out by BIA, BLM, and MMS.  In addition, Interior
managers have lacked the commitment to sustain action for needed
improvements, as evidenced by Interior's numerous, long-standing
uncorrected weaknesses in managing Indian trust ownerships, natural
resource assets, trust fund accounting, and investments. 

Pending trust fund reform legislation (H.R.  4833) would establish an
Office of Special Trustee in the Department of the Interior, who
would be responsible for

  preparing, in consultation with tribes and appropriate Indian
     organizations, a comprehensive strategic plan for all phases of
     the trust management business cycle to ensure proper and
     efficient discharge of the Secretary's trust responsibilities to
     tribes and individual Indians;

  providing oversight of all reform efforts within BIA, BLM, and MMS
     relating to the Secretary's trust responsibilities; and

  coordinating the development of policies, procedures, practices,
     and systems of BIA, BLM, and MMS related to the discharge of the
     Secretary's trust responsibilities. 

The Special Trustee is to have expertise in managing large
governmental or business entities and particular knowledge of trust
fund management, management of financial institutions, and the
investment of large sums of money.  Currently, this type of expertise
is not available in-house. 

Establishing an Office of Special Trustee could provide the necessary
leadership and organizational framework to help ensure that trust
management improvement initiatives are effectively coordinated and
implemented and that they achieve their intended objectives. 


      LACK OF A COMPREHENSIVE
      STRATEGIC PLAN
---------------------------------------------------------- Letter :7.2

A key responsibility of the Special Trustee would be to develop a
comprehensive strategic plan for all phases of the trust management
business cycle, including title and ownership determinations and
recordkeeping; natural resource asset management; and collecting,
accounting for, and investing trust fund revenues.  In our June 1992
report\12 and in numerous testimonies, we emphasized the need for
such a plan.  We stated that Interior needed to reevaluate key
program objectives and rethink the basic concept underlying trust
fund management, including the Secretary's fiduciary responsibility
and the wishes of tribes and Indians under self-determination
initiatives. 

However, Interior continues to develop piecemeal management
improvement plans that do not provide the comprehensive approach to
correcting fundamental problems in the way Interior agencies carry
out their trust fund management business functions.  While the
Secretary's recent 6-Point Trust Fund and Asset Management Reform
Plan enumerated certain important initiatives already planned or
under way in BIA, BLM, and MMS, it does not provide the comprehensive
approach needed to resolve the full range of Interior's trust fund
management problems. 

To develop a comprehensive strategic plan, Interior, BIA, BLM, and
MMS managers would first need to analyze the Secretary's overall
trust fund management mission.  Second, the managers would need to
identify all the activities needed to fulfill this mission.  This
would help to identify any critical activities that are not being
performed, other activities that may be unnecessary, and any current
problems in performing necessary activities.  Third, managers would
need to identify available, internal and external improvement
options, and the feasibility of each, as a means of developing a
comprehensive strategy for corrective action.  Finally, Interior,
BIA, BLM, and MMS would need to establish priorities and milestone
dates for completing corrective actions and also assign
responsibility and hold managers accountable for completing
improvement actions.  A department-level official with trust business
expertise could help to avoid development of inappropriate or
incomplete strategies and fulfill the Secretary's trust
responsibility. 


--------------------
\12 See footnote 2. 


   CONCLUSIONS
------------------------------------------------------------ Letter :8

For many years, Interior has been unable to correct many serious
trust fund financial management weaknesses, including (1) backlogs in
land title and beneficial ownership determinations and recordkeeping,
(2) inadequate management of natural resource assets to ensure that
all earned revenues derived from natural resources are collected, (3)
improper accounting practices, and (4) limited trust fund investment
options.  In addition to recent management initiatives to implement
many needed improvements, additional options would more fully address
trust fund management problems.  Further, more focused leadership,
management commitment, and a comprehensive strategic plan would help
Interior to effectively address all of its trust fund management
responsibilities. 


   RECOMMENDATIONS
------------------------------------------------------------ Letter :9

We recommend that the Congress enact proposed trust fund management
reform legislation to establish an Office of Special Trustee in the
Department of the Interior.  This office would help to ensure the
proper discharge of the Secretary's trust responsibilities by (1)
developing a comprehensive strategic plan for all phases of the
Indian trust management business cycle, (2) overseeing reform efforts
within BIA, BLM, and MMS, and (3) coordinating the development of
BIA, BLM, and MMS policies, procedures, systems, and practices. 

We recommend that the Secretary of the Interior direct the Assistant
Secretary for Indian Affairs and the Assistant Secretary for Lands
and Minerals to fully explore the range of options available in the
federal and private sectors to provide input to Interior's
comprehensive strategic plan for Indian trust business management. 


We also recommend that the Secretary direct the Assistant Secretary
for Indian Affairs to take immediate action to

  eliminate title and ownership determination and recordkeeping
     backlogs by shifting existing resources, hiring temporary
     employees, or contracting for services;

  correct field office trust fund accounting weaknesses;

  ensure timely action to replace BIA's subsidiary and IIM accounting
     system with a system that integrates BIA's land records and
     ownership information and trust fund accounting information; and

  ensure that leases and other contractual information are maintained
     and validated to ensure that all earned trust fund revenues are
     billed for, collected, and posted to the correct account. 


---------------------------------------------------------- Letter :9.1

As agreed with your office, unless you publicly announce the contents
of this report earlier, we will not distribute it until 30 days from
its date.  At that time, we will send copies of the report to the
Secretary of the Interior; the Department's Assistant Secretaries for
Land and Minerals, Indian Affairs, and Policy, Management, and
Budget; the Director of the Office of Management and Budget;
cognizant appropriations, authorizing, and oversight committees; and
other interested parties. 

Please contact me at (202) 512-3406 if you or your staff have any
questions concerning this report.  Major contributors to this report
are listed in appendix VI. 

Sincerely yours,

George H.  Stalcup
Associate Director
Financial Integrity Issues


BACKGROUND
=========================================================== Appendix I

The Secretary of the Interior is responsible for managing the Indian
trust funds and related ownership and natural resource management
functions.  The Secretary delegates these responsibilities to BIA,
BLM, and MMS.  Although BIA is responsible for a large portion of the
Indian trust fund financial management, BLM and MMS are also
responsible for certain Indian trust fund financial management and
natural resource asset management functions.  Together, these
agencies perform the four major functions in the Indian trust fund
management business cycle. 

  Title and Ownership Determinations:  BIA's 12 Area Offices and 85
     Agency Offices (which are located on, or near, Indian
     reservations) prepare documentation on ownership conveyances
     (including wills and death certificates) for use by
     administrative law judges in making probate decisions.  BIA's
     Office of Trust Responsibilities (OTR), through its five
     regional Land Title Records Offices, determines and certifies
     land title and beneficial ownerships and maintains official
     Indian land title and ownership records in OTR's Land Records
     Information System. 

  Natural Resource Asset Management:  OTR is responsible for all
     preleasing activities for Indian natural resources, including
     valuation of resources, advertising bids, and negotiating and
     preparing leases.  Real Estate Departments in BIA's Agency
     Offices also inspect and enforce leases and land use agreements
     for nonmineral leases (for example, timber, grazing, and
     right-of-way agreements.) BIA coordinates these activities with
     BLM. 

BLM's Inspection and Enforcement Office manages mineral resources and
BIA's Agency Offices manage Indian nonmineral resources, leases, and
agreements.  MMS performs compliance audits to ensure that mineral
royalty payments and reports are consistent with production reports. 

  Trust Fund Accounting:  BIA's Area and Agency Offices collect
     nonmineral lease revenue and mineral bonuses and rental
     payments, allocate income, and maintain accounts for individual
     Indians.  The Agency Offices forward collections to their
     respective Area Offices for deposit in BIA's depository banks. 
     The Agency Offices record receipts for Individual Indian Money
     (IIM) accounts and the Area Offices fax information on tribal
     receipts to BIA's Office of Trust Funds Management (OTFM). 

OTFM performs tribal accounting, records transactions, disburses
funds, maintains the trust fund general ledger, reconciles accounts
and systems balances, and prepares reports for management and account
holders. 

MMS collects and accounts for mineral royalty payments and some
rental and bonus payments and transfers revenues to OTFM.  MMS also
reviews payment data for accuracy using a number of system edits and
modules in its Accounting and Financial System. 

  Investment:  OTFM invests tribal and individual Indian trust fund
     balances in Treasury securities, or their derivatives,
     certificates of deposit at federally-insured financial
     institutions, and Treasury overnight deposits.  OTFM accounts
     for and prepares reports on investment activities. 

BIA's trust fund accounting systems are operated by Information
Management Centers located at 6 of its 12 Area Offices and the
National Technical Service Center in Albuquerque, New Mexico.  BIA
uses three major systems for trust fund accounting:  (1) the Finance
System, which is used for both tribal and general ledger trust fund
accounting, (2) an investment system, which generates summaries of
investment securities held on behalf of each tribe, and (3) the
Integrated Resources Management System (IRMS), which provides
subsidiary accounting for IIM accounts.  In addition to IIM
accounting information, IRMS has four other components:  (1) a land
ownership data file, (2) a lease master file, (3) a people file with
account holder names, addresses, account numbers, and census data,
and (4) subsidiary programs to distribute oil and gas royalties. 
(These subsidiary programs are also referred to as the Royalty
Distribution and Reporting System.) OTFM's trust fund general ledger
system (Finance System) generates accounting reports on the results
of collections, deposits, accounting, and disbursing functions
performed by BIA's Agency and Area Offices.\1

Figure I.1 shows the trust fund management business functions and the
relationships of the activities performed by BIA, BLM, and MMS. 

   Figure I.1:  Interior Trust
   Asset and Trust Fund Management
   Business Cycle

   (See figure in printed
   edition.)



   (See figure in printed
   edition.)

   Note:  This flowchart was
   developed based on information
   provided by BIA, BLM, and MMS.

   (See figure in printed
   edition.)


--------------------
\1 The Albuquerque and Navajo Area Offices use the Treasury
Department Regional Disbursing Office to make disbursements to
individual Indian account holders.  However, they use the Information
Management Centers to generate the account statements. 


SCOPE AND METHODOLOGY
========================================================== Appendix II

We identified Interior's trust fund management business functions,
including ownership determinations and recordkeeping, natural
resource asset management, accounting, and investment functions
performed by BIA, BLM, and MMS. 

We also reviewed 45 previous audits, studies, and testimonies by
Interior's Inspector General, other Interior organizations,
independent public accounting firms, management consultants, Interior
organizations, the Indian community and GAO to identify problems and
proposed solutions identified in the past. 

To determine whether federal entities could provide title ownership
and lease recordkeeping, asset management, trust accounting, or
investment services to BIA, we contacted representatives of federal
organizations that perform trust fund management-related functions. 
To determine whether private sector entities could provide systems or
services in these areas, we judgmentally selected 12 private sector
financial trust systems and service providers and 6 natural resource
management companies for review.  We contacted company officials to
discuss the applicability of their systems and services to Interior's
trust fund business functions and reviewed information on systems and
services provided by five of these entities. 

To obtain the views of the Indian community on the systems and
services identified in the federal and private sectors and the
systems and services available through Indian groups or tribes, we
coordinated our study with the InterTribal Monitoring Association. 
We also met with officials at 15 selected tribes and Indian groups,
including representatives from the Joint Interior/BIA/Tribal
Reorganization Task Force, the InterTribal Agriculture Council, the
First Nations Development Institute, the Council of Energy Resource
Tribes, and Allottee Associations, to determine their resource
management, accounting, and investment concerns and what systems and
services they use or are developing to meet their needs. 

We discussed the applicability of the information we obtained from
private sector companies to BIA's trust ownership, natural resource
asset management, accounting, and investment functions with BIA's
headquarters management, officials in its Offices of Trust Funds
Management and Trust Responsibility, and BLM and MMS headquarters
management.  We also discussed our survey results with
representatives of the InterTribal Monitoring Association, the First
Nations Development Institute, the Joint Interior/BIA/Tribal
Reorganization Task Force, and the Intertribal Agriculture Council. 
Finally, we briefed Interior and BIA officials on the results of our
survey. 

To identify obstacles to improvements, we asked agency managers why
some past recommendations were not implemented and why efforts to
implement other recommendations did not succeed. 


OWNERSHIP DETERMINATION AND
RECORDKEEPING IMPROVEMENT OPTIONS
========================================================= Appendix III

We identified options for Interior to improve its Indian land title
and ownership determinations and recordkeeping.  These options
include

  providing necessary resources to maintain up-to-date title and
     beneficial ownership determinations and land records information
     until Land Records Information System (LRIS) and other related
     systems improvements are completed and

  reducing the administrative burden associated with continuing
     fractionation of ownerships. 

BIA is the only federal organization that maintains official land
title and ownership information and mapping services for federal
Indian land.  We reviewed systems improvement efforts under way at
BIA to improve OTR's land record and ownership and mapping systems. 
While BIA's ongoing systems improvements could help to ensure the
accuracy of land title and beneficial ownership information and
provide important mapping services to reservations, progress has been
slow and the improvements will not be fully implemented until 2000. 

A number of private sector companies also offer title and mapping
services.  We judgmentally selected two private sector companies and
considered the applicability of their systems and services to OTR. 
We believe that BIA could benefit from considering some unique
features of these systems in its efforts to improve its land record
and ownership and mapping systems. 

We also reviewed the efforts of BIA's Fractionated Heirship Task
Force and current Indian initiatives directed at reducing the
administrative burden associated with fractionated ownerships. 


   OBTAINING TITLE DETERMINATION
   AND LAND RECORDS EXPERTISE
------------------------------------------------------- Appendix III:1

OTR's Land Titles and Records Program is the official federal program
for recording and maintaining all land title documents and beneficial
ownership data as well as other land records data for all federal
Indian lands.  OTR has management initiatives underway which, if
effectively implemented, could help to ensure more accurate and
up-to-date land title and beneficial ownership information and
reservation maps.  However, because OTR's LRIS improvements are not
planned for full implementation until 2000, BIA will need to take
interim action to eliminate serious backlogs in ownership
determinations and recordkeeping. 


      BIA'S LAND TITLE AND RECORDS
      PROGRAM AND SYSTEMS
----------------------------------------------------- Appendix III:1.1

We reviewed two major land programs and related systems that OTR uses
to provide data on federal Indian lands.  They are (1) the Land
Titles and Records Program, which records land titles and beneficial
ownership information in its Land Records Information System, and (2)
the Geographic Data Service Center, which provides automated maps of
federal Indian lands using its Geographic Information System (GIS). 

Certified Indian ownership information is currently maintained in
OTR's LRIS.  BIA's July 1993 Land Records Management Work Group draft
report estimated that there were 30 million individual page-records
maintained in LRIS.  This did not include unofficial records that are
maintained in BIA's Agency Office systems, which are not yet recorded
in the official LRIS system.  Title and ownership information must be
certified before it is recorded in LRIS.  OTR officials told us that,
due to inheritances, the number of ownership records is continually
increasing. 

In addition to LRIS, some Indian ownership and land records
information is maintained in BIA's Integrated Resources Management
System (IRMS), which handles BIA's subsidiary and IIM trust fund
accounting, and on personal computers in BIA's Agency Offices. 
According to OTR officials, ownership data have often been recorded
in these systems without being certified because BIA's Agency Office
staff who prepare documentation on ownership conveyances (such as
wills and death certificates) for administrative law judges' probate
determinations are aware that probate court and OTR backlogs may
delay ownership certifications several years.\1 As a result, Agency
Office staff update IRMS ownership information based on unverified
information that they have developed.  While the unverified data may
be more accurate than the data it replaces, it may not be consistent
with final ownership determinations and certifications.  In addition,
reliance on unofficial data undermines the maintenance and use of
BIA's official certified LRIS data. 

In July 1992, we testified\2 that BIA had conducted an informal poll
of its five Land Title Records Offices (LTRO) and found that backlogs
in updating land records existed at four of the five locations. 
Reported backlogs ranged from a low of 100 documents in one area to a
high of 17,000 documents in another.  These backlogs impair the
accuracy of BIA's land and beneficial ownership records and the
accuracy of distributions to BIA's trust fund account holders. 

Our current work shows that, even after using overtime and some
contractor support, current title determination and recordkeeping
backlogs remain essentially unchanged.  Our analysis of LTRO backlogs
in preparing title status reports and entering documents in LRIS
showed that OTR would need to almost double its current resources for
a period of 1 to 2 years to eliminate these backlogs and bring land
title and beneficial ownership records up-to-date.  OTR officials
agreed with our assessment.  Until these backlogs are eliminated, BIA
will not be able to provide account holders with an accurate
accounting of their land interests and related revenues. 

According to OTR officials, LRIS improvements (which include
automating chain-of-title information and electronically certifying
ownerships at the time they are recorded in LRIS) are to be phased in
between 1996 and 2000.  OTR officials said that as these improvements
are phased in, there would be a gradual reduction in the need for
additional staff.  However, until LRIS improvements are in place, BIA
could shift its current resources or use additional contractor
support or temporary employees to reduce these backlogs. 

Further, to eliminate the need to maintain duplicate, unofficial
ownership systems information, OTR is working with BIA's Office of
Trust Funds Management (OTFM) to plan a trust funds subsidiary and
IIM accounting system to replace IRMS.  Eliminating redundant systems
would help to ensure that only official, certified data are used to
distribute trust fund revenue to account holders.  OTR officials told
us that the IIM system is to provide for an interface with LRIS for
ownership information, rather than duplicating this information in an
unofficial file.  According to OTR and OTFM officials, the IIM system
plan is to be completed in the summer of 1995.  OTR officials stated
that 1-1/2 to 2 years would be needed to develop a system once the
plan is completed. 


--------------------
\1 We did not review current probate court backlogs or options for
addressing these backlogs. 

\2 Financial Management:  Problems Affecting BIA Trust Fund Financial
Management (GAO/T-AFMD-92-12, July 2, 1992). 


      BIA'S GEOGRAPHIC DATA SYSTEM
      AND SERVICES
----------------------------------------------------- Appendix III:1.2

OTR has a Geographic Data Service Center (GDSC), which provides
automated data and system support to tribes on spatial information,
including maps of boundaries, townships, streams, and roads, and some
land title and beneficial ownership data on reservation lands.  GDSC
operates a computer facility in Denver, Colorado, that can be
accessed from other locations by Geographic Information System (GIS)
work stations, which use personal computers.  GDSC uses U.S. 
Geological Survey maps as a foundation and, information with the help
of other technology, incorporates additional , such as fire fuel and
lightening strike maps, to prepare the detailed maps for tribes.  For
example, GDSC has developed fire fuel maps and lightening strike
maps.  The fire fuel maps provide a visual picture of areas
containing materials, such as grasslands, trees, and shrubs, that
could feed fires should they occur.  Similarly, lightening strike
maps show areas where lightening has occurred most often, to indicate
potential danger areas.  GDSC also has the capability to use
satellite images to prepare land maps. 

According to GDSC officials, GIS can provide as many layers of
spatial, or map, data for reservations as the tribes desire.  GIS
land records information includes land descriptions, such as boundary
designations; owners of mineral rights; parcel numbers; and tract
ownership.  The database is dependent on the amount and type of data
provided by a tribe or other user; GIS does not generate original
data or make ownership or title determinations. 

GDSC officials told us that they actively serve about 100 tribes.  As
an example, GDSC officials described support provided to a tribe that
was having difficulty determining what land it owned.  The tribe
provided land data to GDSC, which in turn prepared data sets and maps
and compared the data to surrounding county data to determine if
there were encroachments on the tribe's lands due to titles filed by
other parties.  In this way, GDSC was able to help the tribe confirm
its boundaries. 

GDSC officials told us that they are also updating maps for some
tribes.  While these maps, which were from 8 to 18 years old, had
been updated with hand-written changes over the years, new maps had
never been prepared.  GIS software (which is still being enhanced)
transcribes map data into digital form.  Maps are then edited on the
computer, and new maps are printed. 

However, GDSC officials said that they are not currently verifying
map data to source documents or verifying the maps to title and
ownership records.  They said that GIS software, when fully
developed, would facilitate the verification of mapping data to
source documents over time because of its ability to interface
automated data and make comparisons with certified title and
ownership records and leasing and mineral use records.  In addition,
GDSC officials said that they have a project underway to assist OTR
in developing software to update the plat maps at the Land Title and
Records Offices.  Most plat maps are out-of-date because the Land
Title and Records Offices do not have cartography capability and
because of the processing backlog on title and ownership
determinations and recordkeeping. 


      PRIVATE SECTOR TITLE AND
      LAND RECORDS SYSTEMS AND
      SERVICES
----------------------------------------------------- Appendix III:1.3

There are numerous private sector title and land records companies. 
Many of these companies use systems and technology that could be
useful to BIA in its systems improvement efforts.  We judgmentally
selected two private sector companies, including a regional title
company and a nationwide land records company that provide title
services to counties and the private sector and met with company
representatives to discuss the applicability of their systems and
services to OTR's land title and records and mapping programs.  While
neither of these companies currently includes federal Indian lands in
its database, we believe that OTR could benefit by reviewing how
these companies use automated systems to handle title ownership and
mapping information.  Such a review could help OTR to (1) improve
LRIS, (2) reduce backlogs in title and beneficial ownership
determinations and recordkeeping, and (3) interface GIS map data with
LRIS ownership information. 


         REGIONAL TITLE COMPANY
--------------------------------------------------- Appendix III:1.3.1

A representative of a Denver area title corporation told us that the
corporation obtains data for its system, including title information,
land descriptions, tax assessments, and delinquencies, from the tax
assessor and tax collection and recorder offices.  The official said
that the corporation updates title documents and records as changes
occur and disputes are resolved.  As a result, the official said
that, in certain instances, the corporation's data are more accurate
than county records.  The official also said that maintaining
automated records helps facilitate accurate research and verification
and eliminates problems associated with maintaining and controlling
manual files.  The use of automated data is consistent with BIA's
goal to automate chain-of-title information.  Exploring private
sector title systems may provide additional insights to BIA in its
efforts to improve OTR's LRIS. 


         NATIONWIDE LAND RECORDS
         COMPANY
--------------------------------------------------- Appendix III:1.3.2

Officials at a nationwide private sector land records company told us
that they maintain databases which cover most of the large counties
in over 30 states.  They said that the company's database includes
over 125 fields of information, including ownership, a unique
identifier for each land parcel, tax assessments, document references
to titles and mortgage liens, sales, and physical property
descriptions. 

This company also provides mapping services.  The company updates
maps for new developments, as houses are built and sold, to show new
parcels and their number identifiers.  For the past 3 years, the
company has also been piloting electronic imaging for maps for the
state of Florida.  After the company inputs data into a computer,
counties can display a map image on a computer monitor, make changes,
and print the result on equipment that produces a sharp, hard copy
image of the map.  Company officials told us that, once perfected,
this technology should allow the counties to manipulate data on the
computer and redraw existing maps as changes occur in land use.  This
will be an advantage over the current microfiche maps. 

We believe that BIA could benefit from a review of such private
sector technology in OTR's continuing efforts to enhance its
Geographic Information System, which provides similar mapping
services to tribes. 


   REDUCING FRACTIONATED
   OWNERSHIPS
------------------------------------------------------- Appendix III:2

In 1991, BIA established an Heirship Task Force to identify options
for reducing fractionated ownerships and the administrative burden
associated with the ever-increasing number of ownership changes
caused by inheritances.  Reducing fractionation would reduce BIA's
related ownership determination and recordkeeping, lease management,
and accounting workloads. 

In February 1992, we reported\3 that since the Indian Land
Consolidation Act of 1983\4 was enacted, the number of small
interests (2 percent or less) at the 12 reservations that we reviewed
had more than doubled, from about 305,000 to over 620,000 records. 
BIA estimated that with legislation to eliminate or consolidate
fractionated interests of 2 percent ownership or less, over half of
the records might be eliminated or consolidated. 

In our July 1992 testimony,\5 we stated that fractionation of
ownerships had complicated BIA's trust fund account reconciliations. 
For example, we found that at three BIA Agency Offices, where BIA
attempted preliminary reconciliation work, 30 percent of the
transactions were for less than $1.00--nickels, dimes, quarters, and
even fractions of a penny; another 27 percent were for $1 to $9; and
an additional 23 percent were for $10 to $49.  Only 20 percent were
for amounts of $50 or more. 

BIA plans to obtain comments on proposed Heirship Task Force
solutions from tribes and Indians during the fall of 1994.  BIA plans
to use the comments to draft proposed legislation to reduce
fractionated ownerships for submission to the Congress in January
1995. 


--------------------
\3 Indian Programs:  Profile of Land Ownership at 12 Reservations
(GAO/RCED-92-96BR, February 10, 1992). 

\4 The act, as amended, generally provides that an Indian
individual's ownership interest of 2 percent or less in a tract of
land transfers to the tribe upon the individual's death, provided
that the interest is not capable of earning $100 or more in any of
the 5 years following the individual's death. 

\5 See footnote 2. 


      INDIAN INITIATIVES TO REDUCE
      FRACTIONATED OWNERSHIPS
----------------------------------------------------- Appendix III:2.1

The First Nations Development Institute has studied and reported on
fractionated land ownerships for a number of years as part of its
efforts to identify and remove barriers to the development of healthy
reservation economies.  First Nations has reported that fractionation
of trust lands, which affects nearly 80 percent of all tribes, is one
of the primary impediments to land and resource development because
it severely impacts the ability of tribes and individual Indian
owners to effectively use and control their own land.  Further, First
Nations stated that transactions related to the land, such as
negotiating lease agreements, probate, and distribution of lease
income, become more complex and costly as fractionation increases. 
For example, First Nations reported that on many reservations, it is
not uncommon to find numerous allotments of land that have 50 or more
owners. 

First Nations' 1991 to 1992 study of fractionation on the Umatilla
Indian reservation assessed administrative costs for 25 agricultural
leases.  According to the study, administrative costs ranged from
$346.50 for a lease with one owner to $2,772.00 for a lease with 78
owners.  First Nations also identified two leases where the
administrative costs exceeded the lease income. 

To address these problems, First Nations has called for solutions
directed at improving BIA's land records and ownership systems and
combining the number of land records per tract to establish
economically viable and manageable tracts of land within reservation
boundaries.  For example, First Nations supports

  establishing a single, automated, ownership and land records system
     with timely, certified title status reports;

  providing the capability to access data locally, in order to
     evaluate and implement plans to address fractionated land
     titles;

  giving owners a meaningful accounting of their lands (including
     income derived and associated allotments) to assist in land
     consolidation and estate planning; and

  revising BIA budget priorities to adequately (1) resolve backlogs
     in records processing and (2) address the needs of tribes and
     Indian owners for technical and financial assistance and
     information. 

OTR officials told us that they agree with these goals and that their
LRIS system improvement efforts are intended to consolidate land
records systems and eliminate redundant, inconsistent data.  However,
as stated above, until LRIS systems improvements are fully
implemented, additional resources will be needed to eliminate title
and ownership determination and recordkeeping backlogs.  Until these
backlogs are eliminated, BIA will not be able to provide account
holders with an accurate accounting of their land interests and
related revenues. 


NATURAL RESOURCE ASSET MANAGEMENT
IMPROVEMENT OPTIONS
========================================================== Appendix IV

We identified options for Interior to improve its management of
Indian natural resource assets.  These options include

  ensuring effective implementation of management initiatives that
     are already under way and expanding opportunities for
     initiatives with other federal agencies,

  obtaining natural resource asset systems and services, and

  delegating responsibility to tribes through Indian
     self-determination initiatives. 


   EFFECTIVELY IMPLEMENTING
   MANAGEMENT INITIATIVES
-------------------------------------------------------- Appendix IV:1

BIA, BLM, and MMS have management improvement initiatives under way
which, if effectively implemented, could improve Interior's
management of Indian natural resources.  Also, Interior coordinates
its natural resource management activities with a few federal
agencies such as the Departments of Agriculture and Energy, and we
believe that Interior may be able to improve its natural resource
management through expanded or new initiatives with these agencies. 


      FEDERAL AGENCY RESOURCE
      MANAGEMENT PROGRAMS
------------------------------------------------------ Appendix IV:1.1

The Department of Agriculture's Soil Conservation Service provides
soil conservation services, including engineering and planning
activities, to Interior and to tribes that request these services. 
We believe that Interior could explore other opportunities with
Agriculture for resource management support, such as the Forest
Service's forest management programs and its timber cost accounting
system.  Interior also coordinates with the Department of Energy for
studies to value oil and gas resources and to determine the impact of
proposed royalty rate reductions.  In addition, BLM was able to help
tribes gain resource management assistance through Department of
Energy fiscal year 1994 fossil fuel grants.  Interior could explore
further initiatives with Energy to improve its management of Indian
energy resources. 


      INTERIOR'S MANAGEMENT
      INITIATIVES
------------------------------------------------------ Appendix IV:1.2

We identified management initiatives underway at BIA, BLM, and MMS
that are directed at increasing field office services to tribes and
Indians and improving resource management systems.  While some Indian
field offices appear to be working well, others are not functioning
as intended.  For example, the Four Corners Office is intended to be
a central location where tribes can get complete information on their
land and minerals management, royalty collection and compliance
audits, and royalty receipts deposited in their trust fund accounts. 
However, this office is not yet functioning as the seamless
organization that Interior envisions because the co-located BIA, BLM,
and MMS staff are continuing to work as separate organizations
without effective coordination. 

Interior also has a number of efforts under way to improve BIA, BLM,
and MMS natural resource management systems.  The success of these
systems efforts will depend upon the effectiveness of their design
and implementation. 


         BIA ENERGY AND MINERALS
         PROGRAMS AND SYSTEMS
         INITIATIVES
---------------------------------------------------- Appendix IV:1.2.1

The Energy and Mineral Resources Division in the Office of Trust
Responsibilities (OTR) provides financial and technical assistance to
tribes in managing and developing their resources, including
financial assistance to locate and quantify mineral resources,
technical assistance in reservoir engineering, economic analyses of
oil and gas and solid mineral deposits, and monitoring mineral
development and production.  The Division also coordinates with BLM
and MMS to assist tribes in reviewing and negotiating agreements and
contracts for mineral development. 

In October 1993, Interior's Office of Inspector General (OIG)
reported\1 that the Energy and Mineral Resources Division was
adequately assisting some Indian landowners in developing their
resources.  The OIG reported that assistance provided by BIA's
Minerals Assessment Program resulted in increased revenues from over
$1 million to several million annually for a number of tribes. 
However, the OIG found that the Division was able to assist less than
half of the requesting tribes because of limited funding.  The OIG
reported that of 46 requests for assistance that met program
requirements, BIA partially funded only 19 requests.  The OIG
recommended that, given the Division's limited funding, BIA consider
other options for providing assistance, such as establishing a
revolving fund and a user fee arrangement to provide a self-funded
Mineral Assessment Program.  Legislation would be required to
authorize such a revolving fund. 

In August 1993, BIA's Energy and Mineral Resources Division began
efforts to develop the National Indian Oil and Gas Evaluation and
Management System (NIOGEMS).  According to a Division official, BIA
presented a prototype of the NIOGEMS system at the Indian Minerals
Conference in February 1994, and began a 1-year pilot test of NIOGEMS
at BIA's Osage Agency Office in June 1994.  Currently, the Osage
tribe performs its own inspection and enforcement and royalty
collection and accounting.  An Energy and Mineral Resources Division
official said that NIOGEMS is helping the tribe perform production
verification by building a software and database structure to support
data analysis.  The Division is also providing technical assistance
in the form of user support and systems modifications. 

The Energy and Mineral Resources Division is coordinating its NIOGEMS
effort with BLM's Fluid Minerals Division, which is developing an
Automated Fluid Minerals Management System (AFMMS).  BIA and BLM
officials told us that their systems designs are compatible and that
they will be able to exchange data.  However, BIA officials told us
that BLM's systems do not have specific data on federal Indian land
and that NIOGEMS will rely on BIA's Land Records Information System
for Indian land records data. 


--------------------
\1 Final Audit Report on Operations of the Division of Energy and
Mineral Resources, Bureau of Indian Affairs (No.  94-I-39, October
31, 1993). 


         BUREAU OF LAND MANAGEMENT
         INDIAN PROGRAM AND
         SYSTEMS INITIATIVES
---------------------------------------------------- Appendix IV:1.2.2

The Federal Oil and Gas Royalty Management Act of 1982 (FOGRMA)
requires 100 percent inspections annually of federal and Indian oil
and gas leases producing, or expecting to produce, significant
quantities\2 of oil or gas in any year or which have a history of
noncompliance.\3 BLM officials said that in fiscal year 1993, they
completed only 92 percent of BLM's planned federal inspections and 83
percent of its planned Indian inspections because of limited
resources. 

BLM officials told us that they have a number of management
improvement efforts under way to improve services to tribes and
allottees.  These include (1) improving BLM Indian program office
services to tribes and allottees, (2) helping tribes obtain
assistance through Department of Energy fossil fuel grants, and (3)
improving minerals management systems.  BLM officials told us that,
under a BLM National Performance Review initiative, they have opened
the Four Corners Laboratory in Farmington, New Mexico, with
co-located BIA, BLM, and MMS staff.  While BLM officials told us that
the Four Corners Office is not yet operating as the organization that
Interior envisions, the concept is for Interior to provide a central
location where tribes can get complete information on their land and
minerals management, royalty collection and compliance audits, and
royalty receipts deposited in their trust fund accounts.  BLM
officials told us that they also have efforts underway to consolidate
and improve other Indian program offices. 

According to BLM officials, limited funding has also impaired their
ability to provide training and technical assistance to tribes that
wish to assume responsibility for inspection and enforcement. 
However, officials said that they are trying some innovative
approaches to provide minerals management support to tribes.  For
example, BLM officials said that at their request, the Department of
Energy funded 14 fossil fuel program grants in five states during
fiscal year 1994, all of which would provide some benefit to Indians. 
These grants included joint arrangements with tribes, direct
arrangements with tribal governments to assess drawing capability of
oil and gas reservoirs on tribal lands, and technology transfers. 

In addition, BLM officials told us that they have efforts underway to
develop the Automated Fluid Minerals Management System (AFMMS) to
replace obsolete nonintegrated minerals management systems, including
BLM's Automated Inspection Records System.  AFMMS is also to
interface with BLM's Automated Land and Mineral Records System
(ALMRS) (Interior's official land records system for the entire
United States) and with MMS' Production Accounting and Audit System. 
According to a BLM Fluid Minerals Management official, the AFMMS
concept is to provide a complete history of well information,
including information on leases and agreements, well applications,
well activity, production, and inspections.  BLM is piloting AFMMS at
its New Mexico State Office and full conversion from BLM's lease data
system and its inspection records system is targeted for the end of
1996. 

BLM officials told us that they are working with the American
Petroleum Institute's Petroleum Data Exchange in the design of AFMMS. 
For example, BLM hopes that industry will download some of their data
into AFMMS or provide electronic access to their data.  BLM officials
told us that they plan to develop a logical data model that will
benefit the federal government, tribes, and industry by using
international standards and new technology, such as that used by
international petroleum companies.  They said that by working with
the Petroleum Institute to incorporate international standards in
AFMMS, they also should be able to participate in standards-setting
in the future. 


--------------------
\2 Under BLM's inspection criteria, significant production is defined
as production for leases, communitization agreements, gas storage
agreements, etc., that meets or exceeds 12,000 barrels of oil per
month or 120 million cubic feet per month. 

\3 Under BLM's inspection criteria, a potential for noncompliance is
based on a history of at least two major or six minor FOGRMA-related
production accountability violations, including site security, within
the preceding 2 fiscal years. 


         MINERALS MANAGEMENT
         SERVICE INDIAN PROGRAM
         AND SYSTEMS INITIATIVES
---------------------------------------------------- Appendix IV:1.2.3

According to MMS officials, 22.4 percent of MMS' budget is directed
at collecting Indian mineral revenues, which constitute 4.3 percent
of MMS' total mineral revenues.  During the past 3 years, MMS has
taken several actions to provide increased royalty management
assistance to tribes and individual Indian allottees.  For example,
in 1991, MMS increased its funding for tribal royalty compliance
audits under cooperative agreements from 50 percent to 100 percent. 
In 1992, MMS opened several Indian program field offices to respond
to Indian royalty management concerns.  Also, in 1992, MMS began
implementing automated systems modules to ensure greater accuracy of
payments and reporting on Indian leases.  In 1993, MMS established
study groups to streamline and improve royalty program regulations
and reporting requirements. 

MMS officials told us that their new field offices are devoted
specifically to improving their Indian program.  Indian offices
include three Indian Royalty Assistance Offices--in Oklahoma City,
Oklahoma; Farmington, New Mexico; and Denver, Colorado.  These
offices perform research on issues and questions received from tribes
and Indian lessors on a walk-in or phone-in basis.  MMS also
established two field offices with Indian Audit Teams (in Oklahoma
City and Albuquerque) to perform spot audits requested by Indians. 

MMS also created study groups to provide input to changes in
regulations related to allowances\4 and gas valuation.  These groups
included representatives of tribes, states, and industry.  Tribal
representatives participating in the study groups told us that after
making compromises to reach consensus with states and industry on
proposed changes to gas valuation regulations, they had difficulty
reaching agreement with MMS on language to be used in MMS' advance
notice of proposed rulemaking.  The representatives said that they
continue to be concerned about whether and how MMS will use their
input in drafting proposed changes to regulations on allowances. 

Tribal representatives also told us that they are concerned about
MMS' enforcement of royalty payment regulations and the quality of
data in MMS's royalty accounting system.  For example, tribal
auditors said that MMS does not always assess penalties or charge
interest for improper reporting or late payments.  Under FOGRMA, any
person who fails or refuses to comply with the act may be assessed a
penalty if the violation is not corrected within 20 days after due
notice.  The act also requires the Secretary to charge interest on
payments that are not received by the payment due date. 

MMS officials said that interest payments are now automatically
charged by the Accounting and Financial System (AFS).  They also said
that relatively few penalties are imposed because the payor has 20
days to correct the error.  The officials said that they believe
stronger penalties could be a significant incentive for companies to
accurately report and pay royalties.  They also said that MMS has
proposed legislation to establish penalties of 20 percent, without a
grace period, for certain thresholds of underreporting on oil and gas
and on coal royalties. 

Tribal royalty auditors are concerned that MMS' royalty audit
tracking system is not user friendly and that the tribes either did
not have the equipment to access MMS' audit tracking system or that
they had difficulty doing so.  Tribal royalty auditors also said that
they could not currently download MMS data to their systems for audit
purposes.  In addition, they said that they had difficulty reading
and interpreting unedited data that they receive from MMS on magnetic
tapes.  MMS officials said that they are developing client-server
technology, using Interior's computer network, to facilitate user
access to MMS' data.  They said that the three tribes with the
largest royalty revenues who have cooperative royalty compliance
audit agreements with MMS will receive client-server hardware and
hookups in September 1995 and that additional tribes will be added to
the network as funds become available.  MMS expects its client-server
technology to be fully available to requesting users within 10 years. 

MMS officials said that as more tribes and states begin to use MMS'
systems data, problems are being identified and corrected.  For
example, in 1992, MMS began implementing automated AFS modules to
perform additional verifications solely on Indian lease payments. 
The modules are designed to (1) identify improper recoupments,\5
severance tax deductions, and royalty rates, (2) assure that an
actual payment has been made before an adjustment can be processed,
and (3) monitor rent and mineral royalty and valuation.  According to
an MMS official, the valuation monitoring module is being phased in
by geographic area and it is operational in MMS' Oklahoma City
Office.  We are currently reviewing MMS' recoupment module to
determine whether it is effective in preventing excessive
recoupments.  The continuing need to develop system controls to
address improper payments raises serious concerns about the
reliability of MMS system. 

MMS officials told us that when MMS and BLM mineral production and
inspection systems improvements are fully implemented, they will
complement each other.  For example, they said that after MMS
installs its new client-server technology and AFMMS is fully
implemented, it should be possible for MMS to compare well data on
industry reports contained in its Production Accounting and Auditing
System (PAAS) directly to well activity and inspection data in BLM's
AFMMS.  However, an MMS official told us that the systems would only
perform effectively if BLM management ensured that its field offices
consistently update AFMMS.  Otherwise, PAAS could erroneously reject
industry data and essentially void the data in MMS' system. 
According to the MMS official, inconsistency in BLM field office
updates of systems data has been a serious problem in the past.  BLM
and MMS cooperation will be needed to help ensure that these systems
are effectively implemented. 

Oversight of minerals management systems improvements is to be
provided by Interior's new Indian Minerals Steering Committee, rather
than its Office of Information Resources Management.  We are
concerned that the Steering Committee, which includes BIA, BLM, and
BIA management, does not have the technical systems or information
resource management expertise to properly oversee these systems
efforts, or the authority to resolve disputes where agreements can
not be reached. 


--------------------
\4 See footnote 11 in the letter. 

\5 Recoupments are recoveries of previous overpayments.  MMS' system
control flags recoupments of more that 50 percent for Indian lessors
and 100 percent for tribes for review. 


   OBTAINING IMPROVED NATURAL
   RESOURCE ASSET SYSTEMS AND
   SERVICES
-------------------------------------------------------- Appendix IV:2

Private sector systems and services exist to handle specific
resources such as timber, coal, oil and gas, farming or grazing, and
real estate.  We judgmentally selected and contacted several related
industry associations and consulting firms to review the types of
systems and services that are available. 

Timber companies and consulting firms have systems and services that
could assist BIA or tribes in developing timber management and
marketing plans.  For example, a company official at a timber company
told us that the company has performed a complete survey of lands,
encompassing 200,000 acres, for one tribe.  The company sampled for
timber volume, size of trees, decay rates, etc., and used a computer
mapping database to develop a harvest plan and determine a sustained
yield level for harvesting that would not deplete the forests. 
According to the company official, the plan included designated
buffer lands, such as wet lands, and identified expected revenue from
forestry activities.  In addition, the company official said that
there are many economic and business software packages on the market
that can be purchased and adapted for timber management purposes. 

With regard to oil and gas resources, private sector firms could
provide engineering and operating services, such as collecting
payments and distributing revenues that could be useful to BIA and
tribes.  Appendix V discusses commercially available lease-based oil
and gas royalty accounting systems. 

We also contacted a mining industry representative who told us that
mining companies could provide services, such as negotiating and
managing coal leases and depositing and distributing lease payments. 
However, if Interior decides to contract for these services, it would
be important for BIA, BLM, and MMS to consider potential conflicts of
interest, because these companies may also be conducting mining
operations on Indian lands. 

We did not identify any single private sector firm that could handle
all of BIA's current range management functions, which include
appraising land and its grazing capacity; negotiating and processing
leases; collecting, accounting for, and disbursing revenues; and
monitoring consumption.  However, there are individual private sector
firms that could provide appraisal services for range lands or assist
tribes with certain range management functions, such as lease
negotiations; day-to-day supervision of lands; or collecting,
accounting for, and disbursing revenues.  In addition, an industry
association representative, and a representative of the Intertribal
Agriculture Council, told us that land grant colleges can provide
assistance in range surveys and land use.  Appendix V discusses
commercially available lease-based realty accounting systems that
could be helpful to BIA in its rangeland accounting functions. 


   INDIAN SELF-DETERMINATION
   INITIATIVES
-------------------------------------------------------- Appendix IV:3

According to Interior's procurement system data, nearly 150 tribes
have contracted with BIA, under Public Law 93-638, Indian
Self-Determination and Educational Assistance Act, to perform
selected land and resource management functions.  Tribal
representatives that we met with described a number of resource
management capabilities they are developing or contracting for,
including timber management, oil and gas royalty accounting, and land
management.  For example, one of the tribes we visited uses a
consulting firm to develop a sustainable yield plan for its timber. 

Tribal representatives told us that they believe they have benefited
from increased revenues and better control over documents and data in
instances where they have assumed greater responsibility for managing
their natural resource assets.  There may be additional
opportunities, under self-determination programs, for tribes to
assume more of these functions.  A Council of Energy Resource Tribes
(CERT)\6 official told us that he believes tribes could manage their
resources at less cost than the Interior Department because tribes
have lower personnel and overhead costs. 

Of the tribes we met with, one tribe, which manages its own natural
gas resources, has nearly completed development of a royalty
accounting system, another has purchased a system from a major public
accounting firm, and a number of other tribes have expressed an
interest in purchasing royalty management systems or accessing MMS
royalty management systems.  MMS officials told us that, under a
National Performance Review initiative for commercialization of data,
they plan to provide tribes with direct access to their systems or to
download their database to the tribes within the next 10 years. 
BIA's NIOGEMS effort, discussed above, could provide tribes with
production data even earlier.  For example, BIA already has a pilot
test of NIOGEMS under way at its Osage Agency Office. 

Representatives of tribes and Indian groups that we met with told us
that they would like to manage their own resources.  However, they
emphasized that most tribes would need technical and/or financial
assistance to manage their resources successfully. 


--------------------
\6 CERT's membership includes tribes with oil and gas resource
production.  CERT provides technical assistance to these tribes in
resolving problems with federal agencies or oil and gas companies. 


TRUST FUND ACCOUNTING AND
INVESTMENT IMPROVEMENT OPTIONS
=========================================================== Appendix V

BIA can improve its trust fund accounting and investment operations
by

  obtaining reliable systems to ensure that accounts are properly
     maintained and that reports are timely and reliable;

  contracting for trust banking services, including account
     maintenance; and

  contracting for investment advisors, and a custodian to settle
     trades, provide security over investment instruments, and track
     investments between financial institutions. 


   OBTAINING RELIABLE ACCOUNTING
   SYSTEMS
--------------------------------------------------------- Appendix V:1

In assessing options for improving BIA's trust fund accounting
systems, we considered the feasibility and appropriateness of (1)
upgrading BIA's current systems or developing an in-house system, (2)
using another federal system, and (3) contracting for accounting
systems. 


      UPGRADING OR DEVELOPING AN
      IN-HOUSE TRUST ACCOUNTING
      SYSTEM
------------------------------------------------------- Appendix V:1.1

Upgrading BIA's current systems would not achieve the modern trust
accounting system that BIA needs because numerous past system
modifications, including automated interfaces between various trust
fund accounting systems that use different software, have not
resulted in efficient, reliable systems.  Further, BIA's trust fund
general ledger system was designed as a budgetary accounting system,
and it does not calculate interest or generate bank-type statements
needed by BIA and its account holders.  Given the cost, the time
required, the lack of in-house trust systems and information resource
management expertise, and continuing changes in systems technology
and software, developing an in-house trust fund accounting system is
not the best option. 


      USING ANOTHER FEDERAL AGENCY
      SYSTEM
------------------------------------------------------- Appendix V:1.2

We discussed BIA's trust fund accounting needs with officials at
federal financial organizations that we believed may have similar
types of operations, including the Federal Reserve, the U.S. 
Treasury, and the Federal Retirement Thrift Investment Board.\1 None
of these organizations appears viable as a means for improving BIA's
trust funds accounting systems.  For example, Federal Reserve
officials told us that they do not have a trust accounting system and
that they would need to contract for such a system in order to handle
BIA's trust fund accounting.  They also told us that they would need
to contract for services to develop a trust accounts receivable
system. 

Treasury currently performs some accounting and disbursement
functions for BIA's Office of Trust Funds Management (OTFM). 
However, OTFM officials told us that Treasury's system does not meet
Indian trust fund accounting needs because it does not (1) maintain
data by each tribal and individual Indian account, (2) record checks
by account holder name or account number, (3) accrue interest, or (4)
provide the comprehensive account statements that are needed by BIA
and its account holders.  Treasury officials agreed that their system
does not fully meet BIA's needs and that a commercial trust
accounting system would better meet OTFM's Indian trust accounting
requirements. 

An official at the Federal Retirement Thrift Investment Board's
Office of Investments told us that the Thrift Savings Plan for
federal employees system is not designed to capture the range of
income associated with BIA's trust fund receipts.  Further, the
Federal Employees' Retirement System Act of 1986, which established
the Plan, limited the Plan's investments to before tax federal
employee payroll deductions and interest earnings.  As a result, the
Plan cannot accept other deposits. 


--------------------
\1 The Board invests participants' retirement contributions to the
Thrift Savings Plan for federal employees. 


      CONTRACTING FOR ACCOUNTING
      SYSTEMS
------------------------------------------------------- Appendix V:1.3

In December 1993, we briefed Interior management on the interim
results of our review.  We stated that based on information that we
obtained from 12 judgmentally selected major private sector trust
accounting systems vendors, service providers, and financial
institutions, there are commercially available trust accounting
systems that could help BIA meet its overall trust collection,
accounting, investment,\2 and reporting needs.  These systems are
used by many banks, brokerage firms, and institutions that manage
private trusts and include money manager features which could be used
to move funds between BIA's depository and investment banks and
brokerage firms.  In addition, these systems can operate in a
centralized, decentralized, or combination mode and they can be
operated by contractors, run in-house by BIA's OTFM, or operated by
tribes who assume accounting responsibility for their trust funds
under Indian self-determination initiatives. 

In March 1994, Interior approved a BIA proposal for OTFM to contract
for an interim trust fund general ledger and investment system.  OTFM
officials told us that they plan to select a contractor by September
30, 1994, and have begun preliminary efforts to plan an approach for
solving their subsidiary and IIM trust fund accounting system needs. 


--------------------
\2 An accounting system supports investments by recording balances
available for investments and recording the investments in the
general ledger. 


         MINERALS AND REALTY
         MANAGEMENT SYSTEMS
----------------------------------------------------- Appendix V:1.3.1

Commercially available minerals and realty management lease-based
subsidiary trust accounting systems could provide BIA or tribes with
opportunities to (1) automate the trust funds accounts receivables
function and (2) collect mineral royalties directly from lessees. 
These systems could also be used by tribes who choose to assume
responsibility for their mineral royalty collection and accounting
functions. 

We judgmentally selected and contacted two companies with lease-based
oil and gas and realty systems that appear to be representative of
commercially available, state-of-the-art systems.  These systems are
designed to interface with most major commercial trust accounting
systems.  Both companies' realty systems account for real estate,
farm, timber, and range property.  Officials at both companies told
us that they believed that their oil and gas systems and realty
systems are capable of handling BIA's trust fund accounting,
including IIM account transactions.  In addition, company officials
told us that converting BIA's ownership, lease, and IIM account files
to their systems would not be difficult. 

Information we reviewed indicated that these systems could handle
multiple ownership of trust assets and distribute revenues and
expenses to multiple owners.  The systems maintain an inventory of
account holders along with the amount of assets owned, revenues
earned, and percentage of ownerships.  Officials at one company we
visited told us that their oil and gas system provides for
user-definable data fields and records information by well.  Both
companies' systems track accounts receivable and generate delinquency
reports.  In addition, the systems produce tickler reports which aid
in asset management, such as reports that track lease renewals and
appraisal dates. 

In addition, MMS could assist tribes who choose to assume
responsibility for their royalty collection and accounting functions
by providing access to MMS' royalty systems or downloading data to
the tribes' systems.  MMS officials told us that their Indian royalty
program initiatives will provide these opportunities to tribes over
the next 10 years. 


         SYSTEMS PLANNING SERVICES
----------------------------------------------------- Appendix V:1.3.2

Private sector firms also offer the capability to match an agency's
information needs and systems requirements to trust accounting and
investment systems currently available in the private sector.  The
firms that we visited are familiar with the major trust systems and
subsystems on the market and they have assisted banks and trust
institutions in selecting and integrating trust systems packages. 
Such firms could assist BIA in determining its information needs and
systems requirements and in identifying systems on the market which
might best meet OTFM's requirements.  They could also assist BIA in
developing an overall strategic plan for trust fund financial
management. 


   CONTRACTING FOR BANKING
   SERVICES
--------------------------------------------------------- Appendix V:2

Currently, BIA maintains Indian trust fund cash balances in the U.S. 
Treasury.  Because Treasury does not have a trust banking system, it
cannot provide the comprehensive account statements and reports that
BIA and its Indian account holders need.  A banking institution could
help BIA better meet its fund accounting and reporting needs. 

For example, a banking arrangement could provide BIA and its account
holders with comprehensive trust account statements, automatic
interest accruals and postings, and reporting of taxable interest
earnings to the Internal Revenue Service.  Further, standardized
computer software used throughout the banking system facilitates cash
management and fund movement, including electronic transfers of
information and funds between banks and the Federal Reserve and
processing of checks and receipts.  The common language also allows
account holders to easily transfer their funds to another bank.  This
would be an advantage to trust fund account holders who decide to
withdraw their money from BIA's trust funds. 

Interior and BIA can contract for banking or financial management
services.  However, because the Secretary of the Interior is the
fiduciary, management responsibility, including the exercise of
judgment and discretion, must remain within Interior.  In this
regard, Interior or BIA would need to establish policies and provide
instructions on matters such as the following:  (1) how tribal and
individual Indian accounts will be maintained--as investments or as
checking and savings accounts, (2) whether the financial institution
would collect oil and gas, grazing, timber, and other revenues, (3)
ownership and income distribution formulas, (4) payment of account
maintenance fees, (5) handling of supervised accounts for minors and
incompetents and accounts restricted due to child support or other
requirements, (6) reporting requirements to account holders and BIA
management, and (7) how the financial institution would relate to
account holders. 

Officials at two banks that we judgmentally selected for review told
us that they believed their banks could meet most of the minimum BIA
trust fund requirements.  In addition, officials at two brokerage
firms told us that they could provide both accounting and investment
services for BIA's trust funds.  Both bank and brokerage firm
officials told us that the administration and reporting for BIA's
327,000 individual Indian accounts would be costly. 

In developing a plan to transfer account maintenance responsibilities
for BIA's IIM accounts, we believe that BIA would benefit from a
review of those accounts to identify and close any that are inactive,
thus reducing management fees.  We have identified IIM accounts by
category and have suggested that BIA reduce a significant number of
the 337,000 IIM accounts that it maintains by cleaning up "hold"
accounts related to probates and incorrect addresses and determining
an alternative way of handling royalty distributions.  BIA's OTFM is
currently exploring how it would handle income collections and
distributions, such as oil and gas royalties and related interest
earnings, that are merely passed through the trust fund accounts
because, for the most part, there would be no residual balances in
these accounts.  According to the OTFM Director, OTFM plans to use
the information we provided to begin to reduce the number of IIM
accounts in the fall of 1994.  Depending upon BIA's approach, 33
percent to 65 percent of the accounts could be eliminated or handled
more efficiently. 

With regard to account holder reporting, quarterly statements on
tribal investments may be sufficient, while monthly statements would
most likely be required if individual Indian trust accounts are
handled as checking or savings accounts.  BIA and its account holders
would need to agree on appropriate reporting requirements based on
the type of account and activity involved and BIA's management
information needs.  In addition, BIA would need to consider whether
OTFM customer service representatives or bank personnel would be
responsible for communicating directly with account holders. 


   INVESTMENT ADVISORS AND
   CUSTODIAN SERVICES
--------------------------------------------------------- Appendix V:3

A variety of investment services are available in the federal and
private sectors and the Indian community.  However, federal sector
services are limited to Treasury.  Tribes that wish to withdraw their
money from BIA's trust funds would also have the option of using
investment services, including advice, training, and asset management
services available through either the private sector or the Indian
community. 


      FEDERAL SECTOR ADVICE AND
      INVESTMENT SERVICES
------------------------------------------------------- Appendix V:3.1

Treasury is the only federal entity that provides investment
services.  Federal Reserve Board officials told us that the Federal
Reserve does not have a federal agency investment function. 
According to the Deputy Director for the Thrift Savings Plan
Investments, the Thrift Investment Board's investments are limited by
law to federal employee payroll contributions and interest earnings,
and the law does not permit them to invest other revenues. 

Treasury's Financial Management Service (FMS) officials told us that
they issue Treasury securities to federal agencies for investment
purposes.  FMS officials also told us that FMS could participate, as
an advisor, on a BIA trust fund investment board.  As an example of
FMS' investment advisory services, FMS officials told us that FMS is
a member of the Air Force welfare fund's investment committee.  They
said that FMS has acted in an advisory role to direct the Air Force
to investment funds, cash/money managers, and pension funds and that
FMS has helped the Air Force Board make decisions regarding these
services.  FMS officials told us that they could assist BIA by
providing standards or guidelines to help BIA select industry experts
as advisors, review contracts with the advisors, and review advice
that BIA receives from its advisors. 

According to a Thrift Savings Plan Investment Office official, the
Thrift's investment board hired an outside consultant only during its
first year of operation, in 1987, to assist in evaluation of asset
management proposals.  The Thrift currently makes its investments
through a contracted asset manager and custodian and it hires a
consulting firm to monitor its custodian's performance. 

In determining how OTFM would use contract advisors and a custodian
(either to advise BIA and OTFM management directly or to advise a BIA
or Interior Department investment board) BIA may want to discuss with
Treasury's FMS and Thrift Retirement Investment Board officials their
experience with investment advisors and custodians.  In addition, the
Thrift Investment Board's experience in setting up the federal
employee retirement investment program could be beneficial to BIA in
developing a basic framework for trust fund investment options. 


         ADDITIONAL BIA INVESTMENT
         OPTIONS
----------------------------------------------------- Appendix V:3.1.1

Indian representatives told us that tribes would like the opportunity
to designate investment of their funds to more than one portfolio. 
Pending trust fund legislation would provide for demonstration
programs to allow tribes and Indians to direct the investment of
their trust funds or to withdraw their funds and manage their own
investments. 

With regard to tribes' direction of their trust fund investments,
Interior and BIA could also consider other types of investment fund
options.  For example, BIA may wish to use the Thrift Savings Plan's
legislation as a basis for requesting similar authority to set up
investment options in addition to government securities for the
Indian trust funds.  Officials from a major bank and associated asset
management company that we met with also suggested creation of
various types of investment options for BIA's short, intermediate,
and long-term investment of the Indian trust funds. 

The Thrift Plan provides a select number of investment fund options,
limits the number of interfund transfers that a participant may make
in 1 year, and requires participants who wish to invest in other than
government securities to sign a risk statement.  Pending trust fund
reform legislation would also limit the government's liability under
the demonstration projects, so long as the Secretary prudently
implements the demonstration. 

BIA currently limits its investments of Indian funds to government
securities, or collateralized accounts, which provide security
similar to that of the Thrift Savings Plan G Fund.  The G Fund
consists of investments in short-term nonmarketable U.S.  Treasury
securities, which are specially issued to it.  But the Thrift plan
offers two additional options--the C and F Funds.  For both of these
Funds, the Thrift uses index funds.  This allows the Thrift to use a
"passive" investment strategy of duplicating the performance of the
index, rather than an "active" investment strategy, which bases the
selection of stocks or funds on economic, financial, and market
analyses. 

The Thrift's C Fund consists of the commingled Standard & Poor's 500
stock index fund, which is representative of 70 percent of the U.S. 
stock markets.  In a commingled fund, the assets of many plans are
combined and invested together. 

The Thrift Plan's F Fund consists of a bond index fund, which
represents the U.S.  government sector, the corporate sector, and the
mortgage-backed securities sector of the U.S.  fixed-income market. 
It is the index used by private managers of the commingled
fixed-income funds.  These securities, which include bonds, notes,
and debentures, usually pay interest semiannually until maturity. 

The Thrift Savings Plan limits participant designations of future
contributions to twice a year and interfund transfers to four times a
year.  This reduces the paperwork burden and management fees
associated with numerous interfund transfers. 


      PRIVATE SECTOR INVESTMENT
      SERVICES
------------------------------------------------------- Appendix V:3.2

We judgmentally selected two banks and two brokerage firms for our
review of private sector investment services.  Officials we met with
who represented banks' and brokerage firms' investment and trust
departments and asset management companies told us that they believed
their institutions could handle Indian trust fund investments.  Most
of them also said that they could handle BIA's trust fund accounting
and reporting.  In addition, officials at some financial institutions
told us that they have the capability to provide training and
investment advice and services directly to tribes, which may decide
to withdraw their money from BIA's trust funds and manage their own
investments. 

As stated above, if BIA, as the fiduciary, chooses to contract for
investment services, it would need to establish policies and
procedures and provide instructions on how the accounts that remain
in the government trust funds would be maintained and invested.  In
this regard, BIA's instructions on account maintenance could reflect
tribes' requests that their funds be invested in certain ways, while
BIA's instructions on individual Indian accounts would need to
reflect BIA's and the account holders' decisions to maintain these
accounts as checking accounts or as investment accounts.  For
example, if BIA and individual Indian account holders decide that
individual Indian accounts would be handled as individual checking or
savings accounts with automatic teller machine card access or as cash
management accounts, then BIA would need to provide instructions
appropriate to those types of accounts. 

BIA and individual Indian account holders could also decide to
maintain the individuals' accounts as investments in a variation of
pooled 401k pension funds or in pooled mutual funds.  In pooled
funds, a share value is determined for each account holder and the
number of shares determines the value of the individual account. 
Interest earnings are calculated based on the share value of the
account.  If individual Indian accounts were to be maintained as
investments, BIA would need to provide instructions on participation,
including deposits and withdrawals, management fees, whether
participants could borrow against their shares, etc.  Officials told
us that the requirement that federal funds be collateralized would
limit their ability to invest these funds for the maximum return. 

Management fees and reporting requirements would also vary depending
upon how the trust fund accounts are to be maintained and/or
invested.  Some bank and brokerage firm officials told us that it
would be costly to maintain individual Indian accounts as 401k
accounts due to the governing rules for such accounts and the
management fees associated with the volume of transactions and small
balances in these accounts.  However, these officials also told us
that if BIA is able to reduce the number of IIM accounts, it might be
feasible to handle them as a variation of 401k pension funds or as
pooled mutual funds for investment earnings.  Under such an
arrangement, management fees could be deducted from the accounts, or
the government could pay the full cost of administration, plus a
reasonable profit margin. 


      NATIVE AMERICAN INVESTMENT
      ADVISORS
------------------------------------------------------- Appendix V:3.3

Native American financial institutions are another source of
investment advice and services for tribes.  The First Nations
Development Institute has prepared a list of Native American
financial institutions and services that these institutions provide
to American Indians.  First Nations has also developed an investment
manual, based on one tribe's experience, as a guide for tribes in
assessing risk and return on various investment options.  In the
manual's case study, a tribe obtained special legislation permitting
it to withdraw a portion of its judgment funds from BIA's trust
funds.  The manual details the advice and consultation given to the
tribe on (1) investment fundamentals and (2) a process for selecting
investment advisors.  It also discusses the tribe's decision to
invest its funds through two separate investment managers to (1)
reduce their risk and (2) have access to two advisors to assist in
the development of investment plans.  The First Nations manual also
highlights the investment experience of seven additional tribes. 

In addition, officials from a newly formed Native American asset
management company told us that they are interested in providing
training, asset management, and investment advice to tribes and
Indians.  Under Public Law 93-638, Indian Self-Determination and
Education Assistance Act grants, tribes could contract with Native
American or private sector financial institutions for asset
management and investment training and/or advice.  Indian
representatives and private financial institutions' officials have
stated on numerous occasions that training, technical, and financial
assistance are critical to the success of Indian financial management
self-determination initiatives. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix VI

ACCOUNTING AND INFORMATION
MANAGEMENT DIVISION, WASHINGTON,
D.C. 

Gayle L.  Condon, Assistant Director
Keith A.  Rhodes, Technical Information Assistant Director
Robert W.  Wagner, Audit Manager

DENVER REGIONAL OFFICE

William L.  Laurie, Evaluator-in-Charge
Missy Klem, Accountant

OFFICE OF GENERAL COUNSEL

Thomas H.  Armstrong, Assistant General Counsel


RELATED GAO PRODUCTS
============================================================ Chapter 0

Financial Management:  Native American Trust Fund Management Reform
Legislation (GAO/T-AIMD-94-174, August 11, 1994). 

Executive Guide:  Improving Mission Performance Through Strategic
Information Management and Technology (GAO/AIMD-94-115, May 1994). 

Financial Management:  Status of BIA's Efforts to Reconcile Indian
Trust Fund Accounts and Implement Management Improvements
(GAO/T-AIMD-94-99, April 12, 1994). 

Financial Management:  BIA's Management of the Indian Trust Funds
(GAO/T-AIMD-93-4, September 27, 1993). 

Financial Management:  Status of BIA's Efforts to Resolve
Long-Standing Trust Fund Management Problems (GAO/T-AFMD-93-8, June
22, 1993). 

Royalty Compliance:  Improvements Made in Interior's Audit Strategy,
but More Are Needed (GAO/RCED-93-3, October 29, 1992). 

Financial Management:  Status of BIA's Efforts to Resolve
Long-Standing Trust Fund Management Problems (GAO/T-AFMD-92-16,
August 12, 1992). 

Indian Issues:  GAO's Analysis of Land Ownership at 12 Reservations
(GAO/T-RCED-92-75, July 2, 1992). 

Financial Management:  Problems Affecting BIA Trust Fund Financial
Management (GAO/T-AFMD-92-12, July 2, 1992). 

Financial Management:  BIA Has Made Limited Progress in Reconciling
Trust Accounts and Developing a Strategic Plan (GAO/AFMD-92-38, June
18, 1992). 

Financial Management:  BIA Has Made Limited Progress in Reconciling
Indian Trust Fund Accounts and Developing A Strategic Plan
(GAO/T-AFMD-92-6, April 2, 1992). 

Indian Programs:  Profile of Land Ownership at 12 Reservations
(GAO/RCED-92-96BR, February 10, 1992). 

Bureau of Indian Affairs' Efforts to Reconcile, Audit, and Manage the
Indian Trust Funds (GAO/T-AFMD-91-6, May 20, 1991). 

Bureau of Indian Affairs' Efforts to Reconcile and Audit the Indian
Trust Funds (GAO/T-AFMD-91-2, April 11, 1991). 

Indian Programs:  Use of Forest Development Funds Should Be Based on
Current Priorities (GAO/RCED-91-53, March 7, 1991). 

Mineral Revenues:  Shortcomings in Onshore Federal Oil and Gas
Production Verification (GAO/RCED-90-99, June 26, 1990). 

Forest Service:  Status of the All-Resource Cost Reporting Project
(GAO/AFMD-89-65, April 14, 1989). 

Timber Program:  A Cost Accounting System Design for Timber Sales in
National Forests (GAO/AFMD-87-33, April 21, 1987). 
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