Financial Management: BIA's Tribal Trust Fund Account Reconciliation
Results (Letter Report, 05/03/96, GAO/AIMD-96-63).

The Bureau of Indian Affairs (BIA) has spent more than five years and
$21 million in a massive effort to locate supporting documentation and
reconcile trust fund accounts, but tribal accounts could not be fully
reconciled or audited due to missing records and the lack of an audit
trail in BIA's systems.  Because BIA does not know the universe of
transactions or leases, it does not know the total amount of receipts
and disbursements that should have been recorded. Indian tribes have
raised questions about the adequacy and reliability of the
reconciliation results. If follow-up meetings with the tribes do not
resolve these concerns, the settlement process that GAO has recommended
could be used as a framework for resolving disagreements on account
balances. In addition, due to cost considerations and the potential lack
of supporting documentation, reconciliations for individual Indian
accounts were never done, and no alternative procedures were developed
to verify these account balances. Because any attempt to reconcile these
accounts would be costly and the results would be limited, these
accounts should be included in the settlement process.

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

 REPORTNUM:  AIMD-96-63
     TITLE:  Financial Management: BIA's Tribal Trust Fund Account 
             Reconciliation Results
      DATE:  05/03/96
   SUBJECT:  Native American claims
             Trust funds
             Claims settlement
             Financial records
             Accounting procedures
             Native Americans
             Accounts receivable
             Funds management
             Agency reports
             Contract modifications
IDENTIFIER:  Indian Trust Fund
             
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Cover
================================================================ COVER


Report to the Committee on Indian Affairs, U.S.  Senate

May 1996

FINANCIAL MANAGEMENT - BIA'S
TRIBAL TRUST FUND ACCOUNT
RECONCILIATION RESULTS

GAO/AIMD-96-63

Tribal Reconciliation Results

(913740)


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

  BIA - Bureau of Indian Affairs
  IIM - Individual Indian Money
  IRMS - Integrated Records Management System
  ITMA - Intertribal Monitoring Association
  MMS - Minerals Management Service
  MOU - Memorandum of Understanding
  OMB - Office of Management and Budget
  OTFM - Office of Trust Funds Management

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


B-266127

May 3, 1996

The Honorable John McCain
Chairman
The Honorable Daniel K.  Inouye
Vice Chair
Committee on Indian Affairs
United States Senate

This report responds to your August 1995 request that we review the
Bureau of Indian Affairs' (BIA) efforts to reconcile and certify
tribal trust fund accounts.  Specifically, you asked us to provide
our overall observations on the results of the reconciliation effort,
including (1) whether the reconciliation report clearly communicated
the results of the reconciliation and fully disclosed known
limitations, (2) whether the certification contract addressed the
extent to which the reconciliation provided as complete an accounting
as possible, and (3) the tribes' responses to BIA's reconciliation
report. 

When the Congress established the Indian trust fund account
reconciliation requirement in the Interior Department's fiscal year
1987 supplemental appropriations act, it directed BIA to provide an
accounting to the account holders and the Congress.  This requirement
was expanded in Interior's fiscal year 1990 appropriations act, which
provided for an independent certification that the reconciliation was
as complete as possible.  Until BIA undertook the trust fund account
reconciliations in May 1991, the accounts--some of which were 50 to
100 years old--had never been reconciled.\1

The reconciliation process was brought to a close during the fall of
1995, and, in January 1996, a report was issued to each tribe on the
results associated with its accounts. 


--------------------
\1 At the direction of the Congress, we studied and investigated
tribal receipts and disbursements for fiscal years 1923 through 1951;
however, as reported in our February 1, 1929, and our April 1, 1951,
reports, we did not attempt to reconcile discrepancies due to
inadequate records. 


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

Although BIA spent over 5 years and about $21 million in a massive
effort to locate supporting documentation and reconcile trust fund
accounts, tribal accounts could not be fully reconciled or audited
due to missing records and the lack of an audit trail in BIA's
systems.  The January 1996 report package that BIA provided to each
tribe presented the results of the reconciliation procedures
performed by its contractor for fiscal years 1973 through 1992, BIA's
reconciliations for fiscal years 1993 through 1995, and a transmittal
letter which described the information provided and BIA's plans to
meet with tribes to discuss the reconciliation results.  However,
because BIA's report package did not explain or describe the numerous
changes in reconciliation scope and methodologies or the procedures
that were not performed, the limitations of the reconciliation were
not evident.  Further, the certification work--which was to verify
that the reconciliation was performed in accordance with BIA's
reconciliation contract requirements but not that the reconciliation
was as complete an accounting as possible--was not completed due to
cost and time constraints.  Tribes have expressed concerns about the
scope and results of the reconciliation process.  BIA may be unable
to resolve these concerns.  Also, cost considerations and the
potential for missing records made individual Indian account
reconciliations impractical.  A legislated settlement process could
be used as a framework for resolving questions about both tribal and
individual Indian account balances. 


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

In response to tribes' concerns that BIA had not consistently
provided them with statements on their account balances, that their
trust fund accounts had never been reconciled, and that BIA planned
to contract with a third party for management of trust fund accounts,
the Congress established the requirement in the Interior Department's
fiscal year 1987 supplemental appropriations act that BIA reconcile
trust fund accounts before they could be transferred to a third
party.  In Interior's fiscal year 1990 appropriations act, the
Congress required that BIA reconcile the accounts to the earliest
possible date.  In a March 1990 decision interpreting this
requirement, we concluded that "Congress's evident purpose is to
obtain, to the greatest extent possible, reliable baseline balances
in the various accounts."

In 1990, BIA decided to address the legislative requirement that it
reconcile trust fund accounts by contracting for a reconstruction of
historical transactions, to ensure that tribal and individual
accounts were reconciled as accurately as possible back to the
earliest possible date based on available records.  In May 1991, BIA
awarded a reconciliation contract valued at $12 million over a 5-year
period to a major independent public accounting firm.  Following a
preliminary assessment of the feasibility of reconciling accounts to
the earliest date possible, BIA's reconciliation contractor reported
in March 1992 that records were available to research tribal accounts
for fiscal years 1973 through 1992.  BIA's contractor also reported
that due to the level of effort and associated cost and the potential
for missing documentation, it was not feasible to reconcile
Individual Indian Money (IIM) accounts for individual Indians.\2 In
addition, BIA determined that its contractor should use alternative
procedures, rather than specific transaction testing, to verify
tribal account balances where insufficient documents were available
to reconstruct the accounting or where more efficient approaches were
identified. 

In addition to requiring that the accounts be reconciled to the
earliest possible date, Interior's fiscal year 1990 appropriations
act required an independent certification that the reconciliation
resulted in the most complete reconciliation possible.  In September
1993, BIA awarded a certification contract for $1.2 million to
another major independent accounting firm to verify that the
reconciliation procedures were performed in accordance with the
reconciliation contract.  BIA terminated the certification contract
as of November 30, 1995.  As of February 14, 1996, BIA had obligated
over $21 million for the 5-year reconciliation effort, including
$18.3 million for reconciliation work and $2.8 million for
certification work. 

The American Indian Trust Fund Management Reform Act of 1994 required
the Secretary of the Interior to provide tribes with reconciled
account statements as of September 30, 1995.  To meet this
requirement, BIA included reconciled account statements, which it
prepared for fiscal years 1993 through 1995, in the reconciliation
report package for each tribe.  The act also requires the Secretary
of the Interior to report to the Senate Committee on Indian Affairs
and the House Committee on Resources by May 31, 1996, (1)
methodologies used to reconcile the accounts, (2) whether tribes
accept or dispute their reconciled account balances, and (3) how the
Secretary plans to resolve any disputes. 

BIA's Office of Trust Funds Management (OTFM)\3 was responsible for
carrying out the reconciliation and certification effort.  As of the
end of fiscal year 1995, OTFM reported that it managed and accounted
for approximately $2.6 billion in Indian trust funds--about $2.1
billion for about 1,500 tribal accounts and about $453 million for
nearly 390,000 IIM accounts.  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.  Fiscal
year 1995 reported receipts to the trust accounts from these sources
totaled about $1.9 billion, and disbursements from the trust accounts
to tribes and individual Indians totaled about $1.7 billion. 


--------------------
\2 BIA also maintains some IIM accounts for tribes. 

\3 On February 9, 1996, a Secretarial Order implemented Interior's
Office of the Special Trustee for American Indians, which was
established by the American Indian Trust Fund Management Reform Act
of 1994.  The Order also transferred OTFM from BIA to the Office of
the Special Trustee. 


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

To provide our observations on the results of the reconciliation and
certification efforts, we reviewed reconciliation and certification
contracts and issue papers,\4

contractor status reports and memoranda, and prototype reconciliation
report drafts.  We met with Interior, BIA, and Office of Management
and Budget (OMB) officials, including BIA's Special Assistant to the
Deputy Commissioner of Indian Affairs for the reconciliation project
(Reconciliation Project Manager), Interior's Special Trustee for
American Indians, and representatives of the independent accounting
firms that BIA contracted with to perform the reconciliation and
certification to discuss our concerns about the reconciliation effort
and the certification contract.  To obtain tribes' views on the
reconciliation and certification efforts, we contacted
representatives of the Intertribal Monitoring Association (ITMA),
which represents a number of tribal account holders, and
representatives of non-ITMA member tribes.  We attended BIA's
February 1996 National Meeting in Albuquerque, New Mexico, to observe
Interior's and BIA's presentation on the reconciliation procedures,
reports, and results and the tribes' responses. 

We conducted our work between April 1995 and March 1996 at BIA's
headquarters in Washington, D.C., and its Office of Trust Funds
Management in Albuquerque, New Mexico.  Our work was performed in
accordance with generally accepted government auditing standards.  We
requested comments on a draft of this report from the Interior
Department's Special Trustee for American Indians.  On April 2, 1996,
we received written comments from BIA's Reconciliation Project
Manager.  These comments are discussed in the "Agency Comments and
Our Evaluation" section of this report.  While we are not reprinting
these comments, copies are available from GAO. 


--------------------
\4 In addition to contract modifications, issue papers were used to
discuss and approve revisions to reconciliation procedures as
unforeseen circumstances were encountered. 


   RECONCILIATION RESULTS
------------------------------------------------------------ Letter :4

Although BIA identified about 20,000 boxes of accounting documents
and lease records and spent about 5 years attempting to reconcile
tribal trust accounts, sufficient records were not available to fully
reconcile the accounts.  For example, BIA's reconciliation contractor
verified 218,531 of tribes' noninvestment receipt and disbursement
transactions totaling $15.3 billion, or 86 percent, of the $17.7
billion in transactions that were recorded in the general ledger. 
However, due to missing records, the contractor was not able to
verify 32,901 of these transactions totaling $2.4 billion (gross). 
In addition, BIA was not able to determine the total amount of
receipts and disbursements that should have been recorded and had no
reconciliation procedure to address the completeness of the
accounting records. 

BIA's contractor also specifically tested $21.3 billion, or 16
percent, of the investment transactions.  According to BIA's
Reconciliation Project Manager, in order to achieve efficiencies, BIA
decided to verify investment activity by asking its contractor to
perform alternative procedures to review interest yields.  BIA
performed related procedures to reconcile investment system balances
and BIA's contractor identified deposit lag times (for information
purposes only) on collections.  However, the completeness of these
procedures was also impacted by missing records. 

BIA's contractor reconciled 692 leases with collections greater than
$25,000 and collections for 227 months for 213 timber sales contracts
for certain tribes.  BIA's contractor reported that $601 million, or
99 percent, of lease receipts tested were verified.  However, this
represented only 10.7 percent of the leases originally identified for
testing.  Because BIA did not know the universe of leases, it could
not determine total lease revenue expected to be collected during a
given period and, therefore, it could not reliably determine the
percent of lease revenue that had been tested. 

Further, not all of the reconciliation procedures specified in BIA's
reconciliation contract were performed and others could not be
completed due to missing records, the lack of an audit trail through
BIA's systems, and time and cost constraints.  For example, BIA did
not reconcile its subsidiary system to its general ledger and BIA
could not complete the reconciliation of its Finance System (general
ledger) transactions to Treasury records.  Also, as stated earlier,
because of the cost and level of effort and the potential lack of
supporting documents, reconciliations of about 300,000 individual
Indian accounts were not performed and no alternative procedures were
developed.  Appendix I contains detailed information on
reconciliation procedures and results. 


   RECONCILIATION REPORTS
------------------------------------------------------------ Letter :5

In January 1996, BIA provided to each tribe a report package\5

on the results of the reconciliation procedures performed by its
contractor for fiscal years 1973 through 1992, BIA's reconciliations
for fiscal years 1993 through 1995, and a transmittal letter which
described the information provided and BIA's plans to meet with
tribes to discuss the reconciliation results. 

We reviewed several drafts of BIA's reconciliation report package and
provided oral and written comments and suggestions to OTFM between
May 1995 and January 1996.  We suggested that the usefulness of their
report could be increased by clarifying technical terms so that the
report would be more understandable to nonaccountants.  We also
suggested that BIA identify methodological changes addressed in
contract modifications and issue papers and disclose scope
limitations as part of the reconciliation report package.  BIA's
reconciliation contractor clarified technical language in the
agreed-upon procedures report and stated the scope of the work
performed.  However, BIA did not disclose in the report package to
tribes the procedures specified in the reconciliation contract which
were not performed or could not be completed and the reasons.  In
addition, for the procedures which were performed, BIA did not fully
disclose scope limitations or changes in methodologies, such as
accounts and time periods that were not covered and alternative
source documents used.  While some scope limitations were discussed
at the February 1996 National Meeting with tribes, BIA did not
explain all methodological changes resulting from contract
modifications and issue papers. 

BIA modified the reconciliation contract 29 times and approved
approximately 140 issue papers--including about 90\6

which addressed changes in tribal reconciliation scope and
procedures.  For example, issue papers determined that certain
adjustments relating to transfers would be reflected as of their
general ledger posting date rather than the date that the original
transaction occurred.  Using the general ledger posting date instead
of the transaction date could impact tribal interest calculations. 
Other issue papers determined that certain procedures could not be
performed for specific tribes due to missing records. 

We suggested that substantial changes in the scope or procedures as a
result of contract modifications and issue papers be explained in the
report package transmitted to the tribes.  BIA considered providing
issue papers to tribes on compact disk.  However, the Reconciliation
Project Manager told us that due to cost considerations, BIA decided
instead that these issue papers would be made available to tribes at
the OTFM in Albuquerque, New Mexico, or that tribes could request
copies of specific documents by mail. 

According to OTFM officials, a reconciliation report package was
issued to each of 269 tribes in January 1996.  The reports included
summary results for all tribes and specific results on each tribe's
accounts.  In addition, on March 8, 1996, OTFM issued reports to 112
tribes on their portions of multitribe judgment awards.  These
judgment awards resulted from claims against the federal government. 
However, OTFM's Reconciliation Project Manager told us that OTFM may
not be able to issue reports to all of the tribes involved in
multitribe awards because some are no longer federally recognized as
tribal entities, and BIA may not be able to locate the tribes or
their descendants. 


--------------------
\5 The report package included unreconciled account statements and a
schedule of proposed adjustments for each of the years covered by the
reconciliation. 

\6 According to the Reconciliation Project Manager, the first 50
issue papers covered the reconciliation feasibility assessment
period. 


   CERTIFICATION OF RECONCILIATION
   RESULTS
------------------------------------------------------------ Letter :6

The fiscal year 1990 appropriations act required a separate,
independent certification that the accounts had been reconciled and
audited to the earliest possible date and that the results were the
most complete reconciliation possible.  The certification requirement
was imposed to obtain independent assurance of the accuracy and
reliability of the reconciled balances.  After the certification
contract was awarded in September 1993, congressional committees and
several tribes expressed concern about the objective of BIA's
certification contract because BIA limited the scope of the
certification contract to ensure only that the reconciliation effort
was performed in accordance with the reconciliation contract.  During
the summer of 1995, Interior, OTFM, OMB, and the reconciliation and
certification contractors' staff worked on modifying the
certification contract to attempt to more fully explain each of the
reconciliation procedures that the certification contractor was to
verify. 

To meet the act's certification requirement, we suggested that the
certification contract focus on the extent to which the
reconciliation procedures resulted in as complete an accounting as
possible.  Interior and OTFM officials told us that they believed
that the reconciliation procedures, as designed, provided reasonable
assurance that the account balances were accurate and that contractor
certification on this point was not needed.  Therefore, the
certification contract focused on verifying that the reconciliation
procedures specified in the reconciliation contract had been
performed and no independent assessment of completeness was required. 

In October 1995, the certification contractor estimated that it would
require an additional 6 months and $1.2 million to complete the
certification work.  According to OTFM's Reconciliation Project
Manager, only $600,000 was available to cover the additional work and
it was not clear that the work could be completed in 6 months.  As a
result, Interior and BIA decided to terminate the certification
effort as of November 30, 1995, and to obtain a status report from
the contractor. 

Because the contract was terminated, BIA's certification contractor
did not complete its verification that the procedures in the
reconciliation contract and related issue papers were performed.  The
certification contractor issued a status letter on November 30, 1995,
which communicated the certification contract scope, methodologies,
and preliminary results of 30 segments of the reconciliation work,
including specific transaction testing, investment analyses, systems
reconciliations, and pilot tribe reconciliation work.  The status
letter identified the following: 

  -- 16 segments where errors or inconsistencies were reported to
     OTFM, including 8 segments with numerous errors and
     inconsistencies and 3 segments with methodological concerns;

  -- 12 segments where work was not performed by the certification
     contractor, or information was insufficient to provide results;
     and

  -- 2 segments where no errors were identified. 

OTFM's Reconciliation Project Manager told us that the reconciliation
contractor had addressed all of the issues and questions raised by
the certification contractor as of November 30, 1995, and that BIA
was following up to obtain clarification on whether the certification
contractor had communicated all findings to BIA.  Because the
certification work was performed while the reconciliation was in
process and the certification procedures were not completed, the
usefulness of the status letter is limited. 


   TRIBAL CONCERNS
------------------------------------------------------------ Letter :7

In February 1996, OTFM and reconciliation contractor officials
conducted a 2-day meeting with tribes in Albuquerque, New Mexico, to
discuss the reconciliation reports and results.  BIA had invited all
269 tribes that had received reconciliation reports, and
representatives of 79 of these tribes attended the national meeting. 
At the meeting, OTFM and reconciliation contractor officials
summarized the reconciliation results and answered tribes' questions. 
Tribes raised questions about the (1) adequacy of the objectives and
the scope of the reconciliation project, (2) effect of missing
documents on the accuracy of the reconciled account balances, and (3)
thoroughness of procedures used for testing the accuracy of recorded
investment interest income. 

Also, tribal representatives said they were concerned that the
reconciliation procedures did not provide the same level of assurance
as an audit, that BIA rather than the reconciliation contractor had
performed some portions of the reconciliation, and that the number of
missing records further limited the assurance provided by the
reconciliation results.  In addition, tribal representatives said
that the investment analyses did not reflect uninvested funds
associated with deposit lag times.  They were concerned that unearned
interest associated with deposit lag times between BIA's receipt of
funds and its deposit of the funds in a Treasury-designated federal
depository bank could be significant. 

The Reconciliation Project Manager explained that while an audit
could not be performed due to the number of missing records, the
reconciliation contractor performed agreed-upon procedures to attempt
to verify account balances.  He said that the results of the
procedures performed were presented in the auditor's agreed-upon
procedures report to each tribe, which was prepared in accordance
with American Institute of Certified Public Accountants standards. 
OTFM's Director said that OTFM will consider having an independent
review of the reconciliation work that BIA performed.\7

The Reconciliation Project Manager explained that the investment
analysis was a review of actual investment earnings and, therefore,
it did not consider the effect of undeposited receipts or whether the
funds earned maximum interest for secured investments.  He also
explained that for the pro forma analysis, interest was calculated at
the Benchmark rate for "uninvested funds" in BIA's cash pool that
earned interest at the Treasury overnight rate and comparisons were
presented in the tribes' reports for information purposes. 

The Reconciliation Project Manager also said that while many actual
collection dates to identify the extent of the deposit lag times were
not known, tribes could estimate interest amounts for the deposit lag
times by using the information provided in their reconciliation
reports.  In October and November 1990, during discussions between
ITMA and BIA on the reconciliation procedures to be performed, ITMA
requested that the reconciliation contract identify deposit lag times
because it believed that related unearned interest could be
significant.  BIA agreed to identify the lag times as a
reconciliation procedure; however, BIA did not agree to propose
adjustments to pay the lost interest.  Because the law requires the
Secretary of the Interior to invest and pay interest on tribal funds,
ITMA stated that if BIA did not propose interest adjustments related
to the deposit lag times, this information should be available for
settlement negotiations.  According to the Reconciliation Project
Manager, the deposit lag times provided in the reconciliation reports
can be used by tribes in any settlement discussions with the
government. 

Tribes stated that they would need significant time to review their
reconciliation reports and the supporting documents.  OTFM's
Reconciliation Project Manager said that tribes could meet BIA's
April 19, 1996, time frame for submitting acknowledgement forms to
BIA on their response to the reconciliation results by indicating on
that form their need for more time to review their reports. 
According to the Reconciliation Project Manager, BIA had anticipated
that tribes may need more time to review their reconciliation
reports.  As a result, BIA's acknowledgement forms ask tribes to
indicate (1) the need for additional time to review the reported
results and account statements, (2) the account balances they accept
as reconciled, and (3) the account balances they dispute. 

According to the Reconciliation Project Manager, OTFM had received
acknowledgement forms as of April 16, 1996, from 21 of the 269 tribes
that had received a report on their reconciliation results.  Of these
acknowledgements, 12 tribes indicated that they needed more time, 8
tribes requested individual meetings, and 1 tribe accepted the
account balances as reconciled.  The Reconciliation Project Manager
told us that if a tribe accepts the reconciled account balances as
correct before it attends a regional meeting, OTFM will follow up to
ensure that the tribe's response reflected a clear understanding of
the reconciliation reports and results.  Appendix II contains
additional information on tribal concerns and OTFM's responses. 


--------------------
\7 In comments on a draft of our report, BIA's Reconciliation Project
Manager stated that OTFM will consider having the tribes or their
representatives review the results of BIA's reconciliations. 


   OTFM FOLLOW-UP WITH TRIBES
------------------------------------------------------------ Letter :8

OTFM planned five regional meetings\8 between March 1996 and July
1996 to serve as workshops to assist individual tribes in reviewing
their reconciliation results.  The Reconciliation Project Manager
encouraged tribal representatives to carefully review their
reconciliation reports, account statements, and the supporting
documents for the basic reconciliation that BIA provided to the
tribes on compact disks.  He also urged the tribes to send their
accountants to the regional meetings where each tribe's
representatives will be allotted time to meet with the reconciliation
contractor and to ask specific questions about their tribe's trust
accounts.  The regional meetings are to serve as workshops to assist
tribes in understanding their reconciliation results. 

According to the Reconciliation Project Manager, OTFM will not be
able to complete planned regional meetings with tribes on the
reconciliation results until July 20, 1996.  As a result, the
Secretary of the Interior plans to meet the May 31, 1996,
reconciliation reporting requirement in the American Indian Trust
Fund Management Reform Act by providing an interim report to the
House and Senate Committees by that date and a final report after the
regional meetings are completed. 


--------------------
\8 Since the completion of our audit work, OTFM has held two of the
five planned meetings--on March 19-22 in Sacramento, California, and
on April 9-12, in Portland, Oregon. 


   PREVIOUS GAO FINDINGS
------------------------------------------------------------ Letter :9

Our past testimonies and reports anticipated that when the
reconciliation was completed, there might not be agreement on
reconciled account balances.  Our April and May 1991 testimonies\9
stated that it would be difficult to locate records to support the
reconciliation effort and that following the reconciliation, some or
all accounts might need to be settled.  Our June 1992 report\10
recommended that BIA develop a proposal for reaching a satisfactory
resolution of the trust account balances with account holders.  Our
report also stated that the BIA reconciliation contractor's latest
cost estimate at that time for reconciling individual Indian accounts
ranged from $180 million to $281 million and that because many
accounts are not reconcilable, alternative approaches to reach
agreement on account balances would be necessary.  In March 1995, we
testified\11 that further tribal reconciliation work would not
provide reasonable assurance that the account balances are accurate
and that the time had come for the Congress to consider legislating a
settlement process that could include both tribal and individual
Indian accounts. 

Following our March 1995 testimony, your Committee and the House
Committee on Resources, Subcommittee on Native American and Insular
Affairs, asked us to prepare, for discussion purposes, draft
legislation to establish a settlement process.  We issued this draft
legislation in September 1995.\12 Reports and testimonies related to
our work are listed at the end of this report. 


--------------------
\9 Bureau of Indian Affairs' Efforts to Reconcile and Audit the
Indian Trust Funds (GAO/T-AFMD-91-2, April 11, 1991) and Bureau of
Indian Affairs' Efforts to Reconcile, Audit, and Manage the Indian
Trust Funds (GAO/T-AFMD-91-6, May 20, 1991). 

\10 Financial Management:  BIA Has Made Limited Progress in
Reconciling Trust Accounts and Developing a Strategic Plan
(GAO/AFMD-92-38, June 18, 1992). 

\11 Financial Management:  Indian Trust Fund Accounts Cannot Be Fully
Reconciled (GAO/T-AIMD-95-94, March 8, 1995). 

\12 Indian Trust Fund Settlement Legislation (GAO/AIMD/OGC-95-237R,
September 29, 1995). 


   CONCLUSIONS
----------------------------------------------------------- Letter :10

Although OTFM made a massive attempt to reconcile tribal accounts,
missing records and systems limitations made a full reconciliation
impossible.  Because BIA does not know the universe of transactions
or leases, it does not know the total amount of receipts and
disbursements that should have been recorded.  Tribes have raised a
number of concerns about the adequacy and reliability of the
reconciliation results.  If follow-up meetings with tribes do not
resolve these concerns, the settlement process which we have
previously recommended could be used as a framework for resolving
disagreements on account balances. 

In addition, due to cost considerations and the potential lack of
supporting documentation, reconciliations for individual Indian
accounts were not performed, and no alternative procedures were
developed to verify these account balances.  Since any attempt to
reconcile these accounts would be costly and the results would be
limited, these accounts could be included in the settlement process. 


   AGENCY COMMENTS AND OUR
   EVALUATION
----------------------------------------------------------- Letter :11

The Interior Department's comments consisted primarily of numerous
technical clarifications, which we incorporated where appropriate. 
The comments neither agreed nor disagreed with our overall message
and conclusion that the accounts could not be fully reconciled and
that a settlement process could provide a useful framework for
resolving disagreements about account balances.  However, BIA
disagreed with our position that limitations in reconciliation scope
and methodologies needed to be disclosed to provide useful
information on the completeness of the reconciliation results. 

The reconciliation requirement as legislated by the Congress was to
reconcile the accounts to the earliest possible date and ensure,
through independent certification, that the reconciliation was as
complete as possible.  Further, the Congress, in the American Indian
Trust Fund Management Reform Act, required BIA's report to include a
description of the reconciliation methodology and the account
holder's conclusion as to whether the reconciliation represents as
full and complete an accounting of its funds as possible.  Therefore,
in order for the tribes and the Congress to understand the
reconciliation results and determine whether the reconciliation
represents as full and complete an accounting as possible, it was
important that BIA explain the limitations in reconciliation scope
and procedures, including procedures that were not performed or were
not completed. 

Our report addresses several areas where our work identified
significant reconciliation limitations and changes in procedures and
methodologies that we believe should have been disclosed by BIA. 
These areas include the lack of a known universe of transactions and
leases, the use of issue papers to approve changes in reconciliation
scope and procedures due to unforeseen circumstances, and
reconciliation procedures that could not be completed or were not
performed.  This additional information provides an important context
for understanding the reconciliation results. 


--------------------------------------------------------- Letter :11.1

We are sending copies of this letter to the House Committee on
Resources; the Secretary of the Interior; the Special Trustee for
American Indians; the Assistant Secretary, Indian Affairs; the
Director of the Office of Management and Budget; and other interested
parties. 

Please contact me at (202) 512-9508 if you or your staff have any
questions concerning this report.  Appendix III lists major
contributors to this report. 

Linda M.  Calbom
Director, Civil Audits


RECONCILIATION PROCEDURES AND
RESULTS
=========================================================== Appendix I

The reconciliation effort was to cover reconstruction of trust fund
account activity, to the extent that records were available, using
eight major reconciliation procedures.  Due to missing records, the
lack of an audit trail in BIA's systems, and cost and time
constraints, not all reconciliation procedures could be completed and
some procedures were not performed.  BIA's reconciliation contractor
performed reconciliation procedures for fiscal years 1973 through
1992.  To meet the requirement in the American Indian Trust Fund
Management Reform Act of 1994 that the reconciliation reports include
the results of reconciliations through September 30, 1995, the
reconciliation report packages provided to the tribes include the
results of reconciliations performed by BIA for fiscal years 1993
through 1995.  The report packages also include the results of
reconciliations that BIA performed between the investment system and
the Finance System (general ledger) for 26 tribes.  The following
summary addresses the reconciliation procedures that were performed
by the contractor and those that could not be performed or were not
completed. 

RECONCILIATION PROCEDURES
PERFORMED

The six major reconciliation procedures that were performed covered
(1) transactions, (2) investment yields, (3) deposit lag times, (4)
selected systems, (5) special procedures for five tribes, and (6)
lease receipts. 


      BASIC TRANSACTION
      RECONCILIATIONS
------------------------------------------------------- Appendix I:0.1

This segment of the reconciliation included tracing 251,432 in total
recorded noninvestment receipt and disbursement transactions\1

from the general ledger to source documents, such as deposit tickets,
disbursement vouchers, and journal vouchers.  OTFM's reconciliation
contractor reported that $15.3 billion, or 86 percent, of the total
$17.7 billion in noninvestment transactions for fiscal years 1973
through 1992 had been verified.  According to OTFM's Reconciliation
Project Manager, noninvestment transactions for 83 tribes were fully
reconciled under this procedure and, for the transactions reconciled,
BIA identified a probable error rate of only .01 percent.  Where
errors were identified, adjustments were proposed. 

Due to missing records, 32,901 of the noninvestment transactions
totaling $2.4 billion (gross) could not be reconciled.  According to
Interior and OTFM documents, the $2.4 billion included the following
transactions which could not be traced to supporting documentation: 

  -- $1.1 billion in receipts credited to tribal accounts that earned
     interest;

  -- $.8 billion in tribal drawdowns (disbursements) of their account
     balances, refunds, and canceled checks; and

  -- $.5 billion in internal transfers between the same tribe's
     accounts. 

In addition, BIA was not able to determine the total amount of
receipts and disbursements that should have been recorded. 
Therefore, the reconciliation project focused on transactions that
were posted to BIA's general ledger for tribal accounts and no
reconciliation procedure was performed to address the completeness of
the accounting records.  Further, the reconciliation report states
that BIA, based on its institutional knowledge, did not accept all
adjustments proposed by the reconciliation contractor. 

BIA's contractor also reconciled $21.3 billion, or 16 percent, of the
recorded investment transactions as part of the basic reconciliation
process.  According to BIA's Reconciliation Project Manager, in order
to achieve efficiencies, BIA decided to terminate the detailed
transaction reconciliations.  Instead, BIA asked its reconciliation
contractor to verify investment transactions by performing procedures
to review investment yields rather than testing individual
transactions.  BIA's contractor also identified deposit lag times for
BIA collections and reconciled investment systems balances. 


--------------------
\1 These transactions included receipts and disbursements from
judgment awards and income from land-use agreements collected by
various BIA offices, including grazing, timber, fishing, and rights
of way. 


      INVESTMENT YIELD ANALYSES
------------------------------------------------------- Appendix I:0.2

This segment of the reconciliation included an investment yield
analysis to compare tribes' interest earnings to the BIA benchmark
rate, which was the annual average yield for all tribal funds
invested.  Any account's annual yield that was at least 2 percentage
points below or 5 percentage points or more above the annual
benchmark was investigated for errors.  BIA's contractor also
recalculated interest earnings on tribal investments in overnight
Treasury deposits and compared interest received by tribes to the
applicable Treasury rate.  As a result of research on variations from
the benchmark parameters and the historical Treasury interest rates,
adjustments were proposed. 

In addition to the yield analysis and Treasury interest analysis,
BIA's contractor performed a pro forma analysis to estimate what
might have been earned had "uninvested funds" (funds in BIA's cash
pool that earned interest at the Treasury overnight rate) yielded
returns comparable to the benchmark rates.  The results of this
procedure were provided for informational purposes and no adjustments
were proposed. 


      DEPOSIT LAG TIMES
------------------------------------------------------- Appendix I:0.3

Deposit lag times represent the number of days from the date funds
were received by BIA to the date that the funds were deposited in a
Treasury-designated federal depository bank.  Because the date that
the collections were received by BIA's various offices was not always
clearly documented on the receipt documents, BIA established a
hierarchy for determining surrogate collection dates.  For example,
if the receipt date did not appear on the collection voucher, the
established hierarchy of surrogate dates was as follows--the most
recent date on the collection voucher subsequent to the date on the
payment check received, the stamped date that the voucher was
processed, the date that the voucher was prepared, and the date that
the voucher was approved. 

The reconciliation report showed that transactions analyzed for lag
times for the 20 years covered by the reconciliation totaled about
$3.2 billion.  These funds were deposited between the established
collection date and 30 days or more following the established
collection date.  The lag time information was provided for
information purposes.  No interest calculations were reported and no
adjustments were proposed for interest lost as a result of deposit
lag times.  As stated earlier, ITMA requested that BIA present this
information in the reconciliation reports. 


      SYSTEMS RECONCILIATIONS
------------------------------------------------------- Appendix I:0.4

The systems reconciliation\2 was to include reconciling (1)
information in BIA's trust fund investment system to its general
ledger in BIA's Finance System, (2) BIA's tribal general ledger in
the Finance System to U.S.  Treasury records, and (3) BIA's
Integrated Records Management System (IRMS) to Finance System.  The
IRMS to Finance System reconciliation was not performed and is
discussed in the next section of this appendix. 

The investment system to Finance System reconciliation covered
investment balances as of September 30, 1992.  BIA performed the
reconciliations for 26 tribes and proposed adjustments totaling
nearly $1.9 million.  BIA's contractor's reconciliation report
disclosed the procedures that BIA had performed. 

To support the reconciliation of its tribal general ledger
transactions in BIA's Finance System to Treasury reported
transactions, OTFM provided available tribal Treasury reports
(SF-224, Statement of Transactions Reports) for fiscal years 1990
through 1992 to the reconciliation contractor.  BIA's contractor
completed the fiscal year 1992 reconciliation and included the
results in BIA's January 1996 report package to tribes.  However,
BIA's reconciliation contractor was not able to complete the fiscal
years 1990 and 1991 Finance System reconciliations in time to include
them in the January 1996 report package due to differences in the way
that BIA and Treasury summarize the tribal trust account activity,
which made the reconciliation between their systems difficult.  For
example, BIA's SF-224, Statement of Transactions Report to Treasury,
did not provide sufficient detail to distinguish tribal accounts from
other fund accounts.  As a result, tremendous effort was needed to
reconstruct tribal account transactions from the source documents for
fiscal years prior to 1992.  According to BIA's Reconciliation
Project Manager, a supplemental report on the fiscal years 1990 and
1991 Finance System reconciliations is being finalized for
distribution to each tribe.  BIA's contractor proposed adjustments to
BIA's general ledger and also proposed reporting corrections to
Treasury for variances where supporting documentation was available. 
No adjustments were proposed where supporting documentation could not
be located. 


--------------------
\2 During the 20-year reconciliation period, BIA used three major
automated systems for trust fund accounting.  They are (1) the
Finance System, which was used to perform both tribal and general
ledger trust fund accounting, (2) an investment system, which
generated summaries of investment securities held on behalf of each
tribe, and (3) the Integrated Resources Management System (IRMS),
which provided subsidiary accounting for IIM accounts. 


      THE SPECIAL PROCEDURES
      REVIEW FOR FIVE TRIBES
------------------------------------------------------- Appendix I:0.5

This effort was designed to perform agreed-upon procedures on an
accelerated, pilot basis to identify potential problem areas.  Five
tribes\3 agreed to participate in the special procedures review.  The
purpose of this work was to determine the workability of the
procedures; however, as specified in the reconciliation contract,
this work was to be performed simultaneously with other
reconciliation work.  BIA prepared a Memorandum of Understanding
(MOU) for each tribe to cover both standard and special procedures. 
Our review of the approved MOUs for each of the five tribes showed
that their special procedures generally covered timeliness of
payments and deposits, internal control reviews, and special deposit
accounts.  The MOUs also covered specific areas of concern to each
tribe, such as a detailed analysis of certain accounts.  We did not
review the reconciliation reports provided to these tribes. 


--------------------
\3 The five tribes agreeing to participate in the pilot procedures
were the (1) Assiniboine and Sioux Tribes of Fort Peck, Montana, (2)
Confederated Salish-Kootenai of Flathead, Montana, (3) Confederated
Tribes of the Yakama Nation, Washington, (4) Hopi Tribe of Arizona,
and (5) Three Affiliated Tribes of Fort Berthold, North Dakota. 


      FILL-THE-GAP PROCEDURES FOR
      LEASES
------------------------------------------------------- Appendix I:0.6

These procedures included verifying tribal income by tracing general
ledger postings to the original source documents, including leases,
sales agreements, and production reports.  Receipts tested covered
oil, gas, and coal royalties; timber sales; other surface leases,
such as business leases; and grazing, hunting, fishing, and rights of
way.  Samples tested were generally selected based on the
availability of supporting documentation. 

The BIA reconciliation contractor's analysis of the general ledger
information showed that 9 percent of the leases represented 95
percent of recorded lease revenues.  Based on this analysis, the
contract called for a review of all leases greater than $5,000 and a
test sample of 100 additional leases of less than $5,000 on a cross
section of tribes.  The reconciliation contractor globally identified
6,446 surface leases with annual collections of over $5,000. 
However, due to time constraints for completing the reconciliation,
1,399 leases with collections greater than $25,000 were identified
for testing, of which OTFM located 755 lease files.  Of the lease
files located, 692 leases were tested.  Because of missing records, a
number of leases and sample test months were substituted for those in
the original sample.  BIA's reconciliation contractor reported that
99 percent of the lease receipts tested were verified.  The leases
tested represent 10.7 percent of the leases known to have annual
collections greater than $5,000 and about one half of the leases
known to have collections greater than $25,000. 

In addition, the reconciliation contractor judgmentally selected and
tested 227 sample months for 213 timber sales contracts for five
tribes\4 with significant timber receipts and oil and mineral
receipts for one tribe.\5 BIA's reconciliation contractor reported
that 99.7 percent of the timber receipts tested were verified and
93.9 percent of the oil and mineral receipts tested were verified. 
Overall, BIA's contractor reported that 98.7 percent of the lease
revenues tested were reconciled. 

RECONCILIATION PROCEDURES NOT
PERFORMED

Not all reconciliation procedures that were specified in BIA's
initial reconciliation contract could be performed or completed due
to missing records and time and cost constraints associated with the
need to locate and trace numerous manual records.  However, BIA's
transmittal letter to tribes did not disclose the inability to
complete these procedures.  Reconciliation procedures that could not
be performed or completed covered (1) reconciling the IRMS
(subsidiary system) to the Finance System (general ledger) and
reconciling the Finance System to Treasury transactions for fiscal
years prior to 1990, (2) verifying balances in tribal IIM\6 and
special deposit accounts,\7 (3) verifying Minerals Management Service
(MMS) royalty collections, and (4) reconciling accounts of individual
Indians. 


--------------------
\4 The five tribes are Hoopa Valley Tribe, California; Makah Tribe,
Spokane Business Council, and Colville Business Council, Washington;
and Confederated Tribes of Warm Springs, Oregon. 

\5 The one tribe with significant oil and mineral receipts that were
collected by BIA was the Osage Nation of Oklahoma. 

\6 Tribal IIM accounts are maintained in the IRMS accounting system. 
Because tribal and individual IIM funds are commingled in the
accounting records, tribal funds cannot be identified or distributed
until ownership records are researched for all leases. 

\7 BIA uses special deposit accounts primarily as clearing accounts
for funds received that have not been distributed to account holders
because the account owners have not been identified. 


      SUBSIDIARY SYSTEMS
      RECONCILIATIONS
------------------------------------------------------- Appendix I:0.7

While BIA officials told us that the IRMS reconciliation was not
performed due to time and funding limitations, we believe that even
without those limitations, the lack of an audit trail in the IRMS
system--including the lack of distribution tables to support
disbursements--would have prevented reconciliation of tribal IIM and
special deposit accounts.  It also would have prevented or severely
limited IRMS to Finance System reconciliations.  In addition, the
Finance System was not reconciled to Treasury for fiscal years prior
to 1990. 


      RECONCILIATIONS OF TRIBAL
      IIM AND SPECIAL DEPOSIT
      ACCOUNTS
------------------------------------------------------- Appendix I:0.8

This initiative was to include exploratory work on the reconciliation
of tribal IIM and special deposit accounts for the five tribes that
participated in the special procedures pilot work.  Tribal IIM
accounts maintained in the IRMS system were to be reconciled to the
source documents and tribal special deposit accounts were to be
reconciled from the source documents that moved the funds to the
tribes' general ledger accounts.  Due to missing records and the lack
of an audit trail through the IRMS system, BIA determined that tribal
transactions could not be efficiently isolated from individual Indian
transactions.  According to OTFM's Reconciliation Project Manager,
the special deposit account work for each of the five tribes was
completed and the results were included in their reconciliation
reports.  However, special deposit account reconciliations related to
leases were not performed because of a change in BIA's method for
selecting leases, which excluded leases with multiple owners for
which payments could not be identified to each owner. 


      FILL-THE-GAP PROCEDURES FOR
      MMS
------------------------------------------------------- Appendix I:0.9

These procedures were requested by ITMA to fill the gap between the
posting of collection transactions and the leases in order to
determine whether MMS Indian royalty accounting data transferred to
BIA were reliable.  The initial work was to include a review of MMS
procedures and documents in order to evaluate the feasibility and
level of effort needed to perform detailed fill-the-gap work for MMS
receipts and to recommend test procedures.  Because MMS retained
records for only 6 years, records for most of the 20-year
reconciliation period were not available.  As a result, BIA asked its
reconciliation contractor to recommend procedures to verify that MMS
followed its royalty collection and accounting procedures.  However,
the procedures proposed by BIA's contractor would not have traced
collections from the leases to the general ledger.  The verification
of MMS' procedures, which was to be performed in fiscal year 1996,
was not performed because the reconciliation project was brought to a
close as of September 30, 1995. 


      IIM RECONCILIATIONS
------------------------------------------------------ Appendix I:0.10

Our June 1992 report\8 stated that many of the approximately 300,000
IIM accounts were not reconcilable due to missing records and the
cost of reconciling a large number of accounts with small balances. 
BIA's reconciliation contractor initially estimated a cost ranging
from $211 million to nearly $400 million.  A subsequent scope
reduction decreased the estimate to between $180 million and $281
million, which was about one-half of the reported $440 million
balance of the IIM accounts as of September 30, 1991.  BIA's
reconciliation contract did not include IIM accounts. 

In our June 1992 report, we recommended that BIA consider alternative
approaches to reach agreement on IIM account balances, such as
negotiating agreements with account holders.  In 1991, BIA
established a work group to develop IIM reconciliation approaches and
alternatives.  In 1995, the work group identified a number of
reconciliation and policy questions for presentation to BIA and
Interior management, including statistical sampling, using dollar
ceilings, reconciling for time periods where records are available,
and sending account statements to account holders for them to confirm
or question the balances.  However, as of March 1, 1996, no decision
had been made on workable IIM account reconciliation alternatives. 


--------------------
\8 Financial Management:  BIA Has Made Limited Progress in
Reconciling Trust Accounts and Developing a Strategic Plan
(GAO/AFMD-92-38, June 18, 1992). 


TRIBAL CONCERNS
========================================================== Appendix II

At BIA's February 1996, National Meeting to explain reconciliation
reports and results, tribes raised a number of concerns, including
the (1) adequacy of the objectives and scope of the reconciliation
project, (2) effect of missing documents on the accuracy of the
reconciled account balances, and (3) thoroughness of procedures used
for testing the accuracy of recorded investment interest income.  The
following discussion highlights the tribes' concerns and OTFM's
responses. 


      PROJECT OBJECTIVES AND SCOPE
------------------------------------------------------ Appendix II:0.1

Tribal concerns about the reconciliation project's objectives and
scope included the following: 

  -- the lack of an audit and how this affected the reliability of
     the reconciled account balances,

  -- the failure to include fraud as a reconciliation objective,

  -- the reliability of portions of the reconciliations that BIA
     rather than the independent contractor had performed and
     adjustments that BIA had proposed, and

  -- the fact that the effort seemed to consist mainly of a
     reconciliation of BIA accounts with BIA-generated documents. 

In response to these concerns, OTFM and reconciliation contractor
officials explained the following: 

  -- The accounts could not be audited due to missing records and, as
     a result, the reconciliation consisted of agreed-upon procedures
     to verify account balances to the extent practicable. 

  -- While detection of fraud was not a reconciliation objective, no
     instances of fraud were identified by the reconciliation
     contractor. 

  -- BIA had reconciled investment system data for several years
     before the reconciliation effort began and that BIA did not
     believe that it was cost-effective to repeat this work. 

  -- Because the American Indian Trust Fund Management Reform Act of
     1994 required that BIA provide tribes with reconciled accounts
     statements as of September 30, 1995, the statements include the
     results of reconciliation procedures performed by BIA's
     contractor for fiscal years 1973 through 1992, and the results
     of OTFM's systems reconciliations for fiscal years 1993 through
     1995. 

  -- OTFM will consider having an independent auditor review the
     results of the procedures performed and adjustments proposed by
     BIA.\1

  -- Tribal authorizations for withdrawals of trust funds and
     Treasury receipt and disbursement documentation were reviewed
     during the reconciliation. 


--------------------
\1 In comments on a draft of our report, BIA's Reconciliation Project
Manager stated that OTFM will consider having the tribes or their
representatives review the results of BIA's reconciliations. 


      MISSING DOCUMENTS
------------------------------------------------------ Appendix II:0.2

Tribal representatives pointed out that the reconciliation report
stated that missing documents had prevented the reconciliation of
almost 33,000 general ledger transactions totaling $2.4 billion
(gross) and many of the leases selected for testing.  They raised
concerns about the assurance provided by the reported results,
including the following: 

  -- The large amount of unreconciled transactions may have impacted
     the validity of the reported reconciliation results. 

  -- The methodology provided no assurance that all transactions were
     recorded in the general ledger. 

  -- Because BIA had no comprehensive database for leases and no
     accounts receivable system, it had no way of determining the
     universe of leases or the amounts of lease revenue expected to
     be collected during a given period. 

  -- The small judgmental sample of leases tested may not be
     representative of the universe of receipt transactions. 

  -- The fill-the-gap procedures, which attempted to trace receipts
     from the general ledger to the leases or other land-use
     agreements, were not designed to find leases that were not
     already known to exist. 

  -- Proposed adjustments that showed amounts owed by tribes on lease
     receipts may have resulted from overpayments by companies which
     may have been corrected in subsequent periods that were not
     reviewed by the reconciliation contractor. 

OTFM's Reconciliation Project Manager told tribal representatives
that despite time and money constraints, the government had made a
good-faith effort to reconcile the tribal accounts and that BIA had
identified a low error rate for the transactions that could be
reconciled.  The Reconciliation Project Manager and contractor
officials explained the following: 

  -- BIA does not know the universe of leases and the general ledger
     was the starting point for both the basic transaction
     reconciliations and the lease receipt testings. 

  -- In some instances, the reconciliation contractor was able to
     verify lease receipts against lease documents and trace them to
     the general ledger. 

  -- Judgmentally selected sample test months for about 10 percent of
     the total leases originally identified for testing were tested. 

  -- It was possible that for lease overpayments, subsequent
     adjustments were made that were not reviewed by the
     reconciliation contractor. 


      INVESTMENT ANALYSIS
------------------------------------------------------ Appendix II:0.3

Another area of concern to tribes was the investment analysis.  This
task included certain analytical procedures and interest yield
analyses for investment in Treasury securities and other investments. 
Tribes expressed the following concerns: 

  -- Invested funds may not have earned maximum interest. 

  -- The yield analyses would not reflect unearned interest on
     uninvested amounts due to deposit lag times--the time that
     elapsed between BIA's various offices' receipt of lease revenues
     and the time the funds were invested. 

  -- The actual lag times could not be determined due to missing
     records and the dates used in the lag time calculations could
     have been several days after the actual collection date. 

  -- The 30-day category included lag times of over 30 days. 

  -- Unearned interest resulting from deposit lag times could be
     significant. 

OTFM's Reconciliation Project Manager provided the following
clarifications. 

  -- BIA invested funds in government securities or collateralized
     accounts, as required. 

  -- The yield analysis did not reflect undeposited amounts due to
     lag times. 

  -- Priorities were established for determining collection dates. 

  -- The zero lag time category generally represented the actual
     collection dates. 

  -- Although the 30-day category included lag times of over 30 days,
     tribes could, for the most part, calculate the interest related
     to lag times by using the information in their reconciliation
     reports. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III

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

Gayle L.  Fischer, Assistant Director
Michael J.  Koury, Audit Manager
Caryn A.  Catignani, Auditor

OFFICE OF THE GENERAL COUNSEL

Thomas H.  Armstrong, Assistant General Counsel


RELATED GAO PRODUCTS
=========================================================== Appendix 0

Indian Trust Fund Settlement Legislation (GAO/AIMD/OGC-95-237R,
September 29, 1995). 

Financial Management:  Indian Trust Fund Accounts Cannot Be Fully
Reconciled (GAO/T-AIMD-95-94, March 8, 1995). 

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

BIA Reconciliation Recommendations (GAO/AIMD-94-138R, June 10, 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:  Creation of Bureau of Indian Affairs' Trust
Fund Special Projects Team (GAO/AIMD-93-74, September 21, 1993). 

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

BIA Appropriation Language (on Tolling the Statute of Limitations on
Certain Indian Claims) (GAO/AFMD-93-84R, June 4, 1993). 

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). 

BIA Reconciliation Monitoring (GAO/AFMD-92-36R, January 13, 1992). 

Responses to Follow-up Questions Following the May 20, 1991 Oversight
Hearing on BIA's Trust Fund Financial Management (B-243843.2, June 5,
1991). 

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). 

*** End of document. ***