[Audit Report on the Indian Probate Process at the Yakama and Puget Sound Agencies, Portland Area Office, Bureau of Indian Affairs]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. 98-I-587

Title: Audit Report on the Indian Probate Process at the Yakama
       and Puget Sound Agencies, Portland Area Office, Bureau
       of Indian Affairs

Date:  July 29, 1998




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U.S. Department of the Interior
Office of Inspector General



AUDIT REPORT


INDIAN PROBATE PROCESS AT THE YAKAMA AND PUGET SOUND AGENCIES,
PORTLAND AREA OFFICE, BUREAU OF INDIAN AFFAIRS

REPORT NO. 98-I-587

JULY 1998




MEMORANDUM


TO:               The Secretary

FROM:             Richard N. Reback
                  Acting Inspector General

SUBJECT SUMMARY:  Final Audit Report for Your Information - "Indian Probate
                  Process at the Yakama and Puget Sound Agencies, Portland Area
                  Office, Bureau of Indian Affairs" (No. 98-I-587)

Attached for your information is a copy of the subject final audit report.  The objective of
the audit was to determine whether the Yakama and Puget Sound Agencies were preparing and
filing probate data with the administrative law judge in accordance with Federal regulations.
Based on our survey, we expanded our objective to also determine whether the agencies were
preparing summary distributions for estates valued at less than $1,000.  Agency
superintendents are authorized by Federal regulations to hold informal hearings to determine
the proper distribution of these estates.

We found that the Yakama and Puget Sound Agencies did not promptly report all Indian
deaths and did not timely submit to the administrative law judge all the required probate data
for Indians whose deaths were reported during fiscal years 1995 and 1996.  Additionally, we
found that required information was not submitted to the administrative law judge because
the agencies assigned a low priority to processing probates and did not assign a sufficient
number of or adequately trained staff to collect and submit probate data.  Further, officials
at the Yakama Agency told us that they were unable to meet the time requirement because
they were emphasizing the processing of their older cases, for which more time was needed
to obtain family histories.  As a result of the agencies not forwarding the probate data to the
administrative law judge in a timely manner, probate hearings were delayed, and estate assets
and subsequent income associated with inherited lands were not distributed to the heirs in
a timely manner.

In its response, the Bureau of Indian Affairs agreed with the report's five recommendations
to address these issues. Based on the response, we considered one recommendation resolved
and implemented and requested additional information for the other four recommendations.
The response also stated that the section of report on staffing, "exemplifies the dilemma of
most of our agency offices in trying to fulfill multiple important responsibilities with
limited resources," and that "since redeployment of current staff simply results in another
important job going undone, it is necessary to increase the overall level of agency staffing."

If  you have any questions concerning this matter, please contact me at (202) 208-5745 or
Mr. Robert J. Williams, Assistant Inspector General for Audits, at (202) 208-4252.

Attachment





AUDIT REPORT                                                         July 29, 1998
                                                                     W-IN-BIA-001-97



Memorandum

To:       Assistant Secretary for Indian Affairs

From:     Robert J. Williams
          Assistant Inspector General for Audits

Subject:  Audit Report on the Indian Probate Process at the Yakama and Puget Sound
          Agencies, Portland Area Office, Bureau of Indian Affairs (No. 98-I-587)


INTRODUCTION

This report presents the results of our review of the Indian probate process at the Yakama
and Puget Sound Agencies, which are under the jurisdiction of the Portland Area Office of
the Bureau of Indian Affairs.  The objective of the audit was to determine whether these
agencies were preparing and filing probate data with the administrative law judge in
accordance with Federal regulations.  Based on our survey, we expanded our objective to
also determine whether the agencies were preparing summary distributions for estates valued
at less than $1,000.  Agency superintendents are authorized by Federal regulations to hold
informal hearings to determine the proper distribution of these estates.


BACKGROUND

The U.S. Government holds property in trust for Indians.  In 1887, the Congress enacted the
General Allotment Act, which authorized the division of tribal lands into parcels for
allotment to individual Indians.  Section 5 of the Act specified that title to allotments was
to be held in trust by the United States for 25 years.  The Congress subsequently extended this
period into perpetuity.  In addition, the Congress enacted probate laws, which provided that
as individual Indians died, their property interests would descend to their heirs.
The Congress has placed primary responsibility for managing and protecting trust assets with
the Secretary of the Interior, who has delegated authority for the management of trust lands
to the Bureau of Indian Affairs, Department of the Interior.  Under the Code of Federal
Regulations (43 CFR 4.210), the Bureau is to begin the probate process when it is notified
of the death of an Indian who owns trust property.  If the trust property consists of either
land or personal property valued in excess of $1,000, such as individual Indian money accounts,
the Bureau is responsible for collecting and transmitting probate data on the decedent to the
administrative law judges in the Department's Office of Hearings and Appeals, which has
jurisdiction over probate cases.  The administrative law judges conduct the probate hearings
and issue orders distributing the assets.  Once the Bureau submits the necessary probate data
to an administrative law judge, the Bureau does not participate further until the wills have
been approved or the heirs of intestate decedents have been determined. At that time, the
Bureau is responsible for distributing the assets as ordered by the judge.  If the trust
personal property is valued at less than $1,000 and there is no land, the agency superintendent
is responsible for preparing a summary distribution to distribute the assets.

In March 1990, the Bureau developed a probate backlog reduction initiative designed to
eliminate its backlog.  The Bureau identified a backlog of 4,285 cases as of the beginning
of fiscal year 1991.  In addition, the Bureau estimated that an additional 2,000 deaths would
be discovered in the process of resolving the 4,285 cases.  Stating that the backlog was
caused by an insufficient number of probate staff, other program priorities, and special
efforts to develop and update the databases for the Bureau's land records, the Bureau requested
additional appropriations to reduce or eliminate the backlog.  Between 1991 and 1996, the
Congress appropriated $5 million to reduce the backlog.  However, despite the probate
initiative, the Bureau estimated that the Bureauwide backlog had increased to about
5,653 cases as of April 1997, of which 254 cases were applicable to the Yakama Agency and
103 cases were applicable to the Puget Sound Agency (see Table 1).  The Bureau estimated
that an additional $4.5 million would be required to eliminate the identified backlog of
5,653 cases, which included 1,619 cases that either were identified during the probate
initiative or were  subsequent deaths associated with the resolution of these cases.


Table 1. Bureau of Indian Affairs Probate Backlog


Description


Bureau
Total
Portland
Area
Office

Yakama
Agencya
Puget
Sound
Agencya


Probate Backlog as of 10/1/90b

4,285
433
63
199c


Probate Backlog as of 4/7/97
Remaining 10/1/90
Since 10/1/90


1,619
4,034

131
586

15
239

54
49


Total as of 4/7/97

5,653
717
254
103




a) The numbers represent the number of probate cases reported by the agencies as of April 7,
1997, adjusted to reflect the results of our review of agency detail records.

b) The totals represent the number of probate cases reported by the Bureau during the probate
initiative.  The Bureau defined its backlog as those cases for which probate data had not been
submitted to the administrative law judge within the 90-day requirement as of October 1, 1990.

c) This number includes 44 cases of the Lummi Nation, which assumed responsibility for
providing probate information to the administrative law judges as of October 1, 1994.


SCOPE OF AUDIT

We conducted our audit at the Bureau's Central Office, Portland Area Office, and Yakama
and Puget Sound Agencies (see Appendix 1).  To accomplish our objective, we reviewed and
analyzed death reports and probate data submitted by the two agencies to the administrative
law judge for deaths reported during fiscal years 1995 and 1996.  We also reviewed laws and
Departmental regulations and policies governing the probate process and evaluated
individual Indian money estate accounts to determine whether probate files had been set up
for estates in excess of $1,000.  In addition, we interviewed (1) personnel at the Bureau
offices visited, including probate staff, who were responsible for collecting and transmitting
all probate data to the administrative law judge; (2) an administrative law judge from the
Office of Hearings and Appeals in Sacramento, California, concerning the adequacy and
timeliness of the data submitted by Bureau personnel; and (3) a field solicitor at the Office
of the Solicitor, Phoenix Field Office, concerning probate-related issues.  We did not review
the hearing process, which is administered by the administrative law judges, or nontrust
property owned by individual Indians, which is not subject to probate by the Department.

Our audit was made in accordance with the "Government Auditing Standards," issued by the
Comptroller General of the United States.  Accordingly, we included such tests of records
and other auditing procedures that were considered necessary under the circumstances.  As
part of our audit, we reviewed the Department of the Interior's Annual Statement and Report,
which is required by the Federal Managers' Financial Integrity Act, for fiscal year 1995 and
determined that none of the Department's reported weaknesses were related to the objective
of this audit.  We also reviewed the Department's Accountability Report for fiscal year 1996,
which includes information required by the Act, and the Bureau of Indian Affairs Annual
Assurance Statement and determined that there were no reported weaknesses related to the
objective of our audit.  As part of our audit, we reviewed the Bureau's 1993 Bureauwide
"Probate" Management Control Review, in which the Bureau identified 13 internal control
weaknesses involving noncompliance with established procedures for processing Indian
probates.  During our review, we noted that 3 of the 13 identified weaknesses were within
the scope of our audit and still existed; namely, the date the agency was notified of a death
was not documented, decedent reports were not distributed to the administrative law judges
within 7 days after the end of each month, and probate data were not submitted to the
administrative law judges within 90 days of notice of death.  We evaluated the Bureau's
system of internal controls related to the probate process to the extent that we considered
necessary.  The internal control weaknesses identified are discussed in the "Results of Audit"
section of this report.  Our recommendations, if implemented, should improve the internal
controls in these areas.


PRIOR AUDIT COVERAGE

Neither the Office of Inspector General nor the General Accounting Office has issued any
reports on the Indian probate process during the past 5 years.


RESULTS OF AUDIT

The Yakama and Puget Sound Agencies did not promptly report all Indian deaths and did not
timely submit to the administrative law judge all the required probate data for Indians whose
deaths were reported during fiscal years 1995 and 1996.  The Code of Federal Regulations
(43 CFR 4.210) requires agency superintendents to (1) prepare and provide to the appropriate
administrative law judge, within the first 7 days of each month, a list of the names of all
Indians who have died and whose names have not been previously reported and (2) file with
the appropriate administrative law judge, within 90 days of receipt of a notice of death of an
Indian who died owning either trust real property or trust personal property valued at $1,000
or more, all data shown in the records pertaining to the property and families of the
deceased.  However, we found that the required information was not submitted because the
agencies assigned a low priority to processing probates and did not assign a sufficient
number of or adequately trained staff to collect and submit probate data.  In addition,
officials at the Yakama Agency told us that they were unable to meet the 90-day requirement
because they were emphasizing the processing of their older cases, for which more time was
needed to obtain family histories.  As a result of the agencies not forwarding the probate data
to the administrative law judge in a timely manner, probate hearings were delayed, and estate
assets and subsequent income associated with inherited lands were not distributed to the heirs
in a timely manner.  Specifically, we identified individual Indian money accounts of about
$467,000 at the Yakama Agency and $1,241 at the Puget Sound Agency for Indians whose
deaths were reported during fiscal years 1995 and 1996 that could not be distributed
primarily because probate data had not been submitted to the administrative law judge.  In
addition, as of April 7, 1997, the backlog totaled 254 cases at the Yakama Agency and
103 cases at the Puget Sound Agency.


Reporting of Deaths

We were not able to determine whether the Yakama and Puget Sound Agencies reported all
deaths to the administrative law judge within the first 7 days of the month after notification
of death because the agencies did not document the dates that they received notifications of
death.  However, we attempted to place the reporting of deaths in perspective by comparing
the number of deaths reported by the agencies with expected deaths, based on the Indian
Health Service's "age-adjusted" annual mortality rate of 0.6 percent for Indians.

     Yakama Agency.  For fiscal years 1995 and 1996, the Yakama Agency, which had
8,713 enrolled Yakama tribal members as of September 30, 1996, reported 159 deaths of
Indians within its jurisdiction to the administrative law judge, all of which occurred during
the 2-year period.  This is an average of 80 deaths per year, or an actual average mortality
rate of about 0.92 percent, which is well above the "age-adjusted" mortality rate of
0.6 percent, and approximates the 1 percent mortality rate the Bureau used in its "Probate"
Management Control Review for fiscal year 1993.  We believe that the Yakama Agency was
able to report the deaths of tribally enrolled members more accurately because it had
contracted with the Yakama Indian Nation Tribal Council to provide reports of death and
heirship data.

     Puget Sound Agency.  For fiscal years 1995 and 1996, the Puget Sound Agency
reported only 40 deaths for 11,411 tribal members, or a mortality rate of 0.18 percent, for the
11 tribes that held individual land allotments administered by the Agency.  We also found
that from February 4, 1995, to January 31, 1996, the Puget Sound Agency did not report any
deaths to the administrative law judge.  It is unlikely that deaths did not occur during this
period.  As such, we believe that the Agency was not informed of or did not report all Indian
deaths that occurred during fiscal years 1995 and 1996 because the mortality rate of
0.18 percent reported by the Agency was significantly below the "age-adjusted" mortality rate
of 0.6 percent.  Unlike the Yakama Agency, the Puget Sound Agency did not have a contract
or other agreement with the 11 tribes that had allotted lands served by the Puget Sound
Agency.  The Puget Sound Agency's probate employee, who was appointed in January 1996,
stated that, in addition to reporting all deaths reported to him, he reviewed the obituaries in
the local paper for Indian deaths and learned of other deaths through informal contacts with
tribal enrollment offices and family members of the deceased Indians.

However, we believe that additional proactive measures are needed to identify deceased
Indians at both agencies.  For example, in our review of individual Indian money estate
accounts as of May 1, 1997, we identified 10 estate accounts, totaling about $217,000, at the
Puget Sound Agency and 3 estate accounts, totaling about $9,000, at the Yakama Agency
that were in excess of $1,000 but for which probate cases were not established. We found
that there were no formal communications between the individual Indian money account
tellers, who administer the accounts, and agency probate staff and that probate staff did not
routinely request the list of individual Indian money estate accounts to determine whether
the deaths of the account owners had been reported to the Bureau and probate cases
established.

We believe that a more systematic method of identifying and reporting deaths as they occur
is necessary if the agencies are to process probates on a timely basis.  In that regard, we
believe that agency officials should instruct probate employees to comply with the
regulations and to report all deaths to the administrative law judge within the 7-day
requirement.  We also believe that information on deaths, such as the estate account listing,
should be compiled in a historical database of tribal members' deaths.  The information
should also form the basis for a process, or decision tree, through which probate employees
could determine and document whether a death (1) requires probate based on whether the
decedent owned trust real property, owned personal property in excess of $1,000, or died
with a will; (2) requires a summary distribution; or (3) does not require either a full probate
or a summary distribution.


Submission of Probate Data

We found that neither the Yakama Agency nor the Puget Sound Agency submitted probate
data for deaths reported in fiscal years 1995 and 1996 to the administrative law judge within
the required 90 days, although during fiscal year 1996, the Puget Sound Agency markedly
increased the number of cases submitted.

     Yakama Agency.  At the Yakama Agency, 103 of the 159 deaths reported to the
administrative law judge for fiscal years 1995 and 1996 required probate.  However, probate
data for only 3 of the 103 deaths were submitted to the administrative law judge, and none
of the data were submitted within the required 90 days.  Agency officials told us that they had
submitted probate data for only three deaths which had occurred during fiscal years 1995 and
1996 because they were emphasizing the processing of the older probate cases first.  We
found that the Agency had processed the older cases first, submitting data for 48 cases during
fiscal year 1995 and for 27 cases during fiscal year 1996 for deaths that occurred prior to
September 30, 1994.  While we agree that the emphasis should be placed on processing the
older probates, we believe that sufficient staff should be available to process both the older
cases and the 1995-1996 work load.  Because the Agency was not able to keep up with its
work load, its backlog increased by 100 cases, to 254 cases, as of April 7, 1997.
Accordingly, the Agency could not distribute individual Indian money estate accounts of
approximately $467,000 to the heirs of these estates.

     Puget Sound Agency.  At the Puget Sound Agency, 24 of the 40 deaths reported to
the administrative law judge for fiscal years 1995 and 1996 required probate.  Probate data
for 18 of the 24 deaths were submitted to the administrative law judge, with data for 9 deaths
submitted within the required 90 days.  In addition to the 18 cases submitted for deaths
reported in fiscal years 1995 and 1996, the probate employee submitted data for 37 deaths
that occurred prior to September 30, 1994, for a total of 55 cases submitted.  However,
notwithstanding the submission of 55 cases, the Agency had a backlog of 103 cases as of
April 7, 1997.

The 55 cases submitted from January through September 1996 represented a marked
improvement in the Puget Sound Agency's processing of probate data.  For example, the
Agency had not submitted any probate data to the administrative law judge during the first
3 months of fiscal year 1996 (October 1, 1995, through December 31, 1995) and had
submitted data for only nine decedents during fiscal year 1995.  The Agency's lack of
performance in submitting probate data had been noted in a September 12, 1994,
memorandum from the Acting Director of the Office of Trust Responsibilities to the Director
of the Portland Area Office, which stated:

Results of a comparison of data on the probate backlog initiative suggest that
the estate and probate-related activities at the Puget Sound Agency may be
in urgent need of special attention. . . .  Evaluation of the data suggests that
the Puget Sound Agency's progress in eliminating the backlog may be less
than expected or budgeted.  At the same time, estates with current or recent
dates of death (1991 and thereafter) may be rolling into an ever increasing
backlog. . . .  The Puget Sound Agency transmitted . . . a net number of five
estates . . . to the ALJ [administrative law judge] in FY [fiscal year] 1993.
This number seems astonishingly low when contrasted with the 95 deaths
reported for the period 1991-1993 at the same Agency.


Staffing and Training

We believe that the Yakama and Puget Sound Agencies did not submit probate data within
the required 90 days primarily because the agency superintendents assigned a low priority
to collecting and submitting current probate data.  As a result of the low priority, an
insufficient number of staff were assigned to probates, and assigned staff did not receive
adequate training.

     Staffing.  At the time of our review, both the Yakama and Puget Sound Agencies had
assigned one employee to process probates.  Based on estimates made by the Bureau in its
1990 initiative that one employee could process approximately 1 probate per week, we
estimated that one employee could process about 40 cases per year.  Based on this estimate
and the two agencies' work loads, we believe that more than one full-time probate employee
at the Yakama Agency would be required to process the number of probate cases that would
normally be anticipated in a year, even if there was no backlog.  For example, the probate
employee at the Yakama Agency could not have processed and transmitted to the
administrative law judge the 1995-1996 work load of 103 cases within the required 90 days.
In addition, with the increase in the Agency's backlog to 254 probate cases, we estimated that
6 to 7 staff years would be required to process just these cases.  Further, the Agency's
probate employee did not process probates on a full-time basis.  The probate employee, a
realty specialist, estimated that she actually spent less than 50 percent of her time
processing
probate cases and performed other realty duties, such as leasing, as part of her job.  During
approximately the last 3 months (mid-July through September) of fiscal year 1996, the
Agency did not submit any probate data because the employee was on extended leave and
the Agency had not assigned another employee to process probate cases during her absence.
After the employee returned from leave in October 1996, she continued to perform both
leasing and probate activities and, in December 1996, was promoted to a realty position that
did not include probate responsibilities.  Although the Agency assigned another realty
specialist to probate activities in January 1997, the new employee's job description also
included duties related to leasing activities.

At the Puget Sound Agency, the probate employee, who was assigned to process probates
on a full-time basis in January 1996, submitted 55 cases during the 9-month period of
January through September 1996, or an annualized rate of about 73 cases per year, which
exceeded the estimated processing rate of 40 cases per year.  However, as noted in the
"Reporting of Deaths" section of this report, deaths at the Puget Sound Agency were
significantly underreported, based on the Indian Health Service's "age-adjusted" annual
mortality rate of 0.6 percent.  Using this rate, we estimated that there would have been about
68 deaths during fiscal year 1996 for the population of 11,411 members.  Based on the
Agency's annualized rate of processing about 73 probate cases per year, it would appear that
once the probate backlog is eliminated at the Agency, one full-time probate employee would
be sufficient to process the expected work load if that employee's productivity continued at
the annualized rate.  However, based on the annualized rate, we estimated that between 1 and
2 staff years would be required to process the backlog of 103 cases.

In the May 19, 1998, response (Appendix 2) to the draft report from the Assistant Secretary
for Indian Affairs, the Bureau said that this section of the report, "exemplifies the dilemma
of most of our agency offices in trying to fulfill multiple important responsibilities with
limited resources."  As an example, the Bureau cited statements contained in our September
1995 audit report "Wapato Irrigation Project, Bureau of Indian Affairs" (No. 95-I-14020),
in which we stated that "operation and maintenance bills were not properly prepared and
mailed primarily because the Area Office did not ensure that Yakama Agency Realty and
Project personnel worked together to update idle land ownership and lease records." The
Bureau stated that "in response to this audit, it should be noted that during the past year, as
a result of Realty and Project staff working together, land ownership information on 7,000
allotments has been entered into the Project's billing system."  Regarding the shifting of
realty personnel, the Bureau stated "Since redeployment of current staff simply results in
another important job going undone, it is necessary to increase the overall level of agency
staffing."  In that regard, the Bureau stated that its pending budget request "includes a
requested increase of $3 million for additional probate staff."

     Training.  The probate employees at both the Yakama and Puget Sound Agencies
informed us that they believed they needed additional training in processing probates.  The
probate employee at the Yakama Agency said that she had received only a few days of
training when she first started but believed that she needed additional training in preparing
probate files for submission to the administrative law judge.  The probate employee at the
Puget Sound Agency said that he had received some on-the-job training from other realty
staff but that he would benefit from training on how to locate potential heirs.  The
administrative law judge who holds hearings for the two agencies told us that the employees
needed training in processing probates.  The judge also told us that he had conducted some
training seminars on probates but not on a consistent basis because of time and money
constraints and that probate training was available from other sources, such as former Bureau
employees.

Because of the insufficient numbers of employees assigned to process probates at the two
agencies and the inadequate training of these employees, the heirs of deceased Indians may
not have received their rightful inheritances in a timely manner.  For example:

     -  At the Puget Sound Agency, one probate case concerned a decedent who reportedly
had died about 50 years ago.  Based on available probate documents in the case file, we
found that no official action was taken on this case until 1974, when a letter was sent to the
sister of the decedent stating that the decedent had owned land and requesting family and
heirship data.  However, the Agency did not follow up to ensure that all the required data
were obtained.  As such, the file contained only the letter and a partially completed family
and heirship form, but it did not contain other required documents.  After 50 years, the case
has not been properly probated, and some of the heirs of the decedent may not have received
their inheritance because they have also died, which would further complicate settlement of
this case.

     - The Yakama Agency allowed more than $225,000 to accumulate in an individual
Indian money estate account established for a case dating back to the 1920s.  The Agency did
not actively pursue the case until the 1960s, at which time there was little information about
the decedent or her possible heirs.  Based on the latest documents in the file, we found that
the Agency had not taken any action since 1984 to determine the heirs of either the $225,000
or the 160-acre allotment of land that had generated the funds from timber sales and livestock
grazing fees.  However, based on our inquiries, Agency personnel said that they planned
further research on this case.

     - The Puget Sound Agency maintained $100,000 in an individual Indian money estate
account for a decedent whose report of death was received by the Agency forester in June
1994.  However, while the forester informed the individual Indian money account teller of
the presumed death, the forester did not report the death to Agency probate staff.  Based on
data in the individual Indian money account files, our audit staff, in June 1997, contacted
staff at the Juneau Area Office and the Anchorage Agency, who confirmed the death of the
individual in 1993 and provided the names of two possible heirs.  The information was given
to Puget Sound Agency realty and probate staff, who have established a probate case file.

We believe that the Portland Area Director and the superintendents of the Yakama and the
Puget Sound Agencies should ensure that sufficient numbers of and adequately trained staff
are assigned to probates to enable the agencies to eliminate the backlog and comply with the
90-day requirement for the submission of probate data to the administrative law judge.


Recommendations

We recommend that the Assistant Secretary for Indian Affairs require appropriate area and
agency officials to:

     1. Develop plans, which include priorities, staffing requirements, target dates, and
titles of officials responsible, for transmitting the required probate data to the
administrative
law judge.

     2. Develop a historical database of the deaths of tribal members for which the
Agency has probate jurisdiction and use the database as the basis for a decision tree.  This
process should document whether the reported death requires probate because the decedent
owned land, had personal property in excess of $1,000, or left a will; requires a summary
distribution because the decedent did not own land and had personal property valued at
$1,000 or less; or does not require either probate or a summary distribution.

     3. Develop procedures for more proactively identifying Indians who have died to
include a systematic review of the individual Indian money estate account listing.

     4. Assign sufficient staff to eliminate the backlog and to process probate cases as
deaths occur and are reported to the agency.

     5. Review and evaluate the training received and needed and provide the necessary
training to enable probate staff to perform their jobs effectively.

Bureau of Indian Affairs Response and Office of Inspector General Reply

In its response (Appendix 2), the Bureau concurred with all five recommendations.  Based
on the Bureau's response and information the Bureau subsequently provided, we consider
Recommendation 3 resolved and implemented and request additional information for
Recommendations 1, 2, 4, and 5 (see Appendix 3).


Comments on Audit Report

The Bureau also provided comments on the report, which we considered and incorporated
in our final report as appropriate. The specific comments and our responses are as follows:


Results of Audit.  The Bureau stated:

While we [the Bureau] do not dispute the fact that the 90-day deadline is
frequently missed, it does not necessarily follow that this alone led to the
subsequent delays in probate hearings and asset distribution.  As of March 30,
1998, the Office of Hearings and Appeals reported that it had 4,068 pending
probate cases, of which 651 had been pending for 18 months or more.  As the
audit did not review the OHA [Office of Hearings and Appeals] processes,
it is just as likely that the timely submission of probate data would simply
have served to increase the backlog at OHA while having little or no impact
on the timing of the ultimate distribution of assets. This section should be
revised to reflect the fact that the Bureau backlog is simply one part of a
significant Departmental backlog in completing all aspects of probate work.

Notwithstanding the situation at the Office of Hearings and Appeals, we believe that the
Bureau should comply with the Code of Federal Regulations (43 CFR 210) which states,
"Within 90 days of receipt of notice of death of an Indian who died owning trust property,
the Superintendent having jurisdiction thereof shall commence the probate of the trust estate
by filing with the appropriate administrative law judge all data shown in the records relative
to the family of the deceased and his property."  In addition, we do not agree that "it is just
as likely that the timely submission of probate data would simply have served to increase the
backlog at OHA [Office of Hearings and Appeals] while having little or no impact on the
timing of the ultimate distribution of assets."   The Bureau cited the total number of pending
probates at the Office of Hearings and Appeals as of March 30, 1998, but it did not specify
the number of probate cases pending for the Yakama and Puget Sound Agencies in fiscal
years 1995 and 1996, which were the locations and years covered by our review.  In that
regard, we found that as of September 30, 1996, only 49 probate cases for the Yakama
Agency were pending at the Office of Hearings and Appeals, of which only 13 were
18 months old or older. Furthermore, our report (page 6) states that only 3 of the 103 cases
requiring probate at the Yakama Agency for deaths reported during fiscal years 1995 and
1996 were submitted to the administrative law judge during that time.  The remaining 100
cases increased the backlog of cases at the Agency.   Thus, at the time of our review, most
of the unprobated cases were at the Agency awaiting submission to the administrative law
judge rather than at the Office of Hearings and Appeals pending hearings.  For the Puget
Sound Agency, our report states (page 7) that the Agency submitted 55 cases to the
administrative law judge during the 9-month period ending September 30, 1996.
Subsequently, we found 76 pending probates for this agency at the Office of Hearings and
Appeals as of September 30, 1996.  However, only six cases were over 18 months old.  The
main issue at the Puget Sound Agency, in our opinion, was that the Agency was apparently
not reporting all deaths.  Delays in Bureau submissions of probate data to the administrative
law judge exacerbate any delays that occur at the Office of Hearings and Appeals because
without the heirship data and family history provided by the Bureau, the judge is precluded
from holding hearings and issuing orders for distributing the assets.  Had the Agency
reported all deaths, the effect would have been to increase the backlog of probate cases at the
Agency, which totaled 103 as of April 7, 1997.

     Reporting of Deaths. The Bureau did not agree with our use of the 1 percent
mortality rate, the rate used in the Bureau's 1993 management control review of probates,
to estimate the number of deaths that occurred.  Instead, the Bureau stated that we should use
the Indian Health Service's "age-adjusted" mortality rate of 0.6 percent. The Bureau also
stated that we applied the percentage factor "to determine how many deaths should have been
reported and probate data subsequently filed with OHA [Office of Hearings and Appeals]."

We used the 1 percent mortality rate in estimating the number of deaths that should have
been reported at the Puget Sound Agency because it was the rate used by the Bureau in its
1993 management control review and because the rate appeared to be justified based on the
actual mortality rate at the Yakama Agency, which averaged 0.92 percent for fiscal years
1995 and 1996.  However, based on the Bureau's response, we have revised our estimates
of the number of deaths that should have been reported by the Puget Sound Agency based
on the Indian Health Service's "age-adjusted" mortality rate of 0.6 percent applied to the
tribal population of 11,411 members.  We did not apply the 1 percent mortality rate to
determine the number of probate cases to be submitted to the administrative law judge.
Rather than projecting the number of probate cases, we determined the number cases that
should have been submitted based on whether the decedent owned either trust real property
or trust personal property valued at $1,000 or more.


The Bureau further stated:

The Department's role in probate proceedings is limited to those Indians who
died owning allotted lands or who had funds in the custody of the Department
of the Interior.  Some agencies report all deaths; others do not.  We have
confirmed with staff from the Solicitor's Office that the Bureau is not
required to report deaths of those Indians for whom no funds or land is held
in trust status.

We do not agree with the Bureau  that only deaths of Indians owning trust property have to
be reported because the Code of Federal Regulations (43 CFR 4.210) states that "within the
first 7 days of each month, each Superintendent shall prepare and furnish to the appropriate
administrative law judge a list of the names of all Indians who have died and whose names
have not been previously reported." Also, the Bureau did not provide a written opinion from
the Office of the Solicitor stating that the Bureau does not have to comply with the Code's
requirements.  In addition, the administrative law judge in the Office of Hearings and
Appeals in Sacramento, California, stated that agencies should report all deaths because the
reports are circulated to other agencies, as well as to the Bureau's land title records
offices,
which may be aware of trust properties of decedents under the jurisdiction of other agencies.
Therefore, the fact as stated by the Bureau that "some agencies report all deaths, others do
not" means that the agencies which do not report all deaths are not in compliance with the
Code of Federal Regulations.  It also means that the agencies are not complying with the
Bureau's guidelines and procedures as set forth in the draft supplement to the Bureau
Manual, dated July 2, 1992, which states:

Upon receiving notice of death, the Superintendent having administrative
jurisdiction over the decedent' s tribe shall immediately notify the Land Title
Records Office, and within the first seven days of the following month, notify
the administrative law Judge of such fact as required by 43 CFR 4.210(a).


If these requirements are no longer applicable, they should be formally modified.

     Yakama Tribe.  The Bureau stated that we should note the "correct spelling" of the
Yakama Tribe.  In 1997, the Tribe changed the spelling of its name from Yakima to Yakama.
The Agency Superintendent, however, stated that the Agency Office had not yet published
a notice in the "Federal Register" to change its name to Yakama.  However, we have
modified our report to reflect the Tribe's spelling.

     Staffing and Training.  The Bureau requested that our report "recognize that both
the OIG [Office of Inspector General] and GAO [General Accounting Office] had
previously made recommendations to improve leasing activities at the Yakama Agency, so
that the casual reader does not assume that leasing activities are optional or of lower
priority
than probate activities."  The Bureau also noted that recent draft audit reports issued by our
office on leasing activities have concluded that the Bureau has "insufficient staff to process
leases in a timely manner and may be reducing income that might otherwise be earned by
members of Indian tribes."  The Bureau concluded its remarks on staffing and training by
stating:

Since redeployment of current staff simply results in another important job
going undone, it is necessary to increase the overall level of agency staffing.
The pending budget request for the Bureau of Indian Affairs includes a
requested increase of $3 million for additional probate staff.

We agree that several recent audit reports have identified insufficient staffing as a factor
contributing to agency staff not being able to process leases in a timely manner.  In this
report, we also identified insufficient staffing and collateral duties as factors contributing
to the untimely processing of probates.  However, it was not our intent to imply that either
leasing activities or probate activities are not important, as the timely processing of leases
and probates is necessary to ensure that lease revenues and other income are distributed to
the appropriate landowners or to the rightful heirs of deceased landowners in a timely
manner.  The recent audit reports indicated that there is insufficient realty staff at the
agencies reviewed to perform all realty-related trust responsibilities in a timely manner.
Accordingly, we have revised the report to recognize the staffing situation identified by the
Bureau.


Other Matters

We also identified deficiencies that need to be corrected at the Yakama and the Puget Sound
Agencies in the areas of summary distributions and the distribution of assets after probate.

     Summary Distributions.  Superintendents at the Yakama and  Puget Sound
Agencies were not preparing and processing summary distributions.  As a result, the assets
from small estates were not distributed to heirs in a timely manner.  The Code of Federal
Regulations (43 CFR 4.271) requires agency superintendents to assemble the apparent heirs
of Indians who have died intestate with only trust personal property or cash valued at less
than $1,000 and to hold an informal hearing to determine the proper distribution of assets.
The summary distributions were not processed, according to the Yakama Agency
Superintendent, because he was not aware of the requirement.  The Puget Sound Agency
Superintendent, who said that he was aware of the requirement, stated that he thought the
probate employee was processing the distributions when necessary.  However, the probate
employee at the Puget Sound Agency said that it was his understanding that when no real
property was involved, he was not required to collect or process any heirship data.  For fiscal
years 1995 and 1996, we identified 16 summary distributions, totaling $4,380, at the Yakama
Agency that should have been processed.  At the Puget Sound Agency, we identified only
one summary distribution for a minor amount that was not processed.  After we discussed
this issue with superintendents of both agencies and the Area Director of the Portland Area
Office, the agency superintendents said that they would begin to process summary
distributions.  While the summary distributions will not add to the agencies' backlogs of
probate cases to be submitted to the administrative law judge, the distributions will increase
the work loads of agency probate staff, as heirship data such as family history and beneficiary
information must be assembled in each case.  The Yakama Agency Superintendent, in his
written comments, stated that he had assigned the Agency Administrative Officer the
responsibility of reducing the backlog in summary distributions and maintaining the
summary files in a current and updated status.

     Distribution of Assets After Probate.  The Yakama and Puget Sound Agencies did
not distribute all revenues in individual Indian money estate accounts to the heirs after the
administrative law judge had probated the case and issued his order specifying how the assets
would be distributed.  Based on our review of estate accounts that had balances of $1,000 or
more, we found that as of April 28, 1997, the Yakama Agency had not distributed a total of
about $83,000 for 10 accounts and the Puget Sound Agency had not distributed a total of
about $26,000 for 6 accounts.  Agency staff said that these funds had not been distributed
because of a lack of communication between those individuals responsible for probate and
those responsible for maintaining the individual Indian money accounts.  In addition, because
new accounts had not been established for the heirs, individual Indian money account tellers
reopened closed estate accounts of decedents to post new revenues from sources such as
timber or grazing leases that should have been posted to the heirs' individual Indian money
accounts.  The Yakama Agency's administrative officer told us that his agency had recently
addressed this problem by instructing individual Indian money account tellers not to reopen
the closed estate accounts but to inform probate staff so that accounts for the heirs could be
established.  The Puget Sound Agency probate employee told us that he would review the
individual Indian money estate accounts and request that new accounts be established as
necessary.

In accordance with the Departmental Manual (360 DM 5.3), please provide us with your
written comments to this report by August 31, 1998.  The response should provide the
information requested in Appendix 3.

The legislation, as amended, creating the Office of Inspector General require semiannual
reporting to the Congress on all audit reports issued, actions taken to implement audit
recommendations, and identification of significant recommendations on which corrective
action has not been taken.

We appreciate the assistance of personnel of the Yakama and Puget Sound Agencies in the
conduct of our audit.


APPENDIX 1

OFFICES VISITED


OFFICE


Central Office
Portland Area Office
     Puget Sound Agency Office
     Yakama Agency Office
Sacramento Area Office
Department of the Interior
     Office of Hearings and Appeals
Office of the Solicitor
     Phoenix Field Office                             LOCATION


Washington, D.C.
Portland, Oregon
Everett, Washington
Toppenish, Washington
Sacramento, California

Sacramento, California

Phoenix, Arizona


APPENDIX 3

STATUS OF AUDIT REPORT RECOMMENDATIONS


Finding/
Recommendation
Reference


Status


Action Required

1, 2, 4, and 5  Management concurs;
additional information
needed.  Provide a copy of the final "High Level
Implementation Plan for Trust
Management Improvements."
Implemented  No further action is required.


ILLEGAL OR WASTEFUL ACTIVITIES SHOULD BE REPORTED TO THE OFFICE OF
INSPECTOR GENERAL BY:


Sending written documents to:



Within the Continental United States

U.S. Department of the Interior
Office of Inspector General
1849 C Street,N.W.
Mail Stop 5341
Washington, D.C. 20240

Calling:

Our 24 hour
Telephone HOTLINE
1-800-424-5081 or
(202) 208-5300

TDD for hearing impaired
(202) 208-2420 or
1-800-354-0996



Outside the Continental United States


Caribbean Region

U.S. Department of the Interior
Office of Inspector General
Eastern Division- Investigations
1550 Wilson Boulevard
Suite 410
Arlington, Virginia 22209

Calling:
(703) 235-9221


North Pacific Region

U.S. Department of the Interior
Office of Inspector General
North Pacific Region
238 Archbishop F.C. F'lores Street
Suite 807, PDN Building
Agana, Guam 96910


Calling:
(700) 550-7428 or
COMM 9-011-671-472-7279