[Audit Report on the Indian Probate Process at the Minnesota Agency, Minneapolis Area Office, Bureau of Indian Affairs]
[From the U.S. Government Printing Office, www.gpo.gov]
Report No. 98-I-672
Title: Audit Report on the Indian Probate Process at the Minnesota
Agency, Minneapolis Area Office, Bureau of Indian Affairs
Date: September 23,1998
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U.S. Department of the Interior
******************************
U.S. Department of the Interior
Office of Inspector General
AUDIT REPORT
INDIAN PROBATE PROCESS AT THE MINNESOTA
AGENCY, MINNEAPOLIS AREA OFFICE, BUREAU OF INDIAN AFFAIRS
REPORT NO. 98-I-672
SEPTEMBER 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 Minnesota
Agency, Minneapolis Area Office,
Bureau of Indian Affairs" (No. 98-I-672)
Attached for your information is a copy of the subject final
audit report. The objective of the audit was to determine
whether the Minnesota Agency was 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 Agency was
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 Minnesota Agency 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 Agency instructed employees to emphasize probates
involving land and did not assign a sufficient number of
adequately trained staff to collect and submit probate data.
As a result of the Agency 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, three recommendations resolved but
not implemented, and requested additional information for
the remaining recommendation. 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 W-IN-BIA-002-97
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 Minnesota Agency, Minneapolis Area Office,
Bureau of Indian Affairs (No. 98-I-672)
INTRODUCTION
This report presents the results of our review of the Indian
probate process[1] at the Minnesota Agency, which is under
the jurisdiction of the Minneapolis Area Office of the
Bureau of Indian Affairs. The objective of the audit was to
determine whether the Agency was 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 Agency was
preparing summary distributions for estates valued at less
than $1,000, which the agency superintendent is authorized
by Federal regulations to resolve through informal hearings.
BACKGROUND
The U.S. Government holds property in trust for Indians.[2]
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 when 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,[3] 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 generally does not participate further until the
wills have been approved or the heirs of intestate decedents
have been determined unless the administrative law judge
requests the staff to attend or testify at the probate
hearings. 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 of
probate cases.[4] 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
2,100 deaths would be discovered in the process of resolving
the 4,285 cases.[5] 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 461 cases were applicable to the six
bands of the Minnesota Chippewa Tribe, under the
jurisdiction of the Minnesota 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
-------------------------------------------------
| | | |Minneapolis|
| | |Bureau | Area |
Minnesota
| Description | |Total | Office |Agency
-------------------------------------------------
Probate Backlog as 4,285 1,160 555
of 10/1/90a
-------------------------------------------------
Probate Backlog as
of 4/7/97 1,619 422 325
Remaining
10/01/90
-------------------------------------------------
Since | |4,034 | 186 |136
10/01/90|| | |
-------------------------------------------------
Total as of 4/7/97 |5,653 | 608 | 461b
-------------------------------------------------
aThese 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.
b The Agency's September 8, 1997, Probate Backlog Report indicated
that the backlog had increased to 491 cases.
SCOPE OF AUDIT
We conducted our audit at the Bureau's Central Office,
Minneapolis Area Office, and the Minnesota Agency (see the
Appendix). To accomplish our objective, we reviewed and
analyzed death reports and probate data submitted by the
Agency 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 cash-only estates, including
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 and (2) an administrative
law judge from the Office of Hearings and Appeals in Saint
Paul, Minnesota, concerning the adequacy and timeliness of
the data submitted by Bureau personnel. 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: the date
that the agency was notified of a death was not documented,
decedent reports were not distributed to the administrative
law judges within the required first 7 days of each month,
and probate data were not submitted to the administrative
law judges within the required 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
During the past 5 years, the Office of Inspector General has
issued one audit report that identified weaknesses in the
Bureau's probate process similar to those identified in this
report. As part of our review of the Bureau's probate
process, we issued, on July 29, 1998, the report "Indian
Probate Process at the Yakama and Puget Sound Agencies,
Portland Area Office, Bureau of Indian Affairs" (No. 98-I-
587). The report stated that the agencies were not
reporting all deaths and were not submitting required
probate data to the administrative law judge in accordance
with Federal regulations for Indians whose deaths were
reported to the agencies during fiscal years 1995 and 1996.
In addition, the report stated that the agency
superintendents at both agencies were not preparing and
processing summary distributions for estates valued at less
than $1,000, which the superintendents are authorized to
resolve through informal hearings. Three of the
recommendations made in the report are applicable to
conditions identified at the Minnesota Agency: (1) plans
should be developed for submitting the required probate data
to the administrative law judge, (2) sufficient staff
should be assigned to process probates, and (3) procedures
should be developed for more proactively identifying
deceased Indians.
RESULTS OF AUDIT
The Minnesota Agency did not promptly report all Indian
deaths and did not timely submit all the required probate
data to the administrative law judge for Indians whose
deaths were reported to the Agency 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 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 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.[6] However, we found that the required
information was not submitted because Agency officials
instructed employees to emphasize probates involving land
and did not assign a sufficient number of staff to collect
and submit probate data. As a result of the Agency 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, for Indians whose deaths were reported to the
Agency during fiscal years 1995 and 1996, we identified
individual Indian money accounts of about $42,000 that could
not be distributed because probate data had not been
submitted to the administrative law judge.
Reporting of Deaths
We were not able to determine whether the Minnesota Agency
reported all deaths to the administrative law judge within
the first 7 days of the month after notification, as
required, because the Agency did not document the dates that
it was notified of the deaths. Probate employees stated
that they were not aware of the requirement that all deaths
were to be reported within 7 days of the month following
receipt of notification. In addition, probate employees
said that Agency Realty Branch officials told them to report
only decedents who died owning trust real property and to
postpone including those deaths on reports until they had
received the death certificates. As a result, based on our
review of available documentation, we determined that the
Agency did not report to the administrative law judge 139 of
333 Indian deaths reported to the Agency during fiscal years
1995 and 1996.
In addition, there was little assurance that the Agency was
notified of all deaths of Indians under its jurisdiction.
Of 333 deaths reported to the Agency during fiscal years
1995 and 1996, only 173[7] were deaths that occurred during
that period, or an average of 87 deaths per year. However,
based on the estimated annual mortality rate of 0.6 percent
for Indians[8] and the 1996 tribal population of about
28,000 for which the Agency had probate responsibility, we
estimated that the mortality rate of 0.31 percent (87
divided by 28,000) reported to the Minnesota Agency was
significantly below the forecasted rate of 0.6 percent.
Consequently, we believe that the Agency probate staff needs
to take more proactive measures to identify deceased
Indians. One additional measure would be to routinely review
information already available in other systems at the
Agency, such as the individual Indian money estate account
listing. This listing could provide information to the
Agency on Indian deaths that may not have been reported to
the Minnesota Chippewa Tribe or the Agency Realty Branch.
Agency probate employees have taken some proactive measures
to identify deceased Indians. For example, one probate
employee obtained a listing of individual Indian money
accounts for Indians who were born before 1910. Although at
the time of our review this employee had not determined
whether the account holders were deceased, we believe that
Agency officials should instruct probate employees to follow
up on this effort because there are more than 1,300 such
accounts, totaling about $1.4 million, on the listing.
Another employee began researching Inheritance and Heirship
cards[9] to identify Indians whose deaths required probate.
Based on this research, the Agency identified Indians of
whose deaths it previously had not been aware. Largely as a
result of this research, the Agency's reported probate
backlog increased from 195 cases as of September 30, 1996,
to 461 cases as of April 7, 1997.
Although we believe that some of the Agency staff is taking
action to identify deceased Indians, we believe that a more
systematic method of identifying and reporting deaths as
they occur is necessary if the Agency is to process probates
in a timely manner. 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 the information from these lists 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
The Minnesota Agency did not submit to the administrative
law judge, within the required 90 days, probate data for all
deaths reported to the Agency in fiscal years 1995 and 1996.
Of the 333 deaths reported to the Agency in fiscal years
1995 and 1996, 225 deaths, or 67 percent, required probate.
Of the 225 deaths requiring probate, 163 cases were
submitted to the administrative law judge: 4 cases met the
90-day requirement, and 113 cases did not meet the
requirement. We could not determine whether the remaining
46 cases met the requirement because the Agency did not
document the dates the deaths were reported to the Agency.
Because the Agency did not submit 62 cases (225 cases less
163 cases) to the administrative law judge, land and
individual Indian money accounts totaling $42,000 could not
be distributed to the heirs of these estates.
Agency officials told us that they did not have sufficient
staff and funding to process probates within the required 90
days because the Agency's probate positions had been
affected by reductions in force in October and December
1995. During the reductions in force, the five experienced
full-time probate employees were replaced with four
employees who had little or no experience in processing
probates. The Agency did not have five probate clerks to
process probates until February 1996. These five probate
employees received training provided by the administrative
law judge in September 1996 and were still processing
probates as of September 1997. We believe that the impact
of the reductions in force is reflected in the decrease,
based on Agency records, in the number of probates sent to
the administrative law judge as follows:
---------------
|Fiscal||
Probates
|Year | |
Processed
---------------
1994 228
---------------
1995 142
---------------
1996 59
---------------
1997 115
---------------
While we agree that the reductions in force adversely
affected the processing of probate cases, we believe that
the Minnesota Agency did not submit probate data within the
required 90 days primarily because the agency superintendent
did not assign a sufficient number of staff to collect and
submit probate data for the current probate work load. At
the time of our review, the Minnesota Agency had five
employees assigned full time to processing probates. Agency
officials stated that one of the five employees processed
current cases and that the other four employees worked
exclusively on backlogged cases. However, based on
discussions with probate employees and on reviews of the
Agency's monthly activity reports, we found that the
employee assigned to process the current cases was assigned
other duties in addition to her probate responsibilities,
even though her job description was identical to that of the
probate clerks assigned to process the backlog. This
employee estimated that she spent only 10 to 30 percent of
her time processing probates, with the remainder of her time
spent performing other duties such as processing time and
attendance reports, travel vouchers, payroll, mail, and
correspondence. This resulted in most current cases being
left unprocessed and adding to the backlog. This employee,
one of the probate clerks who was terminated during the
reduction in force, was rehired in February 1996 and
assigned to process current probates. However, Agency
records indicate that during the remainder of fiscal year
1996, the employee submitted only five probate cases to the
administrative law judge, of which only two were for deaths
that occurred during fiscal year 1996. (Both cases were
submitted within 90 days.) The remaining probate cases
resulting from deaths that occurred during fiscal year 1996
were added to the backlog, on September 30, 1996, and were
scheduled for processing by backlog probate clerks using
money that was designated for the probate backlog.
In the 1990 initiative, the Bureau estimated that it would
take, on the average, approximately 1 week to process one
probate. Using this Bureau estimate, we determined that one
employee could process about 40 probate cases per year.[10]
Based on the 40-case-per-year estimate and the Agency's
probate work load, we concluded that one full-time probate
employee was not sufficient to process the work load
normally anticipated in a year, even without a backlog.
That is, one probate employee could not have processed and
transmitted to the administrative law judge the 1995-1996
average annual work load of 113 new cases within the
required 90 days, even if the employee had not been assigned
other duties and responsibilities. Processing an annual
work load of 113 identified cases would require two to three
full-time employees based on 40 cases being processed per
year.
Further, as noted in the "Reporting of Deaths" section of
this report, we estimated that deaths at the Minnesota
Agency were significantly underreported based on the
Bureau's estimated annual mortality rate of 0.6 percent.
Applying this 0.6 percent rate to the approximately
28,000 tribal members for whom the Agency has probate
jurisdiction, the expected number of deaths in fiscal year
1996 would have been 168. Using the 40-case-per-year
estimate and the 67 percent ratio of deaths requiring
probate to total deaths that occurred during fiscal years
1995 and 1996, we determined that between two and three
employees would be required to process the current
anticipated annual work load on a timely basis. In
addition, with the Agency's reported backlog of 461 probate
cases as of April 7, 1997, between 11 and 12 staff years
would be required to process just these cases. Accordingly,
while the Agency has assigned four full-time probate staff
to resolve the backlog, we believe that additional staff are
needed to help ensure that current (nonbacklog) probates are
submitted to the administrative law judge and that heirs
receive their inheritances in a timely manner. For example:
- Probate data had not been submitted for one decedent
who died in March 1970, although the Agency was notified of
his death by July 1971. The decedent owned land and had an
individual Indian money account of $11,000, but neither was
distributed to the decedent's daughter, who died in 1994
without receiving the inheritance. The Agency also had not
probated the daughter's death or established a probate case
file. In addition, the grandson of the decedent who died in
March 1970 had requested information of the Agency in 1993
regarding the status of his grandfather's estate and in 1994
regarding his mother's estate and offered to provide
information to the Agency concerning these estates.
However, at the time of our review, we found that the Agency
had not sought the information offered by the grandson.
- The Agency had not resolved the probate of a
decedent whose death was reported to the Agency in 1935.
Probate data were not submitted to the administrative law
judge until 1986. After a 1986 hearing revealed
discrepancies in the family history, the judge returned the
case to the Agency for additional information. However, at
the time of our review, the Agency had not resubmitted the
case to the administrative law judge.
The administrative law judge who holds hearings for the
Minnesota Agency indicated that while the probate data
submitted by the Agency were adequate, they were not
submitted in a timely manner. He stated that the Agency
needed additional staff to process probates, that the Agency
had many older cases, and that he was currently working on
cases for decedents who had died from 5 to 25 years ago. He
also stated that the older cases were more time consuming to
process for the Bureau's probate staff, as well as for him
and his staff, because the older cases have more heirs and
that, as more time passes, it becomes increasingly difficult
to locate the heirs.
We believe that the Minneapolis Area Director and the
Minnesota Agency superintendent should ensure that
sufficient numbers of and adequately trained staff are
assigned to probates to enable the Agency to eliminate its
backlog and comply with the 90-day requirement for the
submission of probate data to the administrative law judge.
In addition, the Agency should discontinue the practice of
assigning other duties to the probate employees who process
the current probate work load because this prevents the
timely submittal of probate cases to the administrative law
judge.
In the June 22, 1998, response (Appendix 3) 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."
Regarding the shifting of realty personnel from one vital
function to another, 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."
Recommendations
We recommend that the Assistant Secretary for Indian Affairs
require the Minneapolis Area Office and Minnesota Agency to:
1. Develop plans, which include staffing requirements,
target dates, and titles of officials responsible, for
transmitting the required probate data, including data on
cash estates valued in excess of $1,000, to the
administrative law judge.
2. Develop a historical database of the deaths of the
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. Assign sufficient staff to eliminate the backlog and
to process probate cases as deaths are reported to the
Agency.
4. Develop procedures for more proactively identifying
Indians who have died to include a systematic review of the
individual Indian money estate account listings.
5. Discontinue the practice of assigning other duties
to the probate employee who is responsible for processing
the current probate work load.
Bureau of Indian Affairs Response and Office of Inspector
General Reply
In the June 22, 1998, response (Appendix 2) to the draft
report from the Assistant Secretary for Indian Affairs, the
Bureau concurred with all five recommendations. Based on
the response and on information contained in the Department
of the Interior's "Trust Management Improvement Project,
High Level Implementation Plan," dated July 1998, provided
by the Bureau on August 6, 1998, we consider Recommendation
2 resolved and implemented and Recommendations 1, 3, and 5
resolved but not implemented. Accordingly, the
unimplemented recommendations will be referred to the
Assistant Secretary for Policy, Management and Budget for
tracking of implementation. Also, based on the response and
the "Implementation Plan," additional information is
requested for Recommendation 4 (see Appendix 3).
In its response to Recommendation 4, the Bureau stated that
our report acknowledged the proactive measures taken by the
Minnesota Agency to identify deceased Indians, but the
Bureau did not state whether the Agency adopted the
recommended procedure of systematically reviewing the
individual Indian money estate account listings as an
additional measure to identify deceased Indians. Therefore,
we request that the Bureau provide this information.
Regarding Recommendation 5, the Bureau stated that it
considered the recommendation resolved and implemented based
on the Minnesota Agency's statement that probate backlog
clerks will no longer be assigned collateral duties.
However, we consider Recommendation 5 resolved but not
implemented based on the statement in the "Implementation
Plan" (pages 22 and 23) in which the Bureau requests funding
to "permanently staff BIA [Bureau of Indian Affairs] field
offices with a minimum of one additional staff person to
work on the current estates" and because the Bureau's
response did not specify that the clerk who is processing
the current probate work load will be relieved of collateral
duties.
Additional Comments on Audit Report
The Bureau also provided comments on the report, which we
considered and incorporated into 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 backlog situation at the Office of
Hearings and Appeals, we believe that the Bureau should
comply with the Code of Federal Regulations (43 CFR
4.210), 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
disagree 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 Minnesota Agency in fiscal years 1995
and 1996, which were the location and years covered by
our review. In that regard, we found that as of
September 30, 1996, only 81 probate cases for the
Minnesota Agency were pending at the Office of Hearings
and Appeals, of which only 12 were 18 or more months
old. As of September 30, 1996, the Agency's reported
backlog was 195 cases. 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. Any delays in the Bureau's
submissions of probate data to the administrative law
judge cause further delays at the Office of Hearings
and Appeals because without the heirship data and
family history, the judge is precluded from holding
hearings and issuing orders for distributing the
assets.
Reporting of Deaths. The Bureau disagreed with our use
of the 1 percent mortality rate, the rate used in the
Bureau's 1993 management control review of probates.
Instead, the Bureau stated that we should use the
Indian Health Service's "age-adjusted" mortality rate
of 0.6 percent. We used the 1 percent mortality rate in
the draft report because it was the rate the Bureau
used. However, based on the Bureau's response, we have
revised our report to reflect the Indian health
Service's "age-adjusted" mortality rate of 0.6 percent
to estimate the number of deaths that occurred.
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]." However, we did not
apply the 1 percent mortality rate to determine how
many deaths should have been reported to the
administrative law judge or to determine the number of
probate cases to be submitted to the administrative law
judge. As stated in the report (page 5), our
determination that the Agency did not report 139 of 333
deaths to the administrative law judge was based on the
number of deaths reported to the Agency and other
documentation we reviewed at the Agency. Furthermore,
of the deaths that should have been reported to the
administrative law judge, we determined the number of
cases that required probate based on whether the actual
decedents owned either trust real property or trust
personal property valued at $1,000 or more. We used
the 1 percent morality rate only to demonstrate that
the .31 percent mortality rate reported to the
Minnesota Agency appeared low and to estimate the
number of deaths which may be reported to the Agency to
provide a basis for projecting the number of staff
needed to process anticipated work load.
The Bureau further stated:
[T]he 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 disagree 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." The Bureau did not provide a
written opinion from the Office of the Solicitor
supporting its position 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. We believe that the Bureau's
statement that "some agencies report all deaths, others
do not" demonstrates that all agencies are not in
compliance with the Code of Federal Regulations. In
addition, the Bureau's guidelines and procedures set
forth in the draft supplement to the Bureau Manual,
dated July 2, 1992, state:
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 valid, they should
be formally modified.
Submission of Probate Data. The Bureau stated that our
report should note that "during the reductions in
force, the five experienced probate employees were
replaced with four employees who had little or no
experience in processing probates" and that the last
sentence of the first paragraph on page 7 "should also
be changed to reference four new probate employees
rather than five."
We disagree with the Bureau's statement because
documentation provided by the Agency indicated that as
of February 1996, the Agency had five probate clerks.
These same five probate clerks, employed to process
probates as stated in their job descriptions, were
assigned to process probates at the time of our review
in September 1997. We also located documentation which
indicated that all five clerks were scheduled for
training provided by the administrative law judge in
September 1996. We have revised our report to clarify
the change in probate staff experience.
The Bureau stated that our report should be
"significantly expanded as it exemplifies the dilemma
of most of our Agency offices in trying to fulfill
multiple important responsibilities with limited
resources." The Bureau also stated:
While a number of audits cite a common
finding of inadequate numbers of trained
staff, we [the Bureau] can recall no audit
that has been issued in the last decade which
identifies any program or administrative
office in the Bureau of Indian Affairs which
is over staffed. 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 recent audit reports, such as the "Wapato
Irrigation Project, Bureau of Indian Affairs" (No. 95-
I-1402) and the "Indian Probate Process at the Yakama
and Puget Sound Agencies, Portland Area Office, Bureau
of Indian Affairs" (No 98-I-587), have indicated that
there is insufficient realty staff at the agencies
reviewed to perform all realty-related trust
responsibilities in a timely manner. In this report,
we identified insufficient staffing and collateral
duties as factors contributing to the untimely
processing of probates. We did not intend to imply
that other activities are not important. However, the
timely processing of 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. Accordingly, we have revised the
report to include the Bureau's comments regarding
staffing.
Other Matters
During our review, we also identified other matters
that need to be addressed at the Minnesota Agency in
the areas of summary distributions and the processing
of probates for which the Leech Lake and Mille Lacs
Bands were responsible.
Summary Distributions. The Minnesota Agency did not
process summary distributions in fiscal years 1995 and
1996. 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 have an informal hearing to determine the proper
distribution of assets. Agency realty officials said
that the summary distributions were not processed
because probate employees were emphasizing the
processing of probates involving land. For fiscal
years 1995 and 1996, we identified seven summary
distributions, totaling about $3,400, that the Agency
should have processed. While the summary distributions
will not add to the Agency's backlog of probate cases
to be submitted to the administrative law judge, the
distributions will increase the work loads of Agency
probate staff because heirship data such as family
history and beneficiary information must be assembled
in each case.
Processing Probates for Self-Governance Tribes. We
found that the Agency processed 14 estates that were
the responsibility of the Mille Lacs Band of the
Minnesota Chippewa Tribe. In addition, we identified
32 other estates on the Agency's September 1997 probate
backlog inventory for which the Mille Lacs and the
Leech Lake Bands are responsible under their self-
governance compacts.[11] Under annual funding
agreements negotiated pursuant to the compacts, the
Mille Lacs Band was responsible for processing its own
probates since fiscal year 1991 and the Leech Lake Band
was responsible since fiscal year 1996. However, we
found that the 14 estates were processed by Agency
probate employees because Agency officials had not told
probate employees that these estates were covered by
self-governance compact funding agreements. As a
result, the Agency spent between $14,000 and
$21,000[12] to process the 14 cases. In addition, the
Bureau's processing of probates for which the two bands
are responsible delays the processing of probates for
the other Chippewa bands whose probates are the
responsibility of the Agency. Further, unless
corrective action is taken, the Agency will incur
between $32,000 and $48,000 to process the 32 cases
included in its backlog inventory, which are the
responsibility of the two bands.
On March 2, 1998, subsequent to the completion of our
fieldwork, the Minnesota Agency superintendent informed
us that he had taken the following actions to resolve
this matter:
- Notified the Mille Lacs and Leech Lake Bands that
they were responsible for performing the probate
function.
- Transmitted to the bands listings of all of the
probates for which the bands are responsible for
processing.
- Made available a workstation within the Agency Realty
Branch for use by the bands to gather information and
documentation.
- Removed the probates for which the bands have
processing responsibility from the Agency's probate
inventory list.
- Provided training on probate processing to both
Agency Realty Branch staff and band staff.
We did not make any recommendations to address these
areas because the Agency has taken sufficient
corrective actions. However, we believe that the
Agency should continue to monitor these areas to
prevent recurrences of the situations described.
In accordance with the Departmental Manual (360 DM
5.3), please provide us with your written comments to
this report by October 16, 1998. The response should
provide the information requested in Appendix 3.
The legislation, as amended, creating the Office of
Inspector General requires semiannual reporting to the
Congress on all audit reports issued, actions taken to
implement audit recommendations, and identification of
each significant recommendation on which corrective
action has not been taken.
We appreciate the assistance of personnel of the
Minnesota Agency and the Minneapolis Area Office in the
conduct of our audit.
**FOOTNOTES**
[1]:Probate is the legal process by which wills are approved
and heirs are determined after an individual dies. If there
is not a valid will, the individual is considered to have
died intestate, and the probate process determines the
intestate individual's heirs. If there is a will, the
probate process determines the legality and validity of the
will.
[2]:According to the Code of Federal Regulations (43 CFR 4.201), trust
property is real or personal property, the title to which is held by the
United States for the benefit of Indians.
[3]:The Code of Federal Regulations (25 CFR 115.1) states, "The term
`individual Indian money accounts' means those accounts under the
control of the Secretary of the Interior or his authorized
representative belonging to individuals."
[4]:For the purposes of this report, backlog is all cases of reported
deaths for which probate data had not been submitted to the
administrative law judge within the required 90 days.
[5]:The resolution of old probate cases had the potential to increase
the backlog because one or more of the heirs to the estate being
probated may have died.
[6]:According to the Code of Federal Regulations (43 CFR 4.210), the
data submitted to the administrative law judges include, but are not
limited to, a copy of the death certificate or other evidence of the
death; data for heirship findings, such as information on marriages,
separations, and divorces; names and addresses of probable heirs and a
determination as to whether their relationship is by marriage, blood, or
adoption; and the names, relationships, and last known addresses of
beneficiaries and witnesses when a will or purported will is involved.
[7]:The 173 deaths that occurred during fiscal years 1995 and 1996
consist of 139 deaths not reported to the administrative law judge and
34 deaths reported to the administrative law judge.
[8]:According to the Bureau's "Probate" Management Control Review for
fiscal year 1993, the average mortality rate for Indians is estimated at
about 1 percent per year. However, the Bureau, in its May 19, 1998,
response to the draft of our report "Indian Probate Process at the
Yakama and Puget Sound Agencies, Portland Area Office, Bureau of Indian
Affairs" (No. 98-I-587), included updated 1991-1993 Indian Health
Service mortality rate information, which stated that the age-adjusted
mortality rate for Indians had decreased to 0.6 percent.
[9]:Inheritance and Heirship cards are Bureau records that contain
information on family history and land ownership.
[10]:The 40-case estimate was based on a work year of about 200 days to
account for sickness, leave, holidays, and training.
[11]:Title III of Public Law 93-638, as amended, authorizes the
Secretary of the Interior to enter into a compact with Indian
organizations which allows the organizations "to plan, conduct,
consolidate, and administer programs, services, and functions of the
Department of the Interior that are otherwise available to Indian tribes
and Indians."
[12]:These amounts are based on an Agency-estimated processing cost of
$1,000 to $1,500 per case.
APPENDIX 1
OFFICES VISITED
------------------------------------------------------------
OFFICE LOCATION
Central Office Washington, D.C.
Minneapolis Area Minneapolis, Minnesota
Office Cass Lake, Minnesota
Minnesota Agency
Office Sacramento, California
Sacramento Area
Office St. Paul, Minnesota
Department of the
Interior
Office of Hearings and
Appeals
------------------------------------------------------------
APPENDIX 2
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of 5
APPENDIX 2
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of 5
APPENDIX 2
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of 5
APPENDIX 2
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of 5
APPENDIX 2
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of 5
APPENDIX 2
Page 1
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APPENDIX 3
STATUS OF AUDIT REPORT RECOMMENDATIONS
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Finding/
Recommendation
Reference Status Action Required
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1, 3, and Resolved; No further response to the Office of Inspector General is
5 not required. The recommendations will be referred to the
implemented. Assistant Secretary for Policy, Management and Budget for
tracking of implementation.
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2 Implemented. No further action is required.
----------------------------------------------------------------------------------------
4 Management Provide clarification that the procedures to identify
concurs; deceased Indians include a systematic review of the
additional individual Indian money estate account listings.
information
needed
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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