[Survey Report on Background Investigations for Phoenix Area Education Employees, Bureau of Indian Affairs]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. 99-i-145

Title: Survey Report on Background Investigations for Phoenix Area
       Education Employees, Bureau of Indian Affairs

Date:  December 23, 1998




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




SURVEY REPORT


BACKGROUND INVESTIGATIONS FOR
PHOENIX AREA EDUCATION EMPLOYEES,
BUREAU OF INDIAN AFFAIRS

REPORT NO. 99-I-145
DECEMBER 1998




MEMORANDUM

             TO:  The Secretary

           FROM:  Eljay B. Bowron
                  Inspector General

SUBJECT SUMMARY:  Final Survey Report -
                  "Background Investigations for Phoenix  Area
                  Education Employees, Bureau of Indian
                  Affairs" (No. 99-i-145)

Attached  for  your information is a copy of the subject  final
survey report.   The  objective  of the survey was to determine
whether the Bureau of Indian Affairs  performed,  in accordance
with applicable  laws,  regulations,  and  policies, background
investigations and suitability determinations  for Phoenix Area
education employees who work in Bureau-operated  schools.   The
audit was conducted in response to a request from the Assistant
Secretary for Indian Affairs.

The  Phoenix  Area  Security Office did not timely initiate and
properly complete all  background  investigations  for  new and
existing   education   employees.    However,   the   completed
background investigations received from the Office of Personnel
Management generally were reviewed and adjudicated in a  timely
manner by the Area Security Officer and were documented in  the
personnel  files as completed and approved.  These deficiencies
occurred because  the  Bureau did not have effective processes,
including written procedures, to identify all employees needing
background investigations  and to obtain the information needed
for   the   proper and   timely   completion    of   background
investigations  and  security  clearances.   As  a result,  the
Bureau  could not be assured that the 38 individuals  who  were
employed without the requisite background investigations at one
agency office  and  seven  Bureau-operated schools, which had a
total student enrollment of 1,807, were suitable for employment
at these facilities.  In related  matters,  the   Phoenix  Area
Security   Office   generally  completed  required  fingerprint
verifications  to  identify   individuals  who  had  unsuitable
backgrounds.  However, the Office  did  not  always document in
the personnel files that background investigations and security
clearances  had  been completed or that required  preemployment
reference checks had  been completed and approved for education
employees.

In its response, the Bureau  agreed  with  the  report's  three
recommendations to address these issues. Based on the response,
we  considered  one recommendation resolved and implemented and
two recommendations resolved but not implemented.

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




December 23, 1998                 C-IN-BIA-002-98(A)-R


SURVEY REPORT

Memorandum

     To:  Assistant Secretary for Indian Affairs

   From:  Robert J. Williams
          Assistant Inspector General for Audits

Subject:  Survey Report on Background Investigations
          for Phoenix Area Education Employees,
          Bureau of Indian Affairs (No. 99-i-145)

INTRODUCTION

This  report  presents  the  results  of our survey of
background  investigations for Phoenix Area  education
employees performed  by  the Bureau of Indian Affairs.
The objective of the survey  was  to determine whether
the  Bureau performed, in accordance  with  applicable
laws,    regulations,    and    policies,   background
investigations  and suitability determinations[1]  for
education  employees   who   work  in  Bureau-operated
schools.  The audit was conducted  in  response  to  a
request  from  you,  as  the  Assistant  Secretary for
Indian Affairs.

BACKGROUND

The    legislative    requirements    for   background
investigations for education employees  are  contained
in  the  Indian  Child  Protection and Family Violence
Prevention Act (Public Law 101-630, dated November 28,
1990)  and  the  Crime Control  Act  of  1990  (Public
Law 101-647, dated  November  29,  1990).  In general,
the Acts require that all employees  who  have regular
contact     with     children    receive    background
investigations.  The Code  of  Federal Regulations (25
CFR 63) establishes minimum standards of character "to
ensure that individuals having regular contact with or
control over Indian children have  not  been convicted
of certain types of crimes or acted in a  manner  that
placed  others at risk or raised questions about their
trustworthiness."   In  addition,  the Code of Federal
Regulations   (5 CFR 736)   requires  that   personnel
background investigations be  initiated within 14 days
of    placement   (hire  date)  for  all   noncritical
sensitive positions.[2]   In  that  regard, the Bureau
has designated as noncritical sensitive  positions all
education  employee  positions  within  the Office  of
Indian  Education  Programs.   Further, administrative
instructions for personnel officers  to  keep security
officers  informed  of all relevant personnel  actions
are contained in the Department of the Interior Manual
(441 DM 3.3C), and instructions for employee selecting
officials to conduct and document reference checks and
obtain   information  on   any   previous   background
investigations  are  contained in the Bureau of Indian
Affairs Manual (62 BIAM  11), dated April 6, 1990, and
updated on November 7, 1996.

The Bureau's background investigation  process  begins
after  an  applicant  is  conditionally  selected  for
employment.   First,  the  employing school or related
agency  office  provides  the  applicants   with   the
background  investigation  forms[3]  and instructs the
applicants to return the completed forms  on  or prior
to  the  date  of hire.  Prior to April 28, 1998,  the
school or agency  sent  the forms to the Area Security
Officer for the Officer's determination that the forms
were  complete.   The Security  Officer  reviewed  and
updated incomplete forms by contacting the appropriate
employing school and  sent  the forms to the Office of
Personnel Management.  On April  28,  1998, the Bureau
changed  its  process  and made the agency  or  school
responsible for submitting  the forms to the Office of
Personnel  Management, which conducts  the  background
investigations  and  sends  the  results  to  the Area
Security Officer.

To    comply   with   the   background   investigation
requirements for Bureau employees, the Bureau has five
Security Officers (one Central Office Security Officer
in Washington,  D.C.,  and an Area Security Officer in
Albuquerque,  New  Mexico;   Aberdeen,  South  Dakota;
Billings, Montana; and Phoenix,  Arizona).   The  four
Area  Security  Officers  report to the Central Office
Security    Officer.     For    positions    requiring
investigations,   the  Area  Security   Officers   are
responsible   for   initiating    education   employee
background   investigations   and   adjudicating   the
investigation  results  received  from the  Office  of
Personnel Management.

During  1997, the Office of Indian Education  Programs
employed  approximately  5,165 employees in 82 Bureau-
operated  elementary  and  secondary   schools  and  5
peripheral dormitories for students who  attend public
schools.  The Phoenix Area Security Office,  which  is
also  responsible for background investigations within
the Sacramento  Area, is responsible for the oversight
and coordination  of background investigations related
to 436 education employees  at four agency offices and
nine Bureau-operated elementary  and secondary schools
with a total student enrollment of 2,127.

SCOPE OF SURVEY

Our  survey  was  conducted  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.  To accomplish  our
objective,  we  (1)  obtained  and reviewed applicable
criteria  related  to  initiating,   processing,   and
adjudicating  background  investigations; (2) reviewed
and   discussed   Area  Security   Office   background
investigation   operating   procedures   with   Bureau
officials; and (3)  selected and reviewed a judgmental
sample of education employees'  security and personnel
files.

We   selected  our  sample  from  the  436   education
employees  covered by the Phoenix Area Security Office
shown in the  Bureau's  payroll  system  at  March 16,
1998.   The payroll system indicated that for the  436
education employees, investigations had been completed
for 206 employees  and  had not been completed for 230
employees.  We judgmentally  selected 85 employees (20
percent),  of  which  36 employees  were  recorded  as
having completed investigations  and 49 employees were
recorded as not having completed investigations.   The
scope  of  our  review  did not include the procedures
used by the Office of Personnel  Management to perform
background investigations.

As  part of our survey, we reviewed  the  Departmental
Report  on Accountability for fiscal year 1996 and the
Bureau's  annual  assurance  statement  on  management
controls  for fiscal year 1997, both of which  contain
information   required   by   the   Federal  Managers'
Financial Integrity Act.  We determined  that  neither
report   disclosed  any  internal  control  weaknesses
related to  the  objective  of  this  survey.  We also
evaluated  the  Phoenix  Area's  system  of   internal
controls  related to the education employee background
investigation  process  to  the  extent  we considered
necessary  to accomplish the objective.  The  internal
control weaknesses  identified  are  discussed  in the
Results   of  Survey  section  of  this  report.   Our
recommendations,  if  implemented,  should improve the
internal controls in the areas identified.

Our  survey  was performed from April 27  to  May  20,
1998, and included visits to the Bureau's Phoenix Area
Security Office  in  Phoenix  and the Office of Indian
Education Programs Personnel Office in Albuquerque.

PRIOR AUDIT COVERAGE

During  the  past  5  years,  neither  the  Office  of
Inspector  General nor the General  Accounting  Office
has performed  any  audits  that  addressed  Bureau of
Indian   Affairs   education   employees'   background
investigations    and    suitability   determinations.
However, on June 27, 1997,  the  Office  of  Personnel
Management   issued   the  report  "Appraisal  of  the
Personnel Security/Suitability  Programs of the Bureau
of  Indian  Affairs  Central Office  East/West."   The
report stated that personnel  security and suitability
programs in the Bureau's Central  Office  needed to be
improved.   Specifically,  the report stated  that  19
(22 percent) of 87 personnel  files  reviewed  had  no
indication  that  a  background investigation had been
performed.  The report made recommendations to improve
procedures for ensuring that background investigations
are initiated timely on all employees.  In its October
23, 1997, response to  the  report,  the Bureau stated
that (1) the individuals identified as  not having had
a  background  investigation  had  been  provided  the
necessary  forms  and  that  background investigations
were  being  scheduled with the  Office  of  Personnel
Management and  (2)  the  Bureau  had initiated "a 100
percent  review" of the official personnel  files  for
the Central  Office  East/West  to  determine  whether
additional corrective actions were warranted.  In  its
October 27,  1998,  response (Appendix 1) to the draft
of this report, the Bureau  stated  that all 19 of the
individuals identified as not having  had a background
investigation were Bureau employees but  did  not work
for  the  Office  of  Indian  Education Programs.  The
Bureau further stated that as of October 15, 1998, the
status  of the background investigations  for  the  19
employees was as follows: nine employee investigations
had been  completed, nine employee investigations were
ongoing pending  correction of security forms, and one
investigation was  no  longer  necessary  because  the
employee no longer worked for the Bureau.

In addition, on October 24, 1997, the Acting Personnel
Officer, Office of Indian Education Programs, provided
the  Director with a report on the status of education
employees'  background investigations as listed in the
payroll system.   The report disclosed that background
investigations had  not  been  completed for 1,495 (29
percent) of the Bureau's 5,165 school  employees.  The
Acting  Personnel Officer recommended that  background
investigation  forms  be included with the appointment
documents  sent  to  the Office  of  Indian  Education
Programs Personnel Office to ensure that the forms are
completed by the employee  when the employee is hired.
The report did not require a response, and at the time
of our review, the Acting Personnel  Officer said that
no   action   had   been   taken   on   the   report's
recommendation.

     In its response  to  the  draft  of this report,
     the Bureau stated:

     More  than  half  of  the  1,495  employees,
     however,    had    been   investigated   and
     determined suitable  under  E.O.  [Executive
     Order]10450  standards  which  are the  same
     standards as in Pub. L. [Public Law]101-630.
     Most of these background investigations were
     conducted  in  the  late  1970's  or   early
     1980's.   The  OPM's  [Office  of  Personnel
     Management]   SII   [Security  Investigative
     Index] data base only  maintains information
     on investigations conducted  within the past
     15  years.  Therefore, an SII check  of  the
     OPM files  will  denote  a  "No  Record" for
     investigations completed prior to 1983.

     The Bureau further stated:

     To  determine  an  accurate  universe,   the
     Bureau   security  specialists  conducted  a
     thorough  review  of  all  OIEP  [Office  of
     Indian Education Programs] employees using a
     July   20,  1998,   payroll   listing,   the
     employees'  Official  Personnel Folders, and
     OPM's SII data base.  Based  on  this review
     the Bureau determined that 836 current  OIEP
     employees  required investigations.  Of that
     number, 101  were  employed  at  the Phoenix
     Area.


**FOOTNOTES**

     [1]: An employee suitability determination
(adjudication) consists  of determining   whether
an  employee  has  met  the required  background
investigation standards.

     [2]:The Federal Personnel Manual, Subchapter
2,  identifies  four sensitivity  levels  for
designating  positions   for  security-related
positions: nonsensitive, noncritical-sensitive,
critical-sensitive,  and special-sensitive.   The
subchapter  states  that noncritical-sensitive
includes positions that involve one of the
following:  "access to Secret or Confidential
national security materials, information, etc.;
- Duties that may directly or indirectly adversely
affect the overall  operations of the agency;  -
Duties that demand a high degree of confidence  and
trust."

     [3]:All education employees  are  required by the
Office of Personnel Management to complete a
"Questionnaire for Public Trust  Position" (SF-85P),
a "Supplemental Questionnaire for Selected Positions"
(SF-85P-S), and a "Fingerprint Chart" (SF-87).

RESULTS OF SURVEY

The  Phoenix  Area  Security  Office  did  not  timely
initiate   and   properly   complete   all  background
investigations   for   new   and   existing  education
employees.   Specifically,  we  found  that  the  Area
Security   Office   had   not   initiated   background
investigations for 38 (45 percent) of the 85 employees
in  our sample and had not submitted to the Office  of
Personnel Management background investigation forms in
a  timely   manner  for  16  (34 percent)  of  the  47
remaining   employees.     However,    the   completed
background investigations received from  the Office of
Personnel  Management  generally  were  reviewed   and
adjudicated  in  a  timely manner by the Area Security
Officer.   The  Indian  Child  Protection  and  Family
Violence Prevention  Act,  the  Crime Control Act, and
the   Code   of   Federal   Regulations  contain   the
requirements for performing and  completing background
investigations.   However,  the Bureau  did  not  have
effective processes, including  written procedures, to
identify     all    employees    needing    background
investigations  and  to  the  obtain  the  information
necessary  for  the  proper  and timely completion  of
background investigations and security clearances.  As
a result, the Bureau could not  be assured that the 38
individuals  who were employed without  the  requisite
background investigations  at  one  agency  office and
seven Bureau-operated schools that had a total student
enrollment of 1,807 were suitable for employment[4] at
these  facilities.  In related matters, we found  that
while  the   required   fingerprint  verifications  to
identify individuals with  unsuitable backgrounds were
generally  completed,  background  investigations  and
security clearances were  not always documented in the
personnel files as having been completed, and approved
and required preemployment  reference  checks were not
always  documented  in the personnel files  as  having
been performed.

Initiating Background Investigations

Section 408 of the Indian  Child Protection and Family
Violence  Prevention  Act, dated  November  28,  1990,
requires that background  investigations  be performed
for employees who have regular contact with or control
over Indian children.  In addition, Section 231 of the
Crime  Control  Act of 1990, dated November 29,  1990,
requires that all existing employees involved in child
care services, including  education employees, receive
background investigations no  later than May 29, 1991.
Also,  the Departmental Manual (441  DM  3.3C)  states
that personnel  officers  are responsible for ensuring
that security officers are immediately notified of all
relevant personnel actions,  including  (1) changes in
program  or  position  placement (sensitivity  levels)
which  require  additional   investigation   and   (2)
reassignments, details, transfers, or terminations for
all  sensitive  positions  and  for  positions such as
education  employee  positions which require  security
clearances.  However, we found that the Bureau did not
have written procedures for transmitting the necessary
information, including  relevant personnel actions, to
the Area Security Officer.  Instead, the Bureau relied
on  the  employing  school or  agency  to  inform  the
Security  Officer  of  employees   needing  background
investigations.  However, the schools and agencies did
not  always  identify  employees  who  did   not  have
completed   background   investigations,   obtain  the
required  background  investigation  forms  from   the
employees,  or  submit  the  background  investigation
forms to the Area Security Office.

Based  on  our  review  of  the security and personnel
files for the 85 employees, we  found  that background
investigations  had  not  been  initiated for  10  (48
percent)  of  21  employees  hired  before  the  Crime
Control Act was enacted on November 29,  1990, and for
28 (44 percent) of 64 employees who were hired  on  or
after   that   date.    Examples  of  the  absence  of
initiation  of  background   investigations   are   as
follows:

-   On  June  6,  1994,  the  Bureau  hired  a  special
 education  teacher.   However,  as  of April 27, 1998,
 approximately 4 years after the teacher was hired, the
 employee  had  not  received  a  completed  background
 investigation.  In addition, the Area  Security Office
 had  no  record  of  whether  the  required background
 investigation   forms  had  been  submitted   by   the
 employee.

-  On February 3,  1998,  the  Bureau hired a dormitory
 assistant.  However, as of April 27,  1998,  nearly  3
 months after the assistant was hired, the employee had
 not received a completed background investigation.  In
 addition,  the  Area  Security Office had no record of
 whether  the required background  investigation  forms
 had been submitted by the employee.

-  On April  16,  1984,  the  Bureau  hired a dormitory
 manager for a boarding school.  However,  as  of April
 27, 1998, approximately 7 1/2 years after enactment of
 the Crime Control Act, the employee had not received a
 completed background investigation.  In addition,  the
 Area  Security  Office  had  no  record of whether the
 required  background  investigation   forms  had  been
 submitted by the employee.

-   On August 18, 1985, the Bureau hired  an  education
 aide.   However, as of April 27, 1998, approximately 7
 1/2 years  after  enactment  of the Crime Control Act,
 the employee had not received  a  completed background
 investigation.  In addition, the Area  Security Office
 had  no  record  of  whether  the  required background
 investigation   forms  had  been  submitted   by   the
 employee.

Based on these examples,  we  believe  that the Bureau
should   improve  controls  over  the  initiation   of
background investigations to ensure that all employees
who  have  regular   contact   with  children  receive
background investigations.

Submitting Background Investigation Forms

The Crime Control Act, Section 231,  requires that all
existing and newly hired employees involved  in  child
care  services, including education employees, receive
a  background   investigation,   with   all   existing
employees receiving background investigations no later
than  May  29, 1991.  In addition, the Code of Federal
Regulations  (5 CFR 736) requires personnel background
investigations  to  be  initiated  within  14  days of
placement  (hire  date)  for all noncritical sensitive
positions.  Further, the Phoenix Area Security Officer
position  description  includes   a  requirement  that
procedures  should be developed, in  cooperation  with
the  Office of  Indian  Education  Programs  Personnel
Officer,   for  the  administration  of  the  Security
Program covering  education  employees  throughout the
Phoenix   Area.    However,   we   found   a  lack  of
coordination between the Area Security Office  and the
Personnel Office in the development and implementation
of  the Security Program's operating procedures.   For
example,  schools  and agencies did not always require
employees to submit  background investigation forms in
a timely manner, and the  Area Security Office did not
always   monitor   and   follow   up   on   background
investigation  forms that were returned  to  employees
for completion.

Based on our review  of  security  and personnel files
for  47 employees whose background investigations  had
been  completed   or  initiated,  we  found  that  the
required background  investigation  forms  for  16 (34
percent)  of  the  47  employees  had  not been timely
submitted by the Area Security Office to the Office of
Personnel    Management.    Specifically,   background
investigation  forms  for 13 employees hired after the
November 29, 1990, enactment date of the Crime Control
Act were submitted an average  of  185  days after the
date  of hire rather than within the 14 days  required
by the  Code  of  Federal  Regulations (5 CFR 736) and
that background investigation  forms  for  3 employees
hired before November 29, 1990, were not submitted  in
accordance  with  the Act's due date for submission of
May 29, 1991.  For example:

   On February 6, 1995,  the  Bureau  hired  a  school
principal  but  did not renew the principal's contract
after  it  expired  on  July  20,  1996.  However,  on
February 10,  1997,  the  individual  was  hired  as a
school  counselor.  The  Area  Security Office did not
submit  this  individual's  background   investigation
forms  to  the  Office  of Personnel Management  until
September 18, 1997, approximately  2  1/2  years after
the initial hire date of February 6, 1995.

   On  August  8,  1995,  the  Bureau  hired  a school
janitor.  However, the background investigation  forms
were not submitted by the Area Security Office to  the
Office  of  Personnel  Management until June 17, 1997,
approximately 2 years after the employee was hired.

  On December 4, 1988, the  Bureau  hired an education
program administrator.  However, the  employee did not
receive a background investigation in accordance  with
the  Act's  May  29, 1991, deadline for submission.  A
completed background  investigation  was  not obtained
from the Office of Personnel Management until December
17,  1997,  approximately 6 1/2 years after the  Act's
deadline for submission.

On April 28,  1998,  the Bureau took action to improve
its controls over the  security program by issuing new
operating procedures that primarily addressed employee
position sensitivity designations  and the appointment
of   employees   to  positions  requiring   background
investigations.   If   implemented,  these  procedures
should improve the designation of position sensitivity
levels.  The procedures also made the employing agency
or  school  rather  than  the  Area  Security  Officer
responsible  for submitting  background  investigation
forms to the Office  of  Personnel  Management.  While
this  change  should  improve  the timeliness  of  the
submissions, the procedures do not  provide  assurance
that  all  forms  will  be  obtained and independently
verified before they are submitted  to  the  Office of
Personnel  Management.   Area  Security Officers  were
previously responsible for these duties.  In addition,
the  procedures  do  not  address  the  completion  of
background  investigations  for  individuals  who  are
employed.

Documenting Security Clearances

The Certification of Investigation[5]  requires that a
certification   be  permanently  maintained   in   the
employee's official  personnel  file  after  the  Area
Security Officer has made a final employee suitability
determination.   The  certification  evidences that an
employee received a background investigation  and  was
determined  to  be  suitable for employment by an Area
Security  Officer.   However,   we   found   that  the
certifications were not always (1) timely forwarded by
the  Area  Security  Office  to  the  Office of Indian
Education   Programs   Personnel  Office  and/or   (2)
included   in   the  education   employees'   official
personnel files by  the  Office  of  Indian  Education
Programs  Personnel  Office.   Specifically,  we found
that  the official personnel files for 16 (35 percent)
of 46 employees  reviewed  who  had  approved security
clearances did not contain the required certification.
For example:

-   On  November  9,  1997,  the  Office  of  Personnel
 Management  completed a background investigation for a
 special education  teacher.  On November 25, 1997, the
 Area   Security   Officer   reviewed   the   completed
 background  investigation   and  determined  that  the
 individual was suitable for employment.   However,  as
 of  April  27,  1998,  the  certification had not been
 included in the employee's official personnel file.

-  On  December  6,  1991,  the  Office   of  Personnel
 Management completed a background investigation  for a
 dormitory  assistant.   However, as of April 27, 1998,
 the  certification  had  not   been  included  in  the
 employee's official personnel file.   In addition, the
 Area  Security  Officer  could  not support  that  the
 completed background investigation  had  been reviewed
 or that the security clearance had been approved.

Without   the   certifications,  the  Bureau  has   no
documentation in  the  official  personnel  files that
employees are suitable for employment.

Checking Preemployment References

The  Bureau  of  Indian  Affairs  Manual (62 BIAM  11)
requires (1) employee selecting officials  to  conduct
telephone  reference  checks with at least three prior
employers and three personal  references before making
a  selection,  (2)  the  Office  of  Indian  Education
Programs Personnel Office to ensure that the selecting
official   has  made  and  documented  the   necessary
preemployment   reference  checks  and  contacted  the
Office of Personnel  Management  to  determine whether
any  previous  background  investigations   have  been
performed,   and   (3)   applications  without  proper
documentation to be returned to the selecting official
with  no action taken.  However,  we  found  that  the
Personnel Office, Office of Indian Education Programs,
did not  always  ensure that preemployment references,
including  prior employers  and  personal  references,
were checked and documented by the selecting officials
before selected applicants were hired.

Our  review  of   employee   personnel  files  for  67
education  employees  hired  after   April   6,  1990,
disclosed  that  45  files  (67  percent) did not have
documentation  of  completed  preemployment  reference
checks.  For example:

-   The personnel file for a school  teacher  hired  on
 March   3,   1997,  contained  no  evidence  that  any
 preemployment reference checks had been performed.  We
 also determined  that  the employee had not received a
 completed background investigation  as  of  April  27,
 1998.

-   The personnel file for a school bus driver hired on
 February  16,  1995,  contained  no  evidence  that  a
 preemployment  check  of  personal references had been
 performed.  We also determined  that  the employee had
 not  received a completed background investigation  as
 of April 27, 1998.

The Bureau  needs  to  use all the measures available,
including  preemployment  reference  checks,  to  help
ensure that  employees  who  have regular contact with
children are suitable for employment.

Recommendations

We recommend that the Assistant  Secretary  for Indian
Affairs:

1.  Direct  the  Central  Office  Security  Officer  to
 establish  policies  and  procedures  to  ensure  that
 education  employees  who  have not received completed
 background investigations are  identified and that all
 background investigation forms are  obtained, properly
 completed,  and submitted to the Office  of  Personnel
 Management.

2.   Direct the  Central  Office  Security  Officer  to
 establish  policies  and procedures to ensure that the
 Phoenix Area Security Office is notified by the Office
 of Indian Education Programs  Personnel  Office of all
 relevant personnel actions.

3.  Direct  the  Personnel  Officer,  Office of  Indian
 Education   Programs,  to  ensure  that  preemployment
 reference checks  are  completed timely and documented
 appropriately in accordance with the Bureau Manual and
 that Certification of Investigation documents received
 from the Area Security Office  are  timely included in
 the official personnel file.

Assistant  Secretary for Indian Affairs  Response  and
Office of Inspector General Reply

In the October  27, 1998, response (Appendix 1) to the
draft  report,  the  Assistant  Secretary  for  Indian
Affairs concurred  with  Recommendations  1, 2, and 3.
Based  on the response, we consider Recommendations  1
and 3 resolved  but not implemented and Recommendation
2   resolved   and  implemented.    Accordingly,   the
unimplemented recommendations  will be referred to the
Assistant Secretary for Policy,  Management and Budget
for tracking of implementation (see Appendix 2).

Additional Comments on Audit Report

In  its  response,  the  Bureau  provided   additional
information on the Prior Audit Coverage section of the
draft  report regarding the  June 27, 1997, Office  of
Personnel   Management   report   "Appraisal   of  the
Personnel  Security/Suitability Programs of the Bureau
of Indian Affairs  Central  Office  East/West" and the
October  24,  1997, report from the Office  of  Indian
Education Programs'  Acting  Personnel  Officer to the
Director   pertaining   to  the  status  of  education
employees' background investigations  as listed in the
payroll  system.   Accordingly,  we  have revised  the
Prior  Audit  Coverage  section  of  this  report   to
incorporate the Bureau's comments as appropriate.

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

Since  the  report's  recommendations  are  considered
resolved,   no  further  response  to  the  Office  of
Inspector General is required (see Appendix 2).

We appreciate  the  assistance  of Bureau personnel in
the conduct of our survey.

**FOOTNOTES**

[4]:The Personnel Office for the Office  of  Indian
Education  Programs indicated, on May 7, 1998, that
for these 38 individuals, there were  no reported
incidents of child abuse or molestation.

[5]:The  Certification  of  Investigation is prepared
by the Office of Personnel Management for all completed
background  investigations and is forwarded to the Area
Security Office.

APPENDIX 1
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APPENDIX 2

STATUS OF SURVEY REPORT RECOMMENDATIONS

-------------------------------------------------------
Finding/
Recommendation
Reference   Status        Action Required
-------------------------------------------------------

1 and 3    Resolved;     No further response to the
           not           Office of Inspector General is
           implemented.  required.  The recommendations
                          will be referred to the
                          Assistant Secretary for
                          Policy, Management and Budget
                          for tracking of
                          implementation.
-------------------------------------------------------
2       Implemented.  No further action is required.
-------------------------------------------------------




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