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

Report No. 99-i-146

Title: Survey Report on Background Investigations for Navajo 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
NAVAJO AREA EDUCATION EMPLOYEES,
BUREAU OF INDIAN AFFAIRS

REPORT NO. 99-I-146
DECEMBER 1998




MEMORANDUM


             TO:  The Secretary

           FROM:  Eljay B. Bowron
                  Inspector General

SUBJECT SUMMARY:  Final Survey Report -
                  "Background Investigations for Navajo Area
                  Education Employees, Bureau of Indian
                  Affairs" (No. 99-i-146)

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  Navajo 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 Security  Officer  for  the  Navajo  Area  did  not  timely
initiate  and  properly  complete all background investigations
for  new  and  existing  education   employees.    Also,  three
employees  who  had  criminal histories involving child-related
offenses and were determined  to  be unsuitable to have contact
with  school-age  children  by the Area  Security  Office  were
employed by the Bureau at two  schools  and  an  agency office.
These  deficiencies  occurred because the Bureau did  not  have
effective processes, including  written procedures, to identify
all employees who needed background  investigations,  to obtain
the information needed for the proper and timely completion  of
background  investigations  and suitability determinations, and
to ensure that nonsuitability  determinations  of  the Security
Officer  were  adequately  addressed.  As a result, the  Bureau
could not be assured that the  27 individuals who were employed
without the requisite completed  and/or  adjudicated background
investigations  at  one  agency  office and 22  Bureau-operated
schools, which had a total student  enrollment  of  7,753, were
suitable  for  employment  at  these education facilities.   In
related  matters,  the Navajo Area  Security  Office  generally
completed   required   preemployment   reference   checks   and
fingerprint  verifications   and  properly  documented  in  the
personnel files finished background investigations as completed
and  approved.  However, the Central  Office  Security  Officer
made  certain  employee  suitability  determinations  based  on
incomplete information for education employees.

In its  response,  the  Bureau  agreed  with  the report's four
recommendations to address these issues. Based on the response,
we  considered  three recommendations resolved and  implemented
and one recommendation 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(B)-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 Navajo Area Education Employees,
          Bureau of Indian Affairs (No. 99-i-146)

INTRODUCTION

This  report  presents  the  results  of our survey of
background  investigations  for Navajo 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 Central Office
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.   The Office of
Personnel    Management    conducts   the   background
investigations and sends the  results  to  the Central
Office  Security  Officer  in  Washington,  D.C.,  for
review  and  adjudication.   Prior  to June 1996,  the
adjudications  were  performed  by  an  Area  Security
Officer located at the Navajo Area Office.

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  Central  Office  Security  Office   is
responsible    for    providing   oversight   of   and
coordination for Navajo Area background investigations
related  to  2,960 education   employees  at  5 agency
offices and 47 Bureau-operated schools and dormitories
that have a total student enrollment of 13,648.

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  2,960  education
employees for the Navajo Area listed in  the  Bureau's
payroll system at March 16, 1998.  The payroll  system
indicated  that  for   the  2,960 education employees,
investigations had been completed  for 2,253 employees
and had not been completed for 707 employees.   Of the
2,960   employees,   we   judgmentally   selected  116
employees   (4  percent)  for  review,  of  which   52
employees   were    recorded   as   having   completed
investigations and 64  employees  were recorded as not
having completed investigations.[4]   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 system of internal controls  related  to
the   Navajo   Area   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  June  1-19,  1998, and
included  visits to the Bureau's Navajo Area Personnel
Office in Gallup,  New  Mexico,  the  Office of Indian
Education  Programs  Personnel Office in  Albuquerque,
New Mexico, and the Eastern  Navajo  Agency  Education
Office in Crownpoint, New Mexico.

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  stated  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  at the time the employee is
hired.  The report did not require  a response, and at
the  time of our review, the Acting Personnel  Officer
stated  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, 459  were  employed  at  the  Navajo
     Area.

RESULTS OF SURVEY

We found that the Security Officer for the Navajo Area
did  not  timely  initiate  and properly complete  all
background  investigations  for   new   and   existing
education    employees.    Specifically,    background
investigations  had  not  been  initiated  for  11  (9
percent)  of  the  116  employees  in  our sample, and
background investigation forms had not been  submitted
in   a  timely  manner  to  the  Office  of  Personnel
Management  for  41  (39 percent) of the 105 remaining
employees.  While background  investigations  had been
completed  for  95  of the 105 employees, the Security
Officer  had not reviewed  and  adjudicated  completed
background  investigations  for 16 (17 percent) of the
95 employees.  We also found  that  three employees in
our  sample  who  had  criminal  histories   involving
child-related  offenses[5] and were determined  to  be
unsuitable to have contact with school-age children by
the Area Security  Office  were employed by the Bureau
at two schools and an agency  office. 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  who  needed
background investigations,  to  obtain the information
necessary  for  the  proper and timely  completion  of
background     investigations      and     suitability
determinations,  and  to  ensure  that  nonsuitability
determinations of the Security Officer were adequately
addressed.  In addition, the Bureau delayed  replacing
the former Area Security Officer, which further slowed
the  adjudication  process.   As  a result, the Bureau
could not be assured that the 27 individuals  who were
employed   without   the  requisite  completed  and/or
adjudicated background  investigations  at  one agency
office  and  22  Bureau-operated schools with a  total
student  enrollment   of   7,753   were  suitable  for
employment at these education facilities.   In related
matters,   we   found   that   required  preemployment
reference  checks and fingerprint  verifications  were
generally  completed   and  that  finished  background
investigations  were  properly   documented   in   the
personnel files as having been completed and approved.
However,  certain  employee suitability determinations
made by the Central  Office Security Officer were made
based  on  incomplete information  received  from  the
Office of Personnel Management.

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  Central  Office  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 Personnel Office.

Based  on  our  review  of  the security and personnel
files for the 116 employees,  we found that background
investigations  had  not  been  initiated  for  1  (11
percent) of 9 employees hired before the Crime Control
Act was enacted on November 29, 1990,  and  for  10 (9
percent)  of  107 employees who were hired on or after
that date. Examples  of  the  absence of initiation of
background investigations are as follows:

 On  October  23,  1995,  the Bureau  hired  a  speech
pathology teacher.  However,  we found that as of June
1,  1998, the background investigation  forms  on  the
teacher  had  not  been  submitted  to  the  Office of
Personnel Management.  In addition, the personnel  and
security   files   contained   no   evidence   that  a
preemployment reference check was completed.

 On  August  12,  1996,  the  Bureau  hired  a  school
counselor.  However, we found that as of June 1, 1998,
the  background  investigation  forms on the counselor
had  not  been  submitted to the Office  of  Personnel
Management.  In addition,  the  personnel and security
files  contained  no  evidence  that  a  preemployment
reference check had been completed.

We believe that the Bureau needs  to  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.   However,  we  found   that   schools  and
agencies  did  not always require employees to  submit
the background investigation  forms in a timely manner
and  that  the Area Personnel Office  did  not  always
monitor and  follow  up  on  background  investigation
forms which were returned to employees for completion.

Based  on  our review of security and personnel  files
for the 105  employees whose background investigations
had been initiated  or  completed,  we  found that the
required  background  investigation forms for  41  (39
percent) of the 105 employees  had  not been submitted
timely by the Area Personnel Office to  the  Office of
Personnel    Management.    Specifically,   background
investigation  forms  for 32 employees hired after the
November 29, 1990, enactment date of the Crime Control
Act were submitted an average  of  259 days  after the
date  of  hire rather than within the 14 days required
by the Code  of  Federal  Regulations (5 CFR 736), and
background investigation forms  for  9 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 August 2, 1996,  the  Bureau  hired a schoolteacher
who  submitted the background investigation  forms  to
the employing  school  prior  to  the  hire  date.  On
April 2,  1997,  the  Office  of  Personnel Management
determined  that  the forms were improperly  completed
and returned them to  the employee's agency office for
correction and return by April 23, 1997.  However, the
forms were not returned  by  the agency office until 1
year  later,  and a background investigation  was  not
initiated until  April  24,  1998, approximately 1 3/4
years after the teacher was hired.

On September 13, 1988, the Bureau  hired  a  dormitory
assistant   who   did   not   submit   the  background
investigation  forms  until  March  27,  1998.   As  a
result, the background investigation was not scheduled
with  the  Office of Personnel Management until  April
29, 1998, approximately  7  years  after the Act's May
29, 1991, due date 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.  We believe that if  these  procedures
are   implemented,   the   designation   of   position
sensitivity  levels  will be improved.  The procedures
also made the employing  agency  or  the school rather
than   the  Area  Personnel  Office  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.  The Area Personnel  Office was previously
responsible  for these functions.   In  addition,  the
procedures do not address the completion of background
investigations for individuals who are employed.


**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).

[4]:Our review disclosed that the status of background
investigations as recorded  in  the payroll system was not
accurate. Of the 116 employees selected for review,  background
investigations  had not been initiated for  11employees, and of
the 105 that had been initiated,  95  had  been completed.

[5]:The  Personnel  Office  for  the Office of Indian Education
Programs indicated, on June 19, 1998, that  for  these three
individuals,  there were no reported incidents of child abuse
or molestation.

Adjudicating Background Investigations

The  Code  of Federal Regulations (25 CFR 63) requires
that the Bureau  of Indian Affairs designate qualified
security  personnel   to  adjudicate  the  results  of
background investigations  performed  by the Office of
Personnel Management.  The Code further  requires that
the   adjudicating   official  review  the  background
investigations to determine the character, reputation,
and trustworthiness of  the individuals.  In addition,
the  Departmental  Manual  (441   DM   3.3B)  requires
security   officers   to   ensure   the   review   and
adjudication  of  background investigations.  However,
we   found  that  background   investigation   results
received  from the Office of Personnel Management were
not adjudicated  timely principally because the Bureau
delayed replacing  the  former  Area Security Officer,
who left the Bureau on June 21, 1996, by 22 months.

Our review disclosed that adjudications  had  not been
performed  for  16  (17  percent)  of the 95 employees
reviewed for whom background investigations  had  been
completed.  For example:

-  On  August  19,  1996,  the  Bureau hired a dormitory
  assistant.  A background investigation  was  initiated
  with  the  Office  of  Personnel Management on May  6,
  1997.   However,  we  found   that  the  investigation
  results  received  on  June  13, 1997,  had  not  been
  adjudicated as of June 1, 1998,  almost  2 years after
  the assistant was hired.

-  On  November  8,  1996,  the  Bureau  hired  a school
  teacher.   A  background  investigation  was initiated
  with  the  Office of Personnel Management on  May  29,
  1997.   However,   we  found  that  the  investigation
  results  received on  June  30,  1997,  had  not  been
  adjudicated  as  of  June 1, 1998, approximately 1 1/2
  years after the teacher was hired.

  On  April  28, 1998, the  Bureau  assigned  background
  investigation  reviews  and suitability determinations
  for the Navajo Area to the  Albuquerque  Area Security
  Officer. We believe that this action will  improve the
  adjudication  of  background  investigations  for  the
  Navajo Area.

Implementing Suitability Determinations

The  Departmental  Manual  (441  DM  6.1)  establishes
standards for employee suitability determinations  for
all    education   employee   positions   within   the
Department.    The   Manual  states  that  suitability
determinations should  be  based  on considerations of
but not be limited to (1) delinquency or misconduct in
prior  employment; (2) criminal, dishonest,  infamous,
or   notoriously    disgraceful   conduct;   and   (3)
intentional false statement  or  deception or fraud in
examination or appointment.  In addition,  the Code of
Federal  Regulations  (25  CFR  63)  states  that   an
employer may deny employment to or dismiss an employee
when  an  individual  has been convicted of an offense
involving a child victim,  a  sex  crime,  or  a  drug
felony.

We  found  that  3  (3  percent)  of  the  105 sampled
employees for whom background investigations  had been
initiated and/or completed had been determined  by the
former  Area  Security  Officer  to  be unsuitable for
having   contact   with  or  control  over  school-age
children.  However,  we  determined that as of June 1,
1998, the three individuals were still employed at two
Bureau-operated schools and  one  agency office.  This
occurred because the former Navajo  Area  Director and
Personnel Officer did not ensure compliance  with  the
education   employee   suitability   standards.    For
example:

-  On  August  8,  1994,  the  Bureau hired a substitute
  teacher.    An   employee   background   investigation
  completed  by  the Office of Personnel  Management  on
  November 18, 1994,  disclosed  that  the  employee had
  been  (1) charged with child neglect in May  1994  and
  (2) terminated  from  recent  employment  for  obscene
  behavior.   In a February 27, 1995, memorandum to  the
  Navajo  Area  Personnel   Officer,   the  former  Area
  Security   Officer   stated  that  the  employee   had
  falsified  the  employment  application  and  security
  forms and recommended that the employee be terminated.
  However, the Area  Personnel Officer, in a February 27
  response to the former  Area  Security Officer, stated
  that  the  Merit Systems Protection  Board  would  not
  uphold a termination  action against the employee.  On
  June  1,  1998, the Central  Office  Security  Officer
  stated  that   she   had  also  reviewed  the  adverse
  suitability determination  made  by  the  former  Area
  Security  Officer  and  recommended to the former Area
  Director that the employee  be  terminated.   We found
  that  the  employee was still employed as a substitute
  teacher as of June 1, 1998.

-  On  May 23, 1984,  the  Bureau  hired  an  elementary
  schoolteacher.   However,  a  background investigation
  was not initiated for the employee  until September 7,
  1994.  The background investigation was  completed  by
  the  Office  of  Personnel  Management  on October 31,
  1994,  and disclosed that the employee, in  1993,  (1)
  had been dismissed from his job for child abuse from a
  Bureau-operated  school  and (2) had been arrested and
  charged  with  assault and battery.   In  addition,  a
  followup questionnaire  completed  by  the employee on
  April 3, 1995, disclosed that the employee admitted to
  falsifying  the employment application and  background
  investigation forms.  The former Area Security Officer
  had denied a security clearance for the employee.  The
  Bureau's Central  Office  Security Officer stated that
  in  1996  she  had  reviewed the  adverse  suitability
  determination performed  by  the  former Area Security
  Officer  and recommended to the former  Area  Director
  that the employee  be  terminated.   We found that the
  employee  was  still employed as an elementary  school
  teacher as of June 1, 1998.

- On April 10, 1995,  the  Bureau hired a janitor for an
  agency office.  A preemployment reference check of two
  previous employers was performed  but  did not include
  any verification of personal references.  A background
  investigation  for the employee was completed  by  the
  Office of Personnel  Management  on July 7, 1995.  The
  investigation disclosed that the employee  had  (1)  a
  criminal history which included providing alcohol to a
  minor  in  1991 and a burglary in 1986 and (2) serious
  absenteeism  problems  with two previous employers who
  had not been contacted as  part  of  the preemployment
  reference  check.   As  a result of the investigation,
  the former Area Security  Officer  did  not  approve a
  security  clearance  for  the employee and recommended
  that the employee be terminated.   We  found  that the
  employee was still employed as a janitor as of June 1,
  1998.

We   believe   that   a  system  to  ensure  that  the
recommendations of Security  Officers  are  adequately
addressed  will  help  preclude those individuals  who
have   criminal  histories   involving   child-related
offenses from being hired by Bureau schools.

Determining Suitability

We found  that the Central Office Security Officer did
not  have  procedures   for  determining  whether  the
results   of   a  background  investigation   provided
sufficient information  on which to base a suitability
determination.   Although   we   identified   only   1
determination   in   our   review  of  79  suitability
determinations   that   we  believe   was   based   on
insufficient responses from  the  Office  of Personnel
Management,  we  are reporting this matter because  of
the sensitivity of  the  issue.   We  found  that  the
Security   Officer,   because   no   procedures   were
established,  made employee suitability determinations
based on the information  provided  by  the  Office of
Personnel  Management,  even  if  the information  was
incomplete.   For example, in the instance  we  noted,
the Case Closing Transmittal concerning the background
investigation for an education aide indicated that the
Office of Personnel Management was unable to verify 10
of 11 prior employer  references  and one of the three
personal references and that two local law enforcement
agencies  either  had not been contacted  or  had  not
responded  to  the Office  of  Personnel  Management's
request for a check of criminal history.  Although the
information  provided   in  the  Office  of  Personnel
Management's   Case  Closing   Transmittal   was   not
complete,  the Central  Office  Security  Officer,  on
January  8,  1997,   made   a   favorable  suitability
determination for the employee.  However, there was no
written  justification  for the determination  because
there are no standards requiring  Security Officers to
document   the   basis   for   favorable   suitability
determinations.

Other Issues

The  Departmental  Manual (441 DM 3.3B) requires  that
Security  Officers  ensure   that   all   Departmental
employees  are  appropriately  briefed concerning  the
sensitivity level of their positions.   To comply with
the  Manual, the Bureau developed a briefing  document
(Certification   of   Briefing   Memorandum)  that  is
required to be issued to all education  employees  who
have completed background investigations.  However, we
found   that  after  June  1996,  the  Central  Office
Security Officer had not issued any briefing documents
to Navajo  Area  education  employees.   The  Security
Officer stated that briefing documents were not issued
because  of  the  large case load of employees in  the
Navajo Area.  In addition, the Security Officer stated
that briefing documents  would  be  delivered  to  the
Navajo  Area  employing schools and/or agencies during
the 1998 school semester.

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;   that
  employee  suitability determinations are completed for
  all completed  background investigations; 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  polices  and procedures to ensure that  the
  Navajo Area Security  Office  is  notified by the Area
  Personnel Office of all relevant personnel actions and
  that a clear definition has been developed  as  to the
  quantity  and  type of information needed to determine
  an employee's suitability for employment.

3.   Direct the Director,  Office  of  Indian  Education
  Programs,    to   review   the   adverse   suitability
  determinations  for  the  three  individuals cited and
  take the appropriate personnel action.

4.  Establish a process for the Navajo  Area  to  ensure
  that   suitability   determinations   are   adequately
  reviewed and implemented.

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, 3, and 4.
Based on the response,  we  consider  Recommendation 1
resolved but not implemented and Recommendations 2, 3,
and   4   resolved   and   implemented.   Accordingly,
Recommendation  1 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
Bureau  also  provided  comments  on  actions taken to
improve the adjudication of background investigations.

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.

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APPENDIX 2

STATUS OF SURVEY REPORT RECOMMENDATIONS

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

    1       Resolved;     No further response to the
            not           Office of Inspector General is
            implemented.  required.  The recommendation
                          will be referred to the
                          Assistant Secretary for
                          Policy, Management and Budget
                          for tracking of
                          implementation.
--------------------------------------------------------
2, 3, and   Implemented.  No further action is required.
4
--------------------------------------------------------




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