Indian Issues:

The Office of the Special Trustee Has Implemented Several Key Trust Reforms Required by the 1994 Act, but Important Decisions about Its Future Remain

GAO-07-104: Published: Dec 8, 2006. Publicly Released: Jan 8, 2007.

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The American Indian Trust Fund Management Reform Act of 1994 established the Office of the Special Trustee for American Indians (OST), within the Department of the Interior, to oversee the implementation of management reforms for funds--derived primarily from Interior's leasing of Indian lands--that Interior holds in trust for many Indian tribes and individuals. Specifically, the act directs that an integrated information system be developed that interfaces the trust fund accounting system with the land title records and asset management systems maintained by Interior's Bureau of Indian Affairs (BIA). GAO examined (1) OST's progress in implementing the trust fund management reforms and (2) the extent to which OST has used contractors in implementing these reforms. GAO reviewed OST's strategic plans and contracting documents and interviewed OST and BIA managers.

OST has implemented several key trust fund management reforms, but has not prepared a timetable for completing its remaining trust reform activities and a date for OST's termination, as required by the 1994 Act. OST estimates that almost all key reforms needed to develop an integrated trust management system and to provide improved trust services will be completed by November 2007. Specifically, OST implemented a new trust funds accounting system for processing trust account funds, and BIA and OST are currently validating data for the trust asset and accounting management system for managing Indian land title records and leases for land with recurring income. However, the Special Trustee estimates that data verification for leasing activities will not be completed for all Indian lands until December 2009. OST's most recent strategic plan, issued in 2003, did not include a timetable for implementing trust reforms or a date for OST's termination. The Special Trustee notes that many OST functions, including trust fund operations, trust records management, and appraisal services, need to be performed after reforms are completed. If OST is terminated, these responsibilities would have to be transferred to another Interior office. OST plans to reduce expenditures primarily by terminating contracts once trust reforms are completed. However, OST has not yet developed a workforce plan that reexamines the expenditures and staffing levels needed for trust fund operations once trust reforms are completed. OST has used contractors to perform many of its trust reform activities as a way to minimize the size of its permanent staff. In fiscal years 2004 and 2005, OST allocated $89.7 million, or nearly 21 percent, of its appropriated funds to contracting. About 66 percent of contracting dollars from these 2 fiscal years went to two firms. Over $31 million during this period went to the largest contractor, an Indian-owned 8(a) small business, by adding task orders through an existing contract. OST has primarily relied on Interior's National Business Center to award and manage contracts.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To improve congressional oversight of the trust reforms and ensure that trust fund accounting operations, once implemented, are economically staffed, the Secretary of the Interior should direct the Special Trustee to provide the Congress with a timetable for completing the trust fund management reforms.

    Agency Affected: Department of the Interior

    Status: Closed - Implemented

    Comments: In November 2008, the Office of the Special Trustee for American Indians issued its report on implementing its trust fund management reform initiatives. The report identified costs totaling $57.5 million and anticipated completion dates for the remaining initiatives.

    Recommendation: To improve congressional oversight of the trust reforms and ensure that trust fund accounting operations, once implemented, are economically staffed, the Secretary of the Interior should direct the Special Trustee to, in anticipation of completing the trust reforms, provide the Congress with a plan for future trust fund operations, including, if the decision is made to terminate OST, a determination of where these operations will reside.

    Agency Affected: Department of the Interior

    Status: Closed - Implemented

    Comments: In December 2009, the departments of the Interior and Justice reached a settlement with the plaintiffs in the long-running Cobell class-action lawsuit regarding the federal government's management and accounting of more than 300,000 individual American Indian and Alaska Native trust accounts. On December 9, 2009, Interior issued Secretarial Order No. 3292, which spelled out the framework for the establishment of a Secretarial Commission on Indian Trust Management and Reform that would develop recommendations on the future management and administration of trust assets. One of the Commission's duties is to make recommendations regarding the possible termination of the Office of the Special Trustee for American Indians. On June 20, 2011, the district court approved the $3.4 billion settlement. Following that approval, on July 8, 2011, Interior published a notice in the Federal Register announcing the establishment of the Commission in accordance with the secretarial order. The Commission has 2 years, until July 2013, to complete its duties. While the Commission is doing its work, the Office of the Special Trustee plans to maintain a "steady state" workforce at the agency's current staff levels, skills, and geographic and organization deployment until such time as changes are required by the Commission. This plan is reflected in the Office of the Special Trustee's 2012 Workforce Plan, issued in July 2011. In addition, the plan to maintain a "steady state" was communicated to Congress as part of the Office of the Special Trustee's 2012 Budget Justification.

    Recommendation: To improve congressional oversight of the trust reforms and ensure that trust fund accounting operations, once implemented, are economically staffed, the Secretary of the Interior should direct the Special Trustee to, as trust reforms are completed and contracts are terminated, develop a workforce plan that reexamines and proposes staffing level and funding needs.

    Agency Affected: Department of the Interior

    Status: Closed - Implemented

    Comments: In September 2007, the Office of the Special Trustee for American Indians issued its 2007 Workforce and Diversity Plan. This plan established workforce and staffing targets for each office and branch for the next few years.

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