For immediate release: February 22, 1999

Contact: Stephanie Hanna 202/208-6416

STATUS OF THE DEPARTMENT OF THE INTERIOR'S
INDIAN TRUST FUND & ASSET MANAGEMENT IMPROVEMENTS

Secretary of the Interior Bruce Babbitt has made fixing Indian trust funds management systems one of his highest priorities. Currently the Secretary, through the Office of the Special Trustee for American Indians (OST), maintains approximately 1,700 accounts for 338 Tribal entities with assets in excess of $2.5 billion. Each year, more than $800 million pass through the Tribal trust funds system. The Department also maintains nearly 300,000 Individual Indian Monies (IIM) trust fund accounts through which over $300 million pass each year.

Over many decades, the Bureau of Indian Affairs' (BIA) record keeping and other trust fund systems have not always been what they should be. This is the first administration in 100 years to have attempted a serious correction of that deplorable situation. Administration after administration, and Congress after Congress simply have not allocated necessary resources to the complex job of managing Indian trust assets and trust funds.

Improvement of the Department's trust fund management responsibilities has involved acquiring and installing commercial trust and investment accounting systems for tribal trust funds and significantly better internal controls through yearly audits of financial operations, daily reconciliations of all trust related cash, and use of third party services for safekeeping of investment securities.

In a little over a year, the Department has cleaned up over 200,000 IIM (Individual Indian Money) account files, two-thirds of the total. By the end of 1999, it will have completed the installation of a commercial bank trust fund accounting system for all IIM and tribal accounts. The Department has awarded a contract to replace BIA's key trust management system with modern commercial systems for lease management, accounts receivable, land records and trust administration policies. Supporting these efforts is work on records management, training, policies and procedures and additional internal controls.

Trust fund systems will be modernized and centralized so that the trust data the Department uses is accurate and current. More importantly, the systems and information will be available to tribal managers and Indian trust fund owners all across the United States.

The Department has been increasing budgetary investment in trust reform. The FY 2000 budget seeks more than $100 million for the Office of the Special Trustee to continue improvements. All told, the Department will devote more than $150 million to trust reform.

The Department also has proposed legislation to resolve disputed tribal trust accounts and is working with tribal interests to develop a proposal that all parties can support. We also have proposed legislation to address one of the greatest obstacles to good trust fund practices: the highly fractionated ownership of Indian lands as a result of the failed allotment policies of the past.

At present, an implementation plan has been developed for selected portions of the Special Trustee's Strategic Plan, centered on 13 major projects. These projects were identified and designed to ensure data clean up and systems improvements, but also to address the longstanding deficiencies with regard to the support systems--records management, training, policy and procedures, and internal controls. The projects will include:

• Office of the Special Trustee Financial Data Clean up

• Bureau of Indian Affairs (BIA) Resources Data Clean up

• BIA Probate Backlog

• Office of Hearing & Appeals Probate Backlog

• BIA Appraisal Program

• Trust Funds Accounting System

• Trust Asset and Accounting Management System

• Legal Record Information System Enhancements

• Minerals Management Systems Re-engineering

• Records Management

• Policy and Procedures

• Training

• Internal Controls