BIA Reconciliation Monitoring

Pursuant to a congressional request, GAO reviewed the Bureau of Indian Affairs' (BIA) efforts to improve its detection and handling of Indian trust fund losses. GAO found that: (1) BIA is liable for investing trust funds above the insured limits of $100,000; (2) the National Credit Union Administration will not cover losses in excess of the $100,000 insurance ceiling; (3) BIA has incurred losses on investments at non-accredited, uninsured credit unions as a result of fraud and criminal activity; (4) the Federal Deposit Insurance Corporation (FDIC) will not cover $121,500 in losses at FDIC-insured institutions; (5) BIA will request approximately $4 million in appropriations to cover credit union and bank losses in its next budget submission; and (6) BIA policies regarding notification and reimbursement to Indian account holders for losses due to BIA errors need to be strengthened because the policies do not address the need for loss prevention and detection systems, adequately instruct staff on how to resolve losses, address documentation requirements, and define whether losses should include interest that was earned but not credited to the appropriate account.