Financial Management

Although the Interior Department has brought to a close its project to reconcile the Indian trust funds, tribal accounts were never fully reconciled because of missing records and the lack of an audit trail in Interior's automated accounting systems. In addition, the 1996 report package that Interior provided to each tribe on the reconciliation results did not explain or describe the many changes in reconciliation scope and methodologies or the procedures that had been planned but were not implemented. As a result, the limitations of the reconciliation were not evident. Also, because of cost considerations and the potential for missing records, individual Indian trust fund accounts were not included in the reconciliation project. Indian tribes have raised concerns about the scope and the results of the reconciliation process. The vast majority of tribes have yet to decide whether to accept or dispute their account balances. If Interior cannot resolve the tribes' concerns, a legislated settlement process could be used to settle disputes over account balances. Interior has taken steps during the past three years to correct these long-standing problems with the accuracy of the Indian trust fund accounts, but these efforts will take years to complete. Moreover, the existing trust fund management and accounting systems cannot ensure accurate trust fund accounting and asset management. The appointment of a Special Trustee for American Indians was an important step in establishing high-level leadership at Interior for Indian trust fund management.