Congress may have to prop up a $2 billion Indian trust fund after outside accountants finish auditing thousands of accounts that the Bureau of Indian Affairs has mismanaged, congressional investigators say.
Some of the accounts may be impossible to reconcile, since records are missing or incomplete, said Jeffrey Stein, civil audits director for the General Accounting Office."You've got accounts that go back 50, 60, 70 years that have never been reconciled," he told a House Government Operations subcommittee Monday. "No one really knows" how much is in them.
Congress may have to pay off tribes or individual Indians that the BIA has underpaid from the fund, while other account holders may owe the government money because they were paid too much, Stein said.
The trust fund includes income from Indian lands, payments of claims against the government and royalties from oil, gas and minerals.
Under pressure from Congress, the BIA this month hired the accounting firm Arthur Anderson and Co. to figure out exactly how much money is in the fund's more than 300,000 accounts.
"Basically this trust fund is a bank that doesn't know how much money it has," said the subcommittee chairman, Rep. Mike Synar, D-Okla.
Dozens of audits by the GAO and the Interior Department's inspector general have cited chronic problems with the BIA's handling of the fund, including an unreliable accounting system and a lack of security controls and competent personnel.
According to documents released Monday, the agency already estimates it owes more than $12.1 million to tribes and individuals. It said it is owed $4.8 million in overpayments it made to account holders.
The bureau will be reorganizing its management of the fund while the accountants conduct the audit, said Eddie Brown, assistant interior secretary for Indian affairs.
"It's like putting a large steam ship out to ocean. We had to stop it, turn it around and get it moving," he said.
The fund ballooned in value from about $1.1 billion in 1980 to more than $2 billion in 1990, primarily because of higher oil and gas royalties and settlements of water and land claims.
The 2,000 tribal accounts are valued at $1.5 billion. The rest of the money belongs to 300,000 accounts of individual Indians.
The mismanagement will continue, even after the accounts are reconciled, unless the BIA hires a team of competent accountants and overhauls its accounting system, said James Richards, the Interior Department's inspector general.
"What is Congress to do?" Synar asked Richards at one point.
"I'm not a congressman, but I'd be tearing my hair out, I think," Richards said.
He said the agency was a "multi-faceted monster . . . an organizational nightmare. The BIA will not change until there is some political consensus that it must change."