Interior's accounting 'unreliable'
- By Megan Lisagor
- Apr 24, 2002
The Interior Department's accounting system isn't up to the task of trust reform, according to an internal memo.
"The reason for this is the database is plagued by missing records, unreliable information, severe security deficiencies and unverifiable audit trails," said John Miller, deputy special trustee for policy, in a draft memorandum to Special Trustee Thomas Slonaker received April 19.
Interior has held American Indian-owned lands in trust for more than 100 years, leasing the properties and processing revenues earned from farming and drilling.
"The major problem is that after five years, we do not have a system that can fulfill the fiduciary responsibility now or in the future, much less account for the past," Miller said.
A group of American Indians filed a class action lawsuit in 1996, claiming that poor bookkeeping has made it impossible for landowners and their descendants to determine their account balances. The plaintiffs estimate that lost or missing funds total as much as $10 billion.
In 1999, U.S. District Judge Royce Lamberth directed the department to initiate a historical accounting project. Secretary Gale Norton and Assistant Secretary for Indian Affairs Neal McCaleb, who took office in 2001, face five contempt charges that include failure to comply with that order. Their trial has ended and a decision is pending.
"If the litigation were settled tomorrow or the judge ruled that for accounting purposes...DOI could presume that the current balances are accurate, there is no system in place to accurately maintain the records to the level required of a fiduciary," Miller said. "In other words, the 'bleeding' would continue."
In December 2001, Lamberth ordered Interior to disconnect from the Internet to protect data maintained under its Trust Asset and Accounting Management System.
Miller recommended Interior preserve old records and design a new trust asset management system.
"Since there is now no uniformity, the development should be driven by existing software and expediency," he said. "Then people must be required to use it."