BIA agency lacks accounting for millions in trust

Cobell | Trust

Tuesday, September 25, 2007

Despite handling over $30 million in trust payments a year, the Bureau of Indian Affairs agency in Palm Springs, California, has no accounting or legal staff, according to a new audit.

In 1992, the Interior Department's Inspector General went to the agency and uncovered trust management problems. Members of the Agua Caliente Band of Cahuilla Indians were losing millions of dollars due to inadequate oversight and enforcement, the report said at the time.

Fifteen years later, the picture doesn't appear to have changed much, but the stakes are higher now as annual lease payments in lucrative Palm Springs exceed $30 million. The average Individual Indian Money (IIM) account there has a balance of over $1 million, according to the new audit.

Despite the money involved, the BIA has failed to implement the reforms suggested back in 1992, the Inspector General said. Staff levels have dropped by a third since the 1990s and the agency has no way of verifying whether the payments coming in are accurate.

"According to an internal agency audit, the agency receives lease payments of about $30 million annually, but the agency has no accounting staff to verify the accuracy of payments," the Inspector General audit stated.

As a result, the BIA can't assure landowners that they are receiving the right amount of money at the right time. In one example, the Inspector General couldn't find evidence of more than $250,000 owed to tribal members for use of their land for condo units.

In other example, a $74,346 annual rent payment was 18 days late to the BIA. But the Palm Springs agency never assessed a late fee or interest on the person who owed the money.

BIA employees blamed the situation on a lack of an adequate computer system. They said the Trust Asset Accounting and Management System, despite its name, "is not an accounting system and cannot be used to determine the amount due for leases," the Inspector General audit stated.

In order to conduct lease accounting and billing activities, "manual intervention" is required and agency employees must "work around" TAAMS, according to the Inspector General. "TAAMS does not accrue late fees and interest based on the specific requirements of each lease agreement," the audit said.

Besides lack of staff, the audit said the agency lacks legal expertise. That can be traced to a breakdown in the relationship between the BIA superintendent and the field solicitor who was assigned to the area.

Robert McCarthy, the solicitor, was forced from office after he started raising concerns about trust management issues at the agency. The department is now trying to fire him as he prepares to testify for the Cobell plaintiffs in the upcoming historical accounting trial, which is scheduled to start on October 10 in Washington, D.C.

"Interior needs to start listening to and stop shooting at its messengers," said Jeff Ruch, the executive director of Public Employees for Environmental Responsibility, a group that is defending McCarthy as a "whistleblower."

PEER released a draft copy of the Palm Springs audit yesterday. The group said it had been provided to members and leaders of the Agua Caliente Band.

The report was dated July 20, just a couple of weeks before McCarthy was told he was going to be fired for allegedly disclosing confidential Indian trust data to the media. McCarthy was one of the sources for an April 2007 Gannett News Service story about millions of dollars in lease payments being denied to Agua Caliente landowners.

Inspector General Audit:
Indian Trust Investigative Review (July 2007)

Google Map:
Agua Caliente Lands in Palm Springs

Relevant Links:
Indian Trust: Cobell v. Kempthorne - http://www.indiantrust.com
Cobell v. Norton, Department of Justice - http://www.usdoj.gov/civil/cases/cobell/index.htm