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New Bush budget aims to improve trust fund
TUESDAY, FEBRUARY 4, 2003

The Bush administration on Monday proposed historic increases to carry out its trust reform initiatives but, in a repeat of the current budget, little else in terms of Indian programs at the Department of Interior.

In describing the $481 million request, a $168 million increase, Secretary Gale Norton said the money will help the department meet its trust responsibilities to American Indians and Alaska Natives. "We inherited a history of inadequate management of trust accounts," she said at a press conference.

"We propose major investments to reverse that history," she added.

The majority of the new funds will go to the Office of Special Trustee (OST), a Congressionally-created entity that tribes and the department are seeking to dismantle but lack legislative authority to do so. In order to expand the OST's presence at the reservation level, its budget request is $275 million, an 82 percent increase of $124 million.

The rest will be applied to the Bureau of Indian Affairs (BIA), which is being reorganized along with the OST. Department officials said the effort will cost $15 million in fiscal year 2004.

"Indian trust reform presents a major challenge, one that has attracted our full attention and commitment," said Lynn Scarlett, the assistant secretary for budget, management and policy.

By law and by court order, the department is required conduct an historical accounting of funds owed to individual Indian and tribal beneficiaries. The budget requests $130 million, an increase of $112.5 million, to carry out this initiative.

Bert T. Edwards, the executive director of the Office of Historical Trust Accounting (OHTA), described how the money will be used for a five-year effort affecting the Individual Indian Money (IIM) trust, the subject of a class action suit in federal court. "We analyze transactions, not accounts," he said in an interview, referring to a statistical sampling and transaction-by-transaction methodology. Not until the fourth and fifth years of the project will the majority of beneficiaries see results, he said.

Of the $15 million for reorganization, Donna Erwin, acting special trustee, said a large portion will be used to hire new trust officers who will work at the regional and agency level. The department is currently analyzing where to place them in Indian Country, based on need.

"We want to get people out on the ground, right where the beneficiaries are," Erwin said in an interview, with Oklahoma, the Navajo Nation and the Palm Springs agency of California as the first targets. The trust officers will be "equivalent" to a BIA superintendent, she added.

The BIA's portion of the trust reform increase is $45 million. Most of the money won't be used to carry out any programs at the reservation level but instead to fix the agency's computer systems, which are still disconnected from the Internet more than a year after a federal court found security vulnerabilities that threaten $3.1 billion in Indian trust funds. The budget seeks $32 million to improve information technology.

To expand a consolidation program that encourages individual Indian beneficiaries to sell their land for a cash payment, the budget requests $13 million. But those who take part will not be included in the department's historical accounting proposal and their IIM account will be considered "closed." The BIA is still examining what areas of Indian Country will be targeted, officials said yesterday.

Overall, the BIA's proposed fiscal year 2004 budget is largely static at $2.3 billion. Seven schools, almost all of them in New Mexico, are targeted for repair and replacement with $131 million in funds. Acting assistant secretary Aurene Martin is visiting one of them, Wingate High School in Fort Wingate, New Mexico, today along with another school seeing new construction.

The Interior's budget, according to Norton, is $10.7 billion while the White House Office of Management and Budget (OMB) put it at $10.5 billion. With the temporary 2003 budget still in place, exact comparison of figures was not possible.

Relevant Documents:
BIA Budget | Departmental Offices [for OST] | Trust Budget Overview | DOI Budget [from OMB]

Department of Interior Fiscal Year 2004 Request:
Budget in Brief (DOI February 2003)