WASHINGTON -- Under pressure to find more than $3 billion in missing or unaccounted-for money in Indian trust funds, Interior Secretary Bruce Babbitt unveiled a new $60 million computer accounting system Friday.
"This is the beginning of a new way of doing business," Babbitt said at a news conference.The trust funds were set up in the 19th century when it was national policy to break up reservations and parcel out tracts of 80 or 160 acres to individual Indians.
Some of those lands were rich in timber, minerals or agricultural products. The government, acting as a trustee for the Indian owners, negotiated with individuals and companies seeking to buy or lease the lands or their mineral rights.
The government would set prices for tree sales or mining or farm leases and then collect the money on behalf of the Indian property owners. The government was supposed to manage this task like a trust officer at a local bank, always acting on behalf of the landholder.
A 1998 Interior Department reports showed there are now more than 340,000 individual Indian trust fund accounts, and more than $300 million passes through the accounts each year.
But more than 123,000 accounts lack a Social Security number or taxpayer ID number, and at least 46,000 accounts are for Indians whose whereabouts are unknown. In addition, Indian account holders generally find it impossible to check on the value of their holdings. Often they don't receive regular account statements, and typically they are required to get permission from Interior's Bureau of Indian Affairs to lease their lands.
Meanwhile, several billion dollars may have been lost over the years in undervalued and uncollected lease payments and in destroyed or lost checks for Indian beneficiaries. A 1992 congressional report concluded that "the Indian trust fund is equivalent to a bank that doesn't know how much money it has."
The new computer system is supposed to link the accounts held by the Indians with Interior's land records and to give account holders a way to check their funds at any time. The system is scheduled to be installed first in the bureau's Billings, Mont., regional office next month and to be fully operating throughout BIA by the end of 2000.
Although Babbitt has promised that the system will succeed, critics have charged the project has little chance of working effectively.
A report by the General Accounting Office, a key investigative arm of Congress, concluded that the Interior Department could not "realistically" expect its system to work. The report, released April 28, said Interior officials had failed to analyze whether the new computer project could handle trust fund information, which requires linking data from several different systems.
The report said the department is making the same mistakes as other agencies that have been forced to spend millions of dollars in cost overruns on computer projects.