Status Report to the Court

**Number Fourteen**

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# For the Period

**April 1, 2003 through June 30, 2003**

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## August 1, 2003

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**TABLE OF CONTENTS**

[**I.** **INTRODUCTION** 2](#__RefHeading___Toc47507393)

[**II.** **SECRETARY GALE NORTON'S OBSERVATIONS**
4](#__RefHeading___Toc47507394)

[**A.** **INFORMATION TECHNOLOGY** 9](#__RefHeading___Toc47507395)

[**B.** **CADASTRAL SURVEY** 23](#__RefHeading___Toc47507396)

[**C.** **MINERALS MANAGEMENT SERVICE** 27](#__RefHeading___Toc47507397)

[**D.** **WORKFORCE PLANNING** 30](#__RefHeading___Toc47507398)

[**E.** **OFFICE OF HISTORICAL TRUST ACCOUNTING**
33](#__RefHeading___Toc47507399)

[**III.** **OFFICE OF INDIAN TRUST TRANSITION**
39](#__RefHeading___Toc47507400)

[**IV.** **OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS (OST)**
40](#__RefHeading___Toc47507401)

[**A.** **TRUST BUSINESS MODELING** 44](#__RefHeading___Toc47507402)

[**B.** **COMPREHENSIVE TRUST MANAGEMENT PLAN**
47](#__RefHeading___Toc47507403)

[**C.** **TRUST DATA QUALITY AND INTEGRITY**
50](#__RefHeading___Toc47507404)

[**D.** **CURRENT ACCOUNTING ACTIVITIES**
56](#__RefHeading___Toc47507405)

[**E.** **RECORDS MANAGEMENT** 64](#__RefHeading___Toc47507406)

[**F.** **TRAINING** 68](#__RefHeading___Toc47507407)

[**G. RISK MANAGEMENT AND INTERNAL CONTROL**
70](#__RefHeading___Toc47507408)

[**H. APPRAISAL** 74](#__RefHeading___Toc47507409)

[**I.** **TRUST REGULATIONS, POLICIES AND PROCEDURES**
77](#__RefHeading___Toc47507410)

[**V.** **BUREAU OF INDIAN AFFAIRS** 81](#__RefHeading___Toc47507411)

[**A.** **FRACTIONATION** 81](#__RefHeading___Toc47507412)

[**B.** **PROBATE** 84](#__RefHeading___Toc47507413)

[**ATTACHMENTS** 88](#__RefHeading___Toc47507414)

[]{#__RefHeading___Toc47507393 .anchor}**I. INTRODUCTION**

This *Status Report to the Court Number Fourteen (Report)* represents
the period of April 1, 2003, through June 30, 2003. The *Report* is
provided to keep the Court informed of the progress of the Department of
the Interior's (Interior) trust reform and improvement and its progress
toward conducting a historical accounting of individual Indian monies
held in trust by the United States.[^1]

During this reporting period, a new Special Trustee was officially sworn
in to become the third Special Trustee since the American Indian Trust
Fund Management Reform Act of 1994 was enacted by Congress. The new
Special Trustee was formerly the Director of the Office of Indian Trust
Transition, and has extensive experience with the financial industry and
the Indian trust.

Other accomplishments during this reporting period include:

-   development of decision trees to provide employees an efficient way
    of determining whether or not they are creating or using fiduciary
    trust records;

-   implementation of a process for determining survey priorities that
    was developed by the Bureau of Land Management for use by the Bureau
    of Indian Affairs (BIA);

-   approval and initial implementation of the reorganization of BIA and
    the Office of the Special Trustee for American Indians (OST);

-   emphasis placed on audit and accountability through the creation of
    the Office of Trust Review and Audit (OTRA) in OST.

OTRA is expected to increase the audits and reviews of self-governance
tribes as well as respond to questions and concerns from individual
Indian trust beneficiaries. In addition, OTRA will develop a rating
system for all Interior offices that handle fiduciary trust activities.

Several of the reports discuss the reorganization and reengineering
efforts of Interior. All Interior Departmental Manual changes for the
reorganization were completed during this reporting period. Progress is
also reported for both of these initiatives as a result of briefings
that have been held to inform employees and tribal beneficiaries of the
organizational changes and to gather information useful for the "To-Be"
modeling effort. These projects remain on schedule and full
implementation is expected to occur during the next two fiscal years.

The Court should note changes in the title and content of two of the
sections in this and previous *Status Reports to the Court*. First, the
Trust Data Quality and Integrity (DQ&I) section comes from what was
formerly called the BIA Data-Cleanup Project, and an effort to define
and track the critical data elements necessary to the management of the
fiduciary Indian trust. The original BIA Data-Cleanup Project was
primarily focused on correcting data in the individual Indian account
information and title information. DQ&I staff and contractors are
working with the reorganization and reengineering projects to begin
converting BIA agencies to the new trust business processes and
organization, and to ensure that data contained at the agencies is
correct and the data quality is maintained.

The second change, previously reported as OST Data-Cleanup, is the
Current Accounting Activities section. The Current Accounting Activities
is a compendium of not only the administrative cleanup project that was
completed by creating a file containing information for each account
holder, but also reports on the trust funds accounting system, the
whereabouts unknown project, special deposit accounts project, small
dollar accounts issues and residual accounting discrepancies that remain
from prior to the conversion to the new accounting system.

This *Report* is prepared in the same format as the 8^th^ through the
13^th^ *Reports* with each manager reporting on accomplishments during
the reporting period, current activities, and obstacles and delays
affecting completion of their projects. This *Report* is compiled by OST
and is intended to provide the Court with comprehensive information
regarding the progress of trust reform, improvement and accountability.

[]{#__RefHeading___Toc47507394 .anchor}**II. SECRETARY GALE NORTON'S
OBSERVATIONS**

**[Overview]{.underline}**

Since our last status report, the Department of the Interior continued
to design and implement long-term comprehensive reform. The House of
Representatives and the Senate Committee on Appropriations both acted on
Interior's FY 2004 appropriations bill. The Trial 1.5 and the recent
Internet shutdown by the court have focused much of the attention of
Interior's senior trust management on these particular challenges. Some
of the activities described below occurred during the time this *Report*
was being prepared but after the reporting period. These developments
are believed to have sufficient importance that the Court should receive
this information prior to the next reporting period.

**[Congressional Action]{.underline}**

As I have previously informed the Court, on February 3, 2003, the
Administration's budget was submitted to Congress during a time when
funding for most domestic programs was restrained. Nevertheless, the
Indian trust budget submission was the largest ever requested. The
overall budget request for Interior for FY 2004 is approximately 3.3%
over the FY 2003 request; our FY 2004 Indian trust budget request is 44%
higher than our request for FY 2003. Nearly one-half of the \$344
million increase in Interior's FY 2004 budget is proposed for funding
trust reform initiatives. This high level of funding demonstrates our
commitment to trust reform.

Subsequent to the Administration's budget submission, there was a
considerable amount of action both in the House and Senate appropriating
and authorizing committees on the issue of Indian trust funds.

**[House Action]{.underline}**

On July 10, 2003, while this status report was being compiled, the House
Appropriations Committee reported H.R. 2691 to the full House with House
Report 108-195. The overall Federal trust programs funding in H.R. 2691
was \$219,641,000, which was \$55,000,000 below the budget request but
\$79,282,000 above the FY 2003 enacted level. The Committee included
\$75,000,000 for historical accounting, a decrease of \$55,000,000 from
the budget request but an increase of \$65,844,000 above the FY 2003
enacted level. The House also funded Indian Land Consolidation at
\$20,980,000, the same as the budget request and \$13,052,000 above the
FY 2003 enacted level. These funding levels were included, without
amendment, in H.R. 2691 as passed by the House on July 18, 2003.

House Report 108-195 also noted the Committee's approval of Interior's
reorganization of the trust functions for the Bureau of Indian Affairs
and the Office of the Special Trustee for American Indians. The report
"urges Interior to move as expeditiously as possible in implementing
this reorganization so that trust reform can continue to move forward."

Section 137 of H.R. 2691, as reported, would have required the Secretary
to conduct a historical accounting in a manner similar to that proposed
by Interior in its January 6, 2003, Plan. It also provided the Secretary
with authority to resolve accounting claims through a voluntary
settlement process. The House Report noted:

> After six years of litigation in the *Cobell v. Norton* class action
> law suit, the Committee has appropriated hundreds of millions of
> dollars in litigation related activities that could have been used to
> fund health and education programs in Indian country or directed
> towards reforming the outdated trust systems in Interior. The
> Committee still faces the likelihood of appropriating hundreds of
> millions of dollars, or possibly billions, for a historical
> accounting. The result of this process will likely provide more and
> more money to accountants and lawyers with little benefit for the
> individual account holders. To date, not a single dollar has reached
> the Indian people.

While H.R. 2691 was under consideration on the House floor,
Representative Richard Pombo, Chairman of the House Resources Committee,
raised a point of order with regard to section 137, stating that the
section sought to impose new duties, and, as such, constituted
legislation on an appropriations bill. Representative Pombo's objection
was sustained, and the provisions were removed from the bill.

Prior to the floor objection, Chairman Pombo held a hearing on July 9,
2003, before the full Committee on Resources, the subject of which was
"Can a Process be Developed to Settle Matters Relating to the Indian
Trust Fund Lawsuit?" Associate Deputy Secretary James Cason testified
for Interior at this hearing. (A copy of his written testimony and
Section 137 of H.R. 2691 are attached to this report for the convenience
of the Court.) The Chairman expressed his intent at that hearing to
raise the point of order with regard to section 137. He also emphasized
that the Committee on Resources would take up the matter and move
forward with settlement legislation.

**[Senate Action]{.underline}**

On July 10, 2003, the Senate Appropriations Committee reported S. 1391
to the full Senate with Senate Report 108-89. The Senate bill included
the same funding levels for the Federal Trust Programs as passed by the
House.

The Senate Report states that, due to the ongoing litigation and
uncertainty as to whether Interior's historical accounting plan will be
fully accepted by the Court, the Committee did not fund the entire
request. The Report also noted that because past accounting efforts have
illustrated few mistakes within the individual accounts reconciled, it
is the Committee's belief that the funding provided "will allow Interior
to utilize a statistical sampling model sufficient to further illustrate
Interior's performance in managing trust accounts." The Committee also
made clear that its reduction below the request level should not be
mistaken for an endorsement of the plaintiffs' accounting model or its
assumptions.

S. 1391, as with previous years' appropriations, includes a provision
stating that "notwithstanding any other provision of law, the Secretary
shall not be required to provide a quarterly statement of performance
for any Indian trust account that has not had activity for at least 18
months and has a balance of \$1.00 or less."

In addition, S. 1391 includes \$22,980,000 for Indian Land
Consolidation, an increase of \$15,052,000 over the FY 2003 enacted
level, and \$2,000,000 over the budget request. The Senate Report notes
that consolidating fractionated interests "is one of the most effective
means of ameliorating a problem that grows worse every year." As of the
writing of this section of the Report, the full Senate has not taken
action on S. 1391.

During this reporting period, the Senate Committee on Indian Affairs
indicated its interest in resolving *Cobell v. Norton*. On June 13,
2003, Chairman Campbell and Ranking Minority Member Inouye sent a letter
to Tribal leaders asking for their help in tackling three major tasks
that would improve the management of Indian trust:

-   Stop the continuing fractionation of Indian lands and focus on the
    core problems of Indian probate by swiftly enacting legal reforms to
    the Indian probate statute.

-   Begin an intense effort to reconsolidate the Indian land base by
    buying small parcels of fractionated land and returning them to
    tribal ownership.

-   Explore \"creative, equitable, and expedient ways to settle the
    *Cobell v. Norton* lawsuit."

The Senate Committee on Indian Affairs scheduled a July 30, 2003,
hearing to discuss methodologies for settling the *Cobell* lawsuit.

**[Organizational Leadership]{.underline}**

During this reporting period, Ross Swimmer was officially sworn in as
the new Special Trustee for American Indians. Aurene Martin continues as
Acting Assistant Secretary-Indian Affairs, and no permanent nominee has
yet been named. They are building a closer working relationship among
the Office of the Special Trustee, the Bureau of Indian Affairs, and
other Interior agencies in the advancement of trust improvements.

**[BIA and OST Reorganization]{.underline}**

In the Department of the Interior, the action necessary to change
organizational structures is to amend the Departmental Manual. On April
21, 2003, changes to the Departmental Manual affecting reorganization of
the BIA and the OST were finalized. These changes reflect new
organizational charts and delineate new roles and responsibilities.
Implementation requires further personnel actions to move people into
new positions. In addition, new hiring has begun to increase the number
of fiduciary trust employees at local agencies and regional sites.

BIA and OST have been conducting informational sessions throughout
Indian country on the reorganization, and these continue at the time of
the writing of this report. BIA has engaged the services of a contractor
to assist in change management support to help employees understand the
changes that must occur as they relate to trust management.

Opposition to the reorganization has been expressed by some Indian
leaders and employees, but there has thus far been no serious attempt to
block reorganization through the Congressional appropriations process. I
anticipate that, despite a good strategy for informing employees about
reorganization and for answering their questions, Interior will continue
to experience the employee concerns and complaints that typically arise
with the uncertainties of any reorganization. I also anticipate that,
despite our extensive consultation process, some tribal leaders will
continue to be concerned about how a stronger structure for trust
oversight will affect day-to-day tribal operations.

**[Court Action]{.underline}**

During this reporting period, Trial 1.5 was held. Senior managers spent
much of their time preparing for and testifying at the trial. Time and
attention was also focused on the more recent shutdown of e-mail and
Internet access for the immediate Office of the Secretary, the Executive
Secretariat, Office of Historical Trust Accounting, the Office of
Congressional and Legislative Affairs, and parts of the National
Business Center, Minerals Management Service, and the Bureau of Land
Management.

As the Court is aware, during the compilation of this report, the D.C.
Circuit Court ruled on the government's appeal of the Court's September
2002 ruling. There are also additional aspects of the case pending at
the Court of Appeals.

**[Reengineering Interior's Trust Business Processes]{.underline}**

Interior has reached the stage of its reengineering process known as the
"To-Be" project. A team from all Interior bureaus and offices with trust
management responsibilities has been meeting since April 2003 to design
how trust business should be conducted in the future. This project is
described in more detail elsewhere in this report. While this process is
laborious and time-consuming, I continue to believe it will yield the
best long-term improvements.

**[Records Management]{.underline}**

Interior has also made progress in records management during this
reporting period, as described in this status report.

However, I was very concerned during this reporting period to discover
that the Minerals Management Service had two noteworthy records
management failures. These situations are being reviewed by the Special
Trustee. Disciplinary action has been taken with regard to the
individuals involved in these failures.

**[Conclusion]{.underline}**

I am pleased that Congress appears ready to fund most of our substantial
FY 2004 budget increase for Indian trust functions. As the Interior
appropriations bill moves through the Senate, and during conference, we
will continue to work with the appropriations committees, especially
regarding historical accounting.

Finally, as you will see when you read this report, issues surrounding
lack of Internet and e-mail access and information technology security
continue to be obstacles for many of our trust programs. Many of these
programs would really benefit from transacting business through the
Internet and by e-mail. Lack of Internet and e-mail access is causing
many delays throughout Interior.

A.  []{#__RefHeading___Toc47507395 .anchor}**INFORMATION TECHNOLOGY**

**[Introduction]{.underline}**

This section describes the status of efforts underway regarding the
Department of the Interior (Interior) Information Technology (IT)
Systems, particularly systems that house or provide access to Individual
Indian Trust Data (IITD) or provide various computing capabilities,
including functions critical to the proper administration of the
Individual Indian Trust responsibilities. This section of the report
describes the various efforts being made to improve IT security within
Interior, the status of Internet connectivity, steps being taken to move
towards Office of Management and Budget A-130 (A-130) compliance, as
well as references to other related IT topics.

Interior's computer security efforts are showing significant progress.
Substantial efforts have been made during the past 18 months to install
firewalls and intrusion detection systems, reconfigure systems, update
security patches, scan networks for vulnerabilities, update password
procedures and provide computer security training.

Systems vulnerability scanning efforts conducted by Interior demonstrate
that perimeter security has improved. Interior is taking steps to
eliminate "false positive" scanning results and to ensure the few
remaining real vulnerabilities are consistently addressed. Interior has
also examined the communications nexus, called the Virtual Private
Exchange (VPX), to ensure it is adequately secured. Interior is also
preparing for additional security evaluations of its internal IT
systems.

Despite the improvements to Interior IT system security, progress on
reconnecting Interior systems to the Internet has ground to a halt and
has, in fact, been set back by the imposition of another Temporary
Restraining Order (TRO). The TRO directs, in relevant part, that the
"Interior defendants immediately disconnect from the Internet all
information technology systems which house or provide access to
individual Indian trust data until such time as the Special Master has
determined that all Individual Indian Trust data is properly secured."

Overall, during this reporting period, little or no material progress
has been made in obtaining the Special Master's concurrence on proposals
to reconnect Interior IT systems to the Internet pursuant to the
December 17, 2001, Consent Order. Some of the systems that had been
previously reconnected to the Internet, following months of work (e.g.,
IT systems certifications, developing detailed proposals, visits from
the Special Master, follow-up testing, etc.) to obtain approval by the
Special Master, have been forced off the Internet, again, by the
imposition of the latest TRO.

On a related issue, discussions regarding "penetration" testing have
reached an impasse during the reporting period. As the Department of
Justice (DOJ) briefed the Court and the Special Master, the Consent
Order did not authorize the Special Master to conduct "penetration"
testing into Interior's IT systems, and 18 U.S.C. § 1030 provides that
it is a felony for a person to seek to gain [unauthorized]{.underline}
access to information housed on Government computer systems. In an
effort to cooperate voluntarily with the Special Master and to protect
the Special Master and associated agents from legal exposure, and to
protect Interior's IT systems, Interior permitted the Special Master to
conduct penetration testing pursuant to a pre-defined protocol, called
the "rules of engagement." Although the Special Master did not formally
adopt the rules of engagement, Interior permitted limited penetration
testing consistent with those rules for a period of months. However, a
recent incident, involving an Office of Surface Mining (OSM) server,
raised unresolved issues that led Interior to withdraw its consent until
the issues could be resolved.

During the reporting period, Interior, through DOJ, informed the Special
Master of a variety of IT related matters. For example, Interior:

-   identified a situation where unapproved Internet connectivity may
    have occurred (Boise, Office of the Solicitor (SOL));

-   provided information regarding the status of Intranet vs. Internet
    connectivity in two Bureau of Indian Affairs (BIA) offices (Wewoka &
    Chickasaw);

-   noted that a Fish and Wildlife Service (FWS) laptop computer,
    containing individual Indian trust data, appeared to have been
    stolen; and,

-   responded to inquiries about the status of specific computer servers
    (OSM).

Ongoing dialogue occurred both to inform the Special Master and to
respond to his questions.

Another Interior initiative being taken in response to the Special
Master's requirements is e-mail archiving. Interior engaged a contractor
to implement the real-time capture of all e-mail for designated offices
for inclusion in a searchable e-mail archive. The designated offices are
SOL, BIA, Office of the Assistant Secretary - Indian Affairs ("AS-IA"),
Bureau of Land Management (BLM), Offices of the Assistant Secretary for
Policy, Management and Budget, Office of Hearings and Appeals (OHA),
Office of Historical Trust Accounting (OHTA), Office of the Secretary,
the Office of the Special Trustee for American Indians (OST) and the
Minerals Management Service (MMS). Interior does not believe that
real-time capture of e-mail for the Bureau of Reclamation (BOR),
National Business Center (NBC) or OSM will prove to be productive (i.e.
it will not result in capturing e-mail containing IITD). Nevertheless
those agencies have been added in response to the Special Master's
concerns. Interior has been providing the Special Master with biweekly
status reports regarding Interior's progress towards full implementation
of the real-time capture and archival of Interior's e-mail traffic.

This initiative and the results of the Internet reconnection process
have highlighted another fundamental issue regarding the range of
activities pertaining to Interior's IT systems upon which the Special
Master has focused. After approximately 18 months of reviewing
Interior's IT systems to identify where IITD is housed, it has become
apparent that a relatively small part of Interior's combined IT systems
house IITD. With minor exceptions, all of which have been isolated from
the agencies' communications networks, it appears that FWS, National
Park Service, U.S. Geological Survey, BIA -- Education network, BOR,
Office of Inspector General, OSM and NBC do not house or provide access
to IITD. Thus, Interior plans to work with the Special Master to focus
upon the IT systems that actually house or provide access to IITD. Tasks
like reporting, scanning, penetration testing, compliance, reconnection
considerations, etc., need to be more productively targeted towards
relevant IITD-related systems. Interior plans to discuss these matters
further during the next reporting period.

**[Accomplishments and Completions]{.underline}**

**Computer and Business Systems Enterprise Architecture Plan:**

-   Interior briefed OMB on the comprehensive plan for integrating
    bureau enterprise architectures into the Interior Enterprise
    Architecture (IEA). The high-level business architecture component
    (version 1.0), which models the financial management area, was also
    briefed to OMB. Interior technical subject matter experts began to
    meet in June to produce the Technical Reference Model (TRM) (version
    2.0) to incorporate updated standards and products. Interior
    agencies are expected to act consistent with the TRM.

**Trust Architecture:**

-   During this reporting period, the Trust Enterprise Architecture
    (TEA) Integrated Project Team (IPT) held a meeting to develop the
    Trust Target Architecture Vision and Transition Strategy. The trust
    target architecture vision includes:

> The establishment of a secure, integrated systems environment that
> increases the efficiency, quality and integrity of the trust business
> processes and the trust data that instills beneficiary satisfaction
> and confidence by providing customer focused and consistent business
> services, and accurate trust management information.

-   During this reporting period, the TEA IPT held a meeting to discuss
    the trust data dictionary to establish the structure and format for
    defining trust data element metadata. Establishing the metadata
    requirements for trust data elements is required to support upcoming
    trust data standardization activities.

-   During this reporting period, TEA chaired a joint meeting with OHA,
    BIA, OST, and OHTA. Participants provided status reviews of their
    respective past and current probate tracking and case management
    systems. TEA collected system requirements for the existing probate
    systems and led discussions resulting in the recommendation for a
    consolidated set of system requirements for probate tracking and
    case management. These consolidated requirements should support
    ongoing "To-Be" business process analysis and be used to develop a
    near and long-term transition/implementation strategy toward a
    single probate tracking and case management system.

**[Current Status -- General]{.underline}**

IEA continues to be integrated into the capital planning and investment
control process to support OMB's requirements for IT funding. Work on
mid and detail-level enterprise architecture plans, as well as migration
and implementation plans, is ongoing. Alignment with the newly issued
OMB Federal Enterprise Architecture reference models is underway.

**Trust Asset and Accounting Management System (TAAMS) -- Title
Module:**

In May 2003, the Associate Deputy Secretary transferred program
responsibility for TAAMS Title module from OST to BIA. BIA and OST have
recommended implementing the TAAMS version 1.49 to replace TAAMS version
1.17H (a decision is pending). The new version contains recommended
security enhancements, is expected to provide real-time data entry and
retrieval and should facilitate the eventual retirement of the Land
Records Information System (LRIS).

Also in May 2003, BIA conducted a critical design review of TAAMS Title.
During the review, the project management, configuration management,
code, and design of the application, database, and data center facility
were examined.

BIA reviewed and approved a TAAMS Title User Acceptance Test Plan (UAT).
The UAT provides BIA land title record officers an opportunity to test
the functionality of version 1.49 of the Title module. Additional
follow-up work on the UAT plan is anticipated in the next reporting
period.

**TAAMS -- Realty Module:**

As previously reported to the Court, further development work on the
TAAMS -- Realty Module has been deferred following an assessment by
Interior's contractor. Interior is currently re-engineering its business
systems architecture to more clearly delineate IT systems requirements.
Those systems requirements are expected to be used to evaluate the TAAMS
-- Realty module more closely.

However, BIA is concerned about the continued viability of the
Integrated Resource Management System (IRMS) and related systems.
Therefore, BIA is undertaking an analysis of options which may provide a
more immediate alternative to continued reliance on IRMS. In one effort,
BIA completed (in June 2003) the Trust Lease Management and Lease Income
Allocation Requirements System Gap/Fit Analysis. BIA compiled a set of
lease management and lease income allocation trust program requirements
and matched those requirements with the capability of various BIA, other
Interior bureaus, and trust industry systems. The BIA analysis concluded
that the TAAMS Realty module has the potential to meet the trust lease
management and lease income allocation requirements. This would allow
BIA to retire IRMS and several other localized realty applications. The
analysis also identified future opportunities to team with BLM systems
initiatives. Further work and analysis is needed prior to deciding any
specific course of action regarding a realty module.

**Data Warehouse:**

TEA and TEA-IPT members, with support from two contractors, are
developing a web-enabled integrated information management and access
architecture that is designed to allow employees, management and
beneficiaries to query information and produce reports by fusing
structured and unstructured data from our trust systems database. The
trust systems environment consists of dissimilar technologies and
geographically dispersed systems that are developed and operated by both
government and commercial outsourced application service providers.
Contrary to Interior's initial intent, the TEA-IPT members recommended
that the extraction and transformation of data from the current trust
systems environment into a single data warehouse was not required in
order to create an integrated systems information management and access
architecture.

To accomplish the objective of an integrated trust systems environment,
Interior may use Web portal, data warehouse and XML technologies, to
integrate these dissimilar technologies and geographically dispersed
trust systems into a secure "virtual" data warehouse. The "virtual" data
warehouse, in contrast to a traditional single data warehouse, does not
require migrating data from operational databases into a single database
system to provide unified trust information access and management. To
establish the virtual data warehouse environment, analysis of the trust
systems profile, data models, and data dictionaries is underway to
develop a consolidated data model. An XML interface exchange
specification and a data element security plan are under development. In
order to facilitate both data security and data quality within the trust
environment, the data dictionaries of the trust systems are being
collected into a consolidated trust data dictionary and a data
standardization meeting is scheduled for the next reporting period.

**Capital Planning:**

Interior is integrating IT security into the system development
lifecycle of Interior IT systems through the capital planning and
investment control (CPIC) process. Under the CPIC process, Interior
bureaus and offices prepare an OMB Circular A-11 Exhibit 300 Capital
Asset Plan and Business Case (Exhibit 300) or OMB Circular A-11 Exhibit
300-1 Project Profile (Exhibit

300-1) on each Interior IT system including a description of the funding
needed for IT security. Interior's Office of the Chief Information
Officer (OCIO) IT security team supports this effort by: giving a
briefing to the appropriate program analysts and bureau IT security
managers; developing a security tips document; developing security
review criteria for the Exhibit 300s and 300-1s and reviewing Exhibit
300s as part of Interior's approval process.

**Consent Order A-130 Program Management:**

-   The A-130 Program Management Office (PMO) is pursuing the steps
    needed to comply with OMB Circular A-130, Appendix III, "Security of
    Federal Automated Information Resources."

-   The A-130 PMO leads an IPT consisting of A-130 project managers in
    the chief information offices within Interior bureaus and offices,
    and is supported by contractors with expertise in the management of
    IT projects and systems and compliance with IT security
    requirements. During this reporting period, the IPTs met to
    coordinate A-130 related activities, such as the PMO vision goals
    plus objectives, concept of operations, roles and responsibilities,
    A-130 compliance progress reporting, and information sharing/best
    practices for completing the Certification and Accreditation (C&A)
    project plan.

-   Initial efforts for the A-130 IPT include development of a single IT
    system inventory that is expected to be used by security,
    architecture and capital planning, the identification and
    development of project managers for IT systems, and development of
    the C&A schedule for high-risk systems.

**[Current Status -- IT Security]{.underline}**

**Interior's IT Security Program:**

-   As of June 27, 2003, Interior had trained 66,678 individual users of
    Interior IT systems. Interior continues to train new and existing
    employees on security awareness requirements. The IT Security Office
    standardized the training program on the "Federal Information
    Systems Security Awareness, Version 2," that was developed by the
    Defense Information Systems Agency (DISA) for use throughout
    Interior.

-   Thirty Interior employees attended Certified Information System
    Security Professional (CISSP) certification training in Denver, CO
    during the reporting period. The CISSP certification is designed to
    recognize mastery of an international standard for information
    security.

**A-130 Certification and Accreditation:**

-   During this reporting period, Interior's Chief Information Officer
    (CIO) security office completed the final version of Interior's C&A
    guide, which outlines Interior's C&A process, based on National
    Institute of Standards and Technology's (NIST) draft Special
    Publication (SP) 800-37. There are five phases in the Interior C&A
    process: initial assessment, pre-certification, certification,
    accreditation and post-accreditation. An Interior OCIO bulletin on
    C&A roles and responsibilities was also developed and released on
    April 11, 2003. A major goal of Interior's IT security program is to
    achieve C&A of its IT systems in full compliance with OMB Circular
    A-130, Appendix III. Interior's Indian trust IT systems, i.e., those
    systems identified as supporting trust business processes, are
    scheduled to achieve C&A compliance by December 31, 2005.

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-   A draft Security Test and Evaluation (ST&E) Guide was completed and
    delivered on June 20, 2003. Interior's ST&E process is designed to
    gain objective evidence of proper implementation and functionality
    of an IT system's security features. The activities identified in
    this ST&E guide are applicable to new IT systems, major and minor IT
    system upgrades and legacy IT systems. This guide may be updated
    once the initial draft (currently scheduled for release in
    January 2004) of NIST SP 800-53A, *Techniques and Procedures for
    Verifying the Effectiveness of Security Controls in Federal
    Information Systems,* is released.

-   An introductory C&A workshop for Trust bureaus and offices was held
    on April 2-3, 2003, in Washington, DC. The workshop provided
    information about Interior's C&A program to system owners and Bureau
    Information Technology Security Managers (BITSM).

-   A C&A workshop was held during the reporting period in Arlington,
    VA. The target audience was staff involved in the C&A process,
    including CIOs/Deputy CIOs, system owners, program managers and IT
    security managers. Topics included current IT security issues, as
    well as instructions in developing the documentation required by the
    C&A process. This C&A workshop may be held again in Denver, CO
    during the next reporting period and may become a recurring training
    event to ensure Interior systems are consistent with a NIST-based
    C&A program.

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-   During the reporting period, Interior's CIO security office
    completed the first draft of Interior's System Development
    Life-Cycle (SDLC) Security Integration Guide. The SDLC Security
    Integration Guide is intended to provide Interior's IT system owners
    with a framework for implementing security throughout all stages of
    an IT System's life-cycle and describes how this process maps back
    into the C&A process.

**Interior Computer Incident Response Center:**

In June, a centralized computer security incident handling capability
was implemented within Interior. This contracted support is available
twenty-four hours, seven days per week and provides incident
coordination and reporting. Computer security incidents are reported to
the Homeland Security Department's Federal Computer Incident Response
Center as required by the Federal Information Security Management Act of
2002 (FISMA). The Incident Handling Handbook, which provides program
implementation guidelines and procedures, was completed as well.

**Network Scanning Initiative:**

Interior continued testing the wide area networks (WAN) against an
operational security profile based on the SysAdmin, Audit, Network and
Security (SANS)/Federal Bureau of Investigation Top 20 vulnerability
list. The number of hosts with potential high risk vulnerabilities was
reduced by about fifty percent from the previous quarter and remained
relatively constant throughout this quarter. The results were
distributed to the CIO of each bureau to take appropriate remedial
actions.

**Virtual Private Exchange:**

A contractor conducted a review of the security at Virtual Private
Exchange point in Denver, CO in May 2003. VPX provides a common
connection point for bureau WANs, which allows bureaus to exchange data
over a private network connection. The contractor provided a draft
report to Interior and a final report is expected in the next reporting
period.

**Mid-Year IT Security Program Review:**

As required by FISMA, a mid-year review of IT security programs for
Interior bureaus and major offices was conducted in April 2003. The
review is based on the NIST Special Publication 800-26 *Self-Assessment
Guide for Information Technology Systems.* Interior improved its score
over the IT security program review conducted in the Fall of 2002. The
results of the program review are incorporated as a major component of
the broader Interior IT security scorecard.

**Interior IT Security Scorecard:**

Interior has started using an IT Security Scorecard to track bureau and
office achievements in IT security programs. The Scorecard contains nine
major performance elements that are derived from reportable elements of
FISMA in addition to activities deemed a priority by Interior. Each of
the nine areas is assigned a percentage score that when summarized adds
up to a maximum 100 points.

**Bureau of Indian Affairs -- Security Efforts**

-   Asset Management -- The automated network discovery solution was
    implemented and automated desktop discovery has begun. The automated
    discovery tools are designed to provide a centralized inventory of
    the assets connected to the network. This automated inventory will
    be associated with its respective users so that the Help Desk can
    better assist users.

-   Configuration Management -- A structured process for managing
    changes to Indian Affairs IT systems has been established. Changes
    are managed through the use of an automated tracking tool and an
    instituted process managed through change control boards (CCBs).
    Currently, CCBs have been established for network, desktop, and
    Office of Trust Responsibilities applications. The configuration
    management group is centrally organized under the OCIO CIO, under
    the AS--IA.

-   CPIC -- BIA prepared OMB Circular A-11 Exhibit 300s and Exhibit
    300-1s for the BIA identified trust and non-trust systems. BIA also
    conducted a review of each Exhibit 300 or Exhibit 300-1 and trained
    associated business-owner staff on the CPIC process.

-   Data Management - To better understand the trust systems being used
    by the various agencies, BIA:

1.  Researched and updated a master trust system list to include BIA
    trust systems and identified the system administration point of
    contact, business categorization, application information, and
    systems architecture information.

2.  Compiled several trust system entity relation diagrams or comparable
    records layouts.

3.  Compiled several trust system data dictionaries.

4.  Began an effort to review relationships between the individual trust
    systems and data mapping.

-   NIST 800-26 Self-Assessments -- BIA completed self assessments for
    all regional offices and one Land, Title, and Records Office (LTRO).
    The BIA NIST 800-26 Self-Assessment effort is on hold waiting for
    Interior to determine the status of funding and contract support for
    its contractor.

-   Certification and Accreditation -- Through two independent
    contractors, BIA conducted an initial assessment and issued an
    Interim Approval to Operate (IATO) for 14 systems.

    -   IT Asset Management System

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    -   BIANet

    -   Document Management Program (DMP)

    -   Education Network (ENAN2)

    -   Facilities Management Information System (FMIS)

    -   Great Lakes Accounting Database (GLAD)

    -   Information Management Paperwork Reduction System (IMPRESS)

    -   Integrated Information Resources Management System (IRMS)

    -   Loan Management Accounting System (LOMAS)

    -   Land Records Information System (LRIS)

    -   Management Accounting and Distribution System (MAD)

    -   National Irrigation Information Management System (NIIMS)

    -   Portfolio Management Capital Asset Tracking System (PMCAT)

    -   Royalty Distribution Records System (RDRS)

> The IATO is an internal IT systems management approach that signifies
> IT sub-systems meet a set of minimum expectations; it is not
> associated with Consent Order decisions related to reconnecting to the
> Internet. As work-off plans for vulnerabilities are resolved, full
> Approval to Operate (ATO) packages will be prepared by contractor
> support staff.

-   Secure Network Communications -- The contractor has started to
    install the equipment needed to support a secure communication
    network. The contractor has installed five of the six major nodes --
    Reston, Albuquerque, Portland, Minneapolis, and Phoenix -- into the
    Private Internet Protocol (PIP) environment. Once the major nodes
    are completed, individual sites will be connected into the PIP
    network. The sixth node is under engineering review due to price and
    technology changes that affect connectivity between Alaska and
    Denver. This initiative will require continued funding in future
    fiscal years and may be affected further by the contractor's
    financial status.

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-   Secure E-mail and Web Proxies -- The contractors tested the Internet
    Point of Presence (POP) solution, which is designed to provide
    additional security measures when BIA is allowed to reconnect to the
    Internet. A proposal to connect the POP to the Internet is pending.

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-   Reconnection -- BIA has not been permitted to have Internet
    connectivity since the December 5, 2001, TRO was imposed by the
    Court.

**Office of the Special Trustee -- Security Efforts**

Reconnection -- OST's network has not been permitted to have Internet
connectivity since the December 5, 2001, TRO was imposed by the Court. A
proposal has been pending and OST continues to wait for concurrence from
the Special Master to reconnect the Albuquerque, NM, office to the
Internet.

Initial Assessment -- An Interior contractor conducted a site review of
the OST Albuquerque network in April 2003.

Pre-Certification -- The Interior contractor review provided baseline
information upon which an IATO decision was made. Documentation included
risk assessments, initial technical vulnerability assessments of LANs,
and work-off action plans to correct identified deficiencies. Additional
network intrusion detection and prevention measures were installed and
activated in April 2003. Actions to complete full C&A are currently on
schedule.

**Office of Hearings and Appeals -- Security Efforts**

Reconnection -- OHA has not been permitted to have Internet connectivity
since the December 5, 2001, TRO was imposed by the Court. A proposal has
been pending and OHA continues to wait for concurrence from the Special
Master to operate its web server and connect to the Internet.

IT Program Management -- Pursuant to Interior guidance on enclaves, OHA
has rolled up the management and technical control of the nine regional
LANs and other IT into one General Support System at the headquarters
level.

**Office of the Solicitor -- Security Efforts**

Reconnection -- SOL has not been permitted to have Internet connectivity
since the December 5, 2001, TRO was imposed by the Court. SOL is
building a communication network (SOLNET) as a temporary solution until
the BIA secured communication network (formerly Trust Net) is
operational. During the reporting period, SOL connected the Albuquerque
regional SOL to SOLNET. SOLNET remains disconnected from the Internet.
SOL received its firewall and intrusion detection system, which is
expected to be configured during the next reporting period. Interior
submitted interim reconnection requests for the headquarters, SOL, and
the Alaska Regional SOL to DOJ for review.

Initial Assessment -- All outstanding system and program weaknesses were
reviewed and 95% of them were prioritized for connection during the next
reporting period.

**Minerals Management Service -- Security Efforts**

Reconnection -- MMS had been evaluated by the Special Master, after
which MMS resumed its Internet connectivity. However, with the most
recent June 27, 2003, TRO, MMS has been forced to disconnect from the
Internet, again. This disconnection includes State and Tribal Audit
Committee (STRAC) sites, with the exception of a contractor site that
has remained connected to the Internet with the concurrence of the
Special Master. By maintaining Internet connectivity for this site,
Interior may be able to continue to process mineral leasing payments to
individual Indians, Tribes, States and the Federal Treasury, albeit not
as quickly.

Initial Assessment -- The quantity of systems was reduced to five on the
C&A inventory list. OCS Connect (previously known as E-Gov) was removed
from the list because the system is still in its development phase.
Initial assessment for all five systems identified on the C&A inventory
list was completed. The WAN/LAN general support system was granted an
IATO.

**Bureau of Land Management -- Security Efforts**

Reconnection -- BLM IT systems had been evaluated by the Special Master
and subsequently BLM was permitted Internet connectivity. However, with
the most recent June 27, 2003, TRO, BLM has been forced to disconnect
servers, desktops, and laptops from its communications network. Other IT
systems have been permitted to remain connected to the Internet because
they do not house or provide access to IITD or the IT systems are
subject to exemptions provided in the TRO (e.g., threats related to
fire, life, property, etc.).

Pre-Certification -- Both of the two identified BLM Trust systems,
Automated Third Mineral Support System (AFMSS) and Alaska Land
Information system (ALIS), are progressing towards full C&A. AFMSS has
an IATO as of April 2003 and full C&A is scheduled to be completed by
December 2004. ALIS is scheduled to complete requirements for an IATO by
September 2003 and full C&A is scheduled to be completed by September
2004.

**Office of Historical Trust Accounting -- Security Efforts**

Reconnection -- OHTA shares a portion of the Office of the Secretary
network. The network had been reviewed by the Special Master and was
permitted to have Internet connectivity. However, with the most recent
June 27, 2003, TRO, OHTA has been forced to disconnect from the
Internet, again.

Security Plan -- OHTA is aggressively pursuing an IT Security Program
that implements physical and IT security over all of its IT systems,
processing locations and resource management activities. The OHTA IT
Security Plan was developed to ensure the effective establishment and
implementation of Interior-wide requirements for IT security, IITD
security and Privacy Act requirements. OHTA's IT Security Plan is based
on Interior's Security Plan Best Practice Control Areas, Interior
guidelines, and current best security practices.

Security Staffing -- On March 19, 2003, OHTA appointed a BITSM to
oversee the implementation and management of OHTA's IT Security Program.
BITSM is also supported by a security contractor to OHTA that assists
the BITSM with the development and implementation of the OHTA IT
Security Program. OHTA's IT Security Program is fully supported and
funded by OHTA management.

IT Program Management -- Assessments of OHTA and contractors' computer
systems that process and house IITD were begun. Physical security
assessments of remote facilities processing IITD have been conducted.
OHTA is currently collecting statements from contracting firms
certifying compliance with OHTA security policies and requirements for
the protection of IITD data.

**Bureau of Reclamation -- Security Efforts**

Reconnection -- BOR has only two servers containing any IITD. The
servers host two application systems, the Land Acquisition Management
System (LAMS) and Foundation Information for Real-Property Management
(FIRM). LAMS has been retired and the system and data are in storage.
FIRM remains disconnected from the BOR network and the Internet, pending
reconnection approval.

Initial Assessment -- Initial assessments have been completed for FIRM.
The final asset valuation, privacy impact assessment, and risk
assessment are ready for signature.

Pre-Certification -- The FIRM initial Security Plan and System
Contingency Plan have been developed.

Certification -- The FIRM security test and evaluation process is
underway. Final accreditation is expected to be completed in August
2003.

**National Business Center -- Security Efforts**

Reconnection -- NBC manages the Office of the Secretary network. The
network had been reviewed by the Special Master and was permitted to
have Internet connectivity. However, with the most recent June 27, 2003,
TRO, the portion of the network servicing the Office of the Secretary
has been forced to disconnect from the Internet again.

Network Hardening -- All but one vulnerability identified by the Special
Master's security team visits have been corrected. The remaining item,
the installation of an Intrusion Detection System (IDS), is being
completed in conjunction with an NBC-wide effort to install standard IDS
throughout NBC. An interim intrusion detection solution is in place at
this time.

Pre-Certification -- A risk assessment was completed in October 2002,
and work has progressed on corrective actions to address the
recommendations provided. A modified system security plan is in draft
form and undergoing review. Configuration management and computer
security incident response procedures are in place, and monthly
vulnerability scanning is being conducted.

**[Delays and Obstacles]{.underline}**

There are many challenges that must be addressed regarding the
integration, performance, funding, security, and data integrity of
Interior IT systems. Interior initiated or completed steps to address
some of the challenges reported in previous reporting periods, however,
delays and obstacles listed here still impede progress to achieving
Interior's IT management goals.

-   Employee fears about becoming personally implicated in the
    litigation are undermining creativity and decision-making. This
    continues to be an impediment within Interior as contempt or other
    disciplinary actions against individuals working on this issue
    exacerbate this concern.

-   Information system technical leadership and support staffs are
    insufficient. Bureau and office IT staffs are insufficient and
    through normal attrition, OCIO also has several leadership and staff
    vacancies. Also, this obstacle is impacted further by employee fears
    to work on Indian Trust issues.

-   The government needs to evaluate current funding requirements.
    Interior's FY 2004 budgets are currently before Congress for
    approval and its FY 2005 budgets are in preparation. Funding
    availability will continue to dictate the timing of IT related
    initiatives.

-   Interior is conducting a business process reengineering effort to
    standardize and streamline trust business processes. The "As-Is"
    portion of that process has been completed and "To-Be" reengineering
    efforts are underway. IT systems specifications may depend upon the
    timing and results of the reengineering effort.

-   Interior receives extensive telecommunication services support from
    MCI WorldCom. Much of the planning for BIA's secure
    telecommunications service (previously referred to as TrustNet)
    depends upon services provided by its contractor. The federal
    government is considering the nature of its relationship with its
    contractor considering its recent financial difficulties and status
    with the bankruptcy court.

**[Assurance Statement]{.underline}**

I concur with the content of the information contained in of the
Information Technology section of the *Status Report to the Court Number
Fourteen*. The information provided in this section is accurate to the
best of my knowledge.

Date: July 31, 2003

Name: *Signature on File*

James E. Cason

Associate Deputy Secretary

[]{#__RefHeading___Toc47507396 .anchor}**B. CADASTRAL SURVEY**

**[Introduction]{.underline}**

A cadastral survey is a land survey of sufficient scale to show the
extent and measurement of property boundaries. A cadastral survey as
performed by the Bureau of Land Management (BLM) is used to identify the
location of land boundaries, to determine official acreage of tracts,
and to maintain the related survey records for all public and Indian
lands. Cadastral surveys and records are critical to the success of the
trust. Ownership information, distribution of trust assets, and
management of trust accounts are related to or based upon information
recorded in a cadastral survey. The BLM Cadastral Indian Program Manager
is continuing to develop and oversee these functions in accordance with
25 U.S.C. § 1e76: "whenever it becomes necessary to survey any Indian or
other reservations, or any lands, the same shall be surveyed under the
direction and control of BLM, and as nearly as may be in conformity to
the rules and regulations under which other public lands are surveyed."
Cadastral surveys assure that ongoing and future high-priority cadastral
needs for individual Indian trust and Tribal lands are achieved.

**[Accomplishments and Completions]{.underline}**

**Inventory of Cadastral Needs/Cadastral Automated Request System
(CARS)**

CARS is used to compile the nationwide inventory of cadastral service
requests from the regions and to prioritize the requests based on high
economic value. CARS software version 2.0 was developed and distributed
in this reporting period using input from key BLM, Office of the Special
Trustee for American Indians (OST), and Bureau of Indian Affairs (BIA)
personnel. CARS was implemented in FY2003 and continues to be evaluated
and improved. The result is an improved and more efficient processing
and prioritization of cadastral needs in Indian Country. The fully
automated system has been distributed to each BIA regional office and
BLM state office.

To assure regional priorities are addressed timely and to allow for
workforce planning for all regions, OST, BIA and BLM agreed that 30% of
the cadastral services budget will be allocated and used for regional
priorities, as determined by CARS. This will be implemented in FY2004.
To assist in meeting the highest priorities at both the national and
regional level, an increase in the cadastral services budget is being
considered.

**OST Training Course, "Trust Foundations: An Introduction to Trust
Reform and Change"**

Interior's preliminary request to determine who had trust
responsibilities identified 223 BLM employees involved in cadastral
surveys. The surveyors who still need to complete this course have been
notified that they need to register for the course.

**Individual Development Plans (IDP)**

BLM surveyors who are in trust positions, defined as "those who spend
more than 25 percent of their time on trust activities," have revised
their IDPs to identify short-term and long-term developmental plans
relating to their trust responsibilities.

**Office of Historical Trust Accounting (OHTA) Pilot**

In June 2003, OHTA completed a pilot to evaluate, in part, cadastral
survey data and assess how potential acreage and boundary errors, if
any, affect the distribution of income from tracts on Indian trust
lands. This small scale exploratory effort made three significant
findings: (1) a careful verification of BLM cadastral data is
recommended if a trust asset produces large amounts of income when a
certain set of conditions exist; (2) the linkage of cadastral data with
ownership and realty documents has provided field managers with the most
up-to-date and accurate information available on which to base
management decisions; and (3) it is worth exploring whether the benefits
of the Yakama Cadastral Geographic Information System (CGIS) models
should be expanded to a national level.

**The Western Governors' Association (WGA) Forum, "Putting Land Records
to Work"**

The WGA, with BLM support, sponsored a two day forum on land records on
May 6-7, 2003. This is the second WGA forum on standardization of land
information. Tribal officials and BIA agencies participated in the
forum.

The Yakama Nation gave a presentation on its CGIS, which is based on
parcel location and parcel information. The Yakama model emphasizes the
need for a standardized survey and land data system. BLM is proposing to
increase expenditures to gather Geographic Coordinate Data Base (GCDB)
information in high priority trust areas. GCDB is a fundamental layer of
the CGIS. This will give more field managers accessible and integrated
survey and land data for making better trust asset decisions.

The WGA forum identified the following: (1) the nation would benefit
from developing a national land parcel record system; (2) efficiency in
time and resources is gained when accurate data is developed once and
integrated into a national system; and (3) institutional, organizational
and political issues appear to be the biggest hurdles in creating a
national land parcel records system.

**[Current Status]{.underline}**

**Assistance in the Department of the Interior's (Interior)
Reengineering Efforts**

With the completion of the "As-Is" Trust business process models, OST is
in the "To-Be" reengineering phase. Since cadastral survey was one of
the original eight core trust business processes, BLM is assisting in
the "To-Be" reengineering efforts along with other agencies and
constituents. The Cadastral Indian Program Manager and other BLM
personnel participated in three weeks of "To-Be" reengineering workshops
held this reporting period. This participation ensures that the
reengineered trust business process for cadastral survey services is in
the best interest of the beneficiaries, in accordance with Interior's
fiduciary responsibilities, and with laws and regulations governing
cadastral surveys and land information.

**Interior Indian Trust Lands Boundary Standards**

These standards will increase efficiencies in land transactions and
boundary issues by establishing processes, procedures, and requirements
for cadastral services. The standards have been referred to the Office
of the Solicitor for review. These standards have also been distributed
throughout BIA for comments. The comments are expected to be forwarded
to BLM in the next reporting period.

**Pilot Study of Risk Assessment for Cadastral Services**

The BLM Cadastral Survey Program continues to work with the Trust
Program Management Center (TPMC), formerly the Office of Trust Risk
Management (OTRM), in developing and testing the application for
conducting risk assessments and management control reviews. However, the
application is not yet fully developed and has not been released for use
to BLM. Therefore, during this reporting period, BLM conducted
management control reviews in its New Mexico and Montana State Offices.
These reviews were conducted to assess BLM overall effectiveness in
managing and safeguarding Indian trust assets. Based on the results of
these assessments, it was determined that BLM systems of controls
provide reasonable assurance that the management control objectives have
been achieved. There were no significant or material weaknesses found.
BLM plans to continue to conduct annual reviews of its management,
administrative, and financial controls.

**BLM, BIA, Tribal, and OST Training Course, "Land Tenure in Indian
Country" (LTIC)**

The initial LTIC course is scheduled for August 11-14, 2003, at a Tribal
facility in Temecula, CA. This course was piloted in September 2002, in
Pendleton, OR. This training course is designed to provide communication
tools to realty specialists, cadastral surveyors, appraisers, attorneys,
other land tenure specialists and managers about land issues facing BIA,
BLM, OST and Tribal governments, and provide solutions for resolving
these issues by working together. The expected outcome is to have BIA,
OST and Tribal officials become more knowledgeable about cadastral
survey needs to enhance their ability to fulfill trust duties related to
realty and cadastral survey issues governing Indian land title and
ownership.

The BLM Cadastral Indian Program Manager and the Cadastral Survey
Training Coordinator have been working with the OST Training Coordinator
on the number and types of future LTIC classes. In order to be able to
present this course at four locations in FY2004 and to construct a
virtual classroom course for FY2005, other sources of funding must be
identified for these classes. It was determined that the funding
approach would be similar to OST's initial "*Trust Foundations: An
Introduction to Trust Reform and Change*" course, where all student and
instructor travel was funded by OST. OST expects to assist BLM in
obtaining qualified instructors for these courses, since the present
instructor pool is not large enough to present the course at a rate of
four times each fiscal year. The BLM Cadastral Indian Program Manager
will also be assisting the OST curriculum committee in the development
and implementation of future trust training.

**[Delays and Obstacles]{.underline}**

**Missing BIA Indian Service Survey Records**

BLM cadastral surveyors have often been able to gather only portions of
the records of surveys conducted by the BIA Indian Service Surveyors.
The BIA surveys seem to have been most common from the mid-1890s through
1916 (although earlier surveys are known to exist), and in the
mid-1950s. These surveys are located in at least 12 states and 42
reservations. With incomplete historical records, current cadastral
surveys are exposed to error and impairing the bona fide rights of
allottees, tribes, and fee land owners. These records should be found
and indexed, to assure that the individual allottees and tribes are
provided with stable boundaries. Search efforts for these surveys will
continue as needed until all potential sources of records have been
searched.

**[Assurance Statement]{.underline}**

I concur with the content of the information contained in the Cadastral
Survey section of the *Status Report to the Court Number Fourteen*. The
information provided in this section is accurate to the best of my
knowledge.

Date: July 28, 2003

Name: *Signature on File*

Donald A. Buhler

C.  []{#__RefHeading___Toc47507397 .anchor}**MINERALS MANAGEMENT
    SERVICE**

**[Introduction]{.underline}**

Minerals Revenue Management (MRM), a program of the Minerals Management
Service (MMS), is responsible for collecting, accounting for, and
distributing mineral revenues from both Federal and Indian mineral
leases and for evaluating industry compliance with laws, regulations,
and lease terms. MRM conducts its business processes, maintains reported
information, and distributes revenues at the lease level. The Bureau of
Indian Affairs (BIA) maintains individual Indian ownership records and
distributes the lease revenues to individual Indian beneficiaries.

**[Accomplishments and Completions]{.underline}**

As previously reported in the *Status Report to the Court Number
Thirteen*, MMS's reengineering project is complete. However, MMS
continues to track and report on two recommendations that were added to
this activity as a result of the Electronic Data Systems (EDS) report on
trust reform. Implementing these recommendations will help provide
appropriate documentation of procedures and agreements, but neither
represent problems that are adversely affecting the fulfillment of the
Department of the Interior's (Interior) Indian Trust responsibilities.
Timely completion of the two recommendations will depend not only on MMS
but also on the amount of time and attention that MMS's business
partners---BIA, Bureau of Land Management (BLM), and Office of the
Special Trustee for American Indians (OST)---are able to devote to this
collaborative effort.

[Coordinate Information Exchanges Between MMS and All
Systems]{.underline}. EDS made this general recommendation to help
address future information exchange issues that may arise. In
coordination with other Interior bureaus, MMS will help establish a
policy and process for documenting information exchanges with its
business partners. A key aspect of those policies and procedures will be
the execution of memoranda of understanding and Interconnection Security
Agreements, as recommended by the National Institute of Standards and
Technology security guidelines. MMS is working with its business
partners to execute agreements as appropriate. These agreements are
expected to be complete by December 31, 2003.

[Document Procedures Regarding Royalties Disbursement]{.underline}. This
will document royalty disbursement procedures and will contain
agreed-upon performance expectations between MMS and BIA. These
procedures are expected to be complete by December 31, 2003.

**[Current Status]{.underline}**

[Indian Oil Rule]{.underline}

On February 12, 2003, MMS reopened the comment period on the proposed
rule for valuing crude oil produced from Indian leases. MMS held four
workshops soliciting comments on specific topics regarding potential
changes to the Federal Oil Rule and the proposed Indian Oil Rule. The
workshops were held in March 2003 in Denver, CO, in Houston, TX, in
Washington, DC, and in Albuquerque, NM. The comment period closed on
April 14, 2003. MMS received comments from the Jicarilla Apache Tribe,
the Navajo Nation and Marathon Oil Company. MMS has reviewed the
comments and is conferring with the Solicitor\'s Office in determining
how to proceed in the best interests of Indian lessors.

[Audit Working Paper Incident]{.underline}

An OIG audit identified problems in quality control and audit quality
that affected the integrity of MMS's audit offices -- the Offshore and
Onshore Compliance and Asset Management Offices. The OIG audit of these
offices revealed that MMS failed to perform audits in accordance with
all required professional standards and had control deficiencies that
could, if not corrected, seriously affect MMS's ability to comply with
required auditing standards. For example, the OIG identified one audit
in which MMS recreated a set of working papers that it had lost and
improperly presented the documents as the originals. Additionally, MMS
auditors could not provide working paper files for five audits. MMS
agreed with all of the OIG recommendations and has already begun to take
corrective action, which included disciplinary action for certain
employees. MMS has also arranged for an external peer review during
2003.

MMS was gravely concerned about this occurrence. Further review found
that although the auditors determined the correct amount of royalty due
on the subject leases which was subsequently collected, they were
careless and exercised bad judgment. MMS took appropriate disciplinary
actions.

The MMS is committed to conducting royalty audits of the highest quality
and integrity. MMS audit program has been in existence for more than 20
years. In that time MMS auditors have performed thousands of audits of
royalty payors and have effectively detected and collected over \$2.5
billion in additional royalty revenues for the benefit of state
governments, Indian beneficiaries, and the American public.

[Records Destruction Incident - Farmington Indian Minerals
Office]{.underline}

During the course of a routine MMS internal management control review,
allegations surfaced about destruction of Indian trust records in the
Farmington Indian Minerals Office (FIMO).

MMS immediately notified Interior officials including OIG. MMS also
immediately initiated its own administrative investigation which
included representatives from BLM, BIA, OST, and the Office of Trust
Records. The report of the investigative team was sent to the Associate
Director-Minerals Revenue Management (MRM) for appropriate action.

As a result of this incident, MRM has developed a short-term high-level
action plan summarizing the initial actions to be taken at FIMO in the
areas of personnel and records management. A more detailed
implementation plan for FIMO records is scheduled to be completed in
August. In the interim, the Director of FIMO has been placed on
administrative leave.

**[Delays and Obstacles]{.underline}**

None.

**[Assurance Statement]{.underline}**

I concur with the content of the information contained in the Minerals
Management Service section of the *Status Report to the Court Number
Fourteen*. The information in this section is accurate to the best of my
knowledge.

Date: August 1, 2003

Name: *Signature on File*

Phil Sykora

Chief, Financial Management

Minerals Revenue Management

Minerals Management Service

D.  []{#__RefHeading___Toc47507398 .anchor}**WORKFORCE PLANNING**

**[Introduction]{.underline}**

Workforce planning is a comprehensive process that provides managers
with a framework for making staffing decisions based on an
organization's mission, strategic plan, budgetary resources, and the
associated skills needed to accomplish mission tasks now and in the
future. Indian trust management workforce planning is underway in the
Department of the Interior (Interior) and involves a comprehensive
process of assessing: current workload, current program efficiencies and
gaps, future work and skill gaps together with options for addressing
future workforce needs. This planning process is a large undertaking
that requires both significant top-down leadership and the involvement
of field-level personnel. The trust planning team is combining budget,
program performance, and workforce priorities into a cohesive strategy
that is useful for human resources planning as well as for budget
justifications.

**[Accomplishments and Completions]{.underline}**

**Eight workforce planning training workshops were completed in seven
regions during April, May, and June. This completes these workshops for
Indian trust organizations.**

The management team from seven Bureau of Indian Affairs (BIA) Regions,
including Great Plains (56 attendees in two workshops), Southern Plains
(28 attendees), Midwest (18 attendees), Navajo (29 attendees), Western
(26 attendees), Northwest (28 attendees), and Pacific (23 attendees),
attended Interior's three-day Workforce Planning Workshops. During these
workshops, participants accomplished their stated purpose of determining
how most effectively to allocate resources, and they left the workshop
with the basic components of a first workforce plan.

During these workshops, participants were given information needed to
understand and apply a five-step model for developing workforce plans.
They applied a set of tools to guide the workload analysis process;
learned to identify core capabilities and skills in their organizations;
were provided an approach for documenting the plan; and used a set of
tools for ensuring accountability and periodic updates.

Evaluations of the workshops have been developed and information from
participants is being collected.

**Individual Development Plan (IDP) for BIA Employees**

BIA collected and assessed representative IDPs from a ten percent sample
of Indian trust management employees to confirm that BIA trust employees
have an IDP. During the next reporting period, BIA will further define
trust training requirements based upon the review of IDPs and on the
assessment of critical skills that is a part of development of the BIA
workforce plan.

**Interior provided additional direction for bureau-level workforce
plans.**

Effective workforce planning represents the foundation for all other
workforce management efforts at Interior. By memorandum dated June 22,
2003, the Interior Human Capital Officer directed that each bureau
integrate workforce planning efforts into respective budget submissions
for the FY 2005 budget.

This directive is designed to enhance Interior's ability to assess
bureaus' and offices' workforce plans and to focus on critical strategic
workforce needs during budget formulation and execution. Similarly, the
initiative serves to enhance assessment of fiduciary trust workforce
plans developed by Interior offices and bureaus. The Interior Management
Initiatives Team is expected to review and comment on the bureau
workforce plans during the next reporting period.

**The Indian Trust Human Resources Advisor briefed the Navajo Region
managers.**

During April 2003, the Navajo Region requested a formal presentation on
workforce planning in advance of their Interior three-day Workforce
Planning Workshop at the Navajo Region Management Conference. This
presentation was delivered on May 1, 2003, by the Indian Trust Human
Resources Advisor. Other related presentations at the management
conference focused on succession planning, recruitment and retention,
and change management.

**[Current Status]{.underline}**

By memorandum dated April 7, 2003, the Acting Assistant Secretary-Indian
Affairs provided additional staffing plan guidance and required BIA
directors to submit a staffing plan for each office and region. These
staffing plans are a part of the overall workforce plans. Comprehensive
review of the staffing plans throughout BIA will assist in forecasting
funding requirements. Given the challenges of filling critical
positions, managing with limited resources, and the need to anticipate
and plan for skill loss due to retirements over the next few years, the
need for a "road map" for staffing critical skills is apparent. The
federal appropriations process requires that agencies base funding
requests on a projection of requirements and expected mission results.
Interior's commitment to engage in workforce planning and successfully
link mission goals to workforce needs is essential for gaining
appropriations for legal and regulated requirements.

During this reporting period, the Office of the Special Trustee for
American Indians (OST) has recommended that additional positions be used
to support OST's service to Indian Country. The office plans to hire six
regional fiduciary Trust Administrators, and Trust Officers who are
expected to work at the regional and agency level.

Trust organizations are engaged in workload analysis and skill
assessment. The Indian Trust Human Resources Advisor has continued to
search for an affordable methodology for workload analysis that can be
more easily maintained and operated by the workforce planners in each
trust organization.

**Interior bureaus are expected to develop Workforce Plans** **by
September 30, 2003, for FY 2004-2008 and update annually.**

Each trust organization (every BIA region and OST) has now established a
designated unit that is engaged in workforce planning. Workforce
planning continues to be complicated by the ongoing reengineering;
however, it should enable managers to be more successful in designing
and funding the necessary strategies that should result in effective
staffing of organizations and in meeting employee development needs.

**[Delays and Obstacles]{.underline}**

The restriction on the use of the Internet resulting from the Court
imposed Temporary Restraining Order of December 5, 2001, has continued.
Due to the lack of Internet access, valuable resources must be expended
on every communication in order to continue operations. There is a
critical unmet need to provide easy access to real-time information to
every trust management employee during the necessary change process.

The reengineering of business processes is expected to be complete at
the end of March 2004, and implementation of new processes will follow.
The individual responsibilities of the employees and managers may
change. The completion of workforce plans during CY 2003, will, in many
cases, focus on work as it is known today. As the work is reorganized,
workforce plans will be updated.

**[Assurance Statement]{.underline}**

I concur with the content of the information contained in this section
of the *Status Report to the Court Number Fourteen.* The information
provided in this section is accurate to the best of my knowledge.

Date: July 29, 2003

Name: *Signature on File*

Kathryn A. Bown

Indian Trust Human Resource Advisor

[]{#__RefHeading___Toc47507399 .anchor}**E. OFFICE OF HISTORICAL TRUST
ACCOUNTING**

**[Introduction]{.underline}**

On July 10, 2001, the Office of Historical Trust Accounting (OHTA) was
established by Secretarial Order No. 3231. The purpose of OHTA is to
plan, organize, direct and execute the historical accounting of
Individual Indian Money (IIM) and Tribal Trust accounts (Secretarial
Order No. 3231 and Amendment Numbers 1 and 2).

**[Accomplishments and Completions]{.underline}**

**Accounting Standards Manual**

On June 10, 2003, OHTA issued a revised version of the *Accounting
Standards Manual.* This revision updated and superceded the initial July
2, 2002, version. OHTA staff and several contractors contributed to the
revised version of the *Manual,* which was distributed to all holders of
the initial version and received as defendants' exhibit D-059 in Trial
1.5.

**Collection of Missing Information from Outside Sources**

During this reporting period, two actions were taken to develop the
Department of the Interior's (Interior) policy for the collection of
third-party records. On April 30, 2003, the "Collection of Missing
Indian Trust-Related Records" was published in Part 303, Chapter 5 of
the Departmental Manual. On May 5, 2003, the "Policy and Procedures for
Collection of Missing Indian Trust-Related Records from Third Parties"
was published as a notice in the *Federal Register*, 68 F.R.
23756-23759. In summary, the policy states that Interior intends to
collect records from third parties if a data gap is discovered that
cannot be addressed with existing Federal records.

**Cadastral Pilot**

In June 2003, OHTA completed a pilot project begun in October 2001 to
evaluate, in part, cadastral survey data to assess how potential acreage
and location errors, if any, affect the distribution of income from
tracts of Indian trust lands. Cadastral surveys link realty documents to
the actual land.

The pilot project involved 37 tracts located in six different states and
involved four Land Title Records Offices. Project results indicated that
a large majority of tracts are likely unaffected by the risk factors
identified. OHTA does not at this time contemplate a comprehensive
cadastral resurvey of Indian lands as part of its historical accounting
project. Instead, a more targeted evaluation of survey data may occur if
a particular tract produces a significant amount of income and involves
many increased risk factors.

**[Current Activities]{.underline}**

**Judgment and Per Capita IIM Accounts**

An OHTA Certified Public Accounting (CPA) contractor has been tasked to
reconcile Judgment and Per Capita IIM account groups. As reported in
previous *Status Reports to the Court*, this contractor continues to
perform historical accounting procedures on these IIM accounts. The
contractor delivered two reports to OHTA, dated April 18, 2003, and May
28, 2003, which detailed the results of the contractor's Judgment IIM
historical accounting work. The contractor reported reconciliation of
1,013 Judgment IIM accounts, with an associated total value of \$953,761
as of December 31, 2000. To date, the cumulative number of Judgment IIM
accounts reconciled is 16,821 with a value of \$48,496,799 as of
December 31, 2000.

As reported previously, a different CPA contractor has been engaged to
perform a quality control check of the contractor's work. On June 25,
2003, a quality control report was issued on 700 Judgment IIM accounts
transmitted by the CPA contractor to OHTA on February 3, 2003. The
quality control contractor's report indicated its concurrence with the
historical accounting done by the CPA contractor.

The CPA contractor also transmitted to OHTA two monthly reports on its
work on Per Capita IIM transactions for the reporting period,
reconciling 6,212 Per Capita IIM transactions with an associated value
of \$72,515,642. The CPA contractor transmitted the foregoing in reports
dated April 18, 2003, for 2,838 transactions and May 28, 2003, for 3,374
transactions. To date, the cumulative total of Per Capita IIM
transactions reconciled is 117,425 with a value of \$162,180,239.

**Eastern Region IIM Accounts**

An OHTA CPA contractor continued to obtain transactional documentation
related to the Office of the Special Trustee for American Indians' (OST)
Trust Funds Accounting System (TFAS) to reconcile transaction balances
associated with IIM accounts in the Eastern Region. To date, 260
transactions have been reconciled from the 48 land-based IIM accounts in
the Eastern Region, and the CPA contractor is obtaining additional
documents to reconcile the remaining 61 transactions. The contractor
expects to complete this project by August 31, 2003.

**New IIM Accounts Opened 1998 and Later**

As reported in the *Status Report to the Court Number Thirteen*, a CPA
contractor prepared a work plan, approved by OHTA's quality control
contractor, to perform the accounting for new TFAS accounts in the
Southwest Region. The contractor performing this work has begun to
reconcile supporting documents to the transaction histories. As
reconciliation work progressed, the contractor identified additional
documents that will be required to support the transactions and complete
the accounting for these accounts. The identified documents have been
requested, and the collection process has begun. OHTA expects this
project to be completed by December 31, 2003.

**Historical Accounting Software**

As stated in previous status reports to the Court, the Accounting
Reconciliation Tool (ART) system is intended to standardize the
historical accounting reconciliation completed by OHTA's CPA contractor
firms. OHTA completed a draft business case analysis and capital plan
for the ART at the beginning of April 2003, and using data from the
draft business case completed the Office of Management and Budget's
Circular A-11 Exhibit 300 - Asset Capital Plan and Business Case -
(Exhibit 300) in May 2003. Also, in May 2003, a Chief Information
Officer Scorecard and Checklist was issued regarding the ART Exhibit
300, and OHTA received the final pieces of hardware for the ART system.

During this reporting period, OHTA began a Change Control Board process
to address proposed modifications to the ART that result from increased
demands placed on the ART system. OHTA will be conducting a User
Acceptance Testing of the tool in July 2003, to allow users to determine
whether the ART system meets their requirements. OHTA also expects
additional subsequent testing to occur.

**Prototype for Alaska Sample**

OHTA first reported this project in the *Status Report to the Court
Number Thirteen.* OHTA selected over 150 Alaska transactions from the
electronic data containing different kinds of receipts and
disbursements. While only a small random sample, this project will test
and refine record collection procedures, develop and test training
materials, and provide information on work tasks for the accounting
project.

OHTA selected 33 Alaska receipt transactions from 1987 to 2000 and 33
land-based contracts. To support the transactions, OHTA searched
associated financial and realty documents in the National Archives and
Records Administration's (NARA) facility, in Lee's Summit, MO, and OST's
Albuquerque, NM, records facility.

For disbursement sample testing, OHTA selected two types of
disbursements - checks and Electronic Fund Transfers (EFT) - from 1987
to 2000. The random sample tested 45 check payments, using Department of
the Treasury (Treasury) documents to ascertain whether these checks were
negotiated. Treasury found copies of 33 of the 45 check disbursements,
and the Check Payment and Reconciliation (CP&R) listing was available
for eight additional checks. Treasury found no records for the remaining
four checks as of June 30, 2003.

OHTA will summarize and evaluate the results for work on the 33 Alaska
receipt transactions. The sampling of 33 land documents has been
completed. Treasury will continue searching its records for the four
remaining checks. When the data for the EFT payments are obtained from
Treasury and evaluated, OHTA will issue a report on the results.

**Retrospective (pre-2001) Special Deposit Account (R-SDA) Cleanup
Project**

This project was referred to in the *Status Report to the Court Number
Thirteen* as "Special Deposit Account (SDA) Cleanup Project." R-SDAs are
administrative accounts, opened before January 1, 2001, that temporarily
hold funds (suspense accounts) until they can be allocated to
appropriate recipients. The cleanup project will identify trust and
non-trust account balances contained in R-SDAs, distribute monies to
proper IIM accounts, tribes or private entities, and identify or
reclassify funds that were improperly held in SDAs. As indicated in *The
Historical Accounting Plan for Individual Indian Money Accounts*, dated
January 6, 2003, OHTA's work on R-SDAs is different from other aspects
of its IIM historical accounting, such as the work associated with IIM
Judgment and land-based accounts, because it involves distribution of
funds.

The cleanup of the Alaska Region R-SDAs was substantially completed by
the targeted date of June 30, 2003. A total of sixty-five R-SDAs were
closed. OHTA expects to close the three remaining R-SDAs during the next
reporting period. The total value of the sixty-eight accounts is
approximately \$800,000.

During April and May 2003, OHTA and its contractors presented
Interior\'s orientation package that includes a Memorandum of
Understanding (MOU), Memorandum of Agreement (MOA) and Supplement
1-Agency Tactical Plan (ATP), to four Bureau of Indian Affairs (BIA)
Regions and their respective agencies. OHTA held orientation meetings
with BIA representatives of the Great Plains (Aberdeen, SD), Southwest
(Albuquerque, NM), Navajo (Gallup, NM) and Pacific (Sacramento, CA)
Regions. The MOU between OHTA and BIA concerning the R-SDA Project was
signed on June 20, 2003. OHTA received three signed MOAs and two signed
ATPs from agencies within the Pacific Region, clarifying each agency\'s
partnership preference for the level of OHTA support. OHTA anticipates
receiving a signed MOA from the Palm Springs Area Field Office during
the next reporting period. This will complete the MOAs and ATPs for the
Pacific Region.

The agencies within the Southwest and Navajo Regions agreed to OHTA
assuming responsibility to resolve and close their R-SDAs, and BIA staff
is cooperating to provide the required documents.

The agencies within the Great Plains Region have indicated that they
wish to self-perform the resolution and the closeout of their R-SDAs,
with OHTA providing oversight, and in some cases providing for overtime
and related costs.

The Yankton Agency within the Great Plains Region resolved and closed
208 of its 412 R-SDAs. The closed R-SDAs had a total balance of
\$92,930, and the remaining 204 R-SDAs have a total balance of \$52,486.
These include life estate, non-Indian, *Youpee* escheat and duplicate
accounts.

During this reporting period, OHTA conducted 14 agency visits and
located pertinent documents required for R-SDA cleanup. For 19
additional field offices, an OHTA contractor continued efforts for
ongoing account statement analysis and document search, and prepared 343
"Recommended Action Forms" totaling \$1,403,172. It is expected that
these forms will result in close-out posting by OST's Office of Trust
Funds Management (OTFM) during the next reporting period.

**[New Projects]{.underline}**

**Interior Imaging and Coding Specifications**

On February 26, 2003, OHTA sent a memorandum to the Director, Executive
Secretariat, and to all Chief Information Officers of Interior bureaus
and offices requesting concurrence with OHTA's proposed document imaging
standards for its historical accounting project. These standards
incorporate NARA's standard imaging specifications.

Draft coding specifications were distributed to OHTA contractors for
review and comment. OHTA expects to finalize its draft coding
requirements for IIM trust documents for its historical accounting work
during the next reporting period.

On June 19, 2003, representatives of OHTA, several of its contractors,
and a Minerals Management Service Contracting Officer met to discuss the
proposed contract for coding of imaged Indian trust documents for OHTA's
historical accounting project. As a result of the meeting, the
contractor is expected to submit a revised proposal during the next
reporting period to reflect the targeted document coding requirements
identified by OHTA.

**Alaska Project to Image and Code Indian Trust Documents**

OHTA has selected BIA's Alaska Region to begin its historical accounting
work to reconcile land-based IIM accounts. OHTA formed a document search
team (Team), consisting of representatives of OHTA's staff and two
historian contractors hired to perform records research. The Team has
produced a draft Document Collection Plan that outlines how the Team
will coordinate its efforts with other OHTA contractors in developing a
statistical sample of receipt and disbursement transactions, how
supporting documents for these transactions will be located and
recorded, and how the process will be monitored for quality assurance.

The Team implemented the Document Collection Plan pursuant to the
prototype sample of transactions for the Alaska Project, and collected
and reviewed documents at the Office of Trust Records (OTR) Albuquerque,
NM, records facility, NARA's records facility at Lee's Summit, MO,
offices of a BIA records contractor in Albuquerque, and OST's OTFM
office in Albuquerque. The purpose of the Team's document search is to
gather and identify Alaska records in preparation for imaging for OHTA's
imaging contractor. OHTA's imaging contractor expects to begin imaging
Alaska IIM trust documents during July 2003.

Following meetings with its pending coding contractor, OHTA determined
that coding of imaged Alaska Region trust account records would not meet
OHTA's original time schedule. As a result, on June 23, 2003, OHTA
tasked its imaging, document search, accounting, and ART contractors to
develop an abbreviated version of the coding requirements for the ART
that could be performed at the imaging stage in Albuquerque, NM. This
process will allow the historical account reconciliation work to begin
as soon as all the financial images are entered into the ART. When the
coding contractor is operational in Juneau, AK, it is expected that the
coding contractor will add the balance of the coding for the Alaska
documents.

**[Obstacles and Delays]{.underline}**

OHTA has identified the following problems and concerns.

1.  *December 5, 2001, Temporary Restraining Order/Computer Shutdown* --
    As discussed in this and previous *Status Reports to the Court*,
    OHTA continues to be affected by the computer shutdown that has
    delayed the completion of some of its historical accounting work.

2.  *June 27, 2003, Temporary Restraining Order/Computer Shutdown --*
    Interior has been ordered to disconnect from the Internet all
    information technology systems and computers that house or provide
    access to individual Indian trust data. OHTA will be delayed in its
    accounting work because of this Temporary Restraining Order.

3.  *Delay on Starting the Alaska Project --* OHTA does not expect to
    achieve its FY 2003 target goal of completing the reconciliation of
    20,000 land-based IIM transactions in the Alaska Region. As of this
    report, the Alaska Project will not start until the ART undergoes
    Interior's Certification and Accreditation (C&A) for its IT systems
    in August 2003. Further, owing to construction work at OTR's
    Albuquerque records facility, OHTA delayed the onset of document
    imaging for the Alaska Project.

**[Assurance Statement]{.underline}**

I concur with the contents of the above information on OHTA's activities
contained in the *Status Report to the Court Number Fourteen*. The
information provided in this section is accurate to the best of my
knowledge.

Date: July 29, 2003

Name: *Signature on File*

Bert T. Edwards, Executive Director

[]{#__RefHeading___Toc47507400 .anchor}**III. OFFICE OF INDIAN TRUST
TRANSITION**

The Office of Indian Trust Transition (OITT) was authorized by
Secretarial Order No. 3235, issued November 20, 2001. OITT was
established as a temporary office for the purpose of preparing for the
transition of trust operations from the current organizational structure
to a new, reorganized, trust operating entity. The mission of OITT
included: participating in the tribal task force consultation meetings
during 2002; overseeing the "As-Is" business process study, Bureau of
Indian Affairs (BIA) data cleanup, Trust Asset and Accounting Management
System, and probate project; and developing a Comprehensive Trust
Management Plan (CTM).

The reorganized trust services delivery system and CTM were completed
during the first half of CY 2003. The reorganization was designed in
such a way as to enable the new comprehensive trust management plan to
be implemented. It is expected that the reorganization of BIA and the
Office of the Special Trustee for American Indians (OST) can be fully
staffed by the end of FY 2004, although many of the key positions will
be filled during FY 2003.

The work of OITT has been satisfactorily completed. CTM is now in place
and being implemented. The reorganization was completed with the new
organizational alignment of BIA and OST being incorporated into the
Departmental Manual on April 21, 2003. Full implementation of the
reorganization is expected to continue during the next two fiscal years.

This is expected to be the final report of OITT. During the next
reporting period, the Secretary plans to issue a Secretarial Order
ending OITT and moving responsibility for oversight of any remaining
trust reform projects to BIA and OST. Earlier this calendar year, the
Director of OITT was nominated by the President and confirmed by the
United States Senate to the position of Special Trustee for American
Indians. The Special Trustee will continue to be responsible for
compiling the status reports to the Court.

**[Assurance Statement]{.underline}**

I concur with the content of the information contained in the Office of
Indian Trust Transition Section of the *Status Report to the Court
Number Fourteen*. The information provided in this section is accurate
to the best of my knowledge.

Date: July 26, 2003

Name: *Signature on File*

Ross O. Swimmer

Special Trustee for American Indians

IV. []{#__RefHeading___Toc47507401 .anchor}**OFFICE OF THE SPECIAL
    TRUSTEE FOR AMERICAN INDIANS (OST)**

**[Introduction]{.underline}**

Ross O. Swimmer was officially sworn in as the new Special Trustee for
American Indians on April 17, 2003. He is the third Special Trustee to
hold the office since the American Indian Trust Fund Management Reform
Act of 1994 (Act) was passed. According to the Act, the Special Trustee
is responsible for monitoring the reconciliation of tribal and
Individual Indian Money (IIM) trust accounts to present a fair and
accurate accounting of all trust accounts; to oversee trust reform
efforts within the Bureau of Indian Affairs (BIA), Bureau of Land
Management (BLM) and the Minerals Management Service (MMS); to ensure
that BIA establishes appropriate policies and procedures and develops
necessary systems to properly account for and invest IIM funds and
prepare accurate and timely reports to account holders; to ensure that
BIA establishes policies and practices to maintain accurate ownership
and lease data of Indian lands; to ensure that BLM has policies and
practices to enforce compliance with Federal requirements for drilling,
production, accountability, environmental protection, and safety with
respect to the lease of Indian lands; and to ensure that MMS establishes
policies and practices to enforce lease compliance, report of production
and audit of leases for calculating royalty payments.

In addition, the Special Trustee is responsible for reviewing the
budgets of BIA, BLM and MMS for preparation of a consolidated trust
management budget that will enable implementation of the comprehensive
trust management plan. The budget review is to include a certification
that the budgets are adequate for the discharge of the Secretary's trust
responsibilities and implementation of the plan. Finally, the Act
provides for the appointment of an advisory board to provide advice on
all matters within the jurisdiction of the Special Trustee.

Since the appointment of the first Special Trustee, other duties have
been assigned to the Special Trustee by the Secretary. These additional
duties include control and management of the OST's Office of Trust Funds
Management (OTFM), implementation of the Data Quality and Integrity
project (formerly BIA data cleanup), and additional oversight and
administration as a result of the recent reorganization and the
Comprehensive Trust Management Plan (CTM). The latter duties include
placement of trust officers at local BIA agencies and trust
administrators for BIA regions that will be located in Albuquerque, NM.
Although the line authority for these new positions will be through OST,
the work of the trust officers and administrators will be closely
aligned with BIA counterparts, with special attention directed to
beneficiary services.

**Special Trustee's Observations:**

**[Accomplishments and Completions]{.underline}**

Throughout this *Status Report to the Court Number Fourteen,* the
various managers of trust improvement and reform discuss their
accomplishments. A few of these are of particular interest to the
Special Trustee and will be highlighted in this section.

**Expansion of the OST Financial Audit**

Since 1995, OTFM has been audited annually. The audits cover the time
from OTFM's receipt of funds through the management and disbursement of
funds. In an effort to ensure that collection of the funds is managed
appropriately and that internal controls are in place and being followed
by all agencies collecting funds on behalf of IIM account holders and
tribes, OST has proposed and is implementing an expanded audit for FY
2004 which is expected to cover all funds from the time of collection
from the payors through disbursement to the beneficiaries. In addition,
the audit will be done under the direction of the Inspector General for
Interior rather than OST. The expanded audit should provide greater
insight into the management of Indian funds and help identify and
address any internal control weaknesses.

**Records Improvement**

Despite two problems discussed below, I am pleased with the progress of
records management. As is reported in the records section of this
Report, guidelines have been established for identifying fiduciary trust
records, and procedures are well underway for proper management of trust
records.

Unfortunately, two matters relating to records management occurred
during this reporting period involving the MMS. Some records that appear
to be Indian trust records were destroyed at the Farmington Indian
Minerals Office and records relating to MMS audits were misplaced and
subsequently recreated without advising the Inspector General that the
recreated records were not originals. I reviewed these two matters with
the appropriate authorities and am satisfied that there were internal
controls and substantial guidance from Interior managers which should
have prevented these breaches of records policy. In each case, action
has been taken to discipline the employees involved. However, as a
result of one adverse personnel action, the employee involved has filed
a grievance against Interior. This matter will continue to be reviewed
by OST.

**Audit and Review**

OST has created an Office of Trust Review and Audit (OTRA) consisting of
a portion of the previous Office of Risk Management and the former
Office of American Indian Trust that was transferred to OST from BIA and
was responsible for reviewing tribal self-governance trust compact
operations. OTRA will focus on reviewing internal controls,
investigating complaints from IIM and tribal account holders, continuing
and expanding the audits and reviews of tribal trust contracts and
compacts for operation of trust operations, and will manage a program to
rate the effectiveness of BIA and OST trust operations for compliance
with internal controls and management of trust operations at locations
providing trust services.

OTRA will also have available the services of an investigator from the
Office of the Inspector General of Interior in the event of complaints,
or allegations of wrongdoing or criminal acts. OTRA division has also
been in contact with the Department of the Treasury to request full time
support from the Office of the Comptroller of the Currency (OCC) to
develop the rating system for use in evaluating the various locations of
trust operations within BIA and OST. An OCC examiner is expected to be
available on detail to support this effort beginning September 2003.

**Reorganization**

The reorganization of BIA and OST was completed through the
establishment of the new organizational structure in the Department
Manual on April 21, 2003. The reorganization is intended to support the
goals and objectives of the CTM which was completed earlier this
calendar year. The CTM also incorporates the Fiduciary Obligations
Compliance Plan elements which is the plan submitted to the court on
January 6, 2003. Unless the Court directs otherwise, Interior will
continue implementing the CTM and reorganization including all parts
related to financial management included in the Fiduciary Obligations
Compliance Plan.

The reorganization has been presented to the field offices and tribes at
numerous briefings during this reporting period. BIA has explained the
plan to its field offices. Although there appears to be some resistance
from some BIA employees to parts of the plan, BIA is to be commended for
its efforts, in particular for the recognition that it must change the
culture of its organization as it relates to trust management. In this
regard, the BIA has engaged the services of a contractor to assist in
"change management" support. I have attended several sessions with the
contractor and believe that this effort will be very helpful to BIA and
OST employees as the reorganization is fully implemented from now
through the next calendar year.

**Information Technology**

This continues to be an area of great concern. To date, no new system
has been developed to support the required real property and natural
resource management activity of BIA. Continued use of legacy systems is
causing problems with BIA trust management. These legacy systems must be
replaced in an orderly manner as soon as possible. Interior has a trust
architect working with the Assistant Secretary-Indian Affairs Chief
Information Officer and OST Chief Information Officer to help determine
the kind of systems necessary and fit them into the trust architecture.
It is believed that additional progress toward identifying the necessary
systems will continue during the next reporting period.

The lack of Internet access is continually reflected as an obstacle in
the various sections contained in this *Status Report to the Court
Number Fourteen*. Although security of systems is an appropriate goal,
limited use of the Internet is necessary to support the work of the
various bureaus involved in trust reform and management. A direct result
of the December 5, 2001 Temporary Restraining Order/computer shutdown
and the recent June 27, 2003, Order, is the very large backlog of
encumbrances to be filed in the land record title offices and the need
to use antiquated manual methods for determining title rather than being
able to rely on automated systems. Although the automated system is the
system of record for land titles, the inability to record documents
electronically and transmit this information timely to all BIA land
title offices, results in some documents having to be examined by hand
to ensure that the title reflects current ownership. This also adds to
substantial delays in providing official title status reports.

Similarly, probates are affected by the lack of availability of Internet
use, particularly in case preparation, the stage of probate work where
the greatest backlog exists. Due to the highly fractionated land
ownership, probates are often done for estates of minimal value -- less
than \$100. To manage nearly four million fractionated interests of
property owned by approximately four hundred thousand individual Indians
spread over half of the United States is virtually impossible without
access to modern tools such as the Internet. Interior must continue
doing whatever is possible to meet the requirements of the court for
reconnection to the Internet or develop other methods of interaction
such as dedicated telephone access for communication purposes.

**Summary**

Overall, I am pleased with the progress of trust reform and improvement.
I believe the reorganization will be of great help in focusing on the
fiduciary trust obligations of Interior.

**[Assurance Statement]{.underline}**

The comments and observations are provided by the Special Trustee and
reflect the opinion of the Special Trustee only.

Date: July 26, 2003

Name: *Signature on File*

Ross O. Swimmer

Special Trustee

A.  []{#__RefHeading___Toc47507402 .anchor}**TRUST BUSINESS MODELING**

**[Introduction]{.underline}**

During this reporting period, the Department of the Interior (Interior)
commenced the "To-Be" Reengineering phase of its effort to build a
highly effective fiduciary trust services delivery organization. The
"To-Be" reengineering phase is a process redesign activity intended to
transform the current trust business processes into more efficient,
consistent, integrated and fiscally sound business processes that meet
the needs and priorities of the beneficiaries and Interior. The "To-Be"
reengineering phase consists of seven major tasks:

-   Conduct a reengineering training workshop

-   Develop a Concept of Operations

-   Develop an initial "To-Be" Model

-   Conduct model redesign and refinement (includes Gap and Cost-benefit
    analysis)

-   Validate the initial "To-Be" Model during Bureau of Indian Affairs
    (BIA) Regional site visits

-   Finalize the "To-Be" Model

-   Develop an Implementation Strategy

The integrated and beneficiary-centric "To-Be" Model is scheduled to be
completed by March 31, 2004. Implementation of the "To-Be" Model across
Interior will follow.

The project organization leadership includes the Trust Executive
Steering Committee for oversight, the Office of the Special Trustee for
American Indians (OST) and BIA for project direction, and the Trust
Program Management Center for the development of the "To-Be" model, and
coordination and implementation of the final trust services delivery
model.

**[Accomplishments and Completions]{.underline}**

During this reporting period a copy of the "As-Is" business process
study was submitted to the Court and made available to the general
public. In addition, the preparation, planning, scheduling, team
building and training tasks were completed. Parameters or foundations of
the "To-Be" Model were established and progress is currently being made
on development of the initial "To-Be" Model. The following list
summarizes the completed reengineering activities:

-   A Project Plan for reengineering was completed which sets the scope,
    management approach, schedule, human resources, change control,
    quality assurance and tasks for development of the "To-Be" Model.
    The Project Plan includes:

    -   A "To-Be" Change Management Plan which is intended to prepare
        stakeholders for the changes that the "To-Be" Model will require
        across Interior.

    -   A "To-Be" Communication Plan which is a strategy for keeping all
        stakeholders informed as Interior makes progress toward the
        "To-Be" model. This plan is a dynamic one which will be modified
        as the effectiveness of the various communication strategies is
        evaluated.

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-   A "Business Case for Action" was prepared to relate the importance
    of reengineering to Interior's trust reform effort and to reinforce
    the goals of the *Comprehensive Trust Management Plan* (CTM). The
    Business Case also includes reengineering goals and the need for
    partnerships and collaboration.

-   A reengineering core team was identified for the purpose of engaging
    appropriate Interior bureaus, agencies and offices, and Tribes in
    the reengineering effort at different levels. Their assistance is
    critical to the identification of trust business process
    alternatives and opportunities for improvement. The core team is
    divided into a technical group (Tier 1) and a review and validation
    group (Tier 2).

-   A reengineering training workshop was held in Albuquerque, NM. The
    purpose of the workshop was to acquaint the business process
    sponsors and the Tier 1 core team participants with business process
    reengineering methodologies, strategies and concepts. Change
    management strategies, design principles and implementation
    activities were also presented.

-   Initial design criteria which provide the operating principles,
    parameters and guidelines for reengineering were developed for the
    "To-Be" Model. The design criteria were extracted from the
    Secretary's Trust Principles and the direction, goals and objectives
    identified in the CTM.

-   The Full Service "To-Be" Concept of Operations (ConOps) was
    developed by the trust business process modeling team. The ConOps is
    a high-level view of how trust management will function in the
    "To-Be" Model and serves as the basis, or foundation, for the
    "To-Be" process design. The ConOps illustrates the Beneficiary-Land
    and Natural Resources relationship and builds upon the three
    business lines and the Service Delivery Model identified in the CTM.

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-   The first "To-Be" Reengineering Workshop was held in May 2003. A
    Workshop Summary Report and a CD with the Process Workflow Charts
    were distributed to the participants, and the Tier 2 core team.

The business process modeling team proposed the following initial core
trust business processes:

-   Beneficiary Relationship Development and Management

-   Financial Operation

-   Ownership

-   Land and Natural Resources Planning

-   Land and Natural Resources Use and Management

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-   The second "To-Be" Reengineering Workshop was held in June 2003.
    During this workshop, previously identified trust functions became
    sub-processes to the core trust business processes identified during
    the first Workshop. Each sub-process was defined by a process
    description and logical beginning and ending points. In addition,
    specific roles, locations and organizations involved in performing
    the new sub-processes were identified. A Workshop Summary Report and
    a CD with the Process Workflow Charts were distributed to the
    participants and the Tier 2 core team.

**[Current Status]{.underline}**

The actual "To-Be" reengineering activity began in May and is expected
to continue through September 2003, and is scheduled to be carried out
during monthly workshops with the Tier 1 core team. Between the
workshops, the business process sponsors plan to continue developing
detailed process flow diagrams for the new business processes. In
addition, processes are being aligned with the organizational roles and
business lines as outlined in the CTM. Implementation of the
Communication Plan is continuing and meetings are scheduled in July 2003
to develop a joint OST and BIA Change Management Strategy.

**[Delays and Obstacles]{.underline}**

Major obstacles affecting Interior's efforts to build a trust services
delivery model include:

-   The lack of Internet access

-   The sheer complexity of reengineering the existing trust business
    processes to achieve integrated and consistent business processes

-   The massive, Interior-wide change which will be required to
    transform the existing trust business processes into a
    beneficiary-centric operation.

**[Assurance Statement]{.underline}**

I concur with the content of the information contained in the Trust
Business Modeling section of the *Status Report to the Court Number
Fourteen*. The information provided in this section is accurate to the
best of my knowledge.

Date: July 30, 2003

Name: *Signature on File*

D. Jeff Lords

Acting Deputy Special Trustee,

Trust Accountability

B.  []{#__RefHeading___Toc47507403 .anchor}**COMPREHENSIVE TRUST
    MANAGEMENT PLAN**

**[Accomplishments and Completions]{.underline}**

The Comprehensive Trust Management Plan (CTM) was submitted to the Court
during this reporting period. Following the publication of CTM, an
outreach plan was developed to inform Department of the Interior
(Interior) employees about CTM, and the recently-authorized
reorganization of the Bureau of Indian Affairs (BIA) and the Office of
the Special Trustee for American Indians (OST). The outreach plan was
implemented during June with onsite meetings in each of the twelve BIA
regions. Nine teams of OST/BIA managers went to the regions to brief
staff and Tribal representatives on CTM and reorganization.

**[Current Status]{.underline}**

CTM provides a framework for all trust reform initiatives with an
emphasis on improvement in beneficiary services, business processes,
organization structure and technology. It is anticipated that
implementation of CTM will span several years and result in improved
services to tribal and individual trust beneficiaries. Trust reform will
be implemented largely through the reengineering of Interior business
management processes known as the "To-Be" project. A team of personnel
from all Interior bureaus and offices with trust management
responsibility has been meeting since April 2003 to design how trust
business should be conducted in the future. One focus of the initiative
is on development of a one-stop service delivery system that will enable
beneficiaries to obtain information regardless of which office receives
the request.

The reorganization is another major component of trust management reform
in CTM. The realignment is expected to provide for improved
effectiveness, accountability of trust assets and overall management.
The Secretary of the Interior approved the Departmental Manual changes
on April 21, 2003, authorizing the reorganization. One significant
result of the reorganization will be the placement of OST Trust Officers
in BIA Agency Offices and in Indian country. The Trust Officer is
expected to be a central point of contact for beneficiaries to obtain
information and trust services, and is expected to oversee proper
management of trust assets to ensure compliance with the Secretary's
fiduciary trust responsibilities.

Trust Reform Project Management Tracking Software (TMT) that is tied to
the goals and objectives in CTM is being developed to track the timely
implementation of critical projects that will significantly impact the
implementation of trust reform. TMT should provide management at all
levels of the organization with access to information about the various
ongoing trust initiatives to ensure accomplishment of plan goals and
objectives. Presently, TMT is expected to be connected only to BIA and
OST networks. However, it is anticipated that with the future
restoration of Internet services, additional bureaus' initiatives will
be included in the system, enabling the Special Trustee to track the
status of the projects and initiatives across bureaus, and manage the
implementation of CTM.

The TMT is expected to link trust projects to CTM by organizing the data
according to CTM Strategic Framework. Specifically, the data is expected
to be organized according to the four framework areas of:

1.  Beneficiaries (Tribal and Individual Indians)

2.  Business Processes

3.  Organization

4.  Technology and Data

This should enable the Special Trustee to determine the number of
projects underway in each area of consideration and should provide
greater accountability through increased communication of project
status.

The next steps to be completed for TMT include:

-   Development and implementation within the next reporting period.

-   Issuing a data call to the different bureaus within Interior.

-   Organization and entry of trust reform project task data into TMT,
    to implement CTM.

-   Training for project managers.

-   Address developmental issues and determine management reporting
    capabilities.

**[Obstacles and Delays]{.underline}**

OST continues to encounter obstacles which result in the delay of CTM
and trust reform efforts. These obstacles tend to fall into two
categories:

-   Personnel considerations

-   Technological considerations

Personnel considerations include employee transition impacts and change
management necessitated by OST/BIA reorganization. This obstacle was
expected and is currently being addressed through implementation of an
outreach plan. OST anticipates this obstacle to lessen over time, but
not to be resolved until after full implementation of the
reorganization.

Technological considerations include the need for better communication
and coordination within and across bureaus. Currently, being unable to
share large amounts of information electronically across bureaus is
hindering the ability of Interior to communicate and implement trust
reform as effectively as possible. In order to share documents and
information in electronic format, this information must currently be
saved to disk and mailed or hand-delivered. This increased delay hinders
trust reform as transmission of data in a manual format often takes days
instead of minutes.

The lack of Internet access includes side effects such as the
compounding effect of additional work. This is demonstrated by the
increased amount of manual work necessary to complete a task. As staff
is diverted away from specific trust reform initiatives to improve the
communication and coordination between bureaus, CTM is delayed. This
"extra work" consumes important resources that could otherwise be better
spent to further trust reform efforts if the electronic obstacle to
communication and coordination did not exist.

**[Assurance Statement]{.underline}**

I concur with the content of the information contained in the
Comprehensive Trust Management Plan section of the *Status Report to the
Court Number Fourteen*. The information provided in this section is
accurate to the best of my knowledge.

Date: July 28, 2003

Name: *Signature on File*

Victor J. Christiansen

Office of the Special Trustee for American Indians

C.  []{#__RefHeading___Toc47507404 .anchor}**TRUST DATA QUALITY AND
    INTEGRITY**

> **(Formerly BIA Data Clean-up)**

**[Introduction]{.underline}**

The success of trust reform depends foremost on the accuracy of data,
upon which trust land is maintained, trust land ownership is determined,
trust income distributed, and trust accounts managed. The purpose of
this trust reform task is to standardize trust data elements, implement
quality controls which will ensure trust data is accurate, current, and
secure, and to provide trust real property asset statements to
beneficiaries.

**[Background]{.underline}**

As reported in the *Ninth Report to the Court*, this trust reform task,
then titled, \"Trust Data Quality Analysis,\" was the previous Bureau of
Indian Affairs (BIA) Data Cleanup task. The BIA Data Cleanup effort was
part of a systems approach to trust reform that was directed toward
converting to the Trust Asset and Accounting Management System (TAAMS).
Data cleanup focused on technology and system logic issues, with a
specific emphasis on researching data which did not convert from the
legacy systems to TAAMS. Data cleanup did not necessarily focus on
business-oriented data cleanup issues, such as standardizing databases
or addressing fiduciary responsibility and beneficiary priorities.

As further reported in the *Ninth Report to the Court*, until the core
trust business processes were reengineered, data cleanup requirements
would be driven by fiduciary responsibilities and priorities. The
reprioritized data cleanup project would begin by correcting all trust
data used to manage producing assets for beneficiaries. Developing
corrected, operational databases would require identifying data items
that are critical to producing an accurate record of beneficiaries\'
assets or ensuring correct distributions of trust income.

As reported in the *Tenth Report to the Court*, the Office of the
Special Trustee for American Indians (OST), Trust Systems and Projects
(TS&P) office met with the Director, BIA Office of Trust
Responsibilities and representatives from four BIA Land Title and
Records Offices (LTRO) to discuss the direction of data cleanup and the
development of Critical Data Elements (CDE). It was also reported that
the TS&P office selected the Anadarko Agency and Concho Agency to renew
data quality and evaluation work, as these agencies were two of the top
three trust fund individual Indian money generating agencies in the
country and accounted for seventeen percent (17%) of trust fund revenue
produced.

As further reported in the *Tenth Report to the Court*, once the list of
CDE was agreed upon and formalized, documents and data cleanup actions
would be reviewed and measured against these elements and subjected to a
data quality and validation process. Any errors found would be reported
to the appropriate data owners for validation. Once the document or data
cleanup action was validated, the information would be stored in an
independent interim data system to ensure that data integrity was
maintained. Subsequent changes to the interim data system would be
tightly controlled and require third-party validation.

As reported in the *Eleventh Report to the Court*, the Concho, Anadarko,
and Eastern Navajo Agencies, were selected as Data Quality and Integrity
(DQ&I) Model Agency Project sites as they were three of the top four
agencies for having the highest recurring amounts of trust income being
deposited into Individual Indian Moneys (IIM) accounts. Upon full
implementation at these sites, the DQ&I Model Agency Project would be
scheduled for implementation at the remaining top ten agencies, prior to
a nation-wide deployment.

As further reported in the *Eleventh Report to the Court*, a data
warehouse was scheduled to be developed and used to extract,
periodically, CDE originating from the systems used by the various
Interior bureaus and offices (primarily BIA, Office of Trust Funds
Management (OTFM), and Minerals Management Service). It was
conceptualized that the data warehouse would serve as the interim data
system for the storage of validated CDE, and transaction updates to the
validated CDE would be tightly controlled and require third-party
validation, as reported in the *Tenth Report to Court*.

As reported in the *Twelfth Report to the Court*, the Trust Data Quality
Analysis section was re-titled DQ&I. It was also reported that site
assessments were conducted at the Concho, Anadarko, and Eastern Navajo
Agencies, and that the contractor\'s data cleanup efforts were modified
to focus on the CDE validation/correction effort at the three DQ&I model
sites.

As reported in the *Thirteenth Report to the Court*, the Eastern Navajo
Agency (ENA) was removed from the DQ&I Pilot Agency site list for fiscal
year 2003, because: (1) the Integrated Resources Management System was
not being fully utilized in their trust processes; (2) the Southwest
Region LTRO had a processing backlog for ENA, and (3) the Southwest
Region LTRO had not yet converted to TAAMS land title product.

As further reported in the *Thirteenth Report to the Court*, the Trust
Enterprise Architecture (TEA)-Integrated Product Team (IPT), recommended
the DQ&I Project proceed with the development of a statement of
performance database (rather than a data warehouse as originally
contemplated) for temporary CDE data storage that would be used in the
comparison, analysis, and variance reporting in support of the statement
of performance production.

The statement of performance database was the name used, by TEA-IPT, for
the database where CDE, extracted from the non-integrated trust systems
(i.e. TAAMS land title product, Real Estate Module, Integrated Records
Management System, Royalty Distribution Reporting System, and the Trust
Funds Accounting System), would be temporarily stored in order to
compare and analyze CDE and produce CDE variance reports.

As a result of this TEA-IPT recommendation, the DQ&I Project
implementation approach was modified to incorporate the following three
main components: (1) CDE validation/correction; (2) implementation of a
Post Quality Assurance process, and (3) variance reporting, to
facilitate timeliness and efficiency.

**[Accomplishments and Completions]{.underline}**

During this reporting period, the following major accomplishments were
completed by the Trust Program Management Center:

-   The DQ&I Draft Concept of Operations (ConOps) document was provided
    to the Director, BIA and the Deputy Assistant Secretary Information
    Resources Management / Chief Information Officer. The ConOps
    document provides the detailed methodology and strategy for
    implementing the DQ&I project.

-   The Trust Funds Accounting System (TFAS) trust real property asset
    reporting feasibility study was received. The feasibility study, so
    far, indicates TFAS, with some enhancements and modifications would
    be capable of generating trust real property asset statements for
    beneficiaries who own trust property within the jurisdiction of the
    Anadarko and Concho Agencies. TFAS trust fund distribution
    feasibility study has been suspended due to BIA\'s efforts in
    analyzing existing systems which can perform trust fund
    distributions.

-   Alaska Region and Eastern Oklahoma Region Land Title Data Conversion
    assessments were completed. These assessments were conducted to
    determine whether there were databases containing accurate land
    title information for these regions which could be uploaded to TAAMS
    land title product. The assessment findings were provided to BIA for
    further action.

-   A DQ&I site assessment was conducted at the Pima Agency. The purpose
    of this site assessment was to collect information pertaining to
    this agency's document processing backlog, trust systems used,
    volume of trust transactions, and sources of trust income. This
    information is expected to be used for DQ&I project implementation
    planning at this location.

-   Variance report formats and requirements were developed. These
    report formats and requirements will be forwarded to BIA for report
    development in the next reporting period.

In addition, during this reporting period, the contractor successfully
completed the following:

-   588 right-of-way (ROW) files were organized at the Concho Agency.

-   1,637 surface lease files were organized at the Anadarko Agency.

-   310 oil and gas (O&G) lease assignment documents, at the Anadarko
    Agency, were prepared for recordation and submitted to the Southern
    Plains Regional Office (SPRO) - LTRO.

-   551 homesite and business lease files were organized at the Anadarko
    Agency.

**[Current Status]{.underline}**

**DQ&I Pilot Agency Project**

The Concho and Anadarko Agencies are the DQ&I Pilot Agency Project
sites. The DQ&I project is scheduled to be implemented the next
reporting period at these agencies, as well as at the SPRO-LTRO. The
SPRO-LTRO is the servicing office for the Concho and Anadarko Agencies.

The DQ&I project strategy and methodology focuses on accomplishing two
initiatives: (1) implementing a Post Quality Assurance (Post-QA) process
at the Anadarko Agency, Concho Agency and SPRO-LTRO, and (2)
validating/correcting current CDE to their source documents. CDE are
defined as those trust data elements which are needed to provide: (1)
timely and accurate payments to beneficiaries; (2) timely and accurate
transaction listings and asset inventories to beneficiaries, and (3)
effective management of the assets. Examples of CDE are beneficiary
name, account number, tract identification number, and land ownership
interests.

Once the DQ&I project has been successfully implemented at the Anadarko
Agency, Concho Agency, and SPRO-LTRO, the DQ&I project is planned to be
implemented at other agency locations based upon the locations annual
recurring amount of trust income deposited into IIM accounts and the
number of IIM accounts at that location.

**Post-QA Process**

The Post-QA process is a review of the previous day's encoding of CDE
transactions relating to land title and realty (i.e., tract
identification (ID) numbers, land owner ID numbers, ownership interests,
encumbrance documents, etc.). Specifically, the Post-QA process compares
transactions entered into the BIA legacy systems to their source input
documents, with the intent of ensuring CDE transaction accuracy. The
Post-QA is expected to be performed by a contractor at the Anadarko
Agency, Concho Agency, and SPRO-LTRO. Under the DQ&I Draft ConOps, the
Post-QA process is the mechanism designed to help ensure that
validated/corrected CDE will remain accurate.

**CDE Validation/Correction**

Current CDE should be validated/corrected, on a land tract-by-land tract
basis, to their source input document with errors being delivered to the
CDE owner for resolution. It has been administratively determined that
the CDE validation/correction timeframe is 15 years or the last land
title status report certification date, whichever is closer to the date
CDE validation/correction begins.

Upon completion of CDE validation/correction at the Anadarko Agency,
Concho Agency, and SPRO-LTRO, the Post-QA process should help ensure
that updates to CDE, which have been validated/corrected, are accurate.

**CDE Variance Reporting**

CDE variance reports are expected to be utilized to promote timely and
efficient Post-QA and CDE validation/correction. These variance reports
should identify by land tract: (1) CDE; (2) CDE variances between BIA
and OST systems, where CDE are common among systems, and (3) CDE
updates.

These variance reports can also be utilized by the Anadarko Agency,
Concho Agency, SPRO-LTRO, and OST, as these reports should show CDE
discrepancies between the respective trust systems. By knowing where
these discrepancies are, these offices: (1) should be able to better
administer the trust data they manage, and (2) can perform root cause
analyses to determine the causes of CDE discrepancies across trust
systems.

**Contractor Efforts**

For fiscal year (FY) 2002, the allocation for BIA data cleanup
activities was \$10,956,000. For FY 2003, the allocation for BIA data
cleanup activities was reduced to \$4,967,000. Due to the allocation
reduction and the new focus of the DQ&I project, as reported in the
*Twelfth Report to the Court*, the contractor\'s efforts were modified
to focus on CDE validation/correction effort at the DQ&I pilot sites.
BIA concurred with our modification to reduce the contractor\'s level of
effort and to focus on DQ&I pilot sites.

During this reporting period the contractor's focus was: (1) DQ&I pilot
agency project tasks at the Anadarko and Concho Agencies; (2) Southwest
Regional Office (SRO)-LTRO document processing tasks for ENA, and (3)
Encoding Alaska Region land title transactions into TAAMS land title
product. The Alaska Region land title encoding was performed at the
contractor\'s Albuquerque, NM, office.

Specifically, the contractor\'s continued efforts in support of the
Pilot agency projects were:

-   ROW recordation preparation at the Concho Agency.

-   O&G file organization at the Concho Agency.

-   Land title report gathering and anomaly verification at the Concho
    Agency.

-   O&G lease file organization at the Anadarko Agency.

-   Land title report gathering and anomaly verification at the Anadarko
    Agency.

In addition, the contractor\'s efforts continued to support:

-   Drafting and encoding, into the Land Records Information System
    (LRIS), administrative probate modifications for ENA.

-   Encoding encumbrances, into LRIS, for ENA.

-   Encoding, into LRIS, Certificate of Indian Blood administrative
    modifications for ENA.

-   Encoding land title documents (i.e. trust patents, conveyances,
    encumbrance documents, etc.) into TAAMS land title product, for the
    Alaska Region.

**[Data Cleanup Delays and Obstacles]{.underline}**

As reported in the contractor\'s quarterly report to OST, during this
reporting period the contractor\'s data cleanup efforts were impacted by
the following:

-   Delayed access to BIA legacy systems due to untimely issuance of
    user identifications from the Office of Information Resource
    Management and subsequent untimely security profile set-up by local
    BIA offices.

-   LRIS being unavailable for encoding or for requesting reports at
    SRO-LTRO.

-   LRIS overnight batch update failures at SRO-LTRO.

-   TAAMS land title product being unavailable for encoding or for
    requesting reports.

**[Assurance Statement]{.underline}**

I concur with the content of the information contained in this Trust
Data Quality and Integrity section of the *Status Report to the Court
Number Fourteen*. The information provided in this section is accurate
to the best of my knowledge.

Date: July 28, 2003

Name: *Signature on File*

John E. White

Supervisory Trust Reform Specialist

D.  []{#__RefHeading___Toc47507405 .anchor}**CURRENT ACCOUNTING
    ACTIVITIES**

**[Overview]{.underline}**

Current accounting activities include the following: 1) Locate Missing
Mandatory Documents for Unrestricted Accounts; 2) Trust Funds Accounting
System (TFAS); 3) Whereabouts Unknown Accounts (WAU); 4) Special Deposit
Accounts; 5) Small Balance Accounts; and 6) Accounting Discrepancies.

1.  **Locate Missing Mandatory Documents for Unrestricted Accounts**

**[Introduction]{.underline}**

All unrestricted accounts with automated disbursements require certain
documents. For accounts that were established prior to conversion to
TFAS, some of these documents are missing, and efforts to acquire them
are underway. These documents include disbursement authorizations and
W-9 forms or copies of Social Security cards.

As previously reported, Phase I of the data collection task began prior
to TFAS conversion. Phase I included updating unrestricted accounts
having cumulative disbursements exceeding \$5,000 over a 12-month
period. There were 472 accounts identified, and letters and forms were
sent to the account holders asking them to complete and return the
forms. Documentation has been received for all 472 accounts.

**[Accomplishments and Completions]{.underline}**

Phase II of the "locate missing documents" project included data
collection for all remaining unrestricted accounts regardless of their
disbursement totals, excluding accounts that already contained all
mandatory documents. A total of 39,528 initial letters were mailed to
account holders requesting mandatory documents. A minimum of three
follow-up requests are expected to be sent to these unrestricted account
holders. Documentation of account status change, or other required
information for automated disbursement, was received for 1,874 accounts
this reporting period. Of the 39,528 total remaining unrestricted
accounts, documentation for automated disbursements has been received
for 16,019 accounts, leaving 23,509 accounts still awaiting
documentation. As of June 30, 2003, 3,853 accounts were placed in
restrictive status due to various reasons, i.e., account became a
whereabouts unknown, went into probate, etc., thus eliminating the
requirement for documentation to support the automated disbursement form
and further reducing the number of accounts awaiting documentation for
automated disbursement to 19,656, since this project only involves the
unrestricted accounts. These accounts will remain in restrictive status
until required documentation is received.

Throughout this effort, the cost and logistics of having documents
notarized or witnessed has been an obstacle to the success of this
project. A new policy is expected to go into effect during the next
reporting period that will eliminate the need for notarization. The new
policy will only require a single witness. The new policy should address
the requirements for accepting signatures, and should implement
procedures that are similar to private sector standards.

**[Current Status]{.underline}**

Phase I -- completed, received documentation for all 472 accounts.

Phase II -- 19,656 accounts are awaiting documentation.

**[Delays and Obstacles]{.underline}**

Obstacles include notarization/witnessing requirements, lack of account
holder response, mobility of account holders and the lack of Internet
access.

Electronic imaging is necessary for immediate access to Individual
Indian Monies (IIM) jacket folder contents, including disbursement
authorization forms, W-9's, copies of Social Security cards, birth
certificates, etc. Imaged documents would be accessible by central
office and field staff. If available electronically these documents
could be available to all systems simultaneously. This project has been
referred to the Assistant Deputy Secretary for consideration.

Lack of imaging has also been identified as an issue by the Office of
Historical Trust Accounting (OHTA) and the Office of Trust Records.
Meetings to discuss this issue are being planned for later this year.

**2. TFAS**

**[Introduction]{.underline}**

The conversion of the IIM accounts to TFAS was completed in March 2000.
TFAS is a generic term for the contractor's off-the shelf, standard
trust accounting system. TFAS provides the basic receipt, accounting,
investment, disbursing and reporting functions common to commercial
trust funds management operations. The system is owned and operated by a
contractor, in a service bureau environment.

**[Current Status]{.underline}**

The Office of the Special Trustee for American Indians (OST) is working
with the contractor to explore ways in which it can store additional
information in TFAS to provide performance statements to account holders
which will identify the source of income and a listing of all assets
owned. During the next reporting period, further information from the
contractor is expected to be obtained.

The TFAS contract is being reviewed to determine if real estate modules
can be used as alternatives to the legacy systems currently in place.

**[Delays and Obstacles]{.underline}**

None

**3. Whereabouts Unknown Accounts**

**[Introduction]{.underline}**

Accounts are classified Whereabouts Unknown for various reasons
including: new accounts are established without a valid address,
notification of a change of address has been received from a third
party, correspondence has been initiated but the account holder has not
responded, mail is returned due to invalid addresses, and account
holders refuse or do not claim their mail. As reported in previous
*Status Reports to the Court*, multiple methods are being utilized to
locate account holders whose whereabouts are unknown.

**[Accomplishments and Completions]{.underline}**

The most recent effort was initiated in November 2002, through an
interagency agreement with the Internal Revenue Service (IRS) for a
letter forwarding service. As of June 30, 2003, addresses for 1,996
account holders were updated as a result of the IRS letter forwarding
process.

**[Current Status]{.underline}**

The WATCH effort, as described in earlier status reports to the Court,
continues with a contractor that notifies OST of possible address
changes. During this reporting period, 3,314 WATCH notifications were
received from the contractor. Verification letters and change of address
forms were then sent to these account holders.

OST is working with the Social Security Administration and Veteran's
Administration in an effort to locate WAU account holders. OST is
waiting for *Agreements Covering Reimbursable Services* and projected
cost estimates from both organizations. Approvals from both
organizations have been obtained, and an agreement has been reached. The
contract memorializing this agreement is expected during the next
reporting period.

During the next reporting period, OST will be working on establishing
interagency agreements with Personnel Offices in other Interior agencies
to share the WAU list in an attempt to compare databases for current
address information.

Priority is put into locating the current Top 100 highest dollar balance
WAU account holders. Efforts include looking for phone numbers, calling
other account holders with same last name, calling field offices, etc.
During this reporting period, 16 out of the top 100 WAU account holders
were located, with combined accounts in excess of \$1,187,000.

As of June 30, 2003, there were 67,184 WAU accounts totaling \$88.4
million. The following table illustrates the number of accounts
stratified by account balance and WAU category:

+--------------------+------------+---------+----------+--------+-----+
| **Account          | **Corresp  | **      | **Aw     | **Refu | **T |
| Balance**          | ondence/** | Account | aiting** | sed/** | ota |
|                    |            | Setup** |          |        | l** |
|                    | **Check    |         | **A      | *      |     |
|                    | Returned** | **W/No  | ddress** | *Uncla |     |
|                    |            | Ad      |          | imed** |     |
|                    |            | dress** | **Confir |        |     |
|                    |            |         | mation** | **     |     |
|                    |            |         |          | Mail** |     |
+--------------------+------------+---------+----------+--------+-----+
| Equal to or over   | 27         | 13      | 3        | 0      | 43  |
| \$100,000          |            |         |          |        |     |
+--------------------+------------+---------+----------+--------+-----+
| Under \$100,000    | 42         | 9       | 13       | 0      | 64  |
| and equal to or    |            |         |          |        |     |
| over \$50,000      |            |         |          |        |     |
+--------------------+------------+---------+----------+--------+-----+
| Under \$50,000 and | 2,875      | 657     | 520      | 3      | 4,  |
|                    |            |         |          |        | 055 |
| equal to or over   |            |         |          |        |     |
| \$5000             |            |         |          |        |     |
+--------------------+------------+---------+----------+--------+-----+
| Under \$5000 and   | 6,411      | 1,713   | 1,134    | 5      | 9,  |
|                    |            |         |          |        | 263 |
| equal to or over   |            |         |          |        |     |
| \$1000             |            |         |          |        |     |
+--------------------+------------+---------+----------+--------+-----+
| Under \$1000 and   | 11,546     | 3,606   | 1,959    | 23     | 17, |
|                    |            |         |          |        | 134 |
| equal to or over   |            |         |          |        |     |
| \$100              |            |         |          |        |     |
+--------------------+------------+---------+----------+--------+-----+
| Under \$100 and    | 17,498     | 5,750   | 3,939    | 64     | 27, |
|                    |            |         |          |        | 251 |
| equal to or over   |            |         |          |        |     |
| \$1                |            |         |          |        |     |
+--------------------+------------+---------+----------+--------+-----+
| Under \$1          | 6,217      | 2,016   | 1,121    | 20     | 9,  |
|                    |            |         |          |        | 374 |
+--------------------+------------+---------+----------+--------+-----+
| **Total**          | **44,616** | **1     | *        | *      | *   |
|                    |            | 3,764** | *8,689** | *115** | *67 |
|                    |            |         |          |        | ,18 |
|                    |            |         |          |        | 4** |
+--------------------+------------+---------+----------+--------+-----+

**[Delays and Obstacles]{.underline}**

OST has been unable to access TransUnion's address database due to the
Court's Internet access order of December 2001, which delays progress on
locating addresses for returned mail. TransUnion is a contractor that
notifies OST of address changes. As a workaround, OST and Datacom
continue to request social security number traces via telephone; and
TransUnion continues to provide notification of address changes via the
WATCH program. However, these methods are less efficient and take more
time than would access to TransUnion's database.

> **4. Special Deposit Accounts**

**Introduction**

The Bureau of Indian Affairs (BIA)/OST Interagency Handbook Procedures
define Special Deposit Accounts (SDA) as temporary accounts for the
deposit of trust funds that cannot immediately be credited to the
rightful account holders, and may be used only as an exception to the
mandate for immediate deposit and distribution of trust funds to
individual Indian and tribal beneficiaries.

The SDA project was divided into three projects: 1) OHTA has
responsibility for SDA that were opened on or before December 31, 2000,
also known as the retrospective accounts. 2) SDA created between the
date range of January 1, 2001, and December 31, 2002, are the
responsibility of OST and BIA. 3) Current or prospective activity is the
responsibility of BIA, with oversight by OST. In the current activity,
it is the responsibility of BIA to distribute funds within 30 days of
receipt into SDA in accordance with the BIA-issued SDA policy.

**[Accomplishments and Completions]{.underline}**

As of June 30, 2003, there were 20,786 SDA with a fund balance of \$61.2
million, as compared to March 31, 2003, when there were 21,124 SDA with
a fund balance of \$67 million. This is a decrease of 338 SDA and \$5.8
million from the previous period.

In coordination with the BIA/OST Interagency Handbook training, training
of BIA and OST staff on the SDA Document Preparation and Encoding
Training Procedures was completed for the remaining six BIA Regions.
Supplemental training also was provided at the Great Plains, Western and
Southwest regions for additional staff selected by the BIA.

Transition of the workload between OST and OHTA on the SDA pilot project
accounts is complete. For those SDA that fell into the population of
accounts for which OHTA is responsible, working copy files were
transferred to the OHTA Project Manager. OHTA has taken possession of
the files and has hired a contractor to continue work on the accounts.

> **[Current Status]{.underline}**

As reported in previous *Status Reports to the Court*, OST's primary
focus is on the daily operation and maintenance of the SDA Pro database.
This enables OST to track electronically transactional activity and
generate reports that both BIA and OST management can use as tools to
prevent the recurrence of problems historically associated with SDA.

The SDA Pro database began capturing receipts and disbursements from SDA
on January 2, 2003, and provides an aging report of undistributed SDA
funds. The monthly SDA aging summary and detail reports are made
available on the StrataVision Product, as well as other ancillary
reports that serve as additional research tools. These reports are
available for on-line viewing or printing by OST and BIA employees with
favorable clearance to view trust data. Reports are designed to serve as
a management tool for tracking and monitoring activity at the agency
level and for monitoring compliance or non-compliance with SDA policy.

The Office of Trust Fund Management's (OTFM), Division of Trust Funds
Accounting and OST Trust Accountability Special Projects Office continue
to work with field offices to obtain the required information necessary
to process funds from transactions (i.e., lease/contract/permit and
allotment/tract). The monthly status reports to Regional Directors
include a report on the encoding compliance and distribution compliance
(i.e., SDA aging report). The intent is to provide feedback to the
senior level management so they can enforce compliance at all levels
within their region.

The Director of BIA has designated BIA Deputy Regional Directors to
coordinate the effort to distribute funds in SDA that are greater than
30 days old. The priority established is to work on accounts with
undistributed receipts greater than 90 days old, then 60 and 30 days
old. The Special Projects office has been working with BIA agency staff
to identify the undistributed funds greater than 90 days old to support
the distribution of the funds.

During the week of June 30, 2003, OST Trust Acquisition Support Services
and program management issued a request for proposal for OST's portion
of the SDA project. OST expects to evaluate and select a contractor
within the next reporting period.

In the *Status Report to the Court Number Thirteen*, it was reported
that six agencies in the Great Plains Region did not have the Management
Accounting Distribution System (MADS) interest calculation module
installed. The Great Plains Region reported that the MADS interest
calculation module has been installed across the region, except for Pine
Ridge and Fort Totten agencies. Pine Ridge is to be re-cabled and new
communication hardware is expected to be installed by the end of July.
It is anticipated Pine Ridge will have the program in operation by
mid-August. Fort Totten expects to have the program in operation by the
end of FY 2003.

**[Delays and Obstacles]{.underline}**

To benefit from SDA Pro's capabilities, the required information must be
properly encoded in accordance with the SDA Document Preparation and
Encoding Procedures. Information required to maximize SDA Pro's
functionality is still not available on all source documents from
relevant BIA programs. Furthermore, at some locations, encoding
procedures are used only intermittently. The manual processes and
follow-up work needed when this information is either unavailable or
improperly encoded causes increased workload, and delays completion of
SDA distribution. However, training on the SDA Document Preparation and
Encoding Procedures was completed during this reporting period, and
compliance with these procedures is expected to improve as a result.

Furthermore, during this reporting period, OST Trust Accountability
requested the assistance of four BIA Realty Specialists to help oversee
these problems. In the next reporting period, it is expected that the
BIA Realty Specialists will assist in the effort to distribute funds
greater than 90 days old.

**5. Small Balance Accounts**

As of June 30, 2003, there were 19,570 accounts that have a \$.01 -
\$1.00 balance with no activity for the previous 18 months. The total
sum included in those accounts is \$5,702.79. Statements are sent to
accountholders for these accounts on an annual basis pursuant to
direction from Congress.

In the next reporting period, OST and the Office of the Solicitor expect
to complete work on an options paper identifying potential legislative
and/or administrative resolutions of this matter.

> **6. Accounting Discrepancies**

**[Introduction]{.underline}**

Prior to conversion to TFAS, and as previously identified in the High
Level Implementation Plan, a number of accounting discrepancies existed
and needed to be researched. Some of these discrepancies may impact
individual accounts.

OST has an extensive daily and monthly reconciliation process in place
to make certain that all transactional reporting to the Department of
the Treasury (Treasury) is accurate and that any differences are
researched and corrected by the next accounting period. There have been
no known uncorrected differences between Treasury and OST since at least
June 30, 1998. The current process ensures, on a continuing basis, that
all differences are corrected in a timely manner.

**[Accomplishments and Completions]{.underline}**

As reported in the previous report, the adjustment between Treasury and
Interior to reconcile accounts was effective March 31, 2003. As
anticipated, this adjustment was confirmed during the current reporting
period.

**[Current Status]{.underline}**

Efforts continue to resolve the nearly \$6 million difference between
the subsidiary account ledger (liabilities) and the IIM investment pool
(assets). The solution requires an appropriation from Congress. On June
3, 2003, legislation requesting an authorization and appropriation for
approximately \$6 million was sent to Congress to resolve this problem.

Accounting Discrepancies mentioned in previous audit reports that
occurred prior to the conversion process are currently being evaluated
for resolution. A plan to resolve these additional discrepancies is
expected to be developed during the next reporting period.

**[Assurance Statement]{.underline}**

I believe that the information provided by me in the Current Accounting
Activities section of the *Status Report to the Court Number Fourteen*
is an objective and informative analysis of that project as of June 30,
2003. My belief is based on my knowledge and review of credible
evidence.

Date: July 29, 2003 Date: July 28, 2003

Name: *Signature on File* Name: *Signature on File*

Dianne M. Moran Helen Riggs

Trust Operations Officer Project Manager

I believe that the information provided by me in the Accounting
Discrepancies section of the *Status Report to the Court Number
Fourteen* is an objective and informative analysis of that project as of
June 30, 2003. My belief is based on my knowledge and review of credible
evidence.

Date: July 28, 2003

Name: *Signature on File*

Michael Fansler

Program Analysis Officer

E.  []{#__RefHeading___Toc47507406 .anchor}**RECORDS MANAGEMENT**

**[Introduction]{.underline}**

A records management program has been developed and implemented, and
continues to evolve, to ensure that: necessary Indian records are
maintained; records retention needs are met through authorized
schedules; and the records are safeguarded throughout their life-cycle.
The Office of Trust Records (OTR) was established in 1999 to develop and
implement a program for the economical and efficient management of trust
records, consistent with the American Indian Trust Fund Management
Reform Act of 1994, the Federal Records Act, other statutes and their
implementing regulations. The line authority for supervision and
management of OTR remains with the Assistant Deputy Secretary.

This Status Report modifies the format of reporting on each strategic
goal identified in *Status Report to the Court Number Eleven*. This
report will include information on strategic goals when activity has
occurred on those goals.

**[Accomplishment and Completions]{.underline}**

**Fiduciary Trust Records Definition**

OTR continued to assist the Assistant Deputy Secretary to develop
decision trees for the Bureau of Indian Affairs (BIA), Office of the
Special Trustee for American Indians (OST), the Bureau of Land
Management, the Minerals Management Service (MMS), the Office of Surface
Mining (OSM), and other Department of the Interior (Interior)
Bureaus/Services/Offices. On April 30, 2003, the Deputy Secretary issued
a memorandum on the "Definition of Indian Fiduciary Trust Records" to
the Solicitor, Assistant Secretaries and Bureau Directors and Office
Heads, wherein the Deputy Secretary attached a definition of an Indian
fiduciary trust record that is bureau/office specific. The definition is
determined by following the bureau/office-appropriate process outlined
on the "Is it a Fiduciary Trust Record?" decision tree which was
attached for each bureau/office. The definition process established is
expected to be incorporated into the Departmental Manual during the next
reporting period.

The Deputy Secretary stated that the decision trees apply only to
Interior records. Interior plans to meet with representatives of
compacted and contracted tribes to develop appropriate decision trees
for use with records that Tribes possess in the management of trust
assets. In furtherance of the development of appropriate decision trees
for use by compacted and contracted tribes, the Assistant Deputy
Secretary, OTR and BIA began discussions with two Tribal leaders
regarding development of an appropriate definition for Tribes to apply
to the records they possess under self-governance compacts and
self-determination contracts. Discussions with additional Tribal leaders
are expected to occur in the next reporting period.

The record series matrices for BIA and OST, indicating which series are
or are not trust records, are expected to be finalized and issued in the
next reporting period. OSM advised the Assistant Deputy Secretary on May
19, 2003, that it had applied the OSM decision tree to its records
schedule and developed a matrix of records series containing trust
records.

**Records Management Liaisons**

Eight positions for OTR records management liaisons at BIA regional
offices were advertised on June 23, 2003. Two additional positions are
expected to be advertised in the next reporting period.

**[Current Status]{.underline}**

**Records Retention Schedules**

On May 22, 2003, OTR and the Assistant Deputy Secretary held a
conference call with the National Archives and Records Administration
(NARA) to discuss the Indian trust land and natural resources record
schedules currently incorporated in the 4000 series of the 16 Bureau of
Indian Affairs Manual (BIAM), submitted to NARA, and electronic
schedules as described in the *Status Report to the Court Number
Thirteen*. On June 24-26, 2003, NARA representatives traveled to
Albuquerque and worked with OTR staff on the records schedules. Based on
comments received from NARA, work on the record schedules has been
re-focused and will update the 4000 series of the BIAM rather than
replacing the record series structure. NARA has verbally agreed that all
current collections of Indian records held by Interior will be
permanent. Written confirmation from NARA is expected to be incorporated
in a memorandum of understanding during the next reporting period.

**Record Keeping Requirements**

On May 19, 2003, the OTR Director issued a memorandum to BIA Directors
and OST which provided "Guidance and Procedures to Follow when
Requesting Approval to Move Records to the Federal Records Center (FRC)
or OTR Records Service Center." In the memorandum, the Director
reiterated that inactive records could be retired to an FRC or OTR as
long as the additional guidance provided in the March 31, 2003,
memorandum is followed. OTR will continue to assist BIA and OST offices
in retirement of records to FRC. OTR will assist in obtaining accession
numbers from NARA and approvals from the Assistant Deputy Secretary for
BIA and OST.

**Training**

The revised records training program resumed on April 16, 2003. Training
materials incorporated the trust records decision trees issued by the
Deputy Secretary specific to BIA and OST offices. The forms "Records
Move Plans" and the "Approval Requests for Moving Inactive Records to
OTR and the FRC," and procedures to move records, have also been
incorporated. The examples used in the training program are actual forms
used by BIA and OST, but all information contained within the forms is
fictitious.

**Evaluation of Records Program**

OTR submitted draft policies and procedures for conducting records site
assessments to the Office of the Assistant Deputy Secretary for review
and comment. OTR staff worked with the Office on revising the policies
and procedures. Although it was expected that the drafts would be ready
for distribution to BIA and OST for review and comment during this
reporting period, the drafts were not completed in time to be
distributed. The drafts are expected to be distributed and site
assessments to begin in the next reporting period.

**Record Retrieval**

The contractor indexing Indian records in Albuquerque, NM and in Kansas
City, MO continued its work. The index database was modified to increase
processing speed while maintaining high quality data. However, the
modification to the database resulted in some problems which affected
production in June. These problems included having too many active users
logged onto the system, workstations being rebooted improperly, and
having three bad PCs on the system. The contractor corrected the
problems in Albuquerque. The database problems are expected to be
resolved at the Kansas City site during the next reporting period.

Hardware and software necessary to implement a single index database
with full text search capabilities were purchased. A new server was
configured and loaded with this software. This new server and associated
software has not been connected to the Local Area Network. Documentation
and technical requirements to allow that connection are expected to be
completed during the next reporting period. System testing and data
loading will continue on a stand alone basis. Search capabilities and
queries are expected to be further developed and tested in the next
reporting period.

In indexing boxes of Indian records at both the Albuquerque and Lee's
Summit locations, priority continued to be given to boxes responsive to
Tribal trust litigation requests for production of documents.

**Farmington Indian Minerals Office (FIMO) Review**

OTR participated as a team member in an investigation of alleged
destruction of trust records at FIMO in Farmington, NM. The destruction
came to light as a result of a management control evaluation at FIMO by
MMS/Minerals Revenue Management. OTR's participation was requested by
the Assistant Deputy Secretary. The team found that trust records had
been destroyed. Records training requested by the Acting FIMO Director
is expected to be provided in the next reporting period by OTR and NARA
staff.

**Reporting**

OTR provided a monthly report of April 2003 activities through the
Department of Justice (DOJ) for transmittal to the Special Master. On
May 29, 2003, the Special Master notified DOJ that OTR was relieved of
its obligation to provide him with further monthly reports. Therefore,
OTR will no longer provide monthly reports to DOJ for transmittal to the
Special Master.

**[Delays and Obstacles]{.underline}**

-   The time frame projected for data entry work on the indexing project
    is still not on target and fell further behind due to database
    problems encountered as noted above. The contractor had
    representatives on site in Albuquerque in June to successfully
    address these issues.

-   While the contractor is fully staffed at the Kansas City indexing
    site, the site in Albuquerque still is not at its targeted staffing
    level. Recruitment efforts increased and the Albuquerque site is
    expected to be fully staffed in the next reporting period.

-   OTR completed the physical relocation of the two OTR Albuquerque
    offices into one central location during May and June. This move
    affected progress on the ongoing work as staff packed their
    materials and files in mid-May, the physical move took place, and
    the subsequent unboxing of files occurred through mid-June. The
    benefit to OTR is that staff of these offices are located in one
    building and are now also co-located with the indexing contractor in
    Albuquerque.

**[Assurance Statement]{.underline}**

I concur with the content of the information contained in the Records
Management section of the *Status Report to the Court Number Fourteen*.
The information provided in this section is accurate to the best of my
knowledge.

Date: August 1, 2003

Name: *Signature on File*

Ethel J. Abeita

Director, Office of Trust Records

F.  []{#__RefHeading___Toc47507407 .anchor}**TRAINING**

**[Introduction]{.underline}**

The Department of the Interior (Interior) has a continuing
responsibility to provide adequate staffing, supervision and training
for trust fund management and accounting (25 U.S.C. Sec. 162 a(d)(7)).
Trust training is an integral part of all training for Interior
employees who are involved in the management of Indian Trust Assets, and
is essential to the success of Interior's trust reform efforts.

**[Accomplishments and Completions]{.underline}**

A new training office was established on April 21, 2003, as part of the
reorganization. The office is responsible for the development and
implementation of an Interior-wide trust training program for personnel
performing trust asset and trust management functions. The Office of the
Special Trustee for American Indians (OST) hired a Management/Program
Analyst to work with its Trust Training Coordinator to develop a
centralized trust management training program.

Five regional training sessions on the *Interagency Procedures Handbook*
were completed during this reporting period. In total, 1,363 individuals
have attended the training. This completes the *Interagency Procedures
Handbook* training of current employees. Training will be offered in the
future for new employees as required. The *Interagency Procedures
Handbook* details trust program procedures and was developed as a joint
effort between the Bureau of Indian Affairs (BIA) and OST.

OST offered four sessions of the course, *Fiduciary Overview Program*.
The courses were taught by a contractor and were offered in Billings,
MT, Albuquerque, NM, Tulsa, OK, and Portland, OR. A total of 149 BIA,
OST and Tribal managers attended the course in these areas. This course
provides managers with a comparison of the Federal Indian trust
administered through Interior with more traditional trusts administered
through banks and other financial institutions.

During this reporting period, a contractor provided the course, *Trust
Foundations: An Introduction to Trust Reform and Change,* to 612
students in 24 locations. This course provides employees with a basic
knowledge of the Federal trust responsibility and the trust reform
activities. This brings the number of employees who have completed the
training to 2,951.

Hands-on training for the Trust Funds Accounting System, Stratavision
and Historical Query, is provided on an as-needed basis for OST, BIA and
contractor staff.

**[Current Status]{.underline}**

OST worked with an Interior team to resolve the issue of an appropriate
registrar system to track attendance and course completion for employees
who enroll in trust training classes. OST is working to contract
registrar services from the Bureau of Land Management (BLM) until
Interior implements an Interior-wide system. An agreement with BLM for
interim services is expected to be in place in the next reporting
period.

The curriculum committee discussed in *Status Report to the Court Number
Thirteen* was not selected as anticipated. This effort will continue
during the next reporting period. An outline for a draft training plan
has been developed and will be circulated during the next reporting
period.

OST training staff and BIA training staff are working together to
develop orientation sessions for new employees, as well as for employees
who may be assigned new duties under the reorganization. These sessions
will range from one day to six weeks, depending on the type of position
and responsibilities of the personnel. An important aspect of the
orientation program will be to help employees understand the need for
trust reform and how their jobs fulfill the trust responsibility. This
program plan is anticipated to be completed by the end of CY 2003.

A training inventory is being developed that identifies training that
was provided to trust employees during the past three years. This will
provide an inventory of existing courses, what has been successful, who
provided training, and in which locations and subjects training has been
a priority.

**[Delays and Obstacles]{.underline}**

OST did not contract for an independent registrar system because an
Interior-wide system is under development. Although this is a delay, OST
is satisfied with the solution of contracting with BLM for this service
until an Interior-wide system is in place.

OST has been unable to access the Internet due to the Temporary
Restraining Orders issued in December 2001 and June 2003. This
restriction prevents electronic communication with other governmental
agencies and contractors, and prevents and hinders research of training
tools, and potential contractors.

**[Assurance Statement]{.underline}**

I concur with the content of the information contained in this section
of the *Status Report to the Court Number Fourteen*. The information
provided in this section is accurate to the best of my knowledge.

Date: July 29, 2003

Name: *Signature on File*

Dianne M. Moran

Acting Director, Trust Training

G.  []{#__RefHeading___Toc47507408 .anchor}**RISK MANAGEMENT AND
    INTERNAL CONTROL**

**[Introduction]{.underline}**

The project objectives are to (1) systematically address and make
recommendations to resolve management control deficiencies and (2)
design and implement a comprehensive Risk Management Program that
includes extensive management controls to monitor and evaluate the
Department of the Interior (Interior) Indian trust asset management
program.

[Organizational Change]{.underline}

Due to the reorganization of Indian trust activities this reporting
period, the risk management functions of the Office of Trust Risk
Management (OTRM) were moved to the Trust Program Management Center
(TPMC). All other functions and initiatives within OTRM were assigned to
a new office, the Office of Trust Review and Audit (OTRA), which
replaced OTRM. Due to this reassignment of duties, future reports will
cover review and audit activities separately from risk management
functions.

**[Accomplishments and Completions]{.underline}**

[Pilot Risk Management Programs]{.underline}

The Management Control Plan Database (MCPD) application, a tool
developed to aid trust managers in performing and monitoring their
internal control programs, was submitted this period to the Office of
the Special Trustee for American Indians (OST) Acting Chief Information
Officer for certification and accreditation assessment. The database
includes key business processes directly related to fiduciary trust
management. The application identifies program objectives, risks,
internal controls for mitigating risks, and review and assessment
processes for determining whether controls are appropriately
functioning. Where controls need to be modified or improved, MCPD will
record a corrective action plan to be monitored in the follow-up
assessment process. It also includes reporting features that managers at
all levels can use to monitor progress and provide support for the
annual assurance statements required by the Federal Managers Financial
Integrity Act of 1982. MCPD working model continues to support the pilot
programs operating in the Northwest and Southern Plains Bureau of Indian
Affairs (BIA) Regions.

OTRA contractors trained staff and managers at the Northwest Region,
Warm Springs, Yakama, and Fort Hall agencies to use the programs
contained within MCPD. Planning was completed for training of staff on
the Risk Management program at the remaining ten BIA Regions. The
rollout plan is expected to be presented to the Trust Executive Steering
Committee and the Regional Directors during the next reporting period.
The schedule for completing BIA-wide implementation is the end of
calendar year 2003.

A risk management pilot development program for the Bureau of Land
Management (BLM) fluid minerals program was initiated in the New Mexico
State Office in April 2003. Two workshops for developing similar
programs and for validating work processes for solid minerals, fluid
minerals, and cadastral survey, were held in Santa Fe, NM and Billings,
MT in June 2003. BLM plans to implement pilot programs early in fiscal
year 2004.

[Project Coordination and Training]{.underline}

OTRA management and its contractor continued Risk Management overview
training for trust managers. This period, four additional courses were
presented jointly with Cannon Financial Institute to BIA, BLM, Minerals
Management Service (MMS) and some Tribal managers in Tulsa, OK,
Billings, MT, Albuquerque, NM and Portland, OR.

[Compliance Reviews]{.underline}

Compliance reviews result from inquiries by beneficiaries or other
interested groups and usually question the adequacy or status of trust
and fiduciary activities of Interior. OTRA assigns the inquiries to
internal audit staff to investigate and, when needed, recommend
appropriate corrective actions. OST is working with the Office of
Inspector General (OIG) to arrange for OIG investigator assistance when
these compliance reviews indicate wrongdoing or a potential violation of
law.

During this reporting period, 33 cases were in inventory; 4 were
completed resulting in 3 reports issued; 5 have field work completed
with reports in final review. Of the remaining cases, 9 are in process,
2 are unassigned or suspended, 2 were cancelled and 11 were closed with
no findings. One report was a risk assessment for modifying processes to
simplify probate functions.

During the next reporting period, all new and ongoing cases are to be
screened to assess validity of the complaints/inquiries, determine the
appropriate actions to pursue (including querying the complainant for
additional information in support of the complaint) and make background
queries to the responsible office.

**[Current Status]{.underline}**

[Annual Interior Indian Trust Funds Financial Statement
Audit]{.underline}

The Indian Trust Funds Financial Statement audit is required by the
American Indian Trust Fund Management Reform Act of 1994 and has been
conducted by an independent third party each year since 1995. OIG
manages the annual audit. The annual trust fund financial audit is being
expanded to include several additional operational activities.

A working group comprised of OIG, OST, MMS, BLM and BIA representatives
has planned audits covering the operational trust asset management
functions not previously covered. In FY 2004, audit coverage is expected
to be expanded to include trust cash management at all Interior bureaus
and associated internal control processes. In FY 2005, the expanded
coverage should also include the accuracy of ownership records. The
additional audit work is to be managed by OIG and contracted by
independent firms.

[Annual Audit Corrective Actions]{.underline}

The Data Quality Improvement project is working to resolve the remaining
material weakness in the FY 2002 audit by validating the data elements
necessary for correct distribution of funds.

The corrective action plan for all outstanding audit findings and
recommendations continues to be developed. Key information on corrective
actions required has been or is being requested from responsible bureaus
and offices. Progress on corrective actions is to be reviewed and
monitored through monthly status reports to responsible program managers
and the Trust Executive Steering Committee in future reporting periods.

[Reengineering-Support (formerly reported as Trust Systems and Projects
Support)]{.underline}

An assessment is underway to evaluate risks associated with modifying
the signature-witnessing requirements for disbursement authorizations
and change of address forms pertaining to adult unrestricted Individual
Indian Money accounts.

[Indian Trust Rating System]{.underline}

OTRA continued developmental work on the Indian Trust Rating System for
assessing operational effectiveness of Interior-wide trust asset
management activities. The rating system is expected to identify those
activities that are performing satisfactorily or better. It also should
identify those activities and related operations that require special
attention or assistance.

OTRA staff continued work with the Office of the Comptroller of the
Currency (OCC) to obtain history and background information on rating
systems that OCC and other regulatory financial agencies use to rate and
monitor the performance of fiduciary financial institutions. OCC and
other regulators use a Uniform Interagency Trust Rating System to
establish priorities for examinations of financial institutions. Where
these standards and practices are applicable to the Indian trust
business processes, Interior plans to incorporate them into the Indian
Trust Rating System.

OST arranged for the detail of a senior examiner from OCC to work with
OTRA full time for several months to design and implement the Indian
Trust Rating System.

**[Assurance Statement]{.underline}**

I concur with the content of the information contained in the Risk
Management and Internal Controls section of the *Status Report to the
Court Number Fourteen*. The information provided in this section is
accurate to the best of my knowledge.

Date: July 26, 2003

Name: *Signature on File*

Kenneth M. Moyers

Acting Director, Trust Review and Audit

H.  []{#__RefHeading___Toc47507409 .anchor}**APPRAISAL**

**[Introduction]{.underline}**

The Indian land valuation program was established to provide impartial
estimates of market value for a variety of real property interests on
land owned in trust or restricted status by individual American Indians,
Alaska Natives and Indian tribes. Various regulations governing Indian
trust land actions require the Secretary of the Interior to obtain
valuations. To meet this requirement, an appraisal or other valuation is
used to ensure that fair and just compensation is received on Indian
land transactions. The types of land actions are varied. Major types
include commercial, industrial, recreational, agricultural and other
types of leases; rights-of-way; land sales and land exchanges; grazing
and range permits; and assessing trespass damages.

**[Accomplishments and Completions]{.underline}**

Effective April 21, 2003, the Office of Appraisal Services (OAS) began
reporting to the Deputy Special Trustee-Field Operations. The Chief
Appraiser of the Office of the Special Trustee for American Indians
(OST) supervises the Regional Appraisers.

As reported in the *Status Report to the Court Number Thirteen*,
planning was underway for the Northwest Region to initiate contracts for
grazing rate studies. Two new contracts for grazing lease market studies
on the Ft. Hall and Colville Indian Reservations were initiated during
this reporting period.

OST conducted a market study of rental rates for approximately 63
proprieties located on the Eastern Band of Cherokee Reservation.

The Midwest Regional Appraisal office reported that over 15,000 timber
calculations were completed for allotments under the Indian Land
Consolidation Program (ILCP). These calculations contribute to the
establishment of a comprehensive value per allotment. This initiative
consumed approximately 800 man hours.

**[Current Status]{.underline}**

As reported in the *Status Report to the Court Number Thirteen*, a
contract with an outside professional organization to evaluate the
appraisal functions was awarded on March 21, 2003. The purpose of the
contract is to evaluate and report on OAS policies, procedures,
efficiency, organizational structure, independence, workload
distribution and professional qualifications. The contractor team
members planned to perform site reviews at the twelve Bureau of Indian
Affairs (BIA) regional offices, review appraisals made on behalf of
client organizations, and interview OAS regional staff and clients. Ten
sites have been visited as of June 30, 2003. The contractor report is
expected to be completed by the end of August 2003.

Also, as reported in the *Status Report to the Court Number Thirteen*,
planning is underway to delegate budget and financial responsibility to
the Regional Appraisers. The Regional Appraisers are scheduled to
receive Federal Finance System budget training in July 2003 before being
delegated budget and financial responsibility. Delegation will make it
easier to process contract awards, approve travel requests, and avoid
delays.

> BIA and OST have been engaged in a dialogue regarding appraisal
> services to the Eastern Cherokee Agency. At issue is the necessity of
> an appraisal report for tribal leases. OST and BIA are working
> cooperatively with the Tribe to resolve this matter.
>
> Interior has begun an effort to centralize all Interior bureau
> appraisal programs in order to achieve greater efficiencies,
> independence in the appraisal process and have greater access to
> private contract appraisers. It is expected that this effort will
> resolve many of the backlog problems and improve the timeliness of
> appraisals. OST is participating in the planning of this Interior-wide
> project.
>
> As reported in the *Status Report to the Court Number Thirteen*, a
> Certificate of Eligible Applicants was issued for the Eastern Regional
> Appraiser, and the position was expected to be filled in this
> reporting period. However, the status of this position continues to be
> evaluated in conjunction with the Department of the Interior's
> (Interior) plan for appraisal consolidation.

**[Appraisal Backlog]{.underline}**

Seven OAS Appraisal Regions reported 1,443 appraisal backlogs
(appraisals over 90 days old) for this reporting period as follows:

Alaska 140

Eastern 119

Northwest 450

Navajo 135

Rocky Mountain 184

Midwest 15

Midwest Indian Land Consolidation Program 400

There is currently no appraisal backlog in the Southwest and Great
Plains Region.

The Midwest Region provides valuation services for the ILCP and regular
appraisal requests. Due to the heavy fractionation in this region,
Midwest was selected as the first site for the ILCP pilot. A majority of
the allotments are owned in undivided interest. Six Reservations are
involved: Bad River, Lac Courte Oreilles, Lac du Flambeau, Keweenaw Bay,
Red Cliff, and Fond du Lac. It is expected that more Midwest Regional
Reservations will be included in the future. The Midwest Region does not
value fractionated interests. Instead a "mass" appraisal process is used
to estimate the probable value for several land categories. Based on
this master appraisal, the Midwest Region then values all allotments
within a reservation by proportionately comparing the allotments to the
mass appraisal. These valuations are completed on an annual basis.

OAS has requested that the Regional Appraisers with backlogs prepare a
"Backlog Elimination Plan" with a primary emphasis on Uniform Standards
of Professional Appraisal Practice compliant alternate methods which
would increase efficiency and appraisal volume, the use of contract fee
appraisers, and limit the need for more staff appraisers.

**[Delays and Obstacles]{.underline}**

The lack of Internet access continues to hinder appraisal efforts.

In June 2003, Interior announced proposed plans to consolidate the real
estate appraisal functions now performed by various agencies within
Interior. Interior notified the union representing the affected
employees of its consideration of the proposed appraisal consolidation.
This may temporarily impact workload during OST's consideration of
participating in the consolidation project and as appraisal vacancies
occur.

A Memorandum of Agreement (MOA) between BIA and OST for program funding
resulting from the transfer of the appraisal function from BIA to OST
was signed December 19, 2002. However, problems continue to exist at the
regional and field levels regarding fleet vehicle charge cards and other
administrative support services. OST will continue to work with BIA to
resolve the issues. The MOA is effective through September 30, 2003.

**[Assurance Statement]{.underline}**

I concur with the content of the information contained in this section
of the *Status Report to the Court Number Fourteen*. The information
provided in this section is accurate to the best of my knowledge.

Date: July 31, 2003

Name: *Signature on File*

Gabriel Sneezy

Acting Director, Office of Appraisal Services

[]{#__RefHeading___Toc47507410 .anchor}**I. TRUST REGULATIONS, POLICIES
AND PROCEDURES**

**[Introduction -- Office of Trust Regulations, Policies and
Procedures]{.underline}**

The Office of Trust Regulations, Policies and Procedures (OTP) in the
Office of Special Trustee for American Indians (OST) was established in
the Departmental Manual changes signed by the Secretary on April 21,
2003. OTP is responsible for ensuring organizational knowledge, access,
and compliance with applicable trust-related regulations, policies, and
procedures. The Office:

-   coordinates policies and procedures for implementing regulatory
    requirements

-   participates in program audits

-   promulgates and integrates trust policy into all business processes

-   coordinates trust procedures with internal and external
    organizations involved with trust activities

-   ensures development and implementation of OST's own policies and
    procedures

-   reviews and provides edits of all fiduciary trust policies,
    regulations, handbooks, desk manuals, processes and procedures of
    all Interior bureaus and offices performing trust related
    activities.

An Acting Director for OTP was named during the initial reorganization
of OST. He and his staff are developing a plan to establish the office
so that it carries out its functions effectively and efficiently.

OTP will assist the Secretary in establishing "consistent, written
policies and procedures for trust management and accountability" as
required by the American Indian Trust Fund Management Reform Act (25 USC
162 a(d)(6)). OTP will facilitate and be a clearinghouse for the
Interior-wide activities that are necessary to achieve the statutory
mandate. That mandate must be achieved in an efficient and timely
manner. OTP will monitor that process.

**[Current Status]{.underline}**

Since the creation of OTP in April, the office has undertaken several
initiatives in the discharge of its duties. Some are housekeeping in
nature, such as identifying computer software to aid in performing its
work, while some missions are more substantive and involve establishing
OTP staff, tools and methods of operation.

OTP is assembling an Interior Fiduciary Library. Assessing Interior's
Electronic Library of Interior Policies (ELIPS) is the first step in the
creation of this hard-copy library and its virtual counterpart.

As a universal support function, OTP will be involved with many aspects
of the "To-Be" Project, so it is essential that OTP build a close and
successful working relationship with the core group working on that
Project. To that end, OTP staff members attended the "To-Be" Project's
Tier 1 Workshop in Portland, OR, and presented a short summary to the
group about the responsibilities of OTP. Staff members also plan to
attend the July workshop in Minneapolis.

OTP has begun a review of OST internal policies and has identified
drafts of several which need to be examined. OTP is overseeing the
effort to draft criteria against which issues can be identified,
priorities set, and clearing standards established for the review or
creation of internal fiduciary and administrative policies. With these
criteria established, OTP will work with other Interior bureaus on
review of their fiduciary trust-related policies, procedures and
regulations. A liaison group has been established with members from
those Interior bureaus with fiduciary trust responsibilities so that the
review and rewriting of fiduciary trust-related policies, procedures and
regulations can be co-ordinated through this group.

OTP is designing a clearing and tracking system to catalog those
regulations and policies and procedures that are to be reviewed so that
the Special Trustee can ensure compliance with 25 U.S.C. 4043(c)(1)(B).
The system mission of the OTP Tracking System is to accurately identify
and maintain all developmental phases of fiduciary trust-related laws,
regulations, and directives (policies, procedures, manuals, handbooks)
for all trust offices. Its purpose is to coordinate and facilitate
policy and procedure development relating to Indian fiduciary trust
reform activities to ensure fiduciary and legal requirements are
fulfilled.

**[Bureau of Indian Affairs]{.underline}**

It has been reported to OTP that the following initiatives have been
taken by the Bureau of Indian Affairs (BIA). OTP will follow the
development of these tasks.

**25 CFR 161 - Navajo Partitioned Lands Grazing Permits** - The drafting
and review process was completed during this reporting period. The
Navajo Hopi Land Commission and the Navajo Nation Natural Resource
Commission met and gave their verbal approval for the regulation to be
published in the Federal Register with a 90 day comment period. The
regulation was submitted to the Office of the Solicitor (SOL) and is
still being reviewed. It is anticipated that the regulation can be
published as a draft in the last quarter of CY2003.

**25 CFR 124 -- Deposits of Proceeds of Lands Withdrawn for Native
Selection under the Alaska Native Claims Settlement Act** -- Office of
Trust Funds Management and SOL completed their review and comment on the
draft revision of this regulation. The draft rule is still under
consideration.

**25 CFR 162 Subparts C & D -- Residential Leases and Business Leases**
-- BIA's Office of Trust Responsibilities (BIA-OTR) completed drafting
proposed regulations. Interior\'s Office of Policy, Management and
Budget is currently reviewing the draft for compliance with the
Paperwork Reduction Act. The target date for publication of the proposed
regulations in the Federal Register is August 2003. The comment period
is planned to run for 90 days, during which time tribal consultation
will be conducted on the proposed rule. The publication of the final
rule is scheduled for May 2004.

**25 CFR 216** -- **Surface Exploration, Mining, and Reclamation of
Lands** -- Other mission-critical activities have delayed revision of
this regulation by BIA-OTR staff. It is not expected that the rule will
be revised and published before the latter part of CY2003.

**Internal Program Guidance**

**Grazing Permits (25 CFR 166) Handbook** - BIA-OTR staff and Tribal
representatives met in December 2002, and January/February of 2003 to
continue writing the handbook. An initial draft was completed in March
of 2003. Once the editing and technical review of the draft is
completed, appropriate comments will be incorporated, which is expected
to occur during the last quarter of CY2003. The final draft will be
furnished to SOL for legal review and appropriate changes will be
incorporated in the final document. The proposed printing and
distribution of the handbook is expected during the first quarter of
CY2004.

**National Environmental Policy Act (NEPA) Compliance Handbook** --The
target date for distribution of the BIA NEPA handbook for review and
comment by Indian tribes and Alaska Natives is targeted for the next
reporting period. At least sixty days is expected for review and
comment.

**Indian Affairs Manual (IAM) Forestry Program Chapter** -- The draft
chapter has been reviewed by tribes, agencies, regions and by OST. The
current draft is dated May 21, 2003. In the reorganization, the new BIA
Office of Planning and Policy Analysis assumed responsibility for
coordinating the completion of the draft chapter for review,
distribution for comment, approval and distribution for incorporation
into BIA's IAM. An estimated completion date will be established as the
Office of Planning and Policy Analysis surveys its responsibilities.

**IAM, Part 101, Individual Indian Money Accounts** -- This project has
been assigned to the Office of Tribal Services (OTS), Human Services
Division. Comments have been received from field offices. OTS is working
with SOL on revisions to the IAM to ensure this manual complies with the
regulations governing trust funds for tribes and individual Indians (25
CFR 115). This part is expected to be issued by December 31, 2003.

**Surface Leasing (25 CFR 162) Handbook** -- The final draft remains
under legal review. Upon finalization of the regulations for Subparts C
and D of 25 CFR 162, the handbook will be amended to reflect the changes
pertaining to residential and business leases. The expected distribution
of this handbook has been extended to the spring of CY2004.

**[Assurance Statement]{.underline}**

I believe that the information contained in the OST Trust Regulations,
Policies and Procedures section of the *Status Report to the Court
Number Fourteen* is an objective analysis as of June 30, 2003. The
information provided in this section is accurate to the best of my
knowledge.

Date: July 31, 2003

Name: *Signature on File*

Richard V. Fitzgerald

Acting Director, Office of Trust Regulations,

Policies and Procedures

[]{#__RefHeading___Toc47507411 .anchor}**V. BUREAU OF INDIAN AFFAIRS**

A.  []{#__RefHeading___Toc47507412 .anchor}**FRACTIONATION**

**[Introduction]{.underline}**

Fractionation of Indian land occurs when land passes from one generation
to the next, and more and more heirs or devisees acquire an undivided
interest in the land.

Fractionation of Indian trust and restricted lands has a long history
stemming from the federal Indian policy of the 19^th^ Century.
Fractionation is a complex and potentially emotionally charged issue due
primarily to cultural, historical and family association of the present
Indian owners with the original owners of those lands held in trust by
the United States or subject to a restriction against alienation by the
Secretary of the Interior. Both Congress and the Department of the
Interior (Interior) are attempting to address this complex issue. The
opportunities offered by the Indian Land Consolidation Act and the
Amendments of 2000 (ILCA) are important to the solution of fractionated
ownership of Indian land. Additional ways of streamlining the ILCA
process are being considered.

The continued goal during this reporting period of the Indian Land
Consolidation Program (ILCP) is to acquire small fractional interests in
trust and restricted lands owned by individual Indians and consolidate
the interests among individual Indians or the Indian tribes on whose
reservation the interests are situated in order to lessen the number of
owners. ILCP pilot programs are ongoing in the Midwest and Great Plains
Region.

ILCP is presently operated in two Bureau of Indian Affairs (BIA)
Regions. There are five reservations under the Great Lakes Agency,
Midwest Region, and one reservation under the Rosebud Agency, Great
Plains Region, participating in ILCP. The Land Titles and Records Office
at the Great Plains Region, provides title and recording services for
the Rosebud and Great Lakes Agencies. The implementing official for ILCP
is now the Director of the Indian Land Consolidation Office (Director).

**[Accomplishments and Completions]{.underline}**

-   Acquired 5,094 fractional interests during this reporting period,
    for a total of 58,297 interests through June 2003, representing a
    combined total for the pilots in the Midwest and Great Plains
    Regions.

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-   Maintained a consistent stream of applications to sell interests and
    continued to seek ways to increase the number of applications.

-   Completed 120 certified Title Status Reports (TSR) for tracts
    containing multiple interests identified for purchase on the Rosebud
    Reservation during this reporting period.

-   Received 216 requests for TSR's for tracts containing interests
    targeted for purchase on the Rosebud Reservation this reporting
    period.

-   Completed revestiture of all *Youpee* interests at Great Lakes
    Agency. Subsequent probates have also been posted for the Great
    Lakes Agency. Rosebud Agency has revested interests to heirs of the
    original *Youpee* interest holders.

-   Completed reconciliation of ownership data on the Fond du Lac
    reservation in MN.

**[Current Status]{.underline}**

A draft national ILCP plan has been developed and takes into
consideration the following:

-   Federal and tribal government benefits and costs of the program.

-   Alternative approaches for targeting tracts and owners to maximize
    benefits.

-   Legislative and administrative changes to enhance program
    effectiveness and efficiency.

-   Methods for an aggressive marketing and acquisition program.

Further direction from Interior leadership has been given to the
Director to identify alternative methods for program financing including
federal, tribal and private sources based on economic tradeoffs and long
term public benefits. Among the methods that are expected to be examined
during the next reporting period:

-   Grants from private foundations and individuals.

-   Federal loan program to individual interest owners in order to
    consolidate ownership in a tract.

-   Tribal acquisition programs.

-   Identifying pilot program impacts on federal trust management.

Actions being taken to facilitate and strengthen the ILCP pilot sites:

-   Completion of the first phase in the Midwest Region, Great Lakes
    Agency, is expected by December 2003, signifying that majority
    ownership has been achieved on the first three reservations.

-   Continuing reconciliation of ownership data on the Minnesota
    Chippewa Bands' reservations and the Rosebud Reservation.

-   Continuing to coordinate with the Rosebud Sioux Tribe's land
    acquisition program to leverage federal funds with tribal funds and
    to prioritize purchases of land interests with the tribe.

-   Continuing to purchase all available interests including *Youpee*
    interests from willing sellers.

**[Delays and Obstacles]{.underline}**

-   Expanding the program requires reconciliation of ownership records.
    Reconciliation efforts are expected to be improved with the
    implementation of Trust Asset and Accounting Management System.

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-   Qualified staff is scarce at remote locations.

-   The Great Plains Regional Land Titles Records Office needs to record
    subsequent deceased heirs resulting from *Youpee* re-distributions
    for the Rosebud Agency in addition to existing workload.

-   Need for the Great Plains Regional Land Titles Records Office to
    record the pre-*Youpee* probates for the five reservations under
    Midwest Region in addition to current workload.

**[Assurance Statement]{.underline}**

The content of the information supplied and contained in the
Fractionation section of the *Status Report to the Court Number
Fourteen* is accurate to the best of my knowledge.

Date: July 31, 2003

Name: *Signature on File*

Robert R. Jaeger

Director, Indian Land Consolidation Office

[]{#__RefHeading___Toc47507413 .anchor}**B. PROBATE**

**[Introduction]{.underline}**

Conducting and completing the probate of individual Indian trust assets
requires the cooperative efforts of the Bureau of Indian Affairs (BIA),
the Office of Hearings and Appeals (OHA) and the Office of the Special
Trustee for American Indians (OST). Bringing the probate caseload
current is important to the overall management of trust assets which
relies on up-to-date ownership information.

All probate project responsibilities are now being consolidated and will
be under the direct supervision of BIA.

**[Accomplishments and Completions]{.underline}**

**Number of Cases Processed and Decided**

For this reporting period, BIA reports that BIA deciding officials
received 327 cases and issued decisions in 216 cases; OHA reports that
OHA deciding officials received 701 cases and issued decisions in 641
cases. OST distributed and closed 1,074 accounts representing 1,042
estates. The Trust Funds Accounting System (TFAS), as of the end of June
2003, contains 25,282 open estate accounts. Of these, 12,991 are
classified as official deaths, as evidenced by a certified death
certificate. Another 8,181 of these accounts are classified as
unofficial deaths, where OST has received some indication of death that
has not yet been confirmed by receipt of a death certificate. The rest
of these accounts are classified as in the probate process or as pending
final distribution of the assets. Lists of TFAS estate accounts
classified as "unofficial death" were sent to all BIA Regional Directors
during the reporting period so that their agencies can reconcile
discrepancies and change the account status to "official death" where
the deaths can be confirmed. This reconciliation is expected to occur by
the end of calendar year 2003.

**Case Preparation** **by Contractors**

Case preparation is the gathering of information and documents to enable
the submission of a probate package to a deciding official. During this
reporting period, the contractor continued to expand its efforts to
prepare probate cases in the Midwest, Great Plains, Southern Plains,
Rocky Mountain, Northwest, Pacific, Western and Navajo Regions. The
contractor also developed a Central Research Team to provide research
support in gathering information necessary to prepare a case for
probate. During this reporting period, the contractor completed the
preparation of 382 probate cases (double the 190 cases prepared by the
contractor during the previous reporting period). An additional 23
summary and 84 non-summary cases previously prepared by the contractor
were pending review by BIA at the beginning of this reporting period.
Summary cases are those estates containing only trust cash assets with a
value less than \$5000, not including any interest that may have accrued
after the date of death. Non-summary cases are all other cases,
including any estates containing land assets. During this period, BIA
reviewed and accepted 312 cases from the contractor to be sent to a
deciding official. At the end of the reporting period, 177 probate cases
prepared by the contractor were pending BIA review for acceptance. When
a probate case management and tracking system is developed (see "current
status" below), it will track case preparation by both the contractor
and BIA. The Department of the Interior (Interior) then will be able to
report case preparation statistics for BIA as well as for the
contractor.

**Case Preparation -- Priorities**

A new lead person has been identified in BIA to direct BIA probate
activities and to ensure contractors are available to support BIA in
processing these cases. Emphasis continues to be given to closing the
largest 501 open estate accounts identified in May 2002. These accounts
represented only 3.4% of the estate accounts, but totaled \$31 million
or 65% of the estate funds. By the end of this reporting period 157 of
these cases had been closed (thirty in this reporting period), totaling
more than \$9 million in assets distributed.

**Posting and Recording**

The contractor's *Youpee* posting and recording efforts during this
reporting period continued to be devoted primarily to bringing records
current at the Aberdeen Land Title and Records Office in support of the
pilot Indian Land Consolidation Program (ILCP) project to purchase small
fractionated interests at the Rosebud Agency and in the Midwest Region.
Phase II of the ILCP task for the Rosebud Agency was completed during
this reporting period. Phase I of the contractor's ILCP task for the
Great Lakes Agency was completed during this reporting period with 820
tracts reversed and approved by BIA. Phase II of the ILCP task for the
Great Lakes Agency was nearly completed with 935 probate distributions
completed, 364 of which had been accepted by BIA.

**[Current Status]{.underline}**

**National Association for Public Health Statistics and Information
Systems (NAPHSIS)**

NAPHSIS is a professional organization consisting of representatives
from all of the vital records offices in the United States. Among its
current initiatives is a project to enable electronic reporting of
deaths. A meeting with the Executive Director of NAPHSIS was scheduled
for July 1, 2003, to begin discussions on a proposal for Interior to be
notified by the states when Indian deaths are reported in their
jurisdictions and for Interior to obtain death certificates from the
states in a more timely and direct way.

**Probate Case Management and Tracking System**

In response to the decision to discontinue efforts for a Case Location
and Status database and the need for some way to manage and track the
probate caseload, Interior's Trust Architect assumed the lead in
developing a probate case management and tracking system during this
reporting period. A meeting was held on June 30, 2003, in Washington,
D.C., to begin collecting system requirements.

**Probate Handbook**

A contractor delivered a second draft of the revised Probate Handbook
for the current probate process on May 2, 2003. The draft handbook
incorporates procedures that previously were fragmented among several
separate manuals and covers the probate process from death to
distribution. The revised draft was circulated to BIA, OHA, and OST for
review and comment during this reporting period. The handbook is to be
further refined during the next reporting period based on comments
received.

**Streamlining the Smallest Estates**

As of December 31, 2002, there were 1,522 open estate accounts where the
funds derive only from per capita or judgment payments (and not income
from land interests) with a total value for all 1,522 cases of
\$7,193.86. The Office of Trust Review and Audit conducted a risk
analysis and concluded that a more streamlined approach for probating
these estates would pose little risk of erroneous distribution, while
providing a benefit both to Interior and to the trust beneficiaries. A
determination of procedures is expected to be made during the next
reporting period.

**[Delays and Obstacles]{.underline}**

The lack of access to the Internet, and the lack of electronic mail
communications between OHA and BIA continue to impede the ability to
process and complete probate backlogs. Consequently, critical processes
that used to be automated, such as the preparation of OHA-7 forms, the
assignment of probate docket numbers and case counting and reporting,
must be done manually. Interior's regulations requiring certified copies
of death certificates and other documents (instituted two years ago in
order to facilitate the Attorney Decision Makers' probate process) has
had the unintended consequence of making case preparation more
difficult, more costly, and more time consuming. BIA has brought this to
the attention of Interior's senior management and is seeking relief from
this requirement.

The lack of a comprehensive case management and tracking system prevents
discerning the true extent of the probate caseload. Consequently, cases
may be overlooked and resources may not be provided at the right time or
in the right amounts to address the caseloads adequately. For example, a
manual comparison of TFAS estate accounts to the cases reported by BIA
to the Southwest Region Probate Specialist disclosed 44 open estate
accounts in TFAS for estates that BIA had marked "closed." The
discrepancies occurred largely because the lead agency for the estate
was unaware that another agency had made deposits to the estate account
in the legacy Individual Indian Money system.

The increasing productivity of contractors is beginning to put a strain
on BIA resources to review and accept their work. Options for addressing
this problem are expected to be explored during the next reporting
period.

**[Assurance Statement]{.underline}**

I concur with the content of the information contained in this Probate
section of the *Status Report to the Court Number Fourteen*. The
information provided in this section is accurate to the best of my
knowledge.

Date: July 28, 2003

Name: *Signature on File*

Marinus Heymering Jr.

Supervisory Trust Reform Specialist

[]{#__RefHeading___Toc47507414 .anchor}**ATTACHMENTS**

-   **Jim Cason's prepared statement**

-   **Section 137 of HR 2691**

[^1]: This Report contains information on the broad trust reform efforts
    underway at Interior. Accordingly, it may include information on
    reform efforts that are not within the scope of the *Cobell*
    ligitation.