OFFICE OF 

INSPECTOR GENERAL 

U.S.DEPARTMENT OFTHE INTERIOR 

Independent Auditors’ Reports on 

the Tribal and Other Trust Funds 

and Individuals Indian Monies 

Trust Funds Statements for Fiscal 

Years 2020 and 2019 

AUDIT 

Report No.: 2020-FIN-027 November 2020 
OFFICE OF 

INSPECTOR GENERAL 

U.S.DEPARTMENT OF THE INTERIOR 

HOV 1 0 2020 Memorandum 

To: Jerold Gidner 

Director, Bureau of Trust Funds Administration 

From: Mark Lee Greenblatt 

Inspector General 

Subject: Independent Auditors’ Reports on the Tribal and Other Trust Funds and Individual 

Indian Monies Trust Funds Financial Statements for Fiscal Years 2020 and 2019 

Report No. 2020-FIN-027 

This memorandum transmits the KPMG LLP (KPMG) auditors’ reports of the Office of 

the Special Trustee for American Indians (OST) financial statements for fiscal years (FYs) 2020 

and 2019. The OST financial reports contain financial statements and notes for Tribal and Other 

Trust Funds (Tribal) and Individual Indian Monies Trust Funds (IIM), collectively referred to as 

the Trust Funds Financial Statements. 

Under a contract issued by the OST and monitored by the Office of Inspector General, 

KPMG, an independent public accounting firm, audited the Trust Funds Financial Statements for 

the FYs ended September 30, 2020, and 2019. The contract required that the audit be performed 

in accordance with generally accepted government auditing standards, Office of Management 

and Budget audit guidance, and the Government Accountability Office/Council of the Inspectors 

General on Integrity and Efficiency Financial Audit Manual. 

In its audit of the Trust Funds Financial Statements, KPMG reported: 

• The IIM financial statements were fairly presented, in all material respects, in 

accordance with a basis of accounting that is a comprehensive basis of accounting 

other than generally accepted accounting principles 

• A qualified opinion, consistent with prior years, on the Tribal financial statements 

because it was unable to satisfy itself as to the fairness of trust fund balances 

• No material weaknesses in internal control over financial reporting (including 

safeguarding assets) and compliance with laws and other matters 

In connection with the contract, we reviewed KPMG’s reports and related documentation 

and inquired of its representatives. Our review, as differentiated from an audit of the financial 

statements in accordance with U.S. generally accepted government auditing standards, was not 

intended to enable us to express, and we do not express, opinions on the Trust Funds Financial 

Office of Inspector General | Washington, DC 
Statements or conclusions about the effectiveness of internal control over financial reporting. 

KPMG is responsible for the attached auditors’ reports dated November 10, 2020, and the 

conclusions expressed therein. Our review disclosed no instances where KPMG did not comply, 

in all material respects, with U.S. generally accepted government auditing standards. 

The legislation creating the Office of Inspector General requires that we report to 

Congress semiannually on all audit, inspection, and evaluation reports issued; actions taken to 

implement our recommendations; and recommendations that have not been implemented. 

We appreciate the courtesies and cooperation extended to KPMG and our staff during 

this audit. If you have any questions regarding this report, please contact me at 202-208-5745. 

Attachment 

2 
TRIBAL AND OTHER TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Financial Statements 

September 30, 2020 and 2019 

(With Independent Auditors’ Report Thereon) 
KPMG LLP

Two Park Square, Suite 700

6565 Americas Parkway, N.E.

Albuquerque, NM 87110-8179

KPMG LLP, a Delaware limited liability partnership and a member firm of 

the KPMG global organization of independent member firms affiliated with 

KPMG International Limited, a private English company limited by guarantee. 

Independent Auditors’ Report

U.S. Department of the Interior Office of the Special Trustee 

for American Indians; and 

U.S. Department of the Interior Office of Inspector General: 

Report on the Financial Statements 

We have audited the accompanying financial statements of the Tribal and Other Trust Funds managed by the 

U.S. Department of the Interior Office of the Special Trustee for American Indians (OST), which comprise the 

statements of assets and trust fund balances – cash basis as of September 30, 2020 and 2019 and the related 

statements of changes in trust fund balances – cash basis for the years then ended, and the related notes to 

the financial statements. 

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in 

accordance with the cash basis of accounting described in note 2 to the financial statements; this includes 

determining that the cash basis of accounting is an acceptable basis for the preparation of the financial 

statements in the circumstances. Management is also responsible for the design, implementation, and 

maintenance of internal control relevant to the preparation and fair presentation of financial statements that are 

free from material misstatement, whether due to fraud or error. 

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted 

our audits in accordance with auditing standards generally accepted in the United States of America, in 

accordance with the standards applicable to financial audits contained in Government Auditing Standards 

issued by the Comptroller General of the United States, and in accordance with Office of Management and 

Budget (OMB) Bulletin No. 19-03, Audit Requirements for Federal Financial Statements. Those standards and 

OMB Bulletin No. 19-03 require that we plan and perform the audits to obtain reasonable assurance about 

whether the financial statements are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the 

financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of 

the risks of material misstatement of the financial statements, whether due to fraud or error. In making those 

risk assessments, the auditor considers internal control relevant to OST’s preparation and fair presentation of 

the financial statements in order to design audit procedures that are appropriate in the circumstances, but not 

for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we 

express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and 

the reasonableness of significant accounting estimates made by management, as well as evaluating the overall 

presentation of the financial statements. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our 

qualified audit opinion. 
Basis for Qualified Opinion 

It was not practicable to extend our auditing procedures sufficiently to satisfy ourselves as to the fairness of 

trust fund balances and related changes in trust fund balances in the accompanying financial statements as of 

September 30, 2020 and 2019 due to the effects of certain parties for whom OST holds assets in trust 

disagreeing with balances recorded by OST and/or having requested an accounting of their trust funds, and of 

which certain of these parties have filed claims against the United States Government. Trust fund balances 

enter into the determination of financial position and changes in trust fund balances. 

Qualified Opinion 

In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion 

paragraph, the financial statements referred to above present fairly, in all material respects, the financial 

position of the Tribal and Other Trust Funds managed by OST as of September 30, 2020 and 2019, and the 

changes in trust fund balances for the years then ended, in accordance with the cash basis of accounting 

described in note 2. 

Basis of Accounting 

We draw attention to note 2 of the financial statements, which describes the basis of accounting. The financial 

statements are prepared on the cash basis of accounting as described, which is a basis of accounting other 

than U.S. generally accepted accounting principles. Our opinion is not modified with respect to this matter. 

Other Reporting Required by Government Auditing Standards 

In accordance with Government Auditing Standards, we have also issued our report dated November 10, 2020 

on our consideration of internal control over financial reporting and on our tests of compliance with certain 

provisions of laws, regulations, and other matters for the Tribal and Other Trust Funds managed by OST. The 

purpose of that report is solely to describe the scope of our testing of internal control over financial reporting 

and compliance and the result of that testing, and not to provide an opinion on the effectiveness of OST’s

internal control over financial reporting or on compliance. That report is an integral part of an audit performed in 

accordance with Government Auditing Standards in considering the internal control over financial reporting and 

compliance for the Tribal and Other Trust Funds managed by OST. 

Albuquerque, New Mexico 

November 10, 2020 

2 
TRIBAL AND OTHER TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Statements of Assets and Trust Fund Balances – Cash Basis 

September 30, 2020 and 2019 

(In thousands) 

Assets 2020 2019 

Cash and cash equivalents (note 3) $ 1,030,970 826,498 

Investments (note 4) 3,606,887 3,632,538 

Total assets $ 4,637,857 4,459,036 

Trust Fund Balances 

Held for Indian tribes (notes 6 and 8) $ 4,267,758 4,128,060 

Held by the Department of the Interior and considered to be 

U.S. Government funds (note 6) 370,099 330,976 

Total trust fund balances $ 4,637,857 4,459,036 

See accompanying notes to financial statements. 

3 
TRIBAL AND OTHER TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Statements of Changes in Trust Fund Balances – Cash Basis 

Years ended September 30, 2020 and 2019 

(In thousands) 

2020 2019 

Increases: 

Receipts $ 614,647 515,881 

Interest received on invested funds 109,923 117,837 

Gain on disposition of investments, net 2,212 

726,782

26,884 

 660,602 

Decreases: 

Disbursements to and on behalf of Indian tribes and other trust 

funds and withdrawal of trust funds by Indian tribes (note 8) (547,961) 

Increase in trust fund balances, net 178,821 

(410,750) 

249,852 

Trust fund balances, beginning of year 4,459,036 

Trust fund balances, end of year (notes 6 and 8) $ 4,637,857 

See accompanying notes to financial statements. 

4,209,184 

4,459,036 

4 
TRIBAL AND OTHER TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Notes to Financial Statements 

September 30, 2020 and 2019 

(1) Background and Description of the Trust Funds 

(a) Overview of the Trust Funds 

Establishment and Management of the Trust Funds – The legislation that authorizes the Secretary 

of the United States Department of the Interior (Secretary) to manage the Tribal and Other Trust Funds 

recognizes the unique trust relationship that exists between the Indian tribes, individual Indians, and 

the United States Government (U.S. Government). Agreements between the U.S. Government and the 

various Indian tribes, many of these in the form of treaties, recognize the sovereignty of tribes. During 

the course of the United States’ history and the U.S. Government’s evolving policies toward Indian 

tribes, the trust relationship has retained characteristics based upon tribal sovereignty. The United 

States Congress has designated the Secretary as the trustee delegate with responsibility for the 

financial and nonfinancial resources held in trust on behalf of American Indian tribes, individual Indians, 

and other trust funds. In carrying out the management and oversight of the Indian trust assets, the 

Secretary has a fiduciary responsibility to ensure monies are received for the use of Indian lands and 

the extraction of natural resources from Indian lands, distribute such monies collected to the 

appropriate beneficiaries, ensure that trust accounts are properly maintained and invested, and ensure 

that accurate and complete reports are provided to the trust beneficiaries in accordance with applicable 

law. 

The balances that have accumulated in the Tribal and Other Trust Funds have resulted generally from 

judgment awards, settlement of claims, land use agreements, royalties on natural resource depletion, 

other proceeds derived directly from trust resources, and investment income. 

The accompanying financial statements include only the financial assets held in trust by the Office of 

the Special Trustee for American Indians (OST) for trust beneficiaries and do not include: (i) the 

operating account balances of OST (e.g., Fund Balance with Treasury; Property, Plant, and Equipment; 

etc.,) or (ii) other Indian trust assets, including but not limited to, Indian lands, buildings, or other 

nonfinancial assets managed by the United States Department of the Interior (the Department). 

The Reform Act – The American Indian Trust Fund Management Reform Act of 1994 (Public 

Law 103-412) (the Reform Act) authorized the establishment of OST, which is headed by the Special 

Trustee for American Indians (Special Trustee) who reports to the Secretary. Under this legislation, the 

Special Trustee is responsible for oversight, reform, and coordination of the policies, procedures, 

systems, and practices used by various bureaus and offices of the Department, including but not 

limited to OST, the Bureau of Indian Affairs (BIA) (a component of Indian Affairs (IA)), the Office of 

Natural Resources Revenue (ONRR), and the Bureau of Land Management (BLM), in managing Indian 

trust assets. 

Office of the Special Trustee for American Indians – Indian trust assets, including the Tribal and 

Other Trust Funds, are primarily managed under the delegated authority of OST and BIA. Management 

of Indian trust assets on behalf of the trust beneficiaries is dependent upon the processing of 

trust-related transactions within certain information systems of the Department, including but not limited 

to OST, BIA, ONRR, and other Departmental bureaus and offices. BIA and other Departmental 

bureaus and offices are responsible for managing the natural resources located within the boundaries 

of Indian reservations and trust lands, as well as the processing of data regarding the ownership and 

5 (Continued) 
TRIBAL AND OTHER TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Notes to Financial Statements 

September 30, 2020 and 2019 

leasing of Indian lands. The allocation of receipts and disbursements by OST to trust beneficiaries are 

significantly dependent and reliant upon the receipt of timely and accurate information derived from 

records maintained by BIA, ONRR, and other Departmental bureaus and offices (see note 7). 

Regional Offices – OST and BIA maintain staff at regional offices located throughout the United 

States. 

Agency and Field Offices – OST and BIA also maintain staff at agency and field offices located 

throughout the United States, which are generally located near the tribes and individual Indians served. 

OST and BIA personnel located at most of the agency and field offices perform various functions 

related to trust fund activities. 

Bureau of Trust Funds Administration – During the year ended September 30, 2020, OST remained 

an Office under the Secretary of the Interior. Effective October 1, 2020, pursuant to Secretarial Order 

3384, the Bureau of Trust Funds Administration (“BTFA”) was created directly under the Office of the 

Assistant Secretary -- Indian Affairs (AS-IA), and the core fiduciary functions primarily executed by 

OST, as well as complementary Program Operations to support those core functions, were realigned 

from OST into BTFA. The BTFA has assumed all responsibility for the financial operations and 

functions formerly performed by OST. 

(b) Description of the Trust Funds 

Certain of the Tribal and Other Trust Funds are subject to legal, regulatory, budgetary, court-ordered, 

or other restrictions. A brief description of the Tribal and Other Trust Funds follows: 

• Tribal Trust Funds – As of September 30, 2020 and 2019, the Tribal Trust Funds were comprised 

of approximately 3,800 and 3,600 accounts, respectively, which totaled approximately 

$4,267,758,000 and $4,128,060,000, respectively. 

Tribal Trust Funds realize receipts from a variety of sources, including judgment awards, settlement 

of claims, land use agreements, royalties on natural resource depletion, other proceeds derived 

directly from trust resources, and investment income. 

• Other Trust Funds – Other Trust Funds are comprised of those funds classified as Held by the 

Department of the Interior and considered to be U.S. Government funds (see note 6). Other Trust 

Funds totaled approximately $370,099,000 and $330,976,000 as of September 30, 2020 and 2019, 

respectively. 

Other Trust Funds realize receipts from a variety of sources including leases, rights-of-way, 

judgment awards, settlement of Indian claims, donations and bequests, and investment income. 

(c) Investment of Trust Funds 

Authorizing legislation and a substantial body of case law specify how Indian trust funds should be 

managed and which financial instruments constitute appropriate investments for Indian trust funds. The 

Tribal and Other Trust Funds are invested in U.S. Government securities, including U.S. Department of 

6 (Continued) 
TRIBAL AND OTHER TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Notes to Financial Statements 

September 30, 2020 and 2019 

the Treasury (U.S. Treasury) issues, U.S. Government agency issues, and 

U.S. Government-sponsored entity issues. 

During Fiscal Year 2017, OST accepted certain corporate bonds in settlement of litigation, as approved 

by the Department's Office of the Solicitor. OST intends to hold these corporate bonds until maturity 

and then replace them with U.S. Government backed securities. 

(2) Summary of Significant Accounting Policies 

(a) Basis of Accounting 

OST uses the cash basis of accounting for the Tribal and Other Trust Funds, which is a comprehensive 

basis of accounting other than generally accepted accounting principles. Receipts are recorded when 

received and disbursements are recorded when issued. Investments are stated at historical cost. 

Interest received on invested funds reported in the statements of changes in trust fund balances 

reflects interest received during the fiscal year. 

(b) Cash and Cash Equivalents 

Management considers all highly liquid financial instruments with maturities of three months or less 

when purchased to be cash equivalents. 

(c) Investments 

Investment securities at September 30, 2020 and 2019 consist of U.S. Treasury issues, 

U.S. Government agency issues, U.S. Government-sponsored entity issues, and corporate bonds. 

During Fiscal Year 2017, OST accepted certain corporate bonds in settlement of litigation. OST intends 

to hold these corporate bonds until maturity and then replace them with U.S. Government backed 

securities. Investment securities are recorded at historical cost. Investment income is recognized when 

received. 

The Tribal and Other Trust Funds are invested in U.S. Government securities, as mandated by 25 USC 

Section 162a, and certain corporate bonds accepted in settlement of litigation, as approved by the 

Department's Office of the Solicitor. 

(d) Receipts 

Receipts from various leasing activities, mineral royalties and sales of extracted minerals, timber and 

other forest products, fees and fines, and the granting of easements are generated from a variety of 

nonfinancial assets that are held in trust by the U.S. Government and managed by BIA and other 

Departmental bureaus and offices on behalf of tribes. Receipts in transit at September 30, 2020 and 

2019, if any, awaiting deposit to the U.S. Treasury, are not included in the accompanying financial 

statements. 

Receipts also include payments from the U.S. Government for judgment awards and the settlement of 

claims. 

7 (Continued) 
TRIBAL AND OTHER TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Notes to Financial Statements 

September 30, 2020 and 2019 

(e) Disbursements 

Payments disbursed from the Tribal and Other Trust Funds consist of accumulations of funds from 

various income-producing activities such as leasing, royalty receipts, minerals extraction, timber and 

other forest product sales, fees and fines, judgment awards, settlement of claims, and investment 

income. Under certain conditions, tribes disburse or authorize disbursement of per capita payments to 

their enrolled members. 

Public Law 103-412 specifically allows for the voluntary withdrawal of judgment awards and settlement 

of claims funds from the Tribal and Other Trust Funds. Except where prohibited by statute, an Indian 

tribe may submit a plan to withdraw some or all funds held in trust for the tribe in accordance with 

25 CFR 1200. 

(f) Use of Estimates 

The preparation of the financial statements and notes requires management to make estimates and 

assumptions that affect the reported amounts of assets at the date of the financial statements and the 

reported amounts of increases and decreases in trust fund balances during the reporting period. Actual 

results could differ from those estimates. 

(g) Recently Adopted Accounting Pronouncements 

In January 2016, the Financial Accounting Standards Board issued Accounting Standards Update 

(ASU) No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 

2016-01 eliminated the requirement to disclose the fair value of financial instruments measured at 

amortized cost for entities that are not public entities. ASU 2016-01 is effective for financial statements 

issued for fiscal years beginning after December 15, 2018. OST has adopted this ASU effective 

October 1, 2019, which effectively eliminated the fair value disclosure requirements for the investments 

presented on the statements of assets and trust fund balances. 

(h) Subsequent Events 

Subsequent events are evaluated by management through the date that the financial statements are 

available to be issued, which is November 10, 2020. 

(3) Cash and Cash Equivalents 

Cash equivalents of approximately $1,026 million and $758 million at September 30, 2020 and 2019, 

respectively, consist primarily of overnight investments with the U.S. Treasury. 

8 (Continued) 
TRIBAL AND OTHER TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Notes to Financial Statements 

September 30, 2020 and 2019 

(4) Investments 

The historical cost of investment securities by major class of security at September 30 were as follows 

(amounts exclude investments in U.S. Treasury overnight securities discussed in note 3): 

Historical

cost

(In thousands)

At September 30, 2020:

U.S. Treasury and agency

securities $ 3,235,694 

U.S. Government entity issued

mortgage-backed securities 371,030 

U.S. Corporate Bonds 163

$ 3,606,887 

At September 30, 2019:

U.S. Treasury and agency

securities $ 3,262,214 

U.S. Government entity issued

mortgage-backed securities 370,000 

U.S. Corporate Bonds 324

$ 3,632,538 

The investments above held by the Tribal and Other Trust Funds at September 30, 2020 and 2019 consist 

of fixed income securities, some of which are mortgaged-backed debt securities, issued by the 

U.S. Treasury, U.S. Government agencies, or U.S. Government-sponsored entities and certain corporate 

bonds. All of the fixed income securities are either explicitly or implicitly backed by the U.S. Government. 

The corporate bonds were accepted by OST during Fiscal Year 2017 in settlement of litigation. OST 

intends to hold these corporate bonds until maturity, between 2019 and 2021, and then replace them with 

U.S. Government backed securities. 

9 (Continued) 
TRIBAL AND OTHER TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Notes to Financial Statements 

September 30, 2020 and 2019 

Maturities of investment securities were as follows at September 30, 2020: 

Historical

cost

(In thousands)

Due in one year or less $ 93,068 

Due after one year through five years 171,173 

Due after five years through ten years 1,237,837 

Due after ten years 2,104,809 

$ 3,606,887 

(5) Contingencies 

Certain Indian tribes for whom OST holds assets in trust have requested an accounting of their trust funds, 

and certain of these Indian tribes have filed claims against the U.S. Government for failure to fulfill its 

fiduciary responsibilities. The cases involve claims for breaches of trust concerning the Government’s 

management of monetary and non-monetary trust assets. The relief sought in these cases range from 

declaratory and injunctive relief to compel an accounting, money damages, and other unspecified 

declaratory injunctive, or equitable, relief. At September 30, 2020, 15 tribal trust cases were pending in 

various federal courts. Overall, the U.S. Government contests liability on the claims asserted and has 

pursued its meritorious defenses to the relief sought. Although the Government believes it has valid legal 

defenses to the claims, the U.S. Government continues to engage in various forms of formal and informal 

dispute resolution with some tribes in an effort to resolve the claims without the need for costly and 

protracted litigation. Any monetary settlement or judgment resulting from an adverse outcome of the claims 

described above will not be satisfied with trust fund balances. No amounts have been recorded in the 

accompanying Tribal and Other Trust Funds’ financial statements for potential claims from the 

U.S. Government. 

(6) Trust Fund Balances 

Trust fund balances are the aggregation of financial assets held in trust and represent the amounts owed to 

beneficiaries as of September 30, 2020 and 2019 for which OST has a fiduciary responsibility. 

The Tribal and Other Trust Funds contain the following trust fund balance categories for U.S. Government 

budget purposes, which are reflected as separate components in the accompanying financial statements: 

• Held for Indian tribes – These represent funds held on behalf of Indian tribes. These funds are 

considered non-U.S. Government monies. 

• Held by the Department of the Interior and considered to be U.S. Government funds – These represent 

funds, some of which will be transferred to the Held for Indian tribes category provided certain 

conditions are satisfied, and for others, the corpus of the fund may be nonexpendable. These funds are 

considered U.S. Government monies. 

10 (Continued) 
TRIBAL AND OTHER TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Notes to Financial Statements 

September 30, 2020 and 2019 

A portion of trust fund balances represents estimated payments on production-type leases for which certain 

tribes and individual Indians hold an interest. When certain adjustments to production are identified, 

estimated payments received in excess of production are returned to the depositor or adjusted for in future 

payments. 

(7) Related-Party Transactions with Other Government Organizations 

(a) U.S. Department of the Interior Bureau of Indian Affairs 

BIA is responsible for the collection of certain monies resulting from the management and use of Indian 

trust lands and other trust resources. Upon receipt, OST records the deposit of trust funds to trust 

accounts based on the information received from BIA. 

(b) U.S. Department of the Interior Office of Natural Resources Revenue 

For certain trust leases, ONRR is responsible for the collection of royalty payments on behalf of Indian 

tribes and individual Indians holding mineral rights. ONRR deposits the royalty payments with the 

U.S. Treasury and electronically transfers to OST the related accounting information, generally the next 

business day. The accounting information received from ONRR provides OST an allocation of 100% 

tribally owned lease royalties, enabling OST to record trust deposits directly into tribal accounts. For 

tribally/individually co-owned leases, allocation and accounting data is forwarded, generally twice a 

month, to OST via electronic interface through the Mineral Royalty Accounting Distribution module that 

is maintained by BIA. Pursuant to established procedure and appropriate authorization, the data is 

recorded by OST. ONRR and BLM both perform verification and other monitoring procedures of 

mineral assets. Oil and gas companies sometimes forward payments to ONRR based on estimated 

mineral production in order to comply with the Federal Oil and Gas Royalty Management Act of 1982 

that requires timely distribution of royalties. These estimated payments may be disbursed by OST to 

the beneficiaries. Typically, the oil and gas companies adjust future payments for excess or shortfall 

amounts, if any, based on actual production. 

(c) U.S. Department of the Treasury 

The U.S. Treasury is responsible for the investment of certain tribal trust funds as a result of applicable 

governing settlement agreements or judgments, or legislation. The U.S. Treasury recognizes OST’s 

expertise in investing in a variety of U.S. Government agency and U.S. Government-sponsored entity 

issues in addition to U.S. Treasury issues. For certain of the funds, the U.S. Treasury has implemented 

an interagency agreement for OST to perform the investment management functions of the funds. 

Performance statements for funds managed by OST under an interagency agreement are provided to 

Treasury representatives on a periodic basis. 

The U.S. Treasury also holds cash and certain investments and disburses for OST. 

(d) Other 

The Department’s Office of the Solicitor serves as legal counsel for OST. 

11 (Continued) 
TRIBAL AND OTHER TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Notes to Financial Statements 

September 30, 2020 and 2019 

(8) Transfers of Trust Funds 

Certain per capita disbursements authorized by tribes result in transfers from the Tribal and Other Trust 

Funds to the Individual Indian Monies (IIM) Trust Funds while certain oil and gas distributions may result in 

transfers to/from the IIM Trust Funds from/to the Tribal and Other Trust Funds. Net transfers of trust funds 

from the Tribal and Other Trust Funds to the IIM Trust Funds totaled approximately $16 million and 

$20 million during the years ended September 30, 2020 and 2019, respectively. These transfers are 

reflected as disbursements in the accompanying statements of changes in trust fund balances. In addition, 

pursuant to information provided by BIA, OST historically utilized special deposit accounts maintained 

within the IIM Trust Funds for both tribal and IIM beneficiaries as suspense accounts, whereby funds are 

temporarily posted when allocation information is not provided when the funds are received. Following 

receipt of allocation information from BIA, the funds are transferred from the special deposit accounts to the 

designated tribal and/or IIM account(s). Special deposit accounts totaled approximately $23 million as of 

September 30, 2020 and 2019. Substantially all of the special deposit account monies held in the IIM Trust 

Funds relate to historical balances and has not been distributed because the ultimate disposition of the 

funds has not been determined. Since the ultimate disposition is unknown at September 30, 2020, the 

portion attributable to the Tribal and Other Trust Funds is unknown. 

12 
INDIVIDUAL INDIAN MONIES TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Financial Statements 

September 30, 2020 and 2019 

(With Independent Auditors’ Report Thereon) 
KPMG LLP

Two Park Square, Suite 700

6565 Americas Parkway, N.E.

Albuquerque, NM 87110-8179

KPMG LLP, a Delaware limited liability partnership and a member firm of 

the KPMG global organization of independent member firms affiliated with 

KPMG International Limited, a private English company limited by guarantee. 

Independent Auditors’ Report

U.S. Department of the Interior Office of the Special Trustee 

for American Indians; and 

U.S. Department of the Interior Office of Inspector General: 

Report on the Financial Statements 

We have audited the accompanying financial statements of the Individual Indian Monies Trust Funds managed 

by the U.S. Department of the Interior Office of the Special Trustee for American Indians (OST), which 

comprise the statements of assets and trust fund balances – modified cash basis as of September 30, 2020 

and 2019 and the related statements of changes in trust fund balances – modified cash basis for the years then 

ended, and the related notes to the financial statements. 

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in 

accordance with the modified cash basis of accounting described in note 2 of the financial statements; this 

includes determining that the modified cash basis of accounting is an acceptable basis for the preparation of 

the financial statements in the circumstances. Management is also responsible for the design, implementation, 

and maintenance of internal control relevant to the preparation and fair presentation of financial statements that 

are free from material misstatement, whether due to fraud or error. 

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted 

our audits in accordance with auditing standards generally accepted in the United States of America, in 

accordance with the standards applicable to financial audits contained in Government Auditing Standards 

issued by the Comptroller General of the United States, and in accordance with Office of Management and 

Budget (OMB) Bulletin No. 19-03, Audit Requirements for Federal Financial Statements. Those standards and 

OMB Bulletin No. 19-03 require that we plan and perform the audits to obtain reasonable assurance about 

whether the financial statements are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the 

financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of 

the risks of material misstatement of the financial statements, whether due to fraud or error. In making those 

risk assessments, the auditor considers internal control relevant to OST’s preparation and fair presentation of 

the financial statements in order to design audit procedures that are appropriate in the circumstances, but not 

for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we 

express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and 

the reasonableness of significant accounting estimates made by management, as well as evaluating the overall 

presentation of the financial statements. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our 

audit opinion. 
Opinion 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial 

position of the Individual Indian Monies Trust Funds managed by OST as of September 30, 2020 and 2019, 

and the changes in trust fund balances for the years then ended, in accordance with the modified cash basis of 

accounting described in note 2. 

Basis of Accounting 

We draw attention to note 2 of the financial statements, which describes the basis of accounting. The financial 

statements are prepared on the modified cash basis of accounting as described, which is a basis of accounting 

other than U.S. generally accepted accounting principles. Our opinion is not modified with respect to this 

matter. 

Other Reporting Required by Government Auditing Standards 

In accordance with Government Auditing Standards, we have also issued our report dated November 10, 2020 

on our consideration of internal control over financial reporting and on our tests of compliance with certain 

provisions of laws, regulations, and other matters for the Individual Indian Monies Trust Funds managed by 

OST. The purpose of that report is solely to describe the scope of our testing of internal control over financial 

reporting and compliance and the result of that testing, and not to provide an opinion on the effectiveness of 

OST’s internal control over financial reporting or on compliance. That report is an integral part of an audit 

performed in accordance with Government Auditing Standards in considering the internal control over financial 

reporting and compliance for the Individual Indian Monies Trust Funds managed by OST. 

Albuquerque, New Mexico 

November 10, 2020 

2 
INDIVIDUAL INDIAN MONIES TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Statements of Assets and Trust Fund Balances – Modified Cash Basis 

September 30, 2020 and 2019 

(In thousands) 

Assets 2020 2019 

Cash and cash equivalents (note 3) 

Investments (note 4) 

Accrued interest receivable 

Total assets 

Trust Fund Balances 

$ 97,430 

1,008,806 

6,450 

$ 1,112,686 

126,030 

916,799 

6,631 

1,049,460 

Held for individual Indians (notes 6 and 8) $ 1,112,686 1,049,460 

See accompanying notes to financial statements. 

3 
INDIVIDUAL INDIAN MONIES TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Statements of Changes in Trust Fund Balances – Modified Cash Basis 

Years ended September 30, 2020 and 2019 

(In thousands) 

2020 2019 

Increases: 

Receipts (note 8) $ 939,480 1,150,542 

Interest earned on invested funds 29,539 28,757 

Gain on disposition of investments, net 239 54 

969,258 1,179,353 

Decreases: 

Disbursements to and on behalf of account holders (906,032) (1,061,304) 

Increase in trust fund balances, net 63,226 118,049 

Trust fund balances, beginning of year 1,049,460 931,411 

Trust fund balances, end of year (notes 6 and 8) $ 1,112,686 1,049,460 

See accompanying notes to financial statements. 

4 
INDIVIDUAL INDIAN MONIES TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Notes to Financial Statements 

September 30, 2020 and 2019 

(1) Background and Description of the Trust Funds 

(a) Overview of the Trust Funds 

Establishment and Management of the Trust Funds – The legislation that authorizes the Secretary 

of the United States Department of the Interior (Secretary) to manage the Individual Indian Monies 

Trust Funds (IIM Trust Funds) recognizes the unique trust relationship that exists between the Indian 

tribes, individual Indians, and the United States Government (U.S. Government). Agreements between 

the U.S. Government and the various Indian tribes, many of these in the form of treaties, recognize the 

sovereignty of tribes. During the course of the United States’ history and the U.S. Government’s 

evolving policies toward individual Indians and Indian tribes, the trust relationship has retained 

characteristics based upon tribal sovereignty. The United States Congress has designated the 

Secretary as the trustee delegate with responsibility for the financial and nonfinancial resources held in 

trust on behalf of American Indian tribes, individual Indians, and other trust funds. In carrying out the 

management and oversight of the Indian trust assets, the Secretary has a fiduciary responsibility to 

ensure monies are received for the use of Indian lands and the extraction of natural resources from 

Indian lands, distribute such monies collected to the appropriate beneficiaries, ensure that trust 

accounts are properly maintained and invested, and ensure that accurate and complete reports are 

provided to the trust beneficiaries in accordance with applicable law. 

The balances that have accumulated in the IIM Trust Funds have resulted generally from land use 

agreements, royalties on natural resource depletion, other proceeds derived directly from trust 

resources, receipt of judgment and tribal per capita distributions, settlement of claims, and investment 

income. 

The accompanying financial statements include only the financial assets held in trust by the Office of 

the Special Trustee for American Indians (OST) for trust beneficiaries and do not include: (i) the 

operating account balances of OST (e.g., Fund Balance with Treasury; Property, Plant, and Equipment; 

etc.) or (ii) other Indian trust assets, including but not limited to, Indian lands, buildings, or other 

nonfinancial assets managed by the United States Department of the Interior (the Department). 

The Reform Act – The American Indian Trust Fund Management Reform Act of 1994 (Public Law 

103-412) (the Reform Act) authorized the establishment of OST, which is headed by the Special 

Trustee for American Indians (Special Trustee) who reports to the Secretary. Under this legislation, the 

Special Trustee is responsible for oversight, reform, and coordination of the policies, procedures, 

systems, and practices used by various bureaus and offices of the Department, including but not 

limited to OST, the Bureau of Indian Affairs (BIA) (a component of Indian Affairs (IA)), the Office of 

Natural Resources Revenue (ONRR), and the Bureau of Land Management (BLM), in managing Indian 

trust assets. 

Office of the Special Trustee for American Indians – Indian trust assets, including the IIM Trust 

Funds, are primarily managed under the delegated authority of OST and BIA. Management of Indian 

trust assets on behalf of the trust beneficiaries is dependent upon the processing of trust-related 

transactions within certain information systems of the Department, including but not limited to OST, 

BIA, ONRR, and other Departmental bureaus and offices. BIA and other Departmental bureaus and 

offices are responsible for managing the natural resources located within the boundaries of Indian 

5 (Continued) 
INDIVIDUAL INDIAN MONIES TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Notes to Financial Statements 

September 30, 2020 and 2019 

reservations and trust lands as well as the processing of data regarding the ownership and leasing of 

Indian lands. The allocation of receipts and disbursements by OST to trust beneficiaries are 

significantly dependent and reliant upon the receipt of timely and accurate information derived from 

records maintained by BIA, ONRR, and other Departmental bureaus and offices (see note 7). 

Regional Offices – OST and BIA maintain staff at regional offices located throughout the United 

States. 

Agency and Field Offices – OST and BIA also maintain staff at agency and field offices located 

throughout the United States, which are generally located near the tribes and individual Indians served. 

OST and BIA personnel located at most of the agency and field offices perform various functions 

related to trust fund activities. 

Bureau of Trust Funds Administration – During the year ended September 30. 2020, OST remained 

an Office under the Secretary of the Interior. Effective October 1, 2020, pursuant to Secretarial Order 

3384, the Bureau of Trust Funds Administration (“BTFA”) was created directly under the Office of the

Assistant Secretary -- Indian Affairs (AS-IA), and the core fiduciary functions primarily executed by 

OST, as well as complementary Program Operations to support those core functions, were realigned 

from OST into BTFA. The BTFA has assumed all responsibility for the financial operations and 

functions formerly performed by OST. 

(b) Description of the Trust Funds 

The IIM Trust Funds are comprised of approximately 400,000 and 406,000 accounts, held primarily for 

the benefit of individual Indian account holder beneficiaries and tribal entities, as of September 30, 

2020 and 2019, respectively. Included within the IIM Trust Funds are certain special deposit accounts 

that are subject to legal, regulatory, budgetary, court-ordered, or other restrictions that may ultimately 

result in funds being distributed to tribal and/or other entities. 

The IIM Trust Funds are primarily funds on deposit for individual Indians with a beneficial interest in 

those funds. IIM account holders realize receipts primarily from land use agreements, royalties on 

natural resource depletion, other proceeds derived directly from trust resources, judgment and tribal 

per capita distributions, settlement of claims, and investment income. 

(c) Investment of Trust Funds 

Authorizing legislation and a substantial body of case law specify how Indian trust funds should be 

managed and which financial instruments constitute appropriate investments for Indian trust funds. The 

IIM Trust Funds are pooled and invested in U.S. Government securities, including U.S. Department of 

the Treasury (U.S. Treasury) issues, U.S. Government agency issues, and 

U.S. Government-sponsored entity issues. 

6 (Continued) 
INDIVIDUAL INDIAN MONIES TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Notes to Financial Statements 

September 30, 2020 and 2019 

(2) Summary of Significant Accounting Policies 

(a) Basis of Accounting 

OST uses the cash basis of accounting with certain modifications for the IIM Trust Funds, which is a 

comprehensive basis of accounting other than generally accepted accounting principles. Receipts are 

recorded when received with the exception of interest earned on invested funds (including discount 

accretion and premium amortization), and disbursements are recorded when issued. Investments are 

stated at amortized cost. Accrual adjustments to reflect interest earned but not received, and to record 

any applicable accretion of discounts and amortization of premiums over the terms of the investments, 

have been recorded in the accompanying financial statements. Interest income reported in the 

statements of changes in trust fund balances reflects interest earned, net of any premium amortization 

or discount accretion recognized during the fiscal year. 

(b) Cash and Cash Equivalents 

Management considers all highly liquid financial instruments with maturities of three months or less 

when purchased to be cash equivalents. 

(c) Investments 

Investment securities at September 30, 2020 and 2019 consist of U.S. Treasury issues, 

U.S. Government agency issues, and U.S. Government-sponsored entity issues. IIM Trust Funds are 

pooled and invested. Investment securities are recorded at amortized cost, adjusted for the 

amortization or accretion of premiums or discounts. Premiums and discounts are amortized or accreted 

over the expected life of the related investment security as an adjustment to yield using the 

effective-interest method. Investment income is recognized when earned. 

The IIM Trust Funds are invested in U.S. Government securities, as mandated by 25 USC 162a. 

(d) Receipts 

Receipts from various leasing activities, mineral royalties and sales of extracted minerals, timber and 

other forest products, fees and fines, land sales, and the granting of easements are generated from a 

variety of nonfinancial assets that are held in trust by the U.S. Government and managed by BIA and 

other Departmental bureaus and offices on behalf of individual Indians. Receipts in transit at 

September 30, 2020 and 2019, if any, awaiting deposit to the U.S. Treasury, are not included in the 

accompanying financial statements. 

Receipts also include payments from the U.S. Government for judgment awards and the settlement of 

claims. 

(e) Disbursements 

Payments disbursed from the IIM Trust Funds consist of accumulations of funds from various 

income-producing activities such as leasing, royalty receipts, mineral extraction, timber and other forest 

product sales, judgment awards, land sales, tribal per capita distributions, settlement of claims, and 

investment income. 

7 (Continued) 
INDIVIDUAL INDIAN MONIES TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Notes to Financial Statements 

September 30, 2020 and 2019 

(f) Use of Estimates 

The preparation of the financial statements and notes requires management to make estimates and 

assumptions that affect the reported amounts of assets at the date of the financial statements and the 

reported amounts of increases and decreases in trust fund balances during the reporting period. Actual 

results could differ from those estimates. 

(g) Recently Adopted Accounting Pronouncements 

In January 2016, the Financial Accounting Standards Board issued Accounting Standards Update 

(ASU) No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. 

ASU 2016-01 eliminated the requirement to disclose the fair value of financial instruments measured at 

amortized cost for entities that are not public entities. ASU 2016-01 is effective for financial statements 

issued for fiscal years beginning after December 15, 2018. OST has adopted this ASU effective 

October 1, 2019, which effectively eliminated the fair value disclosure requirements for the investments 

presented on the statements of assets and trust fund balances. 

(h) Subsequent Events 

Subsequent events are evaluated by management through the date that the financial statements are 

available to be issued, which is November 10, 2020. 

(3) Cash and Cash Equivalents 

Cash equivalents of approximately $57 million and $54 million at September 30, 2020 and 2019, 

respectively, consist of overnight investments with the U.S. Treasury. 

8 (Continued) 
INDIVIDUAL INDIAN MONIES TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Notes to Financial Statements 

September 30, 2020 and 2019 

(4) Investments 

The amortized cost of investment securities by major class of security at September 30 were as follows 

(amounts exclude investments in U.S. Treasury overnight securities discussed in note 3): 

Amortized

cost

(In thousands)

At September 30, 2020:

U.S. Treasury and agency

securities $ 926,676 

U.S. Government entity issued

mortgage-backed securities 82,130 

$ 1,008,806 

At September 30, 2019:

U.S. Treasury and agency

securities $ 844,442 

U.S. Government entity issued

mortgage-backed securities 72,357 

$ 916,799 

The investments above held by the IIM Trust Funds at September 30, 2020 and 2019 consist of fixed 

income securities, some of which are mortgaged-backed debt securities, issued by the U.S. Treasury, 

U.S. Government agencies, or U.S. Government-sponsored entities. All of these securities are either 

explicitly or implicitly backed by the U.S. Government. 

Maturities of investment securities were as follows at September 30, 2020: 

Amortized

cost

(In thousands)

Due in one year or less $ 10,005 

Due after one year through five years 189,665 

Due after five years through ten years 319,747 

Due after ten years 489,389 

$ 1,008,806 

9 (Continued) 
INDIVIDUAL INDIAN MONIES TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Notes to Financial Statements 

September 30, 2020 and 2019 

(5) Contingencies 

The Trust Funds are involved in various claims and legal actions arising in the ordinary course of business 

in which certain beneficiaries have filed claims against the U.S. Government for failure to fulfill its fiduciary 

responsibilities. The U.S. Government believes it has valid legal defenses against these claims. Any 

monetary settlement or judgment resulting from an adverse outcome of the claims will not be satisfied with 

trust fund balances. No amounts have been recorded in the accompanying IIM Trust Funds financial 

statements for potential claims from the U.S. Government. 

(6) Trust Fund Balances 

Trust fund balances are the aggregation of financial assets held in trust and primarily represent the 

amounts owed to beneficiaries as of September 30, 2020 and 2019 for which OST has a fiduciary 

responsibility. 

The subsidiary detail of IIM account balances contains approximately 10,800 and 10,900 special deposit 

accounts with balances totaling approximately $23 million as of September 30, 2020 and 2019. 

Substantially all of the special deposit account monies held in the IIM Trust Funds relates to historical 

balances and has not been allocated because the allocation information for the funds has not been 

provided by BIA. Since the ultimate allocation is unknown at September 30, 2020, the portion attributable to 

the IIM Trust Funds is unknown. 

The subsidiary detail of IIM account balances contains certain oil and gas holding accounts with balances 

totaling approximately $46 million and $72 million as of September 30, 2020 and 2019, respectively, which 

have not been distributed to beneficiaries. Upon receipt of the allocation and accounting data, to be 

provided by ONRR and BIA, the monies will be distributed to the proper beneficiaries’ accounts (see

note 7). 

A portion of trust fund balances represents estimated payments on production-type leases for which certain 

individual Indians and tribes hold an interest. When certain adjustments to production are identified, 

estimated payments received in excess of production are returned to the depositor or adjusted for in future 

payments. 

(7) Related-Party Transactions with Other Government Organizations 

(a) U.S. Department of the Interior Bureau of Indian Affairs 

BIA is responsible for the collection of certain monies resulting from the management and use of Indian 

trust lands and other trust resources. Upon receipt, OST records the deposit of trust funds to trust 

accounts based on the information received from BIA. 

10 (Continued) 
INDIVIDUAL INDIAN MONIES TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Notes to Financial Statements 

September 30, 2020 and 2019 

(b) U.S. Department of the Interior Office of Natural Resources Revenue 

For certain trust leases, ONRR is responsible for the collection of royalty payments on behalf of Indian 

tribes and individual Indians holding mineral rights. ONRR deposits the royalty payments with the 

U.S. Treasury and electronically transfers to OST the related accounting information, generally the next 

business day. For tribally/individually co-owned leases and individually owned leases, the allocation 

and accounting data to distribute the monies to the proper IIM account is forwarded, generally twice a 

month, to OST via electronic interface through the Mineral Royalty Accounting Distribution module that 

is maintained by BIA. Pursuant to established procedure and appropriate authorization, the data is 

recorded by OST. ONRR and BLM both perform verification and other monitoring procedures of 

mineral assets. Oil and gas companies sometimes forward payments to ONRR based on estimated 

mineral production in order to comply with the Federal Oil and Gas Royalty Management Act of 1982 

that requires timely distribution of royalties. These estimated payments may be disbursed by OST to 

the beneficiaries. Typically, the oil and gas companies adjust future payments for excess or shortfall 

amounts, if any, based on actual production. 

(c) Other 

The U.S. Treasury holds cash and certain investments and disburses for OST. 

The Department’s Office of the Solicitor serves as legal counsel for OST. 

(8) Transfers of Trust Funds 

Certain per capita disbursements authorized by tribes result in transfers from the Tribal and Other Trust 

Funds to the IIM Trust Funds while certain oil and gas distributions may result in transfers to/from the IIM 

Trust Funds from/to the Tribal and Other Trust Funds. Net transfers of trust funds to the IIM Trust Funds 

from the Tribal and Other Trust Funds totaled approximately $16 million and $20 million during the years 

ended September 30, 2020 and 2019, respectively. These transfers are reflected as receipts in the 

accompanying statements of changes in trust fund balances. In addition, pursuant to information provided 

by BIA, OST historically utilized special deposit accounts (see note 6) maintained within the IIM Trust 

Funds for both tribal and IIM beneficiaries as suspense accounts, whereby funds are temporarily posted 

when allocation information is not provided when the funds are received. Following receipt of allocation 

information from BIA, the funds are transferred from the special deposit accounts to the designated tribal 

and/or IIM account(s). 

11 
TRIBAL AND OTHER TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Independent Auditors’ Report on Internal Control over

Financial Reporting and on Compliance and Other Matters 

September 30, 2020 
KPMG LLP

Two Park Square, Suite 700

6565 Americas Parkway, N.E.

Albuquerque, NM 87110-8179

KPMG LLP, a Delaware limited liability partnership and a member firm of 

the KPMG global organization of independent member firms affiliated with 

KPMG International Limited, a private English company limited by guarantee. 

Independent Auditors’ Report on Internal Control over Financial Reporting and 

on Compliance and Other Matters Based on an Audit of Financial Statements 

Performed in Accordance with Government Auditing Standards 

U.S. Department of the Interior Office of the Special Trustee 

for American Indians; and 

U.S. Department of the Interior Office of Inspector General: 

We have audited, in accordance with auditing standards generally accepted in the United States of America, in 

accordance with the standards applicable to financial audits contained in Government Auditing Standards 

issued by the Comptroller General of the United States, and in accordance with Office of Management and 

Budget (OMB) Bulletin No. 19-03, Audit Requirements for Federal Financial Statements, the financial 

statements of the Tribal and Other Trust Funds managed by the U.S. Department of the Interior Office of the 

Special Trustee for American Indians (OST), which comprise the statements of assets and trust fund 

balances – cash basis as of September 30, 2020 and 2019, and the related statements of changes in trust fund 

balances – cash basis for the years then ended, and the related notes to the financial statements, and have 

issued our report thereon dated November 10, 2020. 

Our audit report states that the Tribal and Other Trust Funds Financial Statements are prepared in accordance 

with a basis of accounting that is a comprehensive basis of accounting other than generally accepted 

accounting principles, as described in note 2 to the Tribal and Other Trust Funds Financial Statements. 

Our audit report on the Tribal and Other Trust Funds Financial Statements was qualified because it was not 

practicable to extend our auditing procedures sufficiently to satisfy ourselves as to the fairness of trust fund 

balances in the Tribal and Other Trust Funds Financial Statements as of September 30, 2020 and 2019 due to 

the effects of certain tribal parties for whom OST holds assets in trust disagreeing with the balances recorded 

by OST, and/or having requested an accounting of their trust funds, and of which certain of these parties have 

filed, or are expected to file, claims against the United States Government. Trust fund balances enter into the 

determination of financial position and changes in trust fund balances. 

Internal Control over Financial Reporting 

In planning and performing our audit of the financial statements as of and for the year ended September 30, 

2020, we considered the internal control over financial reporting (internal control) for the Tribal and Other Trust 

Funds managed by OST as a basis for designing audit procedures that are appropriate in the circumstances for 

the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an 

opinion on the effectiveness of the internal control. Accordingly, we do not express an opinion on the 

effectiveness of the internal control. We did not test all internal controls relevant to operating objectives as 

broadly defined by the Federal Managers’ Financial Integrity Act of 1982. 

A deficiency in internal control exists when the design or operation of a control does not allow management or 

employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, 

misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in 

internal control, such that there is a reasonable possibility that a material misstatement of the financial 

statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a 

deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet 

important enough to merit attention by those charged with governance. 
Our consideration of internal control was for the limited purpose described in the first paragraph of this section 

and was not designed to identify all deficiencies in internal control that might be material weaknesses or 

significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal 

control that we consider to be material weaknesses. However, material weaknesses may exist that have not 

been identified. 

Compliance and Other Matters 

As part of obtaining reasonable assurance about whether the financial statements of the Tribal and Other Trust 

Funds managed by OST as of and for the year ended September 30, 2020 are free from material 

misstatement, we performed tests of compliance with certain provisions of laws and regulations, 

noncompliance with which could have a direct and material effect on the financial statements. However, 

providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we 

do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other 

matters that are required to be reported herein under Government Auditing Standards or OMB Bulletin 

No. 19-03. 

Purpose of this Report 

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and 

the results of that testing, and not to provide an opinion on the effectiveness of internal control or compliance 

for the Tribal and Other Trust Funds managed by OST. This report is an integral part of an audit performed in 

accordance with Government Auditing Standards in considering the internal control and compliance. 

Accordingly, this communication is not suitable for any other purpose. 

Albuquerque, New Mexico 

November 10, 2020 

2 
INDIVIDUAL INDIAN MONIES TRUST FUNDS 

MANAGED BY THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS 

Independent Auditors’ Report on Internal Control over

Financial Reporting and on Compliance and Other Matters 

September 30, 2020 
KPMG LLP

Two Park Square, Suite 700

6565 Americas Parkway, N.E.

Albuquerque, NM 87110-8179

KPMG LLP, a Delaware limited liability partnership and a member firm of 

the KPMG global organization of independent member firms affiliated with 

KPMG International Limited, a private English company limited by guarantee. 

Independent Auditors’ Report on Internal Control over Financial Reporting and 

on Compliance and Other Matters Based on an Audit of Financial Statements 

Performed in Accordance with Government Auditing Standards 

U.S. Department of the Interior Office of the Special Trustee 

for American Indians; and 

U.S. Department of the Interior Office of Inspector General: 

We have audited, in accordance with auditing standards generally accepted in the United States of America, in 

accordance with the standards applicable to financial audits contained in Government Auditing Standards 

issued by the Comptroller General of the United States, and in accordance with Office of Management and 

Budget (OMB) Bulletin No. 19-03, Audit Requirements for Federal Financial Statements, the financial 

statements of the Individual Indian Monies Trust Funds (IIM Trust Funds) managed by the U.S. Department of 

the Interior Office of the Special Trustee for American Indians (OST), which comprise the statements of assets 

and trust fund balances – modified cash basis as of September 30, 2020 and 2019, and the related statements 

of changes in trust fund balances – modified cash basis for the years then ended, and the related notes to the 

financial statements, and have issued our report thereon dated November 10, 2020. 

Our audit report states that the IIM Trust Funds Financial Statements are prepared in accordance with a basis 

of accounting that is a comprehensive basis of accounting other than generally accepted accounting principles, 

as described in note 2 to the IIM Trust Funds Financial Statements. 

Internal Control over Financial Reporting 

In planning and performing our audit of the financial statements as of and for the year ended September 30, 

2020, we considered the internal control over financial reporting (internal control) for the IIM Trust Funds 

managed by OST as a basis for designing audit procedures that are appropriate in the circumstances for the 

purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion 

on the effectiveness of the internal control. Accordingly, we do not express an opinion on the effectiveness of 

the internal control. We did not test all internal controls relevant to operating objectives as broadly defined by 

the Federal Managers’ Financial Integrity Act of 1982. 

A deficiency in internal control exists when the design or operation of a control does not allow management or 

employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, 

misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in 

internal control, such that there is a reasonable possibility that a material misstatement of the financial 

statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a 

deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet 

important enough to merit attention by those charged with governance. 

Our consideration of internal control was for the limited purpose described in the first paragraph of this section 

and was not designed to identify all deficiencies in internal control that might be material weaknesses or 

significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal 

control that we consider to be material weaknesses. However, material weaknesses may exist that have not 

been identified. 
Compliance and Other Matters 

As part of obtaining reasonable assurance about whether the financial statements of the IIM Trust Funds 

managed by OST as of and for the year ended September 30, 2020 are free from material misstatement, we 

performed tests of compliance with certain provisions of laws and regulations, noncompliance with which could 

have a direct and material effect on the financial statements . However, providing an opinion on compliance 

with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. 

The results of our tests disclosed no instances of noncompliance or other matters that are required to be 

reported herein under Government Auditing Standards or OMB Bulletin No. 19-03. 

Purpose of this Report 

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and 

the results of that testing, and not to provide an opinion on the effectiveness of internal control or compliance 

for the IIM Trust Funds managed by OST. This report is an integral part of an audit performed in accordance 

with Government Auditing Standards in considering the internal control and compliance. Accordingly, this 

communication is not suitable for any other purpose. 

Albuquerque, New Mexico 

November 10, 2020 

2 
Report Fraud, Waste,

and Mismanagement

Fraud, waste, and mismanagement in

Government concern everyone: Office 

of Inspector General staff, departmental 

employees, and the general public. We 

actively solicit allegations of any 

inefficient and wasteful practices, fraud, 

and mismanagement related to 

departmental or Insular Area programs 

and operations. You can report 

allegations to us in several ways.

 By Internet: www.doioig.gov

 By Phone: 24-Hour Toll Free: 800-424-5081

Washington Metro Area: 202-208-5300

 By Fax: 703-487-5402

 By Mail: U.S. Department of the Interior

Office of Inspector General

Mail Stop 4428 MIB

1849 C Street, NW.

Washington, DC 20240