GAO

United States General Accounting Office

Report to Congressional Requesters

September 2000 INDIAN TRUST 

FUNDS

Improvements Made 

in Acquisition of New 

Asset and Accounting 

System But Significant 

Risks Remain

GAO/AIMD-00-259

Page 1 GAO/AIMD-00-259 Indian Trust Funds

United States General Accounting Office

Washington, D.C. 20548

Accounting and Information

Management Division

B-284142 Letr

September 15, 2000

The Honorable Ben Nighthorse Campbell

Chairman

Committee on Indian Affairs

United States Senate

The Honorable Slade Gorton

Chairman, Subcommittee on Interior and Related Agencies

Committee on Appropriations

United States Senate

This report responds to your request that we evaluate the Department of 

the Interior’s effort to acquire and develop its new Trust Asset and 

Accounting Management System (TAAMS). TAAMS is part of a broader 

Interior effort to address problems that have beset Indian trust 

management for many decades, including inadequate accounting and 

management information systems; backlogs in asset appraisals, ownership 

determination, and recordkeeping; and poor internal controls. TAAMS 

itself is being developed to address deficiencies in the recording, collecting, 

and accounting for revenues related to the department’s management of 

about 54 million acres of Indian trust land.

In April and July of 1999, we reported1

 that Interior did not follow sound 

acquisition management practices in the early stages of the TAAMS effort 

and, as a result of its poor planning, it could not ensure that TAAMS would 

cost effectively meet trust management needs or adequately mitigate 

development risks. In more recent briefings to your offices, we reported 

that Interior was not following sound practices in conducting system and 

user acceptance tests for TAAMS. As agreed with your offices, we assessed 

(1) actions Interior has taken in response to our previous reviews and 

recommendations and (2) the business and technical risks and challenges 

still confronting Interior as it begins to deploy TAAMS. 

1

Indian Trust Funds: Interior Lacks Assurance That Trust Improvement Plan Will Be 

Effective (GAO/AIMD-99-53, April 28, 1999) and Indian Trust Funds: Challenges Facing 

Interior’s Implementation of New Trust Asset and Accounting Management System

(GAO/T-AIMD-99-238, July 14, 1999).
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Results in Brief Interior is taking some positive actions to address several of the concerns 

raised in our 1999 reports as well as additional concerns raised in our 

subsequent briefings on TAAMS testing efforts. For example, Interior has 

adopted a generally accepted methodology for developing a project such as 

TAAMS and developed plans for mitigating risks, transitioning to the new 

system, and validating and maintaining the integrity of the system 

throughout its useful life. In addition, Interior has taken actions to 

strengthen its testing processes; for example, by expanding tests to assess 

how the system responds to unexpected conditions. Lastly, Interior is 

beginning to develop an information systems architecture for Indian trust 

management which is needed to ensure that trust fund and related systems 

are interoperable, function together efficiently, and are cost-effective over 

their life cycles.

These actions are good steps toward enhancing management of the TAAMS 

effort. However, there are a number of major business and technical 

challenges that still put the TAAMS effort at considerable risk. As to the 

business challenges, Interior has not yet completed actions designed to 

enhance overall trust fund management, including its efforts to revamp 

policies and procedures for the entire trust management cycle and to 

address long-standing internal control weaknesses. Both efforts could have 

a significant impact on TAAMS because they may require new features to 

be built into the system or current capabilities to be modified and, in turn, 

increase the risk of introducing new system defects. Fixing such defects 

late in the development effort can be very costly. The internal controls 

effort is also critical to ensuring the accuracy and completeness of TAAMS 

data on an ongoing basis. In addition, Interior has not reengineered the 

business processes that TAAMS is to support even though these processes 

were designed in a very different system environment. Without taking time 

now to examine and revise its business processes, Interior will not be able 

to maximize the benefits that can be gained from TAAMS and it may 

perpetuate outmoded ways of doing business.

On the technical side, there are actions underway to strengthen Interior’s 

management of the TAAMS project, such as hiring a contractor to evaluate 

data integrity and the adoption of more disciplined testing processes. 

Nevertheless, there are challenging undertakings still ahead. For example, 

Interior needs to ensure that its contractor is following disciplined 

processes for developing and testing TAAMS. And, it needs to carefully 

manage the addition of new TAAMS requirements as new versions of the 

system are continually rolled out and tested. Moreover, without a detailed 
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information systems architecture to help guide the TAAMS effort, Interior 

will need to carefully ensure that TAAMS and other trust fund systems are 

compatible and in line with business needs.

We are making recommendations to Interior to address the business and 

technical risks we identified before undertaking the second phase of the 

TAAMS effort. This phase involves rolling out key trust asset and land 

management functions such as lease, contract, and permit management; 

billing and collection; accounts receivable; lease and contract payment 

distribution; and land resource management.

In its comments on a draft of this report, the Department of the Interior 

generally agreed with our assessment of the status of its efforts and of the 

continuing challenges during the remainder of the TAAMS initiative.

Background The Secretary of the Interior is primarily responsible for administering the 

government’s trust responsibilities to tribes and Indians, including 

managing about $3 billion in Indian trust funds and administering about 

54 million acres of Indian trust lands. Management of the Indian trust funds 

and assets has long been characterized by inadequate accounting and 

information systems; untrained and inexperienced staff; backlogs in 

appraisals, ownership determinations, and recordkeeping; the lack of a 

master lease file and an accounts receivable system; inadequate written 

policies and procedures; and poor internal controls.

Interior’s Effort to Address 

Long-Standing Problems

In 1998, Interior began undertaking a major effort to resolve these 

problems. This initiative now includes 11 projects. They are directed at 

such things as improving systems, enhancing the accuracy and 

completeness of Interior data regarding the ownership and lease of Indian 

lands, and correcting deficiencies with respect to records management, 

training, policy and procedures, and internal controls. 

TAAMS is one of the 11 projects. TAAMS is expected to replace two legacy 

systems that are currently being used to manage Indian trust assets: the 

Land Records Information System (LRIS) and the Integrated Records 

Management System (IRMS). LRIS supports the land title function by 

providing land title-related information, such as ownership and 

encumbrances. It calculates ownership interests, in fractional and decimal 

forms, used by Interior for distribution of land revenue. IRMS supports the 

land resource management function and is primarily used at the agency 
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level for generating lease bills and for income and revenue distribution to 

Indian owners. It contains information on Indians, leases (for example, 

pasture, range, timber, mineral, and mining leases), land ownership, oil and 

gas royalties, and trust fund accounts. 

According to Interior, the two mainframe-based systems are not integrated, 

have no electronic interfaces, and duplicate much of the same information 

(that is, information on ownership, land, and lease/encumbrances). Neither 

fully or adequately supports all of the activities of land title and resource 

management functions. And, in some regions, Interior has found that they 

are not even being used to support the leasing and distribution process.

The TAAMS strategy has evolved considerably since 1998. For example, 

Interior originally envisioned that LRIS functions would not be part of 

TAAMS. However, subsequent to its original improvement plan, Interior 

decided that they should be integrated into TAAMS. Also, Interior is making 

many more modifications to the commercial-off-the-shelf (COTS) software 

package supporting TAAMS than originally anticipated. 

Rather than acquiring, modifying, owning, and operating the COTS system 

itself, Interior has hired a contractor to modify the system and to manage it. 

Under this approach, Interior will provide the contractor with the land and 

trust account data to be entered into the system and will perform its trust 

management functions by remotely accessing contractor-provided 

applications. At present, Interior expects to spend about $40 million on 

TAAMS through fiscal year 2001.

Figure 1 shows the functions now planned for TAAMS, along with TAAMS 

planned interaction with other Interior systems, and deployment dates. As 

noted in the figure, the land title functionality of TAAMS has already been 

deployed in one region.
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Figure 1: TAAMS Functions, Interaction With Other Key Systems, and Deployment Dates

Although TAAMS has been deployed, as of August 31, 2000, Interior did not 

consider it to be the system of record.

Previous GAO Concerns We began our assessment of TAAMS in July 1998 while Interior was in the 

process of specifying the system’s functional requirements. At that time, we 

found that Interior was not following accepted practices that would

(1) help ensure that TAAMS cost effectively met trust management needs 

and (2) reduce development risks. For example: 

• Although Interior was acquiring information services and systems such 

as TAAMS and the Trust Funds Accounting System, at a cost of about 

$60 million, it had not defined an integrated architecture for Indian trust 

operations. Architectures are comprehensive plans that systematically 

and completely describe an organization’s target business environment, 

both in logical (e.g., missions, business functions, and information 

flows) terms and technical (e.g., software, hardware, and 

communications) terms. The Clinger-Cohen Act requires the Chief 

Information Officer of each major federal agency to develop and 

maintain an information systems architecture. Previous GAO reviews 

have shown that, without a defined architecture, agencies are at risk of 

building and buying systems that are duplicative, incompatible, and 

unnecessarily costly to maintain and interface. 

Trust Asset and Land

Management

•Lease/contract/permit

management

•Billing and collection

•Accounts receivable

•Lease/contract payment

distribution

•Land resource

management

Land Title Record

Office (LTRO)

•Land status and records

•Conveyances/transfers

•Certified ownership

•Acquired interest

determination

•Monetary interest

determination

TAAMS Functions

Phase I – In deployment

since May 2000. Already i dl d

operating at Billings, Montana.

Phase II -- To be deployed

after August/September 2000.

TAAMS Interaction With

Other Interior Systems

Trust Fund Accounting

System (TFAS)

TAAMS will send/receive

data regarding

lease/contract payments

and account

status/balances

Minerals Management

Service (MMS)

TAAMS will send/receive

data regarding oil and

gas lease payments
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• Interior did not thoroughly analyze technical alternatives before 

choosing a vendor to provide the asset and land records management 

service. Specifically, it did not assess the desirability of satisfying its 

requirements by (1) modifying legacy systems, (2) acquiring a COTS 

product and using existing Interior infrastructure resources, (3) building 

a system that would provide the necessary capability, and (4) acquiring a 

service. The Clinger-Cohen Act of 1996 requires agencies to establish a 

process to assess the value and risks of information technology 

investments and set priorities for alternative projects.

• Interior did not perform a gap analysis in surveying the availability of 

COTS products. This analysis, which is an accepted practice, would 

systematically and quantitatively compare and contrast COTS products 

against Interior’s requirements based on functional, technical, and cost 

differences.

• Interior did not require the contractor to demonstrate that the COTS 

system could work with Interior-provided data or that the system could 

interface with other Interior systems, which are also accepted practices.

• Interior did not develop a risk management plan to address the 

possibility that the new service would not meet performance or 

business requirements, be able to work with Interior systems, and/or be 

delivered on schedule and within budget.

• Interior did not prepare a realistic project schedule for TAAMS. 

Organizations following sound software acquisition practices would 

typically (1) identify the specific activities that must be performed to 

produce the various project deliverables, (2) identify and document 

dependencies, (3) estimate the amount of time needed to complete 

activities, and (4) analyze the activity sequences, durations, and 

resources requirements. By contrast, Interior used the Interior 

Secretary’s stated expectation that all Indian trust fund-related 

improvements should occur within a 3-year period beginning in 1998 as 

the starting point for developing the TAAMS project schedule.

As Interior continued developing and testing TAAMS, we identified 

additional problems and briefed your staffs on our observations in January 

and May 2000. Namely, we found that there were serious flaws in the way
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Interior was planning and conducting its system tests (which verify that a 

system satisfies functional requirements)2

 and its first set of user 

acceptance tests (which verify that the system operates correctly with 

operational hardware and meets user needs).3

 Without following 

disciplined testing processes, Interior could not ensure the successful 

implementation of TAAMS.

In particular, test plans were flawed because they were designed with the 

assumption that no errors would be found. They also did not include tests 

of invalid and unexpected conditions—known as boundary testing. This 

would include assessing whether TAAMS would accept and process data 

that are obviously erroneous, for example, future birth or death dates, 

invalid fractions, incorrectly formatted social security or taxpayer 

identification numbers, or tracts of land that contain “0” acres. 

Furthermore, some obvious problems/defects that occurred as the tests 

were conducted were ignored because testers assumed that the 

unanticipated results were attributable to eccentricities or malfunctions of 

the computing platform rather than to defects in the system being tested. 

Also, even though the TAAMS contract requires TAAMS to comply with the 

Core Financial Management System Requirements issued by the Joint 

Financial Management Improvement Program (JFMIP), Interior did not use 

test processes already developed by JFMIP to certify compliance with 

these requirements. Lastly, test results were not thoroughly inspected and 

test defects were not effectively tracked. 

Interior’s contract and its oversight of the contractor contributed to some 

of these problems. For example, Interior did not require, and the contractor 

did not provide, adequate documentation showing what boundary 

condition tests had been conducted. In addition, the contract did not 

require the contractor to follow disciplined development and testing 

processes.

2

System testing may also stress the system in ways that may be unnoticed by the user but 

are critical to the proper functioning of the system. It is also designed to apply conditions, 

such as exchanging data with other systems, which are hard to duplicate through a user 

interface.

3

This type of testing focuses on how the system handles typical scenarios or transactions 

rather than extreme conditions and generally assumes that system testing has been 

performed in an acceptable manner. 
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An independent verification and validation review of the system and user 

testing conducted for Interior by another contractor raised some of these 

same concerns and additional ones, such as noting that Interior had not yet 

tested whether the system would be able to handle the maximum user load 

or whether it could interface with Interior’s trust fund accounting and 

minerals management systems. 

In our April 1999 report and during our subsequent briefings, we made a 

number of recommendations to the Secretary of the Interior to address the 

weaknesses we identified. In particular, we recommended that Interior 

develop an information systems architecture for Indian trust operations; 

clearly define and validate functional requirements, security requirements, 

and data requirements for TAAMS; develop and implement an effective risk 

management plan; and ensure that all TAAMS project decisions are based 

on objective data and demonstrated project accomplishments, and are not 

schedule driven. To strengthen testing, our suggestions to Interior included 

tracking defects to determine whether TAAMS is becoming stable; 

performing additional boundary condition tests; thoroughly inspecting test 

results; ensuring that tests are planned with the assumption that errors will 

be found; and ensuring that tests plans clearly define expected results.

Scope and 

Methodology

In conducting our review, we reviewed TAAMS project documents, 

including the project implementation plan, requirements specifications, 

risk management plan, and test plan and procedures. We also observed 

selected development and testing activities, including user acceptance 

tests conducted in February and April 2000 and system acceptance tests 

conducted in July, September, and November 1999. We analyzed these 

plans and testing activities using generally accepted practices and criteria, 

such as the Software Engineering Institute’s4

 Software Acquisition 

Capability Maturity Model and standards promulgated by the Institute of 

Electrical and Electronics Engineers. We also discussed Interior’s efforts to 

develop, test, and implement TAAMS and deviations from accepted 

software acquisition and development practices with the TAAMS project 

manager, Interior’s Chief Information Officer, and the TAAMS contractor.

4

The Software Engineering Institute is recognized for its experience in software 

development and acquisition processes. It has also developed methods and models that can 

be used to define disciplined processes and determine whether an organization has 

implemented them.
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In addition, we reviewed documents related to Interior’s efforts to establish 

policies and procedures and adequate internal controls related to trust 

management, including Interior’s original and revised improvement plan,5

as well as documentation on current trust policies and procedures and 

internal controls. We also interviewed the Policies and Procedures Project 

Manager, the Internal Controls Project Manager, and other responsible 

Interior officials to ascertain their perspective of the status of Interior’s 

trust management improvement efforts. We compared Interior’s planned 

improvement actions for internal controls with GAO’s Standards for 

Internal Control in the Federal Government and the Office of Management 

and Budget’s Circular A-123, revised, Management Accountability and 

Control. We also compared Interior’s work on internal system controls for 

TAAMS to the methodology included in GAO’s Federal Information 

Systems Control Audit Manual and guidance issued by the National 

Institute of Standards and Technology.

We conducted our work at the Department of the Interior, its Office of the 

Special Trustee, and its Bureau of Indian Affairs (BIA), in both Washington, 

D.C., and in Billings, Montana, and at the TAAMS contractor’s facilities in 

Dallas, Texas, from June 1999 through May 2000 in accordance with 

generally accepted government auditing standards.

We provided a draft of this report to Department of the Interior officials for 

their review and comment. We also received several technical comments 

from BIA’s Chief Information Officer. Interior’s agency comments are 

reprinted in appendix I to this report and we have incorporated changes as 

appropriate.

Interior Has Taken 

Positive Actions to 

Strengthen 

Management of the 

TAAMS Effort

Interior has taken actions since our 1999 reports to address some of our 

previous concerns and has begun taking critical steps necessary to instill 

processes, practices, and discipline needed to successfully guide the 

TAAMS effort. Overall, officials responsible for TAAMS have begun to 

recognize the importance of following disciplined system acquisition, 

development, and testing processes, which include developing thorough 

and realistic plans and schedules, following structured approaches to 

5

Trust Management Improvement Project: High Level Implementation Plan (U.S. 

Department of the Interior, July 1998) and Trust Management Improvement Project: High 

Level Implementation Plan (U.S. Department of Interior, Revised and Updated February 29, 

2000).
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determining requirements and conducting tests, and independently 

assessing work being performed on the system. This recognition is 

important. Without disciplined approaches to software development and 

acquisition, agencies can easily fall prey to ad hoc and chaotic processes 

that subject projects to continuing risks of cost overruns, poor quality 

software, and schedule delays. However, taking needed improvement steps 

can be difficult in organizations that are inexperienced in development and 

acquisition and where few processes are defined. 

Over the past year, Interior has adopted a life cycle model for TAAMS. Life 

cycle programs define expectations for managing information technology 

investments from conception, development, and deployment through 

maintenance and support. Interior has adopted an “evolutionary 

prototyping” life cycle model for its TAAMS effort, under which the system 

is designed, modified, and tested in increments to identify and address user 

needs. Prototypes are refined as many times as necessary to achieve the 

desired functionality needed by users. This particular life cycle model has 

been adopted and accepted, but effective adoption of this model requires 

organizations to carefully manage associated risks such as unrealistic 

schedule and budget expectations and poor user feedback—tasks which 

Interior has not carried out adequately in the past for TAAMS.

Also, as noted in table 1, Interior has developed several plans and policies 

key to enhancing TAAMS management, including a project management 

plan, risk management plan, general operating policies, transition 

management plan, quality assurance plan, configuration management plan 

and data management plan. These plans generally conform to industry 

practice. While these plans should have been developed before TAAMS was 

initiated to reduce the risks associated with major acquisitions, they can 

still help Interior to better manage the effort, measure the progress, and 

validate and maintain system and data integrity. In addition, they can 

provide an example of the discipline and structure needed to guide future 

information technology acquisitions.
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Table 1: Key Policies/Plans Developed for the TAAMS Project

Interior also acted to strengthen processes for user acceptance tests that 

were carried out in April 2000 in response to observations we made during 

previous system and user acceptance tests. For example, Interior involved 

land title officers from offices outside its Billings, Montana, office—a 

TAAMS prototype site—to review TAAMS functionality and develop the 

test plan. Involving these officers was important since their needs can 

Policy/plan Definition Importance to system success

Project management plan Defines work to be performed, establishes 

necessary commitments, assigns 

responsibilities, establishes schedules, and 

performance measures.

Documented project plans help organizations to 

define realistic time frames and identify 

responsibilities for key tasks, deliverables, and 

resources. They provide the yardstick by which to 

measure the progress of an effort.

Risk management plan Identifies, assesses, and documents risks 

associated with cost, resource, schedule, and 

technical aspects of the project and 

determines the procedures that will be used to 

manage those risks.

Provides a disciplined means to predict and mitigate 

risks, such as the risk that the system will not (1) meet 

performance and business requirements, (2) work 

with other systems belonging to the organization 

and/or (3) be delivered on schedule and within 

budget.

General operating policies Provides general background information on 

the system including a summary of issues that 

the system intends to correct. It also provides 

the operational policies governing the 

management of system.

Provides a framework for the project and helps to 

identify which management processes will be used.

Transition/deployment 

management plan

Provides a blueprint for the transition to and 

deployment of a new system.

Provides the foundation that is used to develop 

detailed transition and management planning, 

including planning for the implementation of individual 

system components. Also provides a guide for 

carrying out the activities required for installation and 

operation of the system.

Quality assurance plan Defines processes for reviewing and auditing 

the software products and activities to ensure 

that they comply with the applicable processes, 

standards, and procedures and providing staff 

and managers with results of their reviews and 

audits.

Ensures that the system complies with applicable 

processes, standards, and procedures. Reduces the 

risk of software process and product standards not 

being met and, in turn, the risk that the system will 

cost more and take longer to develop than necessary.

Configuration management 

plan

Defines the process to be used for establishing 

product baselines and systematically 

controlling changes made to those baselines.

Enables organizations to establish and maintain the 

integrity of the system throughout its life cycle. 

Prevents organizations from producing and using 

inconsistent product versions and creating operational 

problems.

Data management plan Defines the implementation effort and actions 

required for long-term management of data. 

Describes how Interior will monitor contractor 

operations related to data.

Conveys the data management strategy to locations 

that will be affected by the new system and facilitates 

the planning of data management activities such as 

data conversion. 
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differ from the Billings land title officer’s needs. Interior also performed 

additional boundary condition testing on the land title functions of TAAMS, 

such as assessing whether the system would accept future dates and 

entries on tracts with “0” acres. In some cases, the application responded in 

the expected manner while in others, it did not. Interior officials indicated 

to us that they planned to make additional adjustments to the system to 

address the problems we identified during boundary condition tests.

Lastly, Interior is now undertaking an effort to develop an information 

systems architecture for Indian trust fund management. As of April 2000, 

Interior had developed a detailed work plan, outlining the tasks and 

milestones for completing nine phases of its architecture; appointed an 

architecture project manager; and defined resource requirements, 

including all the bureau/office staffing, contracting and other costs for the 

duration of the project. Interior expects to complete the architecture by 

August 2001.

Major Challenges and 

Risks Still Need to Be 

Addressed

If effectively implemented, Interior’s planned actions over the past year will 

substantially enhance management over the TAAMS effort. However, there 

are a number of major business and technical challenges that still put 

TAAMS at considerable risk. Some of these relate to actions not yet taken 

by Interior to enhance overall trust fund management. On the business 

side, for example, Interior has not reengineered business processes which 

TAAMS is being designed to support even though these processes use an 

older and a very different system environment. Until it does so, Interior will 

not be able to maximize the benefits that can be gained from TAAMS, and it 

may perpetuate outmoded ways of doing business. 

Also, Interior needs to clean up thousands of inaccurate, incomplete, 

and/or outdated trust fund records before converting the data for TAAMS. 

Yet it has only a few months left to do so before the planned 

implementation of phase I of TAAMS. Further, Interior has not established 

needed policies or procedures or adequate internal controls related to trust 

fund management. Policies and procedures would cover activities ranging 

from the way leasing and grazing agreements are awarded to the way 

Indian estates are probated. Internal controls would help strengthen 

management and accountability over a wide range of trust fund operations, 

such as cash management, records management, disbursements, and data 

processing. Both the policy and procedures and internal controls efforts 

could significantly affect TAAMS since they may require new, costly 

features to be built into the system or current capabilities to be modified. 
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Also, the internal controls are critical to prevent future trust fund data 

problems.

On the technical side, there are actions underway to strengthen Interior’s 

management of the TAAMS project, but challenging undertakings still lie 

ahead. For example, Interior needs to ensure that its contractor is 

following disciplined processes for developing and testing TAAMS. And, it 

needs to carefully manage the addition of new TAAMS requirements as 

prototypes are rolled out and tested. Moreover, until Interior has a 

complete information systems architecture, it will continue to face the risk 

of spending more money and time than necessary to ensure that TAAMS 

and other trust fund systems are compatible with each other and in line 

with business needs. 

Each of these challenges is discussed in more detail below.

1. Reengineering business processes. To maximize the success of a 

new system acquisition, organizations should consider the redesign of 

long-standing and ineffective business processes. As we noted in our 

executive guide on financial management,6

 leading finance 

organizations have found that productivity gains typically result from 

more efficient processes, not from simply automating old processes. 

Moreover, the Clinger-Cohen Act of 1996 requires agencies to analyze 

the missions of the agency and, based on the analysis, revise missionrelated and administrative processes, as appropriate, before making 

significant investments in information technology used to support 

those missions.

The need to reengineer is especially critical with trust asset 

management operations: Interior is moving from a mainframe, batchoriented, non-integrated system environment to a client-server, realtime, integrated environment. Such changes demand rethinking old 

ways of doing business. For example, (1) Interior may now need to 

redefine the duties of some staff currently responsible for keying data 

into trust systems since TAAMS combines the functionality of IRMS 

and LRIS, (2) processes requiring data to be transmitted from field 

offices to area offices may be eliminated since data can now be input 

into TAAMS by field offices directly, and (3) approval processes may be 

6

Executive Guide: Creating Value Through World-class Financial Management

(GAO/AIMD-99-45, Exposure Draft, August 1999).
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revamped since transaction approval can be immediately reflected in 

TAAMS. Without taking time now to reexamine and revise its business 

processes, Interior will not be able to maximize the benefits that can be 

gained from TAAMS and may perpetuate outmoded ways of doing 

business.

2. Ensuring data integrity. The accuracy, availability, and completeness 

of trust fund records has been a long-standing problem and one which 

several of Interior’s projects are focused on. Tens of thousands of 

records on trust fund accounts, for example, contain incorrect 

addresses for the account holders or lack social security or taxpayer 

identification numbers. Also, data on land title and resource 

management is inconsistent in terms of completeness and availability. 

Not only does Interior need to ensure that records are accurate, up-todate, and complete before converting to TAAMS, it needs to maintain 

data integrity over the useful life of the system.

Interior has begun addressing both challenges. First, a project 

management decision has been made to delay the implementation of 

TAAMS at any site other than Billings, Montana, until that site has 

developed an acceptable data conversion plan. Second, it has hired a 

contractor to analyze TAAMS’ data once the system is deployed to 

ensure accuracy and completeness. Interior expects that, as a result of 

both actions, data in TAAMS will eventually be at least 95 percent 

accurate.7

 To achieve this rate of accuracy, Interior will need to ensure 

that it can clean up the tens of thousands of trust fund records in time 

for TAAMS deployment this fall. Also, as discussed below, adequate 

internal controls are essential to the ongoing success of TAAMS.

3. Establishing internal controls. A strong system of internal controls 

is key to maintaining data and system integrity on an ongoing basis. 

Internal controls comprise the plans, methods, and procedures used to 

meet an organization’s missions, goals, and objectives. They serve as 

the first line of defense in safeguarding assets and preventing and 

detecting errors and fraud. However, reviews conducted over the past 

15 years by us, Interior’s Inspector General, and independent 

7

The TAAMS Data Management Plan establishes a preconversion goal of 95 percent “good 

data.” This means that data quality reports will identify no more than five errors per 100 

records. This is a cumulative error condition covering all critical data items and record 

relationships. The post conversion data cleanup goal is to obtain a 98.5-percent good data 

rate on data within TAAMS.
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accounting firms have found that there are serious financial 

management and internal control problems permeating every aspect of 

the trust management spectrum. As a result, Interior lacks reasonable 

assurance that its trust operations are effective, efficient, and in 

compliance with applicable laws; that its financial reporting to trust 

account holders and the Congress is reliable; and that trust assets are 

adequately safeguarded.

Interior has made some progress in resolving its internal control 

weaknesses. For example, it has identified and catalogued audit 

findings and recommendations related to weaknesses and mapped 

them to current improvement efforts. And it has selected an approach 

for developing the methodology that will be used by its new Risk 

Management Program Office to monitor internal controls. However, its 

overall progress has been slow. For example, Interior originally 

expected to map identified weaknesses to current improvement efforts 

by October 31, 1998, but it did not complete this until April 30, 2000. It 

originally expected to be able to complete the project and establish 

continuing quality assurance by June 30, 1999. Now, however, it does 

not expect to do this until December 2000. 

Many of the internal controls now being reviewed by Interior—such as 

segregation of duties, supervisory review, system security, and project 

payment management—relate to requirements that should have been 

defined early in the TAAMS effort. Because they were not defined early 

by Interior, TAAMS was developed based on the current control 

environment, long known to be inadequate. As a result, like the policies 

and procedures effort, Interior may have to modify TAAMS after 

deployment to accommodate new controls, thereby increasing 

development risks and costs. Also, until adequate internal controls are 

in place to ensure the accuracy, availability, and completeness of trust 

fund data, Interior will not be able to fully ensure the integrity of 

TAAMS on an ongoing basis.

4. Establishing policies and procedures for trust fund operations.

According to Interior, proper management of Indian trust assets has 

been hampered by a lack of comprehensive, consistent, up-to-date 

regulations, policies, and procedures covering the entire trust business 

cycle, from management of trust assets to distribution of trust income. 

Interior also maintains that contemporary federal environmental 

protection statutes have placed agencies with little direct previous 

experience in managing Indian trust resources in the position of 
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significantly affecting the use and disposition of Indian trust resources. 

According to Interior, this has resulted in program gaps and divergent 

practices, and a corresponding inability to ensure that consistent, 

sound policies and procedures are applied across the department.

Some progress has recently been made on this issue. For example, in 

August 1999, Interior assigned responsibility for a policies and 

procedures improvement project to an official with experience in 

developing and implementing policies and procedures in the federal 

government. In addition, Interior has reviewed four sets of BIA 

regulations—on leasing, grazing, probate, and funds held in trust—and 

drafted proposed revisions. However, like the internal controls effort, 

Interior’s overall progress in addressing this issue has been fairly 

limited. In 1998, Interior envisioned publishing by September 30, 2000, 

new and revised policies and procedures in all trust management areas 

where they are needed. Now, however, it does not expect to accomplish 

this until June 30, 2004. The Policy and Procedures project office was 

not fully staffed until July 2000, almost 2 years after Interior began its 

policies and procedures initiative. We found that Interior’s slow 

progress in establishing internal controls and policies and procedures 

was partly attributable to the effort not getting priority attention from 

senior Interior managers. Such attention is needed to help build 

consensus among disparate stakeholders across the department and to 

ensure that the projects are adequately staffed and supported.

Interior officials have explained that initially the scope of this project 

was greatly underestimated and that their revised plans provide for a 

more thorough review of the conduct of trust functions. Nevertheless, 

these delays pose a significant risk for TAAMS. Certain business rules 

cannot be defined until the policies and procedures effort has resolved 

questions such as whether to record known defective documents and 

whether to distribute income to owners who don’t have a trust 

relationship with the federal government. The business rules that result 

from such policy and procedures decisions may require modification to 

TAAMS. Any rework of this nature bears the risk of introducing new 

defects into the system.

5. Developing TAAMS without a complete architecture. Not having a 

complete information systems architecture to guide TAAMS and other 

projects under its improvement effort will continue to be a major 

challenge for Interior. Architectures enable organizations to know their 

portfolio of desired systems and to develop a clear understanding of 
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how these systems will collectively support and carry out business 

objectives. Moreover, they help ensure that systems are interoperable, 

function together efficiently, and are cost-effective over their life 

cycles. As noted previously, major federal agencies are required under 

the Clinger-Cohen Act to develop and maintain information systems 

architectures.

While the absence of an architecture does not guarantee the failure of 

TAAMS or other system modernization efforts, it does greatly increase 

the risk that Interior will spend more money and time than necessary to 

ensure that its systems are compatible with each other and in line with 

business needs. As a result, Interior will need to take extra precautions 

to ensure that TAAMS can work effectively with other trust fund 

systems and with Interior’s existing information technology 

infrastructure. In February 2000, Interior recognized that this would be 

a challenging task since TAAMS and the two systems with which it is 

supposed to interface—TFAS and MMS—had different owners, 

different software vendors, and different program objectives. It also 

recognized that its plan to purchase two off-the-shelf systems 

independently (TAAMS and TFAS) and interface them with an existing 

system (MMS) had inherent difficulties from its inception. 

6. Defining and managing TAAMS requirements. To help ensure 

successful acquisition of software-intensive service, information 

technology experts recommend that organizations establish and 

maintain a common and unambiguous definition of requirements (e.g., 

performance, function, help desk operations, data characteristics, 

security, etc.) among the acquisition team, the service users, and the 

contractor. The requirements must be consistent with one another, 

verifiable, and traceable to higher-level business or functional 

requirements. As noted in our previous report, poorly defined, vague, or 

conflicting requirements can result in a service which does not meet 

business needs or which cannot be delivered on schedule and within 

budget.

When it first undertook the TAAMS effort, Interior did not follow a 

sound process for defining requirements. For example, in April 1999, 

we reported that Interior did not define high-level functional 

requirements for projects contained in its improvement plan to help 

guide requirements development processes for each of the individual 

projects. It also did not define some specific requirements relating to 

security, data management, and conflicts of interest for TAAMS. Since 
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then, Interior has enhanced and strengthened processes for defining 

requirements for TAAMS, principally by following the new life cycle 

methodology. However, a risk associated with this approach is that 

requirements are (1) defined iteratively rather than before development 

begins and (2) defined by users alone rather than through a more 

formal process involving users as well as business managers and key 

documents such as the information systems architecture and a concept 

of operations, which describes overall quantitative and qualitative 

system characteristics. This introduces the possibility that important 

requirements will not be defined until late in development and/or the 

possibility of “feature creep,” that is, users add more requirements than 

are necessary as they react to protoypes. 

Also, as noted earlier, Interior has not yet dealt with some important 

policy and procedures questions that should have been addressed early 

in development. For example, it has not yet determined how to 

distribute income received on tracts of land which have “mixed 

ownership”8

 even though its field offices apply different rules to this 

situation. It has also not decided how the system should handle official 

records that contain data known to be erroneous.9

 As we stressed in 

our April 1999 report, poorly defined, vague, or conflicting 

requirements can result in a service which does not meet business 

needs or which cannot be delivered on schedule and within budget. As 

8

According to Interior officials, some interests in some trust lands are not trust interests. 

These ownership interests are not considered “trust interests” because the interest is 

classified as a “fee-simple” interest. This situation can occur, for example, when non-Indians 

marry Indians and inherit interests in trust land when their spouses die or when a trust 

owner elects to convert a trust interest, with Interior approval, to a fee-simple interest. BIA 

lacks a written policy on whether income generated through BIA efforts on mixedownership land should be distributed to all owners (trust and fee-simple) or only to trust 

owners.

9

For example, according to Interior officials, the probate process, which determines what 

amounts of a deceased Indian’s land ownership interests should be conveyed to which heirs, 

sometimes produces an obviously erroneous conveyance document. That is, the 

conveyance document may actually show an amount of ownership interest being conveyed 

that is different from the amount that had actually been owned. In such a case, the land title 

system user will notice this discrepancy when the document is to be entered into the 

TAAMS database, and must at that point either (1) enter the obviously erroneous data into 

TAAMS because it is contained on an “official” conveyance document and then request a 

corrected conveyance document from the probate authority or (2) forgo entering the data 

from this official document, return it to the probate authority, and await a corrected 

document. BIA Land Title officials have told us that this situation occurs with some 

frequency and in the absence of a business rule, may be handled inconsistently at different 

BIA offices. 
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a result, it will be essential for Interior to promptly resolve the policy 

and procedures issues and then define the corresponding business 

rules surrounding TAAMS and carefully manage requirements as new 

versions are rolled out.

7. Ensuring that plans and processes needed to successfully 

develop TAAMS are followed. While Interior has started establishing 

plans and processes needed to successfully develop and implement 

TAAMS, it is unclear whether these tools can be effectively 

implemented. Moreover, even if Interior does successfully implement 

disciplined processes, it will still need assurance that its contractor is 

following disciplined processes. To date, an independent assessment of 

whether the TAAMS contractor is doing so has not been made. 

Interior has requested the TAAMS contractor to follow “ISO 9000” 

standards10 relating to system testing to the greatest extent possible 

when performing its internal tests. These standards are recognized 

worldwide as a measure of an organization’s ability to produce quality 

products and can provide a useful benchmark to measure a contractor’s 

performance. 

However, because Interior has only asked the contractor to use the ISO 

standards related to testing, this does not provide assurance that the 

contractor will follow other processes that are critical to successful 

development such as configuration management, risk management, 

and requirements definition. Moreover, Interior has not yet taken steps 

to independently assess its own software development and acquisition 

capabilities. Organizations following best practices conduct such 

assessments periodically, using accepted methodologies, such as the 

Capability Maturity Models developed by Carnegie Mellon’s Software 

Engineering Institute. Such methodologies enable organizations to 

assess whether they have the necessary process discipline in place to 

repeat earlier successes on similar projects and to form specific 

improvement plans. 

In April 1999, after reviewing the Bureau of Land Management’s (BLM) 

efforts to develop and deploy its Automated Land and Mineral Record 

10The International Organization for Standardization (ISO) is a worldwide federation of 

national standards bodies from some 130 countries. ISO 9000 standards provide a 

framework for quality management and quality assurance.
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System, we recommended that Interior obtain an independent 

assessment of BLM’s systems acquisition capabilities, and ensure that it 

uses sound system acquisition processes.11 Interior agreed that it 

needed to do this and to implement our recommendation.

Conclusions Interior is taking significant actions to strengthen TAAMS management and 

it has begun to recognize the value of following disciplined processes in 

developing and testing the system. But much remains to be done before 

Interior moves on to the second phase of TAAMS (which involves 

developing and deploying a range of trust asset functions beyond land title 

functions, including lease/contract/permit management, billing and 

collection, accounts receivable, lease/contract payment distribution, and 

land resource management functions) in order to help ensure that TAAMS 

will operate efficiently and effectively. 

Interior needs to ensure that the new processes and policies it has 

established for developing and testing TAAMS are carefully adhered to. 

Otherwise, TAAMS may well fail to meet current cost, schedule, and 

performance goals. In addition, Interior needs to address larger business 

challenges—developing effective policies and procedures for trust fund 

management and addressing long-standing internal controls weaknesses—

that directly impact TAAMS and more importantly, the business processes 

to be administered through TAAMS. Until these issues are addressed, data 

inaccuracies will continue to plague the trust management process—

whether or not TAAMS is deployed. Further, the longer these efforts take to 

complete, the costlier and riskier modifications to TAAMS are likely to be. 

And finally, Interior needs to take time now to reexamine and reengineer 

business processes. Such efforts could facilitate other initiatives integral to 

strengthening trust fund management, such as defining policies and 

procedures and controls. Moreover, without rethinking old ways of doing 

business, Interior may well find that TAAMS will be limited in optimizing 

trust fund operations. 

Recommendations To ensure that TAAMS is fully aligned with trust management needs and 

that Interior’s use of the system is optimized, we recommend that the 

11Land Management Systems: Major Software Development Does Not Meet BLM’s Business 

Needs (GAO/AIMD-99-135, April 30, 1999).
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Secretary of the Interior direct the Assistant Secretary for Indian Affairs to 

work with the Special Trustee for American Indians to do the following 

before phase II of TAAMS.

• Examine and revise business processes supported by TAAMS.

• Properly develop and implement data conversion plans.

• Evaluate and revise policies, procedures, and internal controls relating 

to TAAMS; ensure that top trust fund managers across the department 

participate in this effort; and ensure that any needed modifications to 

TAAMS are made and tested.

To facilitate Interior’s adoption of disciplined software and acquisition 

processes, we recommend that the Secretary of the Interior direct the Chief 

Information Officer to do the following before phase II of TAAMS.

• Evaluate existing software development and acquisition processes 

against the Capability Maturity Models developed for these activities by 

the Software Engineering Institute; implement disciplined processes 

where they are lacking; and regularly assess progress in this regard.

• Ensure that contractors used by Interior to develop software systems 

have implemented disciplined software development processes.

• Define and manage the requirements that TAAMS should meet using 

accepted processes. Once the requirements have been adequately 

defined, perform a gap analysis to assess whether TAAMS is capable of 

providing the necessary functionality and what modifications, if any, are 

necessary to address Interior’s needs. If modifications are needed, then 

Interior should develop the cost, schedule, and performance impacts of 

making those modifications.

To ensure that TAAMS can properly interoperate with other trust fund 

systems, we reiterate our recommendation to the Secretary to develop an 

information systems technology architecture for trust fund operations. In 

the interim, we recommend that the Secretary direct the Chief Information 

Officer to (1) perform an analysis of the infrastructure necessary to support 

the TAAMS application and ensure its adequacy and (2) ensure that TAAMS 

can interface with TFAS and MMS systems. 

Agency Comments We provided a draft of this report to Department of the Interior officials for 

their review and comment. In their response, Interior officials did not 

comment on our recommendations, but stated that they generally agreed 

with our assessment of the status of Interior efforts on the TAAMS project 
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and of the continuing challenges they face during the remainder of this 

initiative. 

We are sending copies of this report to Senator Daniel K. Inouye, Vice 

Chairman, Senate Committee on Indian Affairs and to Senator Robert C. 

Byrd, Senator Joseph I. Lieberman, Senator Ted Stevens, Senator 

Fred Thompson, Representative Dan Burton, Representative George Miller, 

Representative David Obey, Representative Henry A. Waxman, 

Representative C.W. Bill Young, and Representative Don Young, in their 

capacities as Chairmen or Ranking Minority Members of Senate and House 

Committees. We are also sending copies of this report to the Honorable 

Jacob J. Lew, Director of the Office of Management and Budget; the 

Honorable Bruce Babbitt, Secretary of the Interior; and other interested 

congressional committees and Members of Congress. Copies will be made 

available to others upon request. 

If you have questions regarding this report, please contact me or 

Mike Koury, Assistant Director, at (202) 512-9508. Other key contributors to 

this report include Wendy Albert, Naba Barkakati, Cristina Chaplain, 

Charles Norfleet, and Maria Zacharias.

Keith A. Rhodes

Chief Technologist
Page 23 GAO/AIMD-00-259 Indian Trust Funds
Page 24 GAO/AIMD-00-259 Indian Trust Funds

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