In my opinion, one of the main reasons that we are having this difficulty is that the statute could provide clearer guidance. Contracting Tribes argue that contract support costs should be considered mandatory. The Administration and the Appropriations Committees view them as discretionary. Congressional assistance in clarifying the Act would help resolve the problems faced by the Appropriations Committees in trying to find the right balance between providing funding for direct Indian program services and providing funding for Tribal indirect expenses. Once this question is resolved, there remains one other issue that requires a legislative solution and that is the treatment of indirect costs associated with awards made by other Federal agencies.
Many Federal programs limit indirect cost recovery by grantees.
In the Ramah case, the plaintiffs seek to have BIA and IHS adjust the indirect cost rates upward so that we essentially cover the indirect costs that other agencies are not paying. While we do not believe that to be the intent of '638, we also recognize that most tribal governments depend on Federal support for a majority of their program services and lack outside revenue to cover administrative costs that cannot be charged to the Federal award. The costs of other Federal agency awards should not be shifted to BIA and HHS at the expense of those activities like education, law enforcement, and trust asset management. I will work with Congress and within the Administration to develop legislative amendments regarding the cost effective treatment of indirect costs associated with grant awards. Conclusion Mr. Chairman, I realize that time is short in this session of Congress.