Department Of Interior
March 10, 2004
Mr. Chairman, Mr. Vice Chairman
and Members of the Committee, we are pleased to be here today to discuss
the trust initiatives for the 21st Century of the Office of the Assistant
Secretary - Indian Affairs, the Bureau of Indian Affairs (BIA), and
the Office of the Special Trustee for American Indians (OST). The roadmap
that guides the Department's trust initiatives for the 21st Century
is the Comprehensive Trust Management Plan. The Comprehensive Trust
Management Plan is being used to guide the design and implementation
of the trust reform efforts.
In May 2002, this effort was expanded and a DOI-wide strategic planning team was created that included representatives from national and regional offices of the OST, BIA, Minerals Management Service (MMS), and Bureau of Land Management (BLM). From May 2002 through December 2002, the DOI strategic planning team met regularly to review and update the goals and objectives. It also presented them to the Joint DOI/Tribal Leaders Task Force for review. After several meetings, the task force's subcommittee on planning approved the goals and objectives.
The goals and objectives of the Comprehensive Trust Management Plan include:
Through the examination of the "big picture" of trust management, the Department created a coordinated and integrated system in which all pieces of trust management function as a coherent whole. We recognize that strategic plans are dynamic and therefore, we will regularly evaluate and update this plan to ensure its responsiveness to the ongoing needs of the Department's trust operations and to adapt to changing environments. We are confident that the goals and objectives of the Comprehensive Trust Management Plan will enable the Department to provide important services to Indian country more efficiently and effectively than in the past. We are confident that our trust initiatives under the plan will result in a noticeable enhancement to the level of service our organizations currently provide.
The organizational realignment of the Office of the Assistant Secretary - Indian Affairs, BIA, and OST was one component of this plan. On April 21, 2003, Secretary Norton made effective an historic trust initiative by signing the Department of the Interior Manual establishing clear lines of responsibility by which BIA will provide trust services and OST will provide fiduciary trust oversight. In addition, the Secretary added OST staff at BIA agencies to support the work of BIA's Deputy Agency Superintendents for Trust Services managers. We are pleased to announce that the reorganization efforts have largely been completed.
In August 2001, during our
formulation of the FY 2003 budget, various proposals and issues were
identified concerning the trust asset management roles of the BIA, OST,
and other Departmental entities carrying out trust functions. By that
time, the Department had heard from many sources - e.g., the Special
Trustee, Electronic Data Systems, the Court Monitor in Cobell v. Norton,
and through budget review - recommended multi-bureau consolidation of
trust functions throughout DOI and pursued consolidation of functions
to improve trust asset management. In short, the Department realized
it had to provide an organizational structure that focused on its responsibilities
to both individual Indians and tribal beneficiaries.
The Majority of the reorganization effort has been completed. The reorganization of OST was approved on April 21, 2003. Hiring of appropriate personnel to execute the organizational plan will continue though FY 2005. The reorganization of Indian Affairs was considerably more complex, due to the large size of the organization. The initial phase, the reorganization of the Office of the Assistant Secretary - Indian Affairs was completed on July 27, 2003. The reorganization of BIA's Central Office, with the exception of the Law Enforcement Program, took place on September 21, 2003. We expect to have the Law Enforcement program reorganized by March 31, 2004. The reorganization of the Office of Indian Education Programs took place on October 19, 2003 and the realignment of the BIA regional and agency staff took effect on February 22, 2004. This reorganization is a major accomplishment to implementing and moving forward on our trust initiatives.
Initiatives of the Office
of the Assistant Secretary - Indian Affairs and the Bureau of Indian
Within the DOI structure, BIA retains natural resource trust asset management. The management of the trust functions at the BIA regional and agency levels has been separated by creating the positions of Deputy Regional Director for trust services and Deputy Regional Director for Tribal Services. The Deputies will report to their Regional Director who, in turn, will report to the Director, Bureau of Indian Affairs (formerly the Deputy Commissioner). A similar structure has been created at the agency level. Seven of our Regions have Deputy Regional Directors for Trust Services on board and we are in the process of adding the additional five positions. Six of the twelve Deputy Regional Directors for Tribal Services have been named and we are in the process of adding the nine additional positions.
At the Agency level, most Agencies will have a Deputy Agency Superintendent for Trust Services, who will manage the trust functions. We have hired three Deputy Agency Superintendents, at Concho, Anadarko, and Pima Agencies, and have advertised for several more. The BIA is working in concert with the OST on this effort, so that we hire Deputy Agency Superintendents and Trust Officers at the same locations and at the same time. We expect to hire approximately 45 Deputy Agency Superintendents.
Initiatives of the Office of the Special Trustee for American Indians
OST continues to be responsible for the management of financial assets and certain reform projects, and maintains its statutory oversight responsibilities. The Secretary has delegated additional operating authority, including line authority over regional fiduciary trust administrators and fiduciary trust officers to OST. These new positions are intended to be filled by skilled trust administrators and staff trained for these responsibilities. A staff of six trust administrators is located in Albuquerque and will oversee a staff of trust officers and trust account managers in or near BIA field office locations.
We are pleased to report
that the first recruitment efforts for these positions have been successful.
On May 7, 2003, the regional trust administrator Senior Executive Positions
were advertised. Five of the six positions have been selected and are
going through the hiring process. Two of the five have reported and
all are expected to be on-board by mid-year 2004.
These initiatives place additional emphasis on the implementation of a comprehensive and coordinated audit and risk management function to improve overall fiduciary trust accountability. The Office of Trust Review and Audit is working with agencies to develop a rating system that indicates the level of compliance with fiduciary trust activities and success in meeting the fiduciary responsibilities of the Secretary. It also will indicate those areas where additional oversight will be required.
The organization charts attached set forth the organizational structure for the BIA and OST. This structure accomplishes most of the goals set forth by the Secretary and the 2002 Tribal Task Force.
We want to thank the Congress for all of the support it has given the Department during the creation and implementation of its trust initiatives, especially with the reorganization effort. On December 4, 2002, the Department submitted letters to the House and Senate Appropriations Committees regarding the Department's intention to reprogram funds to implement the changes. On December 18, 2002, the Department received letters in response from the Committees that were consistent with the Department's intention to reprogram.
In FY 2004, Congress provided $453.4 million for the unified trust budget. For FY 2005, the President's budget proposes $614.4 million, an increase of 36%. Approximately $7 million is proposed in the 2005 budget for BIA and OST to complete the new staffing required by the reorganization. It is important to note that virtually all new staff is at the local level where the need is greatest.
Coordination and Outreach
To begin the reorganization
process, Indian Affairs and OST created Trust Initiative Implementation
Teams consisting of staff from both organizations. The teams met regularly
in 2003 to discuss the status of their respective reorganizations. These
meetings allowed for the coordination and communication of internal
organizational activities, which greatly aided our reorganization efforts.
This strong working relationship that was created through these teams
is ongoing. Indian Affairs and OST continue to closely coordinate their
ongoing reorganizations and other trust initiatives. Representatives
selected by the Tribal/DOI Task Force of 2002, continued to meet with
these teams and provide information to Tribes.
In June 2003, Indian Affairs
and OST jointly held presentations to explain the reorganization to
BIA and OST staff and to Tribal leaders. A total of 45 meetings were
held throughout the United States, particularly in the cities where
Regional offices are located and in other cities where there are high
concentrations of staff. In fact, three to four regional or agency offices
received the presentation each week
Three different types of
outreach presentations were conducted. Some presentations were held
just with Superintendents. Those meetings were designed to train the
Superintendents regarding the reorganization, and to provide them with
written information, so that they could in turn educate their Agency
staff. Some presentations were held for BIA and OST employees. Those
meetings were designed to answer their questions about the reorganization.
Finally, presentations were held for Tribal Leaders and individuals
in each Region. Information and a schedule for those briefings were
widely distributed by the regional offices and to tribes. Unfortunately,
in some Regions, the Tribal Leaders chose not to participate with us
in discussions about the reorganization, and walked out of the presentations
we had scheduled.
In addition to the presentations, Indian Affairs and OST held change management meetings to help their affected staff plan for and deal with the changes in the organization. Both Indian Affairs and OST have also sent periodic emails to all employees, informing them of the status of the reorganization throughout the reorganization process.
Prior to implementing the organizational changes at the Regions and Agencies, we wanted to have further discussions with Tribal Leaders about the specific changes that would be occurring in their Regions. We therefore held meetings with the Tribal Leaders from each Region in September and October of 2003 regarding the new structure for their Region. We held the sessions for the Eastern, Eastern Oklahoma, Southern Plains and Midwest Regions on September 24 and 25, in Tulsa, Oklahoma. We held the sessions for the remaining eight Regions the week of October 27, 2003, in Las Vegas, Nevada. We also took written comments from Tribes in each Region for several weeks following the Las Vegas meetings. Following these meetings, we made some changes to the proposed Regional and Agency charts to reflect comments we received at, or after, the meetings.
To begin implementing the trust initiatives, BIA and OST identified two "Pilot Agencies" during 2003. The two pilot agencies were at Concho and Anadarko. In FY 2003, both the Concho and Anadarko agencies realigned staff and added fiduciary Trust Officers as well as Deputy Agency Superintendents. These locations were chosen based on a number of criteria including: the number of beneficiaries served; the high volume of recurring trust income generated; and local workload indicators. The success is already apparent. A close working relationship is present with the OST and BIA staff. Outreach meetings are now being held by the Trust Officers to become better connected with beneficiaries and more decisions are being made at the agency level. A major challenge is getting reconnected to the Internet and having the information technology systems fully operational so that information can be readily available to all personnel at the agency to solve problems, answer beneficiary questions and assure correct ownership of assets.
OST and Indian Affairs have jointly developed a month long orientation program for the remaining Deputy Agency Superintendents and Fiduciary Trust Officers in order for those agencies to implement the trust initiatives. The orientation programs will be held from April 5, 2004 to April 23, 2004 and the week of May 3, 2004.
Although most of the organizational realignment has been completed, some tasks still remain. As mentioned above, we still need to realign employees in the BIA law enforcement program. BIA intends to have this realignment completed by March 31, 2004.
The Indian Affairs Federal
Financial System (FFS) is being modified to reflect the changes made
to the organization and staffing. FFS will be fully converted on October
1, 2004, but this project will continue until December 2004 to ensure
that FFS is functioning properly.
Several positions are still
in the process of being filled. BIA and OST need to complete the hiring
of Indian Affairs Deputy Regional Directors, the sixth OST Regional
Fiduciary Trust Administrator, Indian Affairs Deputy Agency Superintendents
for Trust Services and OST Fiduciary Trust Officers. We anticipate hiring
approximately 45 Trust Officers and 45 Deputy Agency Superintendents
during the remainder of FY 2004 (including those currently advertised,
as discussed above), with the rest to be hired in FY 2005.
Finally, although the Secretary
signed the Department manual on April 21, 2003 making the changes effective,
we are currently preparing a further revision to some non-fiduciary
trust operations in the Departmental Manual for Indian Affairs. The
revision will formalize the structure of Indian Affair's law enforcement
program, create a separate Central Office Division for Tribal Courts
as requested by Tribes, create a separate Central Office Probate and
Estate Services Division to focus on reducing our probate backlog, clarify
the reporting structure for our environmental programs and make other
coupled with our other trust initiatives is enabling the Department
to provide reliable beneficiary focused services. Implementation of
the Comprehensive Trust Management Plan continues with the other initiatives
the Department is currently engaged in working on. We are nearing the
completion of our review and improvement of our business processes ("As-Is"
"To-Be") with implementation to follow; implementing a new
land title records system; and improving our land, natural resource,
and trust fund asset management through the reduction of fractional
OTHER TRUST INITIATIVES
"As-Is" - "To-Be"
The Department is currently working on establishing new technology to maintain a system of land title records using new software that should enable beneficiaries to obtain information regarding their Indian land trust assets in a timely manner. We also are working on ways to invest tribal and individual Indian trust funds to make the trust account productive for the beneficial owner consistent with market conditions existing at the time the investment is made. Through improvements to our record systems, we hope to be able to communicate better with beneficiaries regarding the management and administration of their trust assets.
Reducing Land Fractionation
Addressing the rapidly increasing fractionation on Indian land is critical to improving management of trust assets. Purchase of fractional interests increases the likelihood of more productive economic use of the land, reduces recordkeeping and large numbers of small dollar financial transactions, and decreases the number of interests subject to probate. The BIA has conducted a pilot fractionated interest purchase program in the Midwest Region since 1999. As of December 31, 2003 the Department has purchased 68,938 individual interests equal to approximately 42,075 acres. The Department is in the process of expanding this successful program nationwide. We also plan, where appropriate and to the extent feasible, to enter into agreements with Tribes or tribal or private entities to carry out aspects of the land acquisition program. The 2005 budget request includes an unprecedented $75.0 million for this program.
These trust initiatives are a major undertaking, and we expect the benefits to be widespread. The Department realized it needed an organization that focused on its fiduciary duties as trustee to both individual Indians and tribal beneficiaries. The completion of the reorganization effort provides a major step forward in our ability to provide an efficient and successful trust management system within the Department of the Interior for our individual and tribal beneficiaries. The completion of the "To-Be" business model will be a major improvement in the way fiduciary trust business is done in the Department. Improving our title systems and reducing fractionated interests will lead to better record keeping, an improved probate system, and a more productive and economic use of Indian land. We are confident that all these efforts, which are part of the Department's Comprehensive Trust Management Plan, will improve the performance and accountability of our management of the trust.
This concludes our opening
statement. We look forward to answering any questions the Committee
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