In our audits of Indian affairs activities, we noted that the Federal Government's specific trust responsibilities were not defined clearly in legislation or in administrative regulations and that Bureau of Indian Affairs officials often had difficulty in determining where the trust responsibilities end and the concept of Indian self-determination begins. This situation has led to disagreements between the Bureau and the tribes as to the duties and responsibilities of each party and has resulted in charges that the Bureau has abrogated its trust responsibilities. We noted also that, in the past, Indian tribes that had planned, conduced, and administered Federal Indian programs under existing statutory authority had sometimes made decisions which proved to be unsatisfactory. In several cases, the tribes retroceded the administration of the programs to the Bureau and brought suit against the Secretary for abrogation of the trust responsibility.

The Committee may wish to consider the need for revising section 106 (f) to clarify the Federal Government's trust responsibilities to the Indian people and to define the duties and responsibilities of Indian tribes under the self-determination program. The Committee may also wish to consider amending section 111 of the bill to provide that Indian tribes shall bear the responsibility for their actions and decisions in administering Federal Indian programs and to clarify the conditions when, if at all, the Secretary shall be held accountable for such actions and decisions under the trust responsibility concept.

Section 107(a) provides, among other things, that prior to the issuance of rules and regulations, the Secretary of the Interior and the Secretary of Health, Education, and Welfare shall consult with national and regional Indian organizations; present the proposed rules and regulations to the Interior and Insular Affairs Committees of the Senate and House of Representatives; and publish the proposals in the Federal Register for the purpose of receiving comments from interested parties. Section 107(b) provides that prior to revision or amendment of any rules or regulations promulgated pursuant to subsection (a), the respective Secretary or Secretaries shall consult with national and regional Indian organizations and publish proposed revisions in the Federal Register not less than sixty days prior to the effective date of the proposed amendments or revisions in order to receive comments from interested parties. The Committee may wish to consider if proposed revisions or amendments should also be submitted to the respective Interior and Insular Affairs Committees.

The first sentence of section 108 provides that an Indian tribal organization receiving or expending funds pursuant to a contract or grant under this title shall submit a report to the appropriate Secretary. The second sentence provides that the reports and records of the organization with respect to such contract or grant shall be subject to audit by the appropriate Secretary and the Comptroller General. To assure that the goals of the second sentence are achieved and that the appropriate Secretary and the Comptroller General have sufficient authority to review the activities carried out pursuant to this title, we suggest that the second sentence be deleted and that the following new subsections to section 108 be inserted:

"Each recipient of Federal assistance under this Act pursuant to grants, subgrants, contracts, subcontracts, loans or other arrangements, entered into other than by formal advertising, and which are otherwise authorized by this Act, shall keep such records as the Secretary shall prescribe, including records which fully disclose the amount and disposition by such recipient of the proceeds of such assistance, the total cost of the project or undertaking in connection with which such assistance is given or used, the amount of that portion of the cost of the project or undertaking supplied by other sources, and such other records as will facilitate an effective audit.

"The Secretary and the Comptroller General of the United States, or any of their duly authorized representatives, shall, until the expiration of three years after completion of the project or undertaking referred to in the preceding subsection of this section, have access for the purpose of audit and examination to any books, documents, papers, and records of such recipients which in the opinion of the Secretary or the Comptroller General may be related or pertinent to the grants, contracts, subcontracts, subgrants, loans or other arrangements referred to in the preceding subsection."

Part A of title II of the bill, Education of Indians in Public Schools, would replace the educational programs authorized in the Johnson-O'Malley Act of 1934 (48 Stat. 596), as amended. Section 203 (a) provides a formula for the distribution of Federal funds for the education of federally recognized Indian

children in the public schools of the States. Section 203 (a) also provides that additional funds in an amount not less than 20 percent of the amount determined by the formula shall be provided to the affected school districts for a variety of special programs designed to meet the special needs of Indian pupils in public schools.

In our May 28, 1970, report to the Congress, we pointed out that the JohnsonO'Malley program was based on the concept that education is a responsibility of the State and that Indian children from a reservation are citizens of the State where the reservation is situated and are entitled to the same public education as is provided to other children in that State. We pointed out also that the Johnson-O'Malley program was considered to be a supplemental program in that funds were to be limited to school districts which, after exhausting all other sources of revenue including other Federal aid, are unable to operate schools at adequate State standards.

In our report we stated that we had found that (1) funds had been provided to counties and school districts where needs may not have existed and the funds may not have benefited Indian children from reservations; (2) the Federal government had paid the full cost of educating Indian children living in Federal dormitories while attending public schools, even though most of the children attending the schools were residents of the State; (3) no reduction had been made for the State aid received by the school districts for educating Indian children participating in the dormitory program; and (4) the distribution of Federal funds to the school districts appeared to have been improper or there was no assurance that the funds had been used for their intended purpose. We recommended that the Secretary of the Interior require the Bureau of Indian Affairs to furnish program funds on the basis of demonstrated financial need, encourage State and local participation in the cost of educating Indian children who live in Federal dormitories, and implement additional methods of supervision and control over the distribution and use of funds by the school districts.

We believe that the formula provided for in section 203 (e) of the bill will assist in correcting some of the problems set forth in our report and result in a more equitable distribution of Federal Indian education funds to those States and school districts with the greatest needs. In our opinion, however, section 203 (a) will not insure that the additional funds provided for special programs designed to meet the special needs of Indian pupils are used for the purposes intended. Therefore, the Committee may wish to consider revising section 203 (a) to provide that States and school districts receiving funds for special education programs under this section shall report annually to the Secretary of the Interior on the uses made of such funds and on how the actual use of the funds compares with the planned use of the funds set forth in the education plan approved by the Secretary. This report will assist the Secretary in implementing our recommendation, infra., that he be required to perform periodic program evaluations.

Sec. 203 (c) would require the Secretary to enter into a contract with the State education agency of any State the public education of which is affected by a contract or contracts pursuant to section 202, regardless of who the contractor or contractors may be, to provide the professional and support staff and administrative services necessary to assist local school districts affected by such contract or contracts in implementing the purposes of title II. We suggest that the Committee consider revising this provision so as to authorize rather than require such contracts because some contractors under this title may be competent and qualified and, therefore, would not need technical assistance from the State education agencies.

Sec. 212(7) would provide that, in establishing and carrying out the Indian youth intern program, the Secretary shall take such action as may be necessary to assure that there shall be one supervisor for each twenty Indian youth interns during their period of employment. The section does not, however, set forth the purpose or duties of a supervisor or indicate by whom the supervisor is to be employed. The Committee may wish to consider revising section 212(7) to clarify these matters.

We noted that title II of the bill contains no provisions to require the recipients of Federal funds to maintain adequate records or to authorize the Secretary of the Interior and the Comptroller General, or their duly authorized representatives, to have access for the purposes of audit and examination to any relevant books, documents, papers, and records of the recipients of Federal funds. We suggest, therefore, that language similar to that suggested with respect to section 108 be included in title II.

We noted also that the bill does not specifically provide for an evaluation of the program by the Secretaries of the Interior and Health, Education, and Welfare. It is our view that program evaluation is a fundamental part of effective program administration and that the responsibility for evaluations should rest initially upon the responsible agencies. In line with this concept, we believe the Congress should attempt to specify the kinds of information and tests which will enable it to better assess how well programs are working and whether alternative approaches may offer greater promise. We will be happy to work with the Committee in developing specific language if you wish.

We are also providing our comments on the bill to the Chairman of the Senate Interior and Insular Affairs Committee.

Sincerely yours,

Enclosure.

R. F. KELLER,

Deputy Comptroller General
of the United States.

Mr. MEEDS. Tribal sovereignty, the power of self-government, was first recognized in concept by the U.S. Supreme Court in Worcester v. Georgia-6 Pet. 515 (1832).

While it was clearly recognized that the power to abolish, limit, or modify the original tribal sovereignty was the sole prerogative of the Congress and, indeed, while the Congress has steadily eroded that original sovereignty, extra legal administrative action had all but destroyed that right by the early 1920's.

The growth of the administrative power of the Bureau of Indian Affairs, first under the Department of War and later under the Department of the Interior, on Indian reservation had effectively destroyed existing tribal forms of government. Officials of the BIA assumed the role of colonial administrators on the reservations and administered programs and services on the reservations under a policy which later became known as "paternalism.'

It became clear in the 1920's that this policy was not effectively preparing Indian tribes and people with the necessary skills to function in the non-Indian society. The Meriam Report of 1928 reinforced this conclusion and made recommendation for administrative and legislative action to move away from paternalism to eventual Indian selfdetermination and self-government.

In response to these findings, the Congress enacted the Indian Reorganization Act of 1934. Some have viewed this legislation as conferring powers of self-government on the tribes and imposing an outside form of government to implement these "new" powers. The legal effect of the act, however, was to restrict the extra legal administrative curtailment of tribal sovereignty and to facilitate tribal government forms to implement those sovereign powers which had not been specifically limited by the Congress and, in some areas, to define these powers. While the Indian "new deal" legislation of the 1930's brought some measure of Indian control and self-government, it fell far short of the current administration policy of "Indian Self-Determination without Termination." The Bureau of Indian Affairs continued to administer and operate federally funded programs and services on the reservation and the tribes were given little opportunity to set priorities and to become involved in the policy and decisionmaking functions of the BIA.

After a brief, though disastrous experiment with the so-called "termination" policy in the 1950's which sought to totally terminate the Federal-Indian relationship, both the Congress and the Executive

began to articulate a policy of Indian control and self-determination consistent with the maintenance of the Federal trust responsibility and the unique Federal-Indian relationship.

In an attempt to implement this new policy, the administration resurrected two ancient Indian laws. Under the so-called Buy Indian Act-section 23 of the act of June 25, 1910-which authorized the Secretary to employ Indian labor and purchase products of Indian industry, the administration sought to contract out much of its BIA programs and services to the Indian tribes. Under an 1834 law, the administration sought to confer authority on Indian tribes to direct the employment of Federal employees in the Indian service. These laws have proven to be legally and practically ineffective in successfully implementing the new policy.

Title I of S. 1017 confers specific authority on the Secretary of the Interior and the Secretary of Health, Education, and Welfare to contract the federally funded programs and services of the Bureau of Indian Affairs and the Indian Health Service, respectively, to Indian tribes or tribal organizations. The provisions of the title spell out the conditions of the contracting authority and the rights of the parties under such a contract.

In addition, title II of S. 1017 makes basic reform in the Federal programs for assistance to public schools educating Indian students which are administered by the Bureau of Indian Affairs and provides specific reforms in the BIA's educational program. Part A of title II amends the Johnson-O'Malley Act, providing for BIA assistance to public schools enrolling Indian students, by, inter alia, requiring greater participation of Indian tribes and parents with respect to such contracts. This is consistent with the provisions and intent of title II. Title II also authorizes new programs of BIA assistance to public schools for school construction; training programs for professionals in Indian education; Indian student intern programs; and educational research and development.

We have with us as our first witness this morning the Commissioner of Indian Affairs, the Honorable Morris Thompson. Morris, glad to see you back so soon. We both have been busy.

If you have a written statement, you may read it into the record or summarize it and we will insert it into the record.

THOMPSON,

STATEMENT OF HON. MORRIS COMMISSIONER, BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF INTERIOR, ACCOMPANIED BY RALPH REESER, LEGISLATIVE OFFICER, BIA; ABE ZUNI, ACTING DIRECTOR OF ADMINISTRATION, BIA; DON ASBRA, DIRECTOR OF CONTRACTING SERVICING, BIA; DR. WILLIAM BENHAM, ACTING DIRECTOR OF EDUCATION PROGRAMS; BIA; AND WILLIAM LAY, DIRECTOR OF PUBLIC SCHOOL APPROPRIATIONS, BIA

Mr. THOMPSON. Mr. Chairman, I have on my left Mr. Don Asbra, Director of Contracting Servicing, and on my immediate right, Mr. Ralph Reeser, Legislative Officer, and on his right, Mr. Abe Zuni, Acting Director of Administration.

Mr. MEEDS. Pardon me just 1 minute, Mr. Thompson. The gentleman from Ohio is recognized.

Mr. REGULA. Mr. Chairman, I just want to insert a statement in the record.

Mr. MEEDS. Without objection the statement of the ranking minority member will be inserted in the record.

[The statement of Congressman Regula follows:]

STATEMENT OF HON. RALPH S. REGULA, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO

Thank you, Mr. Chairman, The legislation on which we are about to hear testimony represents a further effort to implement the policy of Indian selfdetermination proposed by President Nixon in 1970.

During the past year this committee has worked hard to pass legislation that will build a solid legislative framework to carry out this policy. Parts of that framework we have seen signed into law include the Indian Financing Act, the Indian Judgment Distribution Act and the Menominee Restoration Act. The Menominee bill was especially significant as it constituted a direct reversal of the termination policy begun in the 1950's.

The bill before us is designed to promote Indian self-determination in two distinct but related areas: Federally-funded Indian services and Indian education. It proposes a vehicle by which Indian people can eventually assume full control over programs and services administered by the Bureau of Indian Affairs and the Indian Health Service. It further provides for increased Indian participation in the planning and conduct of Indian educational programs, and for new programs to upgrade the quality of Indian education.

I believe there is no question that this committee agrees with the general purposes of this bill. It particulars, however, present important questions concerning Indian policy priorities and the expenditure of large sums of taxpayers' dollars. These questions and the answers proposed in S.1017 deserve thorough consideration by the members of this committee and the witnesses testifying here today.

Mr. MEEDS. Please proceed.

Mr. THOMPSON. Mr. Chairman, it is both a pleasure and a challenge to testify this morning. A pleasure because S. 1017 as passed by the Senate contains the essential authority which the administration has long sought to implement its philosophy of Indian self-determination. A challenge because the bill is exceedingly complex, because it deals with the additional subject of Indian education, and because we have several amendments to recommend. In order to keep my testimony manageable, I propose to discuss first title I of the bill, the Indian Self-Determination Act, and then, if the committee agrees, to answer questions on its provisions. I would then proceed to discuss title II, the Indian Education Assistance Act, and to answer questions on that title if that is all right with the committee.

Title I-Indian Self-Determination Act. This title is an amalgamation of three proposals for Indian self-determination suggested by President Nixon in his 1970 Indian message: a proposal providing for Indians to assume control of Federal programs established for their benefit; a proposal whereby Federal employees who accompanied programs transferred to the tribes could retain their civil service benefits; and a proposal to amend the Johnson-O'Malley Act by adding Indian tribes themselves to the list of parties with whom the Secretary of the Interior can contract out the education of Indians.

Title I takes a somewhat different approach to the goal of enabling Indians to have control of programs directed toward their well-being