Chapter 1 Introduction The Bureau of Indian Affairs (BIA), Department of the Interior, is the primary federal agency charged with carrying out the government's relationship with, and responsibilities toward, 507 federally recognized tribes with about 950,000 enrolled members. In addition to being a trustee for Indian lands, BIA provides services to tribes in such areas as education, economic development, natural resource management, infrastructure (roads, housing, construction), law enforcement, and social services. Background BIA has a three-tier organizational structure: a Central Office, area offices, and agency offices. The Central Office is responsible for general policy, program management, and oversight on a national level. Twelve area offices, each managed by an area director, report to the Central Office. Area offices provide technical assistance and oversight for programs operated within their respective geographical boundaries. Under the authority of the area offices, BIA has 83 agency offices nationwide, each managed by an agency superintendent. These offices are primarily responsible for working with tribes on a daily basis. An agency office may be responsible for one or more tribes; agency offices are classified, or referred to, as single-tribe or multi-tribe agencies. The BIA Budget and Tribal The BIA budget, as submitted annually to the Congress, is divided into Participation various programs/activities, the most significant of which, in terms of funding, is BIA'S Operation of Indian Programs (OIP). Beginning with the fiscal year 1973 budget, tribes were involved in developing a portion of the OIP budget through the Indian Priority System (IPS) budget formulation process. This process was characterized by BIA in 1976 as one of two principal methods for pursuing Indian self-determination through greater self-government; to that end, it was to provide an opportunity for tribes to set priorities among programs and determine funding for them.' The other means for furthering Indian self-determination— authorizing tribes to contract with BIA to perform program services 'BIA initially referred to this process as "band analysis," but it is now called the Indian Priority System. For consistency throughout this report, we refer to the process as the IPS process and programs budgeted through its use as IPS programs. Introduction was provided for in the Indian Self-Determination and Education Assistance Act of 1975 (P.L. 93-638).2 In this act, as amended,3 the Congress declared its commitment to the maintenance of the Federal Government's unique and continuing relationship with, and responsibility to, individual Indian tribes and to the Indian people as a whole through the establishment of a meaningful Indian selfdetermination policy which will permit an orderly transition from Federal domination of programs for, and services to, Indians to effective and meaningful participation by the Indian people in the planning, conduct, and administration of those programs and services. In general, the IPS process calls for BIA to first identify specific programs and an overall budget amount to be made available to carry them out as an initial step in its overall annual budget formulation process. BIA agencies, in consultation with the tribes, are then asked to set priorities among those programs and identify the share of the available funding to be devoted to each program. BIA then aggregates this input for inclusion in its annual budget submission. Objectives, Scope, and In a June 1989 letter, the Chairman, Vice-Chairman, and two members On February 8, 1990, we briefed Committee staff members on the preliminary results of our work. At that time, the staff asked that, as part of our first objective, we clarify the extent to which IPS funds are used by BIA area and agency offices for those offices' operations. 2Through BIA's contracting policy, tribes can apply for a contract with BIA to plan, conduct, and administer all or parts of programs which BIA is authorized to administer for the benefit of Indians. 3Indian Self-Determination and Education Assistance Act Amendments of 1988, P.L. 100-472. Introduction Our work examining overall BIA budget levels, as well as the IPS portion, was based on aggregated budget and accounting data obtained from BIA'S Central Office and from BIA'S National Technical Support Center in Albuquerque, New Mexico; we did not independently verify those data. We also reviewed prior reports or studies that discussed the BIA budget process. In addition, we reviewed an April 1989 BIA report on the IPS process that discussed substantive issues raised by tribes and BIA officials in 11 of the 12 BIA areas.5 To identify BIA'S IPS procedures and how the IPS process was carried out at the tribal level, we reviewed applicable legislation, appropriate BIA manuals, and annual budget formulation guidelines developed by BIA. We also reviewed relevant documents and interviewed officials at five tribes and their corresponding BIA area and agency offices. The five tribes included in our review were Turtle Mountain Chippewa, Taos Pueblo, Northern Cheyenne, Seminole Tribe of Florida, and Pascua Yaqui. We selected this judgmental sample of tribes considering such factors as tribal population, geographic location of the tribe, whether the tribe was under a BIA single- or multi-tribe agency office, and interest expressed by the Committee. On the basis of the selection of tribes, we also visited the following BIA area and agency offices: Aberdeen Area (South Dakota) and Turtle Mountain Agency (North Dakota), Albuquerque Area and Northern Pueblos Agency (both in New Mexico), Billings Area and Northern Cheyenne Agency (both in Montana), Eastern Area (Virginia) and Seminole Agency (Florida), and Phoenix Area and Salt River Agency (both in Arizona). At each location we interviewed officials involved in the budget process as well as program managers. We focused on the budget formulation and execution process for fiscal year 1989 but also obtained information covering budget formulation for fiscal years 1987 through 1992 when 4Key reports were (1) Report on Federal Administration and Structure of Indian Affairs, Final Report to the American Indian Policy Review Commission, Philip S. Deloria, et al. (Washington, D.C.: Government Printing Office, 1976) and (2) Tribal Participation in the Bureau of Indian Affairs Budget System Should Be Increased (GAO/CED-78-62, Feb. 15, 1978). 5Indian Priority System (IPS) Review Team Report, U.S. Department of Interior, Office of the Secretary (Washington, D.C.: Apr. 5, 1989). This report was submitted by BIA in response to P.L. 100-472, Indian Self-Determination and Education Assistance Act Amendments of 1988. It included comments from teams comprised of tribal and BIA area and agency office officials in 11 of the 12 areas. The Navajo area did not submit a response. "Programs for two of the tribes selected are administered by multi-tribe agencies. Specifically, Salt River Agency Office administers programs for three tribes, including Pascua Yaqui, and the Northern Pueblos Agency for eight tribes, including Taos Pueblo. Introduction available. We gathered information for a number of years to show funding trends and to determine whether and how implementation of the IPS process varied from year to year. We performed this work from October 1989 through June 1990 in accordance with generally accepted government auditing standards. Chapter 2 IPS and Its Relationship to BIA Budgeting for Indian Programs The IPS budget formulation process provides a means for Indian tribes to become involved in the development of a portion of BIA's annual budget. Our review showed that the portion of BIA's budget subject to the IPS process decreased between fiscal years 1978 and 1990. In addition, BIA area and agency offices use a portion of IPS funds for overall executive direction and administration. Further, the combination of BIA programs subject to the IPS process has varied over the years; in recent years the major portion of the IPS budget has been devoted to tribal services such as law enforcement, social services, and adult vocational training. How the IPS Process Is BIA instituted the IPS process to involve tribes in the formulation of BIA's Carried Out annual budgets. The process begins approximately 18 months prior to the fiscal year for which the budget is being developed. At that time BIA'S Central Office provides BIA area and agency offices and tribes with initial budget funding amounts for those programs subject to the IPS process. These initial "base amounts" are categorized by IPS program and are set at the level of funding contained in the prior year's budget request to the President. The initial IPS base amounts are classified as either "area direct operations" or "area field operations" funds for area offices and as "tribe/agency" funds at the agency offices. The way in which a tribe is provided initial base funding amounts varies depending on whether the tribe's respective BIA agency is a single-tribe or multi-tribe agency. Single-tribe agencies receive consolidated base amounts that include funds for programs administered by both the BIA agency office and the tribe. Multi-tribe agencies receive consolidated base amounts or separate tribe and agency base amounts. For tribes that receive separate base amounts, the amount generally corresponds to the funding for the programs that the tribes contract from BIA. After initial base amounts have been provided, BIA agency offices, together with tribes, rank IPS programs by order of importance and designate funding amounts for each program assuming four different potential funding levels. For fiscal year 1989 the funding levels represented 80, 90, 100, and 110 percent of the initial base funding amounts. A collective determination of program priorities and funding amounts generally results from meetings between BIA agency and tribal representatives. Once a determination is made for the tribe/agency budget, it is forwarded to the respective BIA area office. The area office, which also develops a proposed budget for its IPS programs, submits the area office |