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Comments From the Bureau of Indian Affairs

See comment 4.

See comment 2.

See comment 5.

Determination of Tribal Involvement

The report relies on memoranda and "informal guidance" provided by the Bureau in earlier years to determine the extent of tribal participation in the budget formulation process. As you have discovered the tribe/agency budget formulation occurs at the agency level. Drawing conclusions based solely on written material emanating from the Central Office as to how the process worked ten or 15 years ago is unwarranted.

The report notes that the earlier guidance was directed more to tribal involve-
ment while current direction, as contained in the Bureau of Indian Affairs
Manual, is directed to BIA agency and area personnel. Prior to the issuance
of 41 BIAM, Supplement 1 in March 1988 there was no formal Bureau guidance.
As the Bureau manuals are directed to Bureau employees only, it is appropriate
that such guidance be directed to those federal employees with responsibilities
associated with budget formulation. Furthermore, an opinion issued by the
Solicitor for the Department of the Interior on October 1, 1990, (Enclosure 2)
states on page 4 that one of the functions which cannot be contracted to tribes
and which must be conducted by federal employees is the "...formulation of the
Secretary's and the President's policies and their budgetary and legislative
recommendations and views...." Thus, it is entirely appropriate that formal
Bureau guidance on budget formulation be directed at those who are responsible
for carrying out these duties.

Executive Direction and Administrative Services

In a number of instances the report states that the tribes have very little
influence over the requests for executive direction and administrative services.
The Bureau has made a concerted effort in recent years to improve the accuracy
of its budget submissions. Part of "truth in budgeting," is an effort to
display the actual costs of executive direction and administrative services.
There is an impression among some tribes that if these functions were zeroed
out at the agency level, the Bureau would find money from some other
source of money to support these functions. There is no other source.

Appropriations for tribe/agency executive direction in fiscal year 1990 totaled
$8,127,000. This provides an average of $97,915 for each of 83 agency offices.
Most agency superintendents are grade GM-14 and they are assisted by a GS-5
secretary. Assuming an average salary of $57,000 for the superintendent and
$19,000 for the secretary, and average benefits of 20 percent, salary and
benefit costs run an average of $91,200, leaving a grand total of approximately
$6,000 annually for training, travel, office supplies, materials, and equipment.
The report does a great disservice to the federal budget process by leaving
the impression that this is somehow excessive.

With respect to area offices, the report states that between 37 and 51 percent
of the funds retained for area operations were budgeted for area office execu-
tive direction and administrative services. First, as noted previously, these
funds are not "retained" by the area offices from what would otherwise be
available at the agency level; they are budgeted and justified at the area
level. Secondly, the report gives the erroneous impression that between
one-third and one-half of the budget is spent for executive direction and

Comments From the Bureau of Indian Affairs

See comment 5.

See comment 2.

See comment 6.

administrative services by comparing this funding only to that available for area direct operations.

Area Directors are not only responsible for managing programs which are funded
through the IPS, but also the rest of the BIA programs whether funded in the
Operation of Indian Programs account, the Construction account, or allocated
to the BIA from other agencies such as the Department of Transportation or
the Bureau of Land Management. In addition, administrative support functions
such as accounting, personnel, property, and contracting provide support ser-
vices to all programs, not just those budgeted through the IPS. For example,
in FY 1990 annual appropriations, permanent appropriations and trust funds
amounted to $1.8 billion. Of this amount, $31.3 million (1.7 percent) was
provided for area direct operations and $264 million (14.7 percent) was
provided for tribe/agency operations. Enclosure 3 provides information on the
total appropriated funds and selected reimburseable and allocated accounts
that were distributed to each area office in fiscal year 1990 and provides a
more accurate depiction of the percentage of the total funds which are used
for executive direction and administrative services by the areas. As this
data shows, the percentage of the total funds distributed to the area offices
which is used for executive direction and administrative services ranges from
eight-tenths of one percent (.8%) to 3.8 percent rather than the 37-51 percent
figures cited in the GAO report.

We are deeply concerned that there exists a great deal of misunderstanding regarding the Indian Priority System and that rather than being instructive, the draft report further distorts the issue by assuming that something in the Indian Self-Determination and Education Assistance Act relieves Bureau management of its responsibilities associated with the formulation of the President's budget and by selective use of budget figures which ignores more than two-thirds of the funds which are administered by the Bureau.

See comment 7.

Enclosures

Sincerely,

cretary Indian Affairs

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99 ** GRAND TOTALS** $26,288,000 $307,088,000 $27,266,000 $287,944,000 $26,651,000 $254,526,000 $31,265,000 $264,066,000

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217,000 140,000 19,843,000 18,808,000

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This is in response to your memorandum dated January 25, 1990, requesting an opinion as to whether Executive Direction (Element 71), Administrative Services (Element 72) and Education and Training General (Element 10) are contractable to tribal organizations under Section 102 of Title I of Pub. L. 93-638, the Indian Self-Determination Act, 25 U.S.C. § 450f (the Act).

Executive Direction (Element 71) is defined in 42 BIAM Supplement No. 2 (Accounts Handbook) as "[a] program function to provide line (as differentiated from staff) direction of Bureau operations at the several organizational levels, and related functions in the Office of the Commissioner." It includes "[p]ersonal services and other costs to carry on the activities of personnel specifically assigned . . . to the positions of Commissioner, Deputy Commissioner, Area Director, Deputy Area Director, and Agency Superintendent; clerical or secretarial positions immediately serving those positions; and immediate Assistants, to the Commissioner, Deputy Commissioner, or Area Director. A similar, although not identical, definition of Executive Direction is found in yearly budget justifications for the Bureau of Indian Affairs. See, for instance, Budget Justifications, F.Y. 1990, Bureau of Indian Affairs, pp. 200-202, and 221, where the purpose of Executive Direction is "[t]o provide planning, direction, and line management leadership for the development and implementation of policy initiatives and programs undertaken by the bureau to ensure achievement of its

It also includes certain other components, mostly related to Central Office operations, such as legislative development, information services, program review, and Equal Employment Opportunity.

Comments From the Bureau of Indian Affairs

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mission, goals, and objectives." It is further provided that "[t]his program covers the operation of the immediate office and staff of the line managers at central office and area office levels of the bureau. The line managers and their staff provide for organizational leadership and coordination to ensure that all program levels are effectively integrated to achieve the overall mission of the bureau. Basic activities include decision-making, direction, policy formulation and review, tribal consultation, public relations, representation of the bureau to other governmental agencies and private sector organizations, and overall management of assigned resources."

Administrative Services (Element 72) is defined in 42 BIAM Supplement No. 2 (Accounts Handbook) as "[a] program function to provide general administrative support for all Bureau programs at the Central office, Area Office, and Agency levels." It includes "those administrative services that cannot be readily identified directly with a particular program area or function (element series or element) and that are commonly funded on a clearing account basis." It includes personal services and other costs of Central Office and Area Office units providing staff services and support in the areas of property, procurement, contracting, personnel and financial management. See also, Budget Justifications, F.Y. 1990, Bureau of Indian Affairs, pp. 203-208, where the purpose of Administrative Services is "[t]o provide policies and support in the areas of property, procurement, contracting, personnel and financial management to all the bureau's program service delivery systems. It is further stated that "[t]he function serves as an equal partner with the program functions to accomplish the mission of the bureau, ensuring that those administrative services necessary for program operations are adequately provided. At the same time, it provides the foundation for the control and accountability of resources used to achieve its mission. These dual roles must be carefully balanced to ensure that one does not dominate the other and to ensure that the total system operates effectively for the benefit of the bureau's clientele."

Education and Training - General (Element 10) is defined in 42 BIAM Supplement No. 2 (Accounts Handbook) as "a program function of the Bureau to provide educational opportunities for eligible Indians. . .." It includes activities of the Central Office or Area Office units having over-all direction of the program area, but may include activities at some Agencies and 'Locations.'" À more precise definition of Element 10 is found in yearly budget justifications for the BIA where it is described as technical support and program supervision for post-secondary education programs; peripheral dormitories; off-reservation boarding schools; tribal contract schools; federal title programs; elementary and secondary programs; higher education and adult education programs; exceptional education programs; student

Executive Direction also includes the immediate office of the superintendent. See F.Y. 1990 Budget Justifications at p. 221.

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