Chairman ABOUREZK. The oversight hearings have been planned in two stages: Today, we will be receiving testimony from administration witnesses-BIA and IHS, and on June 24, we are scheduled to receive testimony from tribal witnesses at a hearing in Albuquerque, N. Mex. We project that review of administration testimony will enable the committee to specifically identify the significant policy and factual issues. On June 24, we will, consequently, be asking tribal witnesses to address their testimony to these identified issues and discuss preferred alternative solutions. Such solutions may take the form of amendments to the act, changes in the administration's regulations and/or adoption of different practices by the administration.

I would like to start out by welcoming the witnesses.

We have two panels of witnesses today. They are both from the administration. The first panel is from the Department of Interior and the second panel is from the Department of Health, Education, and Welfare.

Mr. Raymond Butler, Acting Deputy Commissioner of Indian Affairs will be first.

STATEMENT OF RAYMOND U. BUTLER, ACTING DEPUTY COMMISSIONER OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR, ACCOMPANIED BY JOSEPH W. GORRELL, ASSISTANT DIRECTOR, FINANCIAL MANAGEMENT, BUREAU OF INDIAN AFFAIRS; LAFOLLETTE BUTLER, ACTING DIRECTOR, COMMISSIONERS SELFDETERMINATION STAFF, BIA; THEODORE KRENZKE, DIRECTOR, INDIAN SERVICES, BIA; AND DONALD ASBRA, CONTRACTING OFFICER, BIA

Mr. BUTLER. Mr. Chairman, on my far left is Mr. Joe Gorrell, Assistant Director of Financial Management; on his immediate left is Mr. LaFollette Butler who has been on detail to the Washington office working extensively on the implementation of Public Law 93638; to my far right is Mr. Don Asbra, our Chief of Contracting Services; and on my immediate right is Mr. Ted Krenzke, our Director of Indian Services.

Mr. Chairman, if I may this morning I will defer to your judgment whether to leave this on the record.

I will offer two apologies. One is that I sincerely, personally apologize for the lateness of our prepared witness statement. As you and I know there are other people who review our proposed statements and we still have a little educational process relative to our trust responsibilities.

Second, Mr. Chairman, I do apologize to you for the number of staff members that I have with me this morning. However, in my judgment this is a most serious piece of legislation. It has serious concept and principle. It was my judgment that we needed the staff here. A number of them have worked on the implementation of this program since its inception.

Chairman ABOUREZK. I guess you have as many staff as you need so that is no problem. I do not even consider that an apology, but if you do I will accept it. I will object to the other one. [Laughter.]

Mr. RAYMOND BUTLER. Mr. Chairman, we welcome the opportunity to appear before this committee to answer questions relating to the administration of the Indian Self-Determination and Education Assistance Act of 1975. We expect the hearings to assist in the eventual revision of the regulations implementing Public Law 93-638, as well as reviewing the practicalities of administration. We hope that this discussion will lead to close cooperation between the Congress, the Indian tribes, and the Department in working to implement the goals of the

act.

Public Law 93-638, signed into law on January 4, 1975, required that implementing regulations be promulgated within 10 months of enactment and contained prescribed benchmarks within that time frame for Indian consultation, for presentation to the committees of Congress and publication as proposed rulemaking. The regulations were published in final form on November 4, 1975, and became effective on December 4, 1975. We have now had 18 months of practical experience in the administration of the act.

I am certain that in these hearings, the committee will be discussing the aspects of our administration. First, though, let me say a few words about the framework within which we think the act and Indian selfdetermination should be viewed.

We regard Indian self-determination as being synonymous with Indian self-government. Legally and historically the U.S. Government, and the colonial government which was its predecessor, has dealt with Indian tribes as governments. The Indian policies of the past had one constant, the treatment of Indian tribes as governments. But to recognize the special relationship of the Federal Government to Indians as being a relationship between governments, and to extol the virtues and values of self-government is one thing; to follow where the acceptance of these principles lead is quite another.

Let me quote here from the noted legal scholar, Felix Cohen, on Indian self-government. He said, "Not all who speak of self-government mean the same thing by the term. Therefore let me say at the outset that by self-government I mean that form of government in which decisions are made not by the people who are wisest, or ablest, or closest to some throne in Washington or in Heaven, but rather by the people who are most directly affected by the decisions."

We view the Indian Self-Determination Act as a commitment by the Nation to the principle of the Federal-Indian relationship as being one between governments and to the principle of Indian tribal selfgovernment. I think all of us need to realize that Public Law 93-638 is an all-important philosophy and spirit which should and will pervade the Nation's administration of Indian policy, a philosophy and spirit which should and will become a way of life for us.

However, in our implementation of the act, we have become aware of certain concerns of tribal leaders.

Although the act authorized us to waive any contracting law or regulation inconsistent with the purposes of the act, the assumption of operation of Bureau programs by a tribe is nevertheless through a contractual relationship. Such a relationship by its very nature may impose some limitations on the contractor, that is the tribal government, that may be inconsistent with the intent of the act. This needs further examination by the administration, the Congress, and the tribes.

The act does not relieve the Bureau of program responsibility. Tribal assumption of program operation under contract is another, a different, method for carrying out the Bureau's program responsibility. We have attempted to work out these concerns in the regulations and in our administration of the act in coordination with the tribes.

The administration stands ready to work with the Congress and the Indian tribes to fully insure the goals of the act and to carry out our responsibility in implementing those goals. It is through oversight hearings, such as this, that a scrutiny of implementation to date may identify concerns of the committee and the Indians, so that we may all work together to insure that such concerns are identified and addressed. Mr. Chairman, if I may I would like to add further that: Although the concepts and principles announced in the act are applicable basically to the Bureau of Indian Affairs and to the Indian Health Service, as the Indian tribes have moved forward in their dealings with other Federal agencies in the Government it is my judgment that the concepts and principles of Public Law 93-638 are to give the basic option to Indian tribes for a local delivery system. These concepts and principles should, perhaps, become equally applicable to all of the other Federal agencies.

I have talked with a number of Indian leaders. We have talked about their concerns over title XX legislation and the way in which it is administered on their behalf. They have concerns over the language of the Older Americans Act. They have concerns over language of the Comprehensive Employment and Training Act. They have desires to redesign and to implement these types of programs in a manner which in their judgment would best serve their people at the local level.

In addition to the specifics of Public Law 93-638, it is our judgment that self-determination philosophy goes far beyond the areas of the exercise of tribal government powers and their sovereign powers that remain. In the personnel selections that are made-particularly in the key personnel selections that are made-we have that concern. In the tribal governmental operated program at the local level where we use the Buy-Indian Act authority basically is a concern.

In the budget process itself one of the things that has concerned me is this. Mr. Chairman, I particularly relate to my former experiences in the social services field at which time, in the not too distant past, we were contracting more of the programs than any of the other programs within the Bureau. This has been the adversary role in the negotiation process which we are placed in with respect to the Indian leaders and the Indian people.

During my short reign of terror here, as some people refer to it, I have convinced certain people to take a look at our budgetary process as it relates to what self-determination in tribal government services really means. We are at this time giving very serious consideration to restructuring the BIA budget to the maximum extent possible on a tribe-by-tribe basis rather than a program-by-program or a functionby-function basis. In my judgment this traditional program-by-program structure of the BIA Federal budget fails to recognize the complex nature of tribal communities and their many interdependent parts and facets.

Problem-solving is of such a complexity that it demands a discipline with a locally designed comprehensive approach. Such an approach is

often frustrated by the present rather rigid program structure of the BIA budget. Restructuring of the program and the budget process on a tribal basis will provide the flexibility required for local program development both in the planning and the execution stages. A tribally oriented budget structure will encourage realistic disciplined tribal planning which has often been frustrated by the rigidity of the present program structure. It will allow tribal leaders to select the most effective program mix to meet their unique situation and to make adjustments in current year operations to recognize changing conditions on their reservations.

The current budge structure in my judgment is often far more responsive to decision making far removed from the local scene than it is to tribal officials.

I might parenthetically comment, Mr. Chairman, that recently when I was discussing this concept with some of the National Tribal Chairman's Association members I pointed out to them that we are looking at this type of structure. There are many pros and cons. I do not know whether it will work. There will be bugs in it to start with. I made the comment that I wanted their views. I inadvertently made the statement that if they thought I was all wet in this approach to please tell me. Not to my real surprise, one of the tribal chairman raised his hand in the back of the room and, as I recognized him he said, "Commissioner, a few minutes ago you invited us to comment. You are all wet."

Thank you, Mr. Chairman. We are pleased to respond in dialogue with the committee as we proceed on the oversight hearings.

Chairman ABOUREZK. What do you see as the purpose of Public Law 93-638? What is your conception of what its purpose was and is?

Mr. RAYMOND BUTLER. In my judgment, Mr. Chairman, I reflect upon my experiences in the area of social services. The purpose is to give the respective Indian tribes the option to deliver the type of services which they feel their community members need at the local level and to redesign those programs in a manner which, in their judgment, will best serve their people.

Chairman ABOUREZK. Has that end been accomplished?

Mr. RAYMOND BUTLER. Mr. Chairman, I think it is only a beginning. Chairman ABOUREZK. What is "only a beginning?"

Mr. RAYMOND BUTLER. It is only the beginning in effecting the real concepts and principles of Public Law 93-638. A number of the tribes were somewhat hesitant to begin with. Other tribes moved in quite rapidly. I am thinking particularly of the Eastern Band of the Choctaws in Philadelphia, Miss., which have moved in quite rapidly to the concepts of delivering the system. On the Navajo Tribe, for example, the entire general assistance program has been for a number of years delivered locally by the Navajo tribal government.

Chairman ABOUREZK. Public Law 93-638 has been law a little over 2 years now. Do you remember the exact date it was signed into law? Mr. Raymond BUTLER. Yes, January 4, 1975.

Chairman ABOUREZK. Two-and-a-half years then.

You say that the implementation of Public Law 93-638 has only just begun; is that right?

Mr. RAYMOND BUTLER. Yes; the act required us to set forth the regulations for its administration within a 10-month period. They were

published in November and became final in December of 1975 so that basically we have only been into the administration of Public Law 93-638 for about 18 months now.

Chairman ABOUREZK. Do you believe that 10 percent of the purposes of Public Law 93-638 have been accomplished, or 20 percent, or what would you estimate as to the percentage amount of its purposes as being accomplished?

Mr. RAYMOND BUTLER. Mr. Chairman, in measuring it in terms of contracts and dollar volume-and I do not wish to sound facetious in this area—it is purely coincidental that as of March 31 of this year we have 638 contracts. [Laughter.]

The dollar volume of this amount is in the neighborhood of $127 million of our budget. So in that respect, budgetwise, we are a little over 15 percent.

Chairman ABOUREZK. $127 million is out on 638 contracts?

Mr. RAYMOND BUTLER. Yes.

Chairman ABOUREZK. What are those contracts for? What categories are they in? Are they for the delivery of services, or for training of the tribal people and the handling of their own contracts?

Mr. RAYMOND BUTLER. Mr. Chairman, we have $41 million in education. We have $34 million in social services programs.

Chairman ABOUREZK. What was the amount for social services?
Mr. RAYMOND BUTLER. $34 million.

In the Indian action team program we have $19.5 million. In law enforcement we have $4.6 million. In natural resources we have $3.5 million. In the housing program we have $214 million. And in the forestry program we have $12 million as examples of the programmatical types which tribes are taking under contract.

Chairman ABOUREZK. We sent you a list of questions in advance which we had asked the BIA to respond to. I want to refer to some of those questions now.

On questions No. 6, 9, 10, and 11 which relate to statistics regarding money allocations for contractors, the money retained by the Bureau for contract administration and money put out as advance payments. The answers you provided show no available statistics.

I am curious to know why the BIA cannot identify and designate the budget items such as administration, advance payments, and allocations to contractors. Also, what administrative steps are you taking to provide accurate information for such matters in the future?

Mr. RAYMOND BUTLER. Mr. Chairman, I can only comment that the reporting system that we have devised simply does not afford us the opportunity to identify those at this time.

I will ask Mr. Gorrell to comment further on this about our data processing system. But as I understand it we have not necessarily separated the Public Law 93-638 funding. For example, in the staffing requirements we have three positions occupied at the present time in Washington which are being exclusively paid for from Public Law 93-638 funds. The other staffing positions in contracting and policy development have been intermeshed with the general administration of the Bureau programs so that we do not at this time have the capacity to identify that.

Chairman ABOUREZK. You mean you don't have the capacity? You don't have the bookkeepers?