IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA _________________________________ ELOUISE PEPION COBELL, et al., ) Plaintiffs, v. ) ) ) ) ) GALE A. NORTON, Secretary of the Interior, et al., ) )) ) Defendants. _________________________________) NOTICE OF FILING OF INTERIOR DEFENDANTS' NINETEENTH STATUS REPORT Interior Defendants hereby give notice of the filing of their nineteenth report due in accordance with the Order of December 21, 1999. A copy of the report is attached hereto. Dated: November 1, 2004 Case No. 1:96CV01285 (Judge Lamberth) Respectfully submitted, ROBERT D. McCALLUM, JR. Associate Attorney General PETER D. KEISLER Assistant Attorney General STUART E. SCHIFFER Deputy Assistant Attorney General J. CHRISTOPHER KOHN Director SANDRA P. SPOONER Deputy Director DC Bar No. 261495 /s/ John T. Stemplewicz JOHN T. STEMPLEWICZ Senior Trial Counsel Commercial Litigation Branch Civil Division P.O. Box 875 Ben Franklin Station Washington, D.C. 20044-0875 (202) 307-1104 CERTIFICATE OF SERVICE I hereby certify that, on November 1, 2004 the foregoing Interior's Status Report to the Court Number Nineteen (For the Period July 1, 2004 through September 30, 2004) was served by Electronic Case Filing, and on the following who is not registered for Electronic Case Filing, by facsimile: Earl Old Person (Pro se) Blackfeet Tribe P.O. Box 850 Browning, MT 59417 Fax (406) 338-7530 /s/ Jay St. John Jay St. John T H E S E C R E T A R Y O F T H E I N T E R I O R Sandra P. Spooner U S . Department of Justice Civil Division Commercial Litigation Branch P.O. Box 875 Ben Franklin Station Washington, D.C. 20044-0875 Re: Cobell v. Norton - Status Report to the Court Number Nineteen Dear Ms. Spooner: Enclosed is the Department of the Interior’s Status Report to the Court Number Nineteen (For the Period July 1, 2004 through September 30, 2004). Please forward a copy to the Court. This is the twelfth report in the revised Report format. My signature on this Report reflects my belief that my personal observations are true and correct, and that the information provided to me by others for inclusion in my observations, as well as accompanying sections of the Report are correct to the best of my knowledge. Thank you for your assistance. Enclosure W A S H I N G T O N October 29,2004 ,&ale A. Norton Status Report to the Court Number Nineteen For the Period July 1,2004 through September 30,2004 November 1,2004 November 1.2004 STATUS REPORT TO THE COURT NUMBER NINETEEN TABLE OF CONTENTS I . INTRODUCTION ............................................................................................................. 1 I1 . SECRETARY GALE NORTON’S OBSERVATIONS ................................................. 2 A . INFORMATION TECHNOLOGY ................................................................................. 4 B . CADASTRAL SURVEY ................................................................................................ 10 C . MINERALS MANAGEMENT SERVICE ................................................................... 13 D . OFFICE OF HISTORICAL TRUST ACCOUNTING ............................................... 15 111 . OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS ................... 24 A . TRUST REVIEW AND AUDIT .................................................................................... 27 B . OST-OFFICE OF THE CHIEF INFORMATION OFFICER ................................... 30 1 . RECORDS MANAGEMENT .................................................................................... 30 C . TRUST ACCOUNTABILITY ....................................................................................... 34 1 . TRUST BUSINESS PROCESS MODELING .......................................................... 34 2 . TRUST DATA QUALITY AND INTEGRITY ........................................................ 37 3 . INDIAN FIDUCIARY TRUST TRAINING PROGRAM ...................................... 40 4 . RISK MANAGEMENT .............................................................................................. 42 5 . REGULATIONS, POLICIES AND PROCEDURES .............................................. 43 D . FIELD OPERATIONS ................................................................................................... 45 1 . APPRAISAL ................................................................................................................ 45 E . TRUST SERVICES ........................................................................................................ 48 1 . CURRENT ACCOUNTING ACTIVITIES ............................................................. 48 IV . BUREAU OF INDIAN AFFAIRS ................................................................................. 53 A . TRUST REGULATIONS, POLICIES AND PROCEDURES ................................... 53 B . FRACTIONATION ........................................................................................................ 56 C . PROBATE ....................................................................................................................... 58 ACRONYMS AND ABBREVIATIONS ................................................................................... 60 Introduction INTRODUCTION I STATUS REPORT TO THE COURT NUMBER NINETEEN November 1,2004 - 1 - r. This Status Report to the Court Number Nineteen (Report) represents the period from July 1, 2004, through September 30,2004. The Report is presented for the purpose of informing the Court on the progress of trust reform activities occurring during this reporting period, and progress of the historical accounting of individual Indian beneficiary funds managed by Interior. This Report is prepared in a manner consistent with previous reports to the Court. Each manager in charge of an area of trust administration and the director of the historical accounting project are submitting reports on the progress of their respective activities. A glossary of acronyms and abbreviations is included in this Report. The glossary is located at the end of the Report. This report contains information on the broad trust reform efforts underway at Interior. Accordingly, it may include information on reform efforts that are not within the scope of the Cobell litigation. ,YTATIJS REPORT TO THE COURT NlJMBER NINETEE,Y Secretary Gale Norton's Observations November 1,2004 11. SECRETARY GALE NORTON'S OBSERVATIONS hi-ing this reporting period, I reviewed and accepted most of the key components of the "To- Be" Model, subject to further discussion 011 a few specific issues desci-ihed I I I the Special Trustee's Observations. I believe the model will enable Interior to continiic tlie implementation o f its Coiiiprelietisive Trust Management Plan. Now that tlie "To-Re" Model has been completed, we will refer to it as tlie Fiduciary Trust Model. It encompasses those business processes necessary to manage the fiduciary trust activities of Interior. I'he end of this reporting period is also the end oftlie governmelit's fiscal 5 cw. We begin the tien' fiscal year without an appropriation, and will operate with a contintiing resolution for tiinding purposes. This pennits Tnterior to spend money at the same lei el as I- Y2004 but not to iiiitiatc new program or projects. Based on initial actions taken by Congressional appropriators, u e have sonic indication of likely filial action. Except for our i-cqucst fni- liistorical accounting .md the Indian land consolidation initiative, both of which ai-c c\pcctccl to ~ L ' C L ' I I . ~ less fiiiidiiig ihan ~-ecltiested, all othcr trust activities are expected to be fiindcd at or nc;it' iuIiiested le\rels. lppropriatc management of our IT systems remains a high pi-toi-ity u itliiii Intel-lor. I am pleased 10 report that the E-Gov Institute, a tion-goveniiiieiital organization. an ai-ded Interior the "Excellence in Enterprise Architecture Award" in the category of Federal C'i1.1 Iian Leadership in Goveniiiient Transfoimation. I am also encouraged to hear that. foi- se\ en consecutive months, no Interior IT hosts \\ere found to have \.ulnerabilities listed in the SAYS Top 20. The Inspector General reported in his annual evaluation of Interior's IT seciii-I t 5 2 pt-oy-uii t h a t "the Department continues to improve the security over its information systems," altliough Iic also recommended ,itlditional improvements that are described in tlie IT section of this report. Inlcrior trust qcrations that directly affect our ability to provide services to bencficiat-ics continue to be 1 nipacted adLwsely by not having access to the Internet. (hie of otir greatest challenges has been the creation of a compi-chensi\ c rccoids management prograni. not only to protect trust records, but all Tndian records so that generations to collie cvill i i L i \ L' cicccss to 11ie ~ ~ r i t t e i i history of iht: past aiid cLirrciit opcicitiifii~ o f h i i m c i f l ' c i i i ~ . Oiir alliance with Haskell Indian Nations University to forge a records management instructional prog-aam is progressing well. Fifteen students are now e~irollctl for the frill sciiicstcr in the words management course at Haskell. This will eventually help LIS to IiaI c qiialificd records iiianagement specialists available at bureaus and offices thi-oiiyliotit Indian country to ensure the proper protection and preservation of Indian records. ('ongress made progress toward probate refonii with the passaye o f S. 172 1. \\ Iiich also should help to reduce further fractionation of allotted lands. I also just learned tiic President signed the Rill on Octobcr 27, 2004. It appears that the legislation, sponsoi-ed by Senator Ben Campbell, reflects many of our suggestions, as well as agreeiiieiits reached through neyotiations among stakeholders. - 2 - STATUS REPORT TO THE COURT NUMBER NINETEE3 November 1,2004 Secretarv Gale Norton’s Observations On tlie personnel fiont, Principal Deputy Assistant Secretary of Indian A ffaii.s 4iirenc Martin departed for private practice. Her work with Tribes and individual Indians \\ i t h regard to trust matters has been important to Interior and we appreciate her sen ice. It is important that we continue moving forward with tnist reforin and im1~llem~ntation of tlie I. icfuciary Trust Model. We contiiiue working to obtain the support and coopcration of Congress, Indian Tribes and other beneficiaries and stakeholders of the tixist. Thc Ibllo\f ing reports of maiiagers describe their accomplishments and concerns during this reporting period. - 3 - STATUS REPORT TO THE COURT NUMBER NINETEEN November 1,2004 Information Technology Introduction This section describes the status of Interior IT systems, particularly the systems that house or provide access to IlTD or provide various computing capabilities, including functions critical to the proper administration of the individual Indian trust responsibilities within Interior. In addition, this section describes various efforts being made to improve IITD security within Interior, pursuant to OMB Circular A-1 30 Appendix 111, and the status of Internet connectivity. Accomplishments and Completions Computer Security: Interior continues to make progress in ensuring IT security and, in particular, addressing the potential risks associated with unauthorized access to IITD fi-om the Internet. A primary focus for this quarter has been completing actions required for certification and accreditation of Interior IT systems pursuant to A-1 30. The most noteworthy accomplishments and completions during the reporting period are described below. Training and Awareness Bureaus and offices conducted a simulation exercise for incident response. The exercise tested procedures and practices in place to determine their effectiveness in responding to security incidents. It also provided IT staff and management hands-on experience in dealing with unexpected situations. All bureaus and offices completed the test and docuniented potential improvements to processes. Prevention and Monitoring 0 0 Interior continued testing Internet-accessible systems against the SANS Top 20 vulnerability list. For the second consecutive reporting period, no hosts were found to have vulnerabilities listed in the SANS Top 20. BIA completed its assessment of the Blaster worm incident reported in the previous report to the Court. The virus was introduced to BIA by magnetic media and subsequently spread to other machines that had not been patched for Blaster worm vulnerability. The incident occurred while BIA was in the process of implementing two actions that would have mitigated or prevented the incident: (1) deploying automated patching capability; and (2) replacing legacy operating systems. The first of these actions was completed but cannot be used with older operating systems; the second is scheduled to be completed by the end of CY2004. A. INFORMATION TECHNOLOGY - 4 - STA TUS REPORT TO THE COURT NUMBER NINE TEEN November 1,2004 Information Technology 0 Policies and Guidance 0 The Memorandum, “Information Technology Security Requirements for Acquisition,” dated August 18, 2004, from Interior’s CIO and Director of the Office of Acquisition and Property Management, was sent to the heads of bureaus and offices, bureau and office CIOs, deputy CIOs and procurement chiefs. This memorandum establishes guidelines for assuring IT security requirements are included in IT-related contracts. A-130 Certification and Accreditation: Over 90% of Interior’s general support systems and major applications have been certified and accredited by the respective bureau or office DAA and have full authority to operate. C&A reviews conducted by a qualified third-party have been completed for 21 % of the bureau and office accreditations. OCIO expects to report on these reviews in future reporting periods. IT Systems Architecture: Interior was honored for its Enterprise Architecture Program, which guides the modernization of Interior’s business operations to provide more cost-efficient, user-centered service to the nation. The E-Gov Institute, a private organization, awarded Interior the Excellence in Enterprise Architecture Award in the category of Federal Civilian Leadership in Government Transformation. The Enterprise Architecture Program provides a roadmap for leveraging information technology to meet strategic and programmatic goals and objectives efficiently and effectively. Interior updated its program maturity self-assessment using the OMB Enterprise Architecture framework tool. Interior scored 4.0 on a 5.0 scale, which indicates the architecture is being operationalized across Interior and is providing perfonnance impact to business operations. This is an improvement from a 3.3 rating from the last quarterly submission, and up from 2.0 in 2003. Phase 3A of DEAR data validation and population was completed this reporting period. This phase focused on cross-mapping Interior’s system inventory to the goals and objectives in the DO1 Strategic Plan FY 2003 - 2008 and the Interior Enterprise Architecture Performance Reference Model. This cross-mapping provides Interior information to identify system gaps in its portfolio for accomplishing the DO1 Strategic Plan. TrustNet During this reporting period, TrustNet, an internal secured network, was expanded as follows: 0 Four of the six OHTA sites have been connected to TrustNet on a managed service program (firewalls, intrusion detection and monitoring). The Office of the Solicitor moved 95% of its data communications infrastructure from Denver to Herndon, VA, and is expected to be connected to the Department’s TrustNet during the next reporting period. - 5 - Information Technology November 1,2004 Current Status A-130 Certification and Accreditation: OCIO has implemented a comprehensive program to define, accomplish, and review certification and accreditation packages. Interior established policies that use criteria identified in publications issued by the National Institute for Standards and Technology. Additionally, Interior to date has delivered formal C&A training to 258 bureau staff responsible for the conduct of certification and accreditation procedures. In FY2004, Interior bureaus and officcs applied $12 million in funding, specifically budgeted to accomplish C&A. OCIO established a Blanket Purchase Agreement with vendors qualified to support the bureaus in independent verification of controls. This investment and focus helped bureaus and offices achieve accreditation for over 90% of major applications and GSS, compared to the 10% accredited as of September 30,2003. As noted in GAO-04-376, Agencies Need to Implement Corzsistent Processes in Authorizing Systems for Operation (June 2004), accreditation packages of federal agencies required by the Federal Information Security Management Act and A- 130 vary in quality and standards of content. OCIO is addressing this challenge faced by federal agencies by establishing a quantitative checklist for C&A package quality and applying it to accredited systems. Although not required by FISMA or A-1 30, Interior expects to perform a 100% quality review of the C&A packages by the end of the second quarter of FY2005. C&A reviews conducted by a qualified third party have been completed for 2 1 % of the bureau and office accreditations. OCIO expects to report on these reviews in future reporting periods. Areas in C&A packages identified for improvement will be tracked via the POA&M process, which includes a schedule for resolution. Trust Network Connection: Interior’s Enterprise Services Network consolidates departmental Tnternet connections. adds centrally-managed network perimeter security, provides secure connectivity between bureaus and offices (Intranet) and implements twenty-four hour network security monitoring. The trust network segment, which hosts trust related computer systems, will be connected to the ESN via a series of additional network security devices including firewalls, routers and intrusion detection devices. These devices will be configured to allow outbound connections to the ESN and block all incoming access except electronic mail. Internal trust computer applications are protected by at least three security layers: Internet perimeter security, Intranet security and host-based security. Shared network segments (known as demilitarized zones) will be created to allow trust and non- trust bureaus and offices to share a limited subset of trust data, such as electronic mail. Under no circumstances will direct Internet access be permitted to internal trust network segments. STATUS REPORT TO THE COURTNUMBER NINETEEN - 6 - Information Technology The trust network segment has been certified and accredited using Interior’s NIST-based security C&A process. Routine scanning and vulnerability testing are used to ensure the trust network is Interior continues to develop reconnection plans for Interior bureaus and offices (BIA, OHA, OST and SOL) that have not been permitted by the Court to have Internet access since December 5,2001. Continued disconnection of these systems hampers Interior’s ability to provide the most effective IT operations and security. STATUS REPORT TO THE COURT NUMBER NINETEEN November 1,2004 secured from unauthorized access from the Internet. Reports: 0 GAO i ssued “Federal Chief Information Officers: Responsibilities, Reporting Relationships, Tenure, and Challenges” (GAO-04-823) and “Information and Technology Management: Responsibilities, Reporting Relationships, Tenure and Challenges of Agency Chief Information Officers” (GAO-04-957T). As these reports cover descriptions of CIO roles govenmient-wide, they may or may not be of interest to the Court. 0 Although Interior issued its annual FISMA report on October 8, 2004, following the end of this reporting period, the Court may find it of interest. In summary, the report states Interior systems are adequately secured, its investments are sound and Interior is in compliance with the President’s mandates and congressional direction. FISMA provides a framework and relevant agency roles in ensuring the effectiveness of security controls with regard to information resources that support federal operations and assets. In support of FISMA, Interior has: 0 Increased annual IT security spending from approximately $4 million in previous years to $49.2 million in FY2004, including $12 million specifically identified for C&A. The FY2004 budget is consistent with OMB guidance suggesting that 5% of IT spending be targeted for security. 0 Accredited over 90% of IT systems as of September 30, 2004. Reviewed 21 % of those accreditations against quality standards. 0 Established configuration standards for common platforms to facilitate security settings and patch management. 0 Promulgated policies, directives, and standards for IT security topics including C&A, 0 peer-to-peer technologies, security in contracts, and others. Trained 76,888 employees and contractor staff (93% of end users) in relevant computer user policies and practices. 0 Maintained a monthly scanning program that assesses Interior systems against the SANS Top 20 vulnerability list, entering the eighth consecutive month with no vulnerabilities found. In addition, OIG issued its FY2004 Annual Evaluation, DOI Information Security Program on October 12,2004. This report states that lnterior “has effectively designed its information security program to meet the requirements of FISMA and continued to improve security over its information systems.” As part of the evaluation, OIG examined 19 fully accredited - 7 - November 1,2004 Information Technology systems. The report “identified weaknesses in the conduct of a majority of the system certifications” which, in the IG’s opinion, “demonstrates a clear need for qualitative examination by the CIO of reported bureau accomplishments.” Bureaus and offices have not had an opportunity to review “identified weaknesses.” These findings will be reviewed to determine their validity. OCIO is currently conducting such an examination. OCIO is working with OIG to determine a clear inventory of findings, which will be incorporated into the POA&M process in accordance with OMB guidance. By maintaining a managed and accountable effort, Interior expects to continue to translate budget into value-added results for the IT security program. Given the comprehensive nature of FISMA, meeting its requirements affirms the focus and responsibility Interior takes in protecting the confidentiality, integrity, and availability of its information systems. Delays and Obstacles There are many challenges that must be addressed regarding the integration, performance, funding, security, and data integrity of Interior IT systems. Interior initiated or completed steps to address some of the challenges reported in this and previous reporting periods. However, delays and obstacles listed here still impede progress in achieving Interior’s IT management goals: Litigation 0 Employee fears about becoming personally implicated in the Cobell litigation are undermining creativity and decision-making. This impediment has worsened within Interior as new restrictions on communication have been placed on Interior employees by the Court. Fund in g 0 Funding availability will continue to diciate the timing of IT-related iniriatives. Interior’s FY2005 budget will require managing a variety of IT-related requirements and tradeoffs. The additional resources (time, personnel, and funding) provided for IT security have limited the funding for other IT-related activities, which on occasion has adversely impacted overall systems performance. Reengineering Effort 0 Interior is conducting a business process reengineering effort to standardize and streamline trust business processes. IT system specifications, design, and procurement may depend upon the timing and results of the reengineering effort and available funding. STATUS REPORT TO THE COURT NUMBER NINETEEN - 8 - Denied Internet Access Several Interior bureaus and offices (BIA, OHA, OST and SOL) have not been permitted by the Court to have Internet access since December 5,2001. Lack of Internet access impedes work processes and the ability to communicate effectively, both internally and externally. For example, not having access to the Internet continues to deny the public electronic access to OHA administrative decisions. Maintaining security on internal systems is more difficult without access to the Internet for research, reporting, and patch management. Assurance Statement I concur with the content of the information contained in the Information Technology section of the Status Report to the Court Nuinber Nineteen. The information provided in this section is accurate to the best of my knowledge. Date: October 27, 2004 Name: Signature on File W. Hord Tipton Interior Chief Information Officer STATUS REPORT TO THE COURT NUMBER NINETEEN November 1.2004 - 9 - Information Technolow STATUS REPORT TO THE COURT NUMBER NINETEEN November 1,2004 Cadastral Survey B. CADASTRAL SURVEY Introduction Cadastral surveys provide assurance that land boundaries for individual Indian and tribal trust lands are identified appropriately. By federal law, surveys of Indian lands are to be performed under BLM’s direction and control. Official surveys, whether preexisting or new, identify the location of land boundaries of Indian trust assets and determine official acreage. The official surveys are integral to realty transactions, resource management activities, litigation support and the federal system of patent, allotment and survey records maintained by BLM. Ownership information, distribution of trust assets, and management of trust accounts may be related to or based upon information recorded in official surveys. Accomplishments and Completions Training The latest LTIC class, attended by 3 1 individuals from BIA, BLM, OST and tribal governments across the country, was held during this reporting period. The attendees were a mix of cadastral surveyors, realty specialist/officers, resource managers, legal counsel, self-govemance specialists, leasing compliance officers/managers, accountants, paralegal specialists, natural resource specialists, public service directors, probate clerks, and agency superintendents. The BLM National Training Center released the third Internet-based self-paced course, dealing with cadastral survey comer point identification. This course contains material related to finding the location of comer points in Indian country and federal lands. Assistance in Interior Reengineering Efforts The BLM Cadastral Indian Program Manager participated in the FTM decisionmaker group implementation team meetings. The team continued to develop a framework to meet Interior’s fiduciary trust responsibilities for Tribes, individual Indians and Alaska Natives. The cadastral elements of the FTM were presented to BLM managers and to the FTM implementation team during this reporting period. Current Status GCDB Data Collection for High Priority Areas BIA, OST, BLM and the four Tribes selected for the GCDB pilot projects to develop a CGIS continue to plan for the implementation of these projects. These four projects are expected to demonstrate how accurate and reliable survey data can be used to improve the management of resources and other trust assets. These projects also are expected to provide documentation of the benefits realized or obstacles encountered in the collection of GCDB data. It is anticipated that data collection for these projects will start during the next reporting period. - 10- STATUS REPORT TO THE COURT NUMBER NINETEEN November 1.2004 Cadastral Survev Interior Indian Trust Lands Boundary Standards (Draft) BIA, BLM, OST and tribal representatives have scheduled their third working group meeting for October 19-2 1 ? 2004, in Nashville, to continue to examine and finalize the land boundary standards, develop an implementation pladconsultation schedule and outline development plans for manuals, handbooks and directives. Training The BLM Cadastral Indian Program Manager and Cadastral Survey Training Coordinator continued to assist the OST curriculum committee and BIA in the development and implementation of future land tenure and boundary management trust training courses. Creation of the Certified Federal Surveyor Program The BLM Cadastral Program staff has consulted with the American Congress of Surveying and Mapping to develop a certification program for non-BLM surveyors. The certification of state licensed and/or registered land surveyors and non-BLM Series 1373 Federal Land Surveyors is expected to enhance survey services under the direction and control of BLM on Indian lands. It is anticipated that this program will be in place during FY2005, and the first surveyor is expected to be certified in FY2006. Delays and Obstacles Communications with Class Members in Cobell v. Norton The BLM cadastral program is affected by the Court orders concerning communications with class members in the Cobell v. Nortorz case. In the process of performing cadastral surveys in support of land transfers, BLM’s cadastral surveyors must communicate in writing with landowners regarding the surveys being performed? therefore, may be required to send the court approved notice together with the survey report. Funding of the Recommendations Outlined in the FTM The BLM Cadastral Survey Program has not been able to obtain clarification on the funding of the recommendations outlined in the FTM related to cadastral surveys. This funding issue may affect BLM’s capability to meet its timeline as proposed in the FTM. This issue is expected to be addressed during the next reporting period. - 11 - STATUS REPORT TO THE COURT NUMBER NINETEEN November 1,2004 Cadastral Survey Disconnection from the Internet The Court-ordered disconnection from the Internet continues to adversely impact the way communications are handled between BLM, BIA and OST, including the way CARS is being implemented. Limited Resources The cost to perform all requested cadastral services would be approximately 64.4 million dollars. The current budget of eight million dollars per year only addresses the most urgent needs. Furthermore, an estimated four to five million dollars in new cadastral requests are generated each year. Assurance Statement I concur with the content of the information contained in the Cadastral Survey section of the Stutus Report to the Court Number Nineteen. The information provided in this section is accurate to the best of my knowledge. Date: October 27,2004 Name: Signature on File Donald A. Buhler Chief Cadastral Surveyor Bureau of Land Management Missing BIA Indian Service Survey Records and Unofficial Survey Records BLM cadastral surveyors often have been able to gather only portions of the records of unofficial surveys conducted by the BIA Indian Service surveyors from the 19'h and 20th centuries, as well as unofficial surveys performed by other federal agencies or their agents. These unofficial surveys are known to exist in at least 12 states and on 42 reservations. Incomplete records can lead to errors in current official surveys and impair the bona fide rights of individual Indians, Tribes and fee land owners. Evidence of unofficial surveys is discovered by BLM surveyors in the course of performing official surveys. Once the existence of on-the-ground unofficial surveys is identified, a search is made for the missing records. BIA has identified a lack of resources and personnel, which has delayed the previously reported development of an inventory of its Indian Service records that relate to land surveys. BLM will continue to search for the records as surveys are performed. - 1 2 - STATUS REPORT TO THE COURTNUMBER NINETEEN Minerals Manapement Service November 1,2004 C. MINERALS MANAGEMENT SERVICE Introduction Minerals Revenue Management, an MMS program, is responsible for collecting, accounting for, and distributing mineral revenues from both federal and Indian mineral leases, and for evaluating industry compliance with laws, regulations and lease terms. MRM maintains reported information and distributes revenues at the lease-level. BIA maintains individual Indian ownership records that are used to provide information to OST for disbursement of the lease revenues to individual Indian beneficiaries. Current Status Indian Oil Rule As previously reported, the proposed rule for valuing crude oil produced from Indian leases is being considered. Issues associated with the proposed rule remain under review by SOL. A timeline for implementation of the new rule has not been established. Payment Receipt Date Verification Enhancements to the MRM financial system remain on hold as MRM is preparing for an upgrade to its PeopleSoft software. The upgrade has been rescheduled and is expected to be completed on November 15,2004. The two-week delay is necessary to enable the auditors to complete their audit of the FY2004 financial statements with a minimum of disruption to MRM’s work. As previously reported, MRM expects to resume enhancement efforts on the remaining three scenarios after the upgrade. Following the PeopleSoft upgrade, MRM expects to be able to identify actual occurrences of incorrect information. Once determined, the information is expected to be provided to BIA and OST in order to make any necessary corrections to beneficiary accounts. Once the software changes are implemented, MMS expects to provide a completion date for this project. Document Procedures Regarding Royalties Disbursement As previously reported, MMS is working with BIA and OST to prepare Memoranda of Understanding documenting inter-bureau procedures regarding information exchanges associated with mineral revenue disbursements. Previously, MMS provided BIA and OST each a draft MOU containing proposed formats along with MMS-relevant mineral revenue disbursement procedures. MMS also requested that BIA and OST provide a point of contact to help expedite the review and execution of both MOU. The effective date of the OST/MMS MOU was August 13, 2004. MMS continues to await BIA’s response. The target date for completing the BINMMS MOU remains December 2004. - 13- Assurance Statement I concur with the content of the information contained in the Minerals Management Service section of the Status Report to the Court Number Nineteen. The information provided in this section is accurate to the best of my knowledge. Date: October 20, 2004 Name: Signuture on File Cathy J. Hamilton Chief of Staff Minerals Revenue Management Minerals Management Service STATUS REPORT TO THE COURTNUMBER NINETEEN Minerals Management Service November 1,2004 - 1 4 - STATUS REPORT TO THE COURTNUMBER NINETEEN Office of Historical Trust Accounting November 1,2004 D. OFFICE OF HISTORICAL TRUST ACCOUNTING Introduction OHTA was established by Secretarial Order No. 3231 on July 10,2001, and is charged with planning, organizing, directing and executing the historical accounting of IIM and tribal trust accounts. Current Status Accounting Standards Manual Periodic revisions are routinely made to the Accounting Standards Manual. These revisions include such things as adding a table showing corporate documentation required from the various professional firms hired by OHTA to perform account reconciliations. Most recently, updates to the manual have been issued in January, May and July 2004. Judgment IIM Accounts OHTA continues to perform historical accounting procedures on Judgment I N accounts. During this reporting period, OHTA completely reconciled an additional 6,53 1 accounts in Subgroups,’ as follows: 1 18 accounts in Subgroup A, 4,853 accounts in Subgroup B, 349 accounts in Subgroup C, and 1,2 1 1 accounts in Subgroup D. OHTA has completed quality control review of the 479 accounts completely reconciled during the previous reporting period. Also, quality control review was completed on 3,263 accounts completely reconciled during this reporting period, leaving 3,268 accounts from Subgroup B to be reviewed during the next reporting period. As more data-particularly from the “Paper Era”-is collected and keyed into the transaction listings, some accounts are reclassified into Subgroups different from their original classification. The following tables present the total number of Judgment I1M accounts in each Subgroup reconciled as of September 30, 2004, including accounts reconciled in previous reporting periods. The tables also report balances and throughput. Subgroup A contains Judgment IIM accounts with receipt deposit(s) and monthly interest postings through December 3 1,2000, and no disbursement of funds. Subgroup B contains only Judgment IIM accounts with receipt deposit(s) and monthly interest postings with a single disbursement. Subgroup C contains only Judgment IIM accounts with receipt deposit(s) and monthly interest postings with multiple disbursements. Subgroup D contains accounts with both (1) Judgment transactions with receipt deposit(s) and monthly interest postings, and ( 2 ) land- based transactions (income from land interests owned by the account holder). - 1 5 - STATUS REPORT TO THE COURTNUMBER NINETEEN November 1,2004 Judgment IIM Accounts Open as of 12/31/00 Number of Accounts: 33,205 Balances Total: $80,839,699 Completely Reconciled Number of Accounts $ Balances Reconciled $ Throughput* Reconciled Partially Reconciled Number of Accounts $ Balances $ Throughput* Reconciled $ Throughput to be Reconciled** Paper Era Reconstruction Number of Accounts*** $ Balances to be Reconciled $ Throughput to be Reconciled** Status of Work Subgroup A 17,803 $50,915,830 $5 1,178,252 0 __ -- Subgroup B $6,796 $1 1,347 - 1 6 - Office of Historical Trust Accounting Throughput* Total: $140,694,346 Subgroup D 795 $256,524 $9,948,752 3,525 $7,337.813 $2,932,937 $20,499,896 Subgroup C $3,415 $17,682 Totals 18,598 $5 1,172,354 $61,127,004 3,53 1 $7,337,813 $2,943,148 $20,528,925 1 1,076 $22,329,532 $56,095,269 STATUS REPORT TO THE COURT NUMBER NINETEEN November 1,2004 Judgment IIM Accounts Open as of or after 10/25/94 but Closed Prior to 12/31/00 Number of Accounts: 47,334 Balances Total: $0 Throughput* Total: $499,956,704 Completely Reconciled Number of Accounts $ Balances Reconciled $ Throughput* Reconciled Partially Reconciled Number of Accounts $ Balances $ Throughput* Reconciled $ Throughput to be Reconciled* * Paper Era Reconstruction Number of Accounts* * * $ Balances Reconciled $ Throughput to be Reconciled *Throughput is defined as the sum of the receipts and disbursements in the Electronic Era portion of an account. ** Throughput relating to respective accounts to be reconciled. *** Distribution of reconstructed Paper Era accounts unknown. The majority of the remaining Judgment IIM accounts (as well as some Per Capita IIM accounts) require conversion of transaction data recorded in manual ledgers into electronic format. As of September 30, 2004, OHTA has searched approximately 2,400 boxes of stored records for manual ledgers required to complete the account history for Judgment and Per Capita IIM accounts that originated in the “Paper Era.” Approximately 18 1,000 transactions for 20,000 accounts have been located and entered into electronic format as a result of this effort. -- $288,907,4 17 Subgroup A NA NA NA NA NA NA NA Subgroup B 1 1,085 -- $62,991,894 3,037 -_ $4,765,465 $15,897,357 - 17- Office of Historical Trust Accounting Subgroup C 503 _- $4.653,502 1,037 -- $2,179,026 $6,894,453 Subgroup D s11 -- $8,677,666 7,893 -- $10,075,470 $94,914,454 Totals 12,099 -- $76,323,062 1 1,967 -- $17,019,961 $1 17,706,264 23,268 STATUS REPORT TO THE COURTNUMBER NINETEEN Office of Historical Trust Accounting November 1,2004 Per Capita IIM Accounts OHTA continues to perform historical accounting procedures on Per Capita IIM accounts. During this reporting period, OHTA completely reconciled 2,203 accounts in subgroup^,^ as follows: 319 accounts in Subgroup A, 1,520 accounts in Subgroup B, 298 accounts in Subgroup C, and 66 accounts in Subgroup D. OHTA has completed quality control review of all accounts that were completely reconciled in this and previous reporting periods. As more data-particularly from the “Paper Era”-is collected and keyed into the transaction listings, some accounts are reclassified into Subgroups different from their original classification. The following tables present the total number of Per Capita IIM accounts in each Subgroup reconciled as of September 30,2004, including accounts reconciled in previous reporting periods. The tables also report balances and throughput. Note: This section continues on the next page. Subgroup A contains Per Capita IIM accounts with receipt deposit(s) and monthly interest postings through December 3 1, 2000, and no disbursement of funds. Subgroup B contains only Per Capita IIM accounts with receipt deposit(s) and monthly interest postings with a single disbursement but do not necessarily disburse the entire balance of the account. Subgroup C contains only Per Capita 11M accounts with receipt deposit(s) and monthly interest postings with multiple disbursements but do not necessarily disburse the entire balance of the account. Subgroup D contains accounts with both (1) Per Capita transactions with receipt deposit(s) and monthly interest postings, and (2) land-based transactions (income from land interests owned by the account holder). - 18- STATUS REPORT TO THE COURTNUMBER NINETEEN November 1,2004 Per Capita IIM Accounts Open as of 12/31/00 Number of Accounts: 9,013 Balances Total: $69,486,684 Completely Reconciled Number of Accounts $ Balances Reconciled $ Throughput* Reconciled Partially Reconciled Number of Accounts $ Balances $ Throughput* Reconciled $ Throughput to be Reconciled** Paper Era Reconstruction Number of Accounts*** 9 Balances to be Reconciled $ Throughput to be Reconciled Status of Work Office of Historical Trust Accounting Throug..put Total: 98, 08,350 Subproup A 1,465 $10,882,415 $12,296,769 Subgroup C 78 $265,139 $690,834 727 $8,854,166 $9,8 17,271 $4,065,235 Subgroup B 165 $776,3 17 $1,279,15 1 488 $5,871,985 $5,699,205 $1,870,625 - 1 9 - Subgroup D 54 $60,603 $2 15,244 5,348 $42,397,434 $36,175,963 $25,668.196 Totals 1,762 $1 1,984,474 $14,48 1,998 6,563 $57,123,585 $5 1,692,439 $3 1,604,056 688 $378,625 $429,857 STATUS REPORT TO THE COURTNUMBER NINETEEN November 1,2004 Office of Historical Trust Accounting Per Capita IIM Accounts Open as of or after 10/25/94 but closed prior to 12/31/00 Number of Accounts: 10,020 Throughput* Total: $93,733,222 Balances Total: $0 Completely Reconciled Number of Accounts $ Balances Reconciled $ Throughput* Reconciled Partially Reconciled Number of Accounts $ Balances $ Throughput* Reconciled $ Throughput to be Reconciled* * -- $813,394 * Throughput is defined as the sum of the receipts and disbursements in the Electronic Era portion of Totals 3,493 -_ $38,595,416 4,4 19 -- $19,842,456 $34,481,956 2,108 Paper Era Reconstruction Number of Accounts*** $ Balances to be Reconciled $ Throughput to be Reconciled an account. ** Throughput relating to respective accounts to be reconciled. *** Distribution of reconstructed Paper Era accounts unknown. Land-Based IIM Accounts During this reporting period, OHTA completed its activity to collect supporting documentation for transactions in the “Electronic Era” that exceed $100,000 and for randomly drawn transactions from a randoin sample of land-based IIM accounts. Also, OHTA completed its accounting and reconciliation work on the transactions for which supporting documents were Submouu A NA NA NA NA NA NA NA Subproup C 420 -- $5,565,619 789 -_ $5,300,416 $9,096,861 Subgroup B 3,061 -- $32,871,650 91 1 -- $3,675,570 $8,357,656 - 20 - Subgroup D 12 _- $158,147 2,719 -- $10,866,470 $17,027,439 STATUS REPORT TO THE COURT NUMBER NINETEEN November 1,2004 Office of Historical Trust Accounting collected. A final report on this work is expected to be available by the end of the next reporting period. Dollars $67,900,000 (12,407,2651 SS,492,73 5 6,293,605 /23,325,47 1) 38,460,869 (67,282) (3,47 1,547) $34,922,040 Special Deposit Accounts Clean-Up Project The SDA Clean-Up Project continues to identify the proper ownership of residual funds in SDA. The objective is to identify and to transfer or distribute funds held in SDA to proper IIM accounts, tribal accounts, or non-trust owners. The results of the SDA Clean-Up Project as of September 30,2004, are provided in the following table. SDA as of December 3 1, 2000 SDA as of January 1, 2003 OHTA continues to coordinate its SDA work with BIA and OST. During this reporting period, OHTA prepared SDA materials to clean up SDA at 73 agency, regional and tribal offices. (282) 13,230 -- SDA Resolution Progress Net SDA resolved from January 1, 200 1, through December 3 1, 2002 (eight quarters) Interest posted on undistributed SDA and additional collections (net of disbursements thereof, including collections in prior periods) credited to SDA from January 1, 2003, through June 30,2004 SDA resolved from January 1, 2003, through June 30,2004 (six quarters) SD.4 that remain to be resolved as of June 30, 2004 - Reported in the Stutus Report to the Court Number Eighteen Interest posted on undistributed SDA and additional collections (net of disbursements thereof, including collections in prior periods) credited to SDA during the reporting period ending September 30, 2004 SDA resolved from July 1, 2004, through September 30, 2004 SDA remaining to be resolved as of September 30, 2004 - 21 - Number of Accounts 21,415 (3,687) 17,728 __ /4,2 16) 13,512 - Total $26,797,018 Documents Loaded into Accounting Reconciliation Tool 19 1,554 25,958 2 1 7 3 12 STATUS REPORT TO THE COURT NUMBER NINETEEN Office of Historical Trust Accounting November 1,2004 In the Status Report to the Court Number Eighteen, OHTA reported that seven RAF were still pending as of June 30, 2004. Further research has been conducted on the associated SDA, and new RAF that address the original seven RAF have been submitted for routine processing. The following table reflects the SDA dollars resolved by type of recipient from January 1, 2003, to September 30,2004. Recipient data for the period from January 1, 2001, to December 3 1, 2002, are not yet readily available. Recipients in the “other” category include transfers to Miscellaneous Receipts Account at Treasury, account reclassifications, transfers to the Federal Finance System, etc. Dollars resolved from January 1 , 2003, to September 30,2004 Paid to Non- Indian Third Parties $3,498,888 Other $4,601,300 Transfers to Tribal Accounts $8,565,825 Transfers to IIM Accounts $10,131,005 Irnaping and Codinp Promess Imaging/Coding - Indian Trust Documents OHTA’s imaging and coding efforts continued during this reporting period. As of September 30, 2004, OHTA had completed the following imaging and coding work. Work results from July 9, 2003, to June 30,2004 - Reported in the Stutus Report to the Court Number Eighteen W-ork results from July 1, 2004, to September 30,2004 Cumulative results from July 9, 2003, to September 30, 2004 Documents Coded 200,937 17,126 ~~ 2 18,063 Delays and Obstacles Three factors affected OHTA’s ability to search for trust records necessary to its ongoing historical accounting projects. Because of Interior’s priority to preserve and protect Indian trust-related records, OTR continues to relocate records &om Albuquerque to the AIRR in Lenexa, KS. Records being prepared for shipment or in transit were unavailable to OHTA during this reporting period. Pages Scanned 5,238,936 952,872 6,191.808 - 22 - Assurance Statement 1 concur with the contents of the information contained in the Office of Historical Trust Accounting section of the Status Report to the Court Number Nineteen. The information provided in this section is accurate to the best of my knowledge. October 27,2004 Date: Name: Signature on File Bert T. Edwards, Executive Director Office of Historical Trust Accounting STATUS REPORT TO THE COURTNUMBER NINETEEN November 1,2004 Office of Historical Trust Accounting Similarly, records being processed by NARA at the AIRR were unavailable. During this reporting period, OHTA reduced its contractor imaging staff in Albuquerque by 74% in preparation to move its imaging operations to the ATRR in Lenexa, KS. This staff change reduced the volume of documents imaged and coded. OHTA expects imaging to be fully operational in the ATRR by the end of the next reporting period. As reported in the Status Report to the Court Number Eighteen, OHTA’s access to OTR records in Albuquerque was limited because of court orders in Pueblo of Laguna v. United States, Jicarilla Apache v. United States, and Osage Nation and/or Tribe of Indians of Oklahoma v. United States. During this reporting period, representatives of the Tribes involved in these cases continued to review records and select documents for production. Once the reviews and subsequent document productions are complete, OHTA again should be able to access these documents. - 23 - STATUS REPORT TO THE COURTNUMBER NINETEEN Office of the Special Trustee for American Indians November 1,2004 111. OFF’TCE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS Introduction The Office of the Special Trustee for American Indians was created by the Amcrican Indian Trust Fund Management Reform Act of 1994. The 1994 Act provides direction to the Department of the Interior on accounting for Indian tnist fimds and reforming the operation of the Indian fiduciary trust. The Spccial Trustee’s responsibilities under the Act include creating a comprehensive stratcgic plan for the operation of the trust and providing ovcrsight of the accounting for lndian trust funds and the reform of the trust. In addition to the role of the Special Trustee set forth in the Act, the Secretary assigned other duties to the Spccial Trustee, including accounting and investing of collected funds, developing a risk management program, nianaging a reenginecring effort of the trust business processes and creating an audit and review function to grade the performance of various Interior bureaus and offices and Tribes that perform fiduciary trust functions. Special Trustee’s Observations The following lists the status ofvarious projects that are underway or completed in the Office of the Special Trustee for American Indians. Trust Initiatives for the 21’‘ Century I am pleased to report that the draft “To-Be” Model was completed and that the major components were accepted by the Secretary during this reporting period. Two issues remain open as a result of the Secretary’s review. One is the issue of permitting direct pay to bcncficiaries by lessees or other users of allotted land. The second is the growing issue of how to treat non-trusdfee interests when lcasing parcels of trust land. Tt is expected that these two issues will be resolved during the next reporting period. Since the “To-Bc” Model is now the final design model for managing the tnist, it is now referred to as the Fiduciary Trust Model. Notice of the adoption of the FTM has been given to employees of Interior. Efforts to hirc trust officers continued during this reporting period. OST extended offers to an additional ten individuals to serve as trust officers. Nine ofthese offers haw been accepted. The prospective trust officers are undergoing employment revicws prior to being hired. Twcnty-five trust officers and 14 related support starf have been hired as or the end of the reporting period. The implementation plan for the FTM continues to be developed, with the full plan scheduled to be completed during ihe next reporting period. Several key improvements are in progress, including development of a commercial lockbox system for collection of revenue from trust lands, establishment of a call ccnter for beneficiary information and standardization of trust practices across Interior bureaus and offices. - 24 - STATUS REPORT TO THE COURTNUMBER NINETEEN Office of the Special Trustee for American Tndians November 1,2004 Trust Review and Audit OTRA continued its work on a draft trust examination handbook. It is currently being used as a guide to review the BIA regional offices, agencies and Tribes in the two Oklahoma regions. The handbook will continue to be modified as necessary, while it is used during future trust examinations. Findings and recommendations regarding the Section 139 Tribes were received by thc Special Trustee during this reporting period. Onc Tribe was determined not able to perform its fiduciary trust functions in a manner acceptable to Interior. That Tribe was provided assistance with its record management and IT Iunctions, and its progress will be monitored. A further review is expected during the next fiscal year to check the progrcss of the Tribe in its trust management functions. The findings and recommendations for the Section 139 Tribes are expected to be discussed with the Secretary during the next reporting period. Appraisals A contract was signed between OST and Interior’s Appraisal Services Dircctorate. This contract places responsibility for oversight and management of OST appraisal services under the Directorate. It is expected that this contract will enhance the management of the OST appraisal program. Investment Contract for Pooled IIM Funds During this reporting period, a contract was entered into with an investmcnt management firm for managemen:nt of the IIM pool of funds. It is expccted that the contract will enable OST to continue achieving high returns for money invested on behalf of individual Indian account holders. The contracting firm handles very large investments for businesses and individuals and has particular expertise in the U.S. securities markets. Conclusion I am pleased with the progress being made in completing the FTM and the implcmentation plan. As is discussed in other areas of this Rcport, the IT systems and applications also are moving forward. It remains critically important to everyone’s success to have appropriate computer applications to help manage the enormous amount of data rcquired for the trust. Management of the trust continues to be difficult as a result of ofices and bureaus performing trust Functions not having access to the Internet. Not only does it impede the work of Interior, it also denies the opportunity to beneficiaries to access their accounts and other information by using this tool. The loss of productivity from lack of access to the Tnternet appears to far outweigh the current risk of using the Internet. -25 - STATUS REPORT TO THE COURT NUMBER NINETEEN November 1,2004 Office of the Special Trustee for American Indians Assurance S taternent The comments and observations are provided by the Special Trustee for American Indians and reflect the opinion of thc Special Trustee only. Date: October 28, 2004 Name: Signature on File Ross 0. Swimmer Special Trustee for American Tndian - 26 - Trust Review and Audit STATUS REPORT TO THE COURT NUMBER NINETEEN November 1.2004 A. TRUST REVIEW AND AUDIT Introduction OTRA reports directly to the Special Trustee for Amcrican Indians. OTRA was created by OST as a response to trust initiatives developcd during the tribal consultation process of 2002. OTRA conducts performance audits of Interior entities as wcll as Tribes that manage fiduciary trust activities. These reviews are planned to result in a performancc rating. OTRA also conducts audits and reviews that may be requested by individual account holders, Tribcs,, the Special Trustee and Interior staff. Priorities for review are determincd by the locations with the greatest volume of trust activities. Accomplishments and Completions Annual Interior Indian Trust Funds Financial Statement Audit The Indian trust funds financial staterncnt audit, required by thc American Indian Trust Fund Management Reform Act of 1994, is conducted by independent third party under OIG management. The FY2003 audit rcport was issued by OIG. OST has completed the inailing of notices to the account holders, advising them that the annual audit has been completed and is available for review. Annual Audit Corrective Actions During this reporting period, recommendations wcre implemented from a prior OIG audit (Q-IN- OST-0025-2004) related to making improvements to the security screening process for new employees and contract personnel. Current Status Compliance Reviews Compliance reviews result fiom inquiries by beneficiaries or other interested groups and usually question the adequacy or status of trust and fiduciary activities of Tnterior. OTRA resolves these inquiries by correspondence, field examinations, special reviews or by referral to the responsible agency. During this reporting period, twclve cases were in inventory. Of the twelve, field work is in process for ten. Two cases were completed and closed. These reported numbers change as OTRA inquiries are ongoing and issucs are resolved by corrcspoiidence and by other means as stated above. Examinations of Self-Governance Demonstration Tribes The FY2004 Tnterior appropriations act provided for conditional exemption for ten self- governance Tribes (three individual Tribes and a consortium of seven Tribcs) froin the impacts of trust reform and reorganization. Howevcr, their exemptions are conditioned upon their operating trust programs in accordance with the same fiduciary standards to which the Secretary - 27 - Trust Review and Audit STATUS REPORT TO THE COURT NUMBER NINETEEN November 1,2004 is held and satisfying the Secretary that they have the capability to do so. Tnist evaluations were conductcd, and final reports were issued. The frnal reports included a finding of the Tribes’ capacity to perform trust programs as required by the appropriations act and any corrective action needcd. These reports were received by the Tribes and the Special Trustcc during this reporting period, and the findings and recommendations are expected to be discussed with the Secretary during the next reporting period. One Tribe was dctcmiined not to be meeting performance standards regarding records and IT management. Corrective action plans for deficiencies or weaknesses have been developed for all the Tribes and implementation will be monitorcd. Tndian Trust Rating System Development of the rating system continues, following a busincss exam model used by the Office of the Comptroller of the Currency, with the assistance of a former senior cxamincr from that office. The purpose of the rating system will be to measure performance of fiduciary trust activities accomplishcd in whole or part by the respective Tnterior offices or the Tribes that have compacted or contracted various activities. A status report on the Indian trust rating system was provided to the TESC during this reporting period. Also, pilot tests of the new examination process werc conducted with Tribes and BIA agencies within the Southern Plains Region and the Eastern Oklahoma Region. The examination process and procedures will stay in draft while field tcsting, discussion with Interior entities and consultation with Tribes contiiiues. Additional examinations are schedulcd for the Eastern Oklahoma Region during the next reporting period. The planning and development of a trust examination handbook is ongoing as OTRA tests the processes for examining trust fiduciary operations. The handbook will continue to be reviscd based on the pilot testing of the exam process in the field. Delavs and Obstacles Lack of Internet access impedes work processes and the ability to communicate effectively, both internally and externally. - 2 8 - STATUS REPORT TO TIiE COURT NtJMBER NlNETEEN November 1.2004 Trust Review and Audit Assurance Statement I concur with the content of the information contained in the Trust Review and Audit section of the Sfatzts Report to the Court Number Nineteen. The infomation provided in this section is accurate to the best of my knowledge, Date: October 22,2004 Name: Sigtiature on File William P. Ragsdale Director, Office of Trust Review and Audit Office of the Special Trustee for American Itidims - 2 9 - STATUS REPORT TO THE COlJRT NUMBER NINETEEN November 1,2004 Records Management B. OST-OFFICE OF THE CHIEF INFORMATION OFFICER 1. RECORDS MANAGEMENT Introduction The Office of Trust Records was established in 1999 to develop and implement a program for the economical and efficient inanageinent of trust records, consistent with the 1994 Act, the Fcdcral Records Act and other statutes and iniplcnicnting regulations. The OTR records management program has been developed and implemented, and continues to evolvc, to ensure that necessary Indian records are maintaincd, records retention schedules are consistent with retention needs, and records are safeguarded throughout their life-cycles. Accomplishments and Completions American Indian Records Repository During this reporting period, approximately 23,300 boxes of indexed inactive Indian records were moved to the AIRR in Lenexa, KS, both from OTR’s facilitics in Albuquerque and from the Lee’s Summit FRC in Kansas City, MO. A total of approximately 64,200 indexed boxcs are located in the AIRR, as of the end of this reporting pcriod. Records Indexing Project A total of86,868 boxes had been indexed by the end of this reporting period. Priority for the indexing of boxes of Indian records continues to be given to thosc boxes of records potentially responsive to tribal trust litigation, and includes boxes required by OHTA for litigation discovcry requests. With the conclusion of the Lee’s Summit portion of the indexing project in July 2004, OTR’s indexing contractor moved its work site from Kansas City, MO, to Lenexa, KS (the Lenexa Annex) in order to be located closer to the AIRR. Approximately 8,700 boxes of records were moved fiom Albuquerque to Lenexa Tor indexing. Also, during this reporting period, OTR relocated to Lenexa approxirnatcly 11,700 boxes of records fiom the GSA Indian Trust Accounting Division warehouse in Lanham, MD. Indexing of these boxes also will be conducted at the Lenexa Anncx. All indexed boxes then will be stored in thc AIRR. It is anticipated that the Albuquerque portion of the indexing project will conclude during the next reporting pcriod, and all indexing will occur in Lenexa thereafter. Haskell Indian Nations University Records Management Certificate Program As reported in the Slcrlus Report to the Court Number Ffteeen, Intcrior and NARA agreed to develop an archival and records management studies program at Haskell Tndian Nations University in Lawrence, KS. Pursuant to this agreement, the first records management class was - 30- STATUS REPORT TO THE COURT NUMBER NINETEEN November 1,2004 Records Management offcrcd to HaskeIl students as classes began in September. OTR is providing the instructor for the fifteen students enrolled in the class this semester. Training OTR provided records management training for 355 BTA/OST-identified records contacts during this reporting period. Tn FY2004, OTR trained 1,397 BIA/OST eniployees and 35 tribal employees. Equipment Purchases During FY2004, OTR provided more than 400 items or fireproof filing equipment to BIA and OST programs and 13 items to one Tribc. During an evaluation of this Tribe’s ability to manage trust functions, as required in its compact, it was noted that the Tribe was in need of such equipment . Records Movement During this reporting period, revised policy and guidance for requesting approval to move inactive records was implemented. Pursuant to this guidance, Interior bureaus and offices that have completed certifications regarding Indian trust records now may move ccrtified non-trust records without prior approval from thc Associate Deputy Secretary. Instead, disposition of non- trust records once again is governed by NARA-approved record retention schedules. Bureaus and offices still arc required to submit a move plan and receive approval from the Assistant Deputy Secretary, acting on behalf of the Associate Deputy Secretary, before moving trust records. Additionally, the policy and guidance delegates authority to OTR for approving move plans submitted by BIA and OST, in that all of their inactive records are to be moved to the A M under OTR’s direction. Records Management liaison During this reporting period, OTR filled the records management specialist position in the BIA Ccntral Office. Current Status Safeguarding Records A contract was awarded on September 30,2004, for scrvices to assess and prescribe treatment for records that were or may have been damaged or contaminated by mold, mildew, mouse droppings, and other adverse elements. During the next rcporting period, OTR and the contractor expect to concentrate on boxes requiring remediation that are located in OTR facilities in Albuquerque. As of the end of this rcporting period, OTR has 269 boxes that need to bc assessed. - 31 - STATUS REPORT TO THE COURT NUMBER NINETEEN November 1,2004 Records Management Record Keeping Requirements NBC completed the identification of all offices under the Office of the Secretary that maintain Indian fiduciary trust records. NBC will work with these offices to perform records inventories and to update records retention schedules, as appropriate. This will be an ongoing project. Ultimately, NBC is expected to updatc record schedules, which will be submitled to the Archivist of the United States for approval. The TribalFederal Trust Records Management Work Group met on August 24,2004, in Nashville. The Work Group continued discussions on tribal responsibility for creation and maintcnaiice of trust records for contractedcompacted trust programs. It is anticipated that a letter to all tribal leaders will be sent in the next reporting period providing an update and soliciting comments on the work of the group. Site Assessments During this reporting period, OTR completed records management site assessments of BIA programs located at Pawnee Agency, Southem Utc Agency, Laguna Agency, Northern Pueblos . Agency, Anadarko Agency, Shawnee Agency, Horton Field Office and Southern Plains Regional Office, and completed site assessments at the OST field offices located at Pawnee Agency, Anadarko Agency, Shawncc Agency, Horton Field Office and thc Southern Plains Regional Office. Written reports are expected to be provided to each office in the next reporting period. Records Retention Schedules Draft records retention schedules for sixteen non-fiduciary-trust BIA programs were submitted for comment to NARA and BTA. After comments are received, OTR will revise Lhc schedules, as necessary. Delays and Obstacles Lack of lntcrnet access continues to hinder OR’S ability to provide access to the record indcx database for authorized users of the rccords. If Internet access were available, autliorized researchers could conduct their searches remotely from their respective work sites and only visit OTR when necessary to inspect specific boxes. Use of the limited space in OTR facilities continued to affcct Om’s daily work activities as OTR staff attempted to rcspond to requests for boxes of records from federal attorneys, plaintiffs’ tribal trust litigation attorneys and their contractors, and federal agencies and their contractors. Due to tribal trust litigation court orders and agreements regarding discovery, several thousand boxes of indexed records must remain in Albuquerque. Otherwise, these boxes could be moved to Lenexa and discovery could take place in the A M , a state-of-the-art archive facility. - 32 - STATUS REPORT TO THE COURT NUMBER NINETEEN November 1,2004 Assurance Statement I concur with the content of the infomiation contained in the Records Management section of the Status Report to /he Court Number Nineteen. The information provided in this section is accurate to the best of my knowledge. Date: October 28,2004 Name: Signature onJile Ethel J. Abeita Director, Office of Trust Records Office of the Special Trustee for American Indians - 33 - Records Management STATUS REPORT TO THE COURTNUMBER NINETEEN Trust Business Process Modelinn November 1.2004 C. TRUST ACCOUNTABILITY 1. TRUST BUSINESS PROCESS MODELING Tntroduction Interior is working to build a highly effectivc fiduciary trust services organization by implementing the business objectives contained in the CTM. Those business objectives are being used to guide implementation of the Fiduciary Trust Model. The FTM, formerly known as the “To-Be” Model, is structured around the following major trust business processes: Financial Operations - To assure the timely identification, collection, dcposit, invcstmcnt and distribution of income duc or hcld on behalf of tribal and individual beneficiary account holdcrs. Beneficiary Relationship Development and Management - To provide beneficiaries with accurate and timely trust asset information and counseling on asset use and management by incorporating the Secretary’s Trust Principles and the concepts outlincd in the CTM into the process. Ownership - To ensure the inventory of trust or restricted ownership interests is current, accurate and accessible. This proccss cnsures the identification of all beneficiary ownership interests for accurate and timely distribution of income, as well as distribution of trust assets to current and future beneficiarics. Land and Natural Resources Planning - To provide beneficiaries with the support necessary to develop wide-area plans that enhance, and expedite thc management and utilization of trust land and natural rcsources. Land and Natural Resources Use and Management - To ensure lands are productive and managed in accordance with accepted conservation and prcservation practices. Land use is monitored for compliance with and enforcement of established agreements to protect trust assets. When implemented, the FTM should transform the current trust business processes into more cficient, consistent, integrated and fiscally responsible business processes that meet the needs and priorities of the beneficiaries. Accomplishments and Completions The major components of FTM were accepted by Secretary Norton during this reporting period, except for the provisions concerning direct pay and accounting for fee owners’ interests in trust parcels. On August 26,2004, the Special Trustee and the Assistant Secretary- Indian Affairs issued a joint memorandum to all AS-LA, BlA and OST crnployees announcing the approval. - 3 4 - Trust Business Process Modeling STATUS REPORT TO THE COURT NUMBER NJNETEEN November 1,2004 Interior began a plan to implement thc FTM in three phases. TPMC coordinated and facilitated implementation team meetings during this reporting period and identified eight sub-projects for Phase 1. Teams and project leaders have been established for the sub-projects. Detailed project plans are being dcveloped by each team to identify significant milestones and ensure that ongoing trust initiatives and FTM initiatives are coordinated. The developmcnt of these plans will complete Phase 1, which is expected in thc next reporting period. Current Status Tmplementation of the FTM is a collaborative effort and is integrated with other trust reform initiatives. TPMC has responsibility to coordinate implementation and pilot projects. Tnitial implementation tasks include developing operating procedures, identifying organizational dependencies, coordinating systems requirements, developing training, and creating interim solutions until full implementation can bc achieved. TPMC expects to continue coordinating the universal support functions that provide the records management rcquirernents, policies and procedures, internal controls, risk management, training, workforce planning, and 1T systems required to implement thc FTM within each of the Phase 1 project schedules and to consolidate those functions to leverage available resources. TPMC continues to participate in the Lntcrior-wide effort to identify functional requirenients for the IT systems that support implementation and operation of the FTM. A contract was awarded to assist TPMC in implementing thc trust call center prototype for OST- Field Operations. The nationwide, toll-free call center is expected to enhance beneficiaries’ access to information regarding their trust assets. The prototype also is designcd to allow Tnterior to capture the frequency and types of calls so that the prototype can laler be expanded into a filly operational Trust Beneficiary Relationship Management Systcm. The caI1 center prototype is expected to be deployed in December 2004. Delays and Obstacles 0 Major obstacles affecting the ability of Interior to build a trust services delivery model include: lack of Internet access, sheer complexity of reengineering the existing trust business processes to achievc integrated and consistent business processes. - 35 - Trust Business Process Modeling Assurance Statement I concur with thc content of the information contained in the Trust Business Process Modeling section of the Status Report to dze Court Number Nineteen. The infomation provided in this section is accurate to the best of my knowledge. Date: November 1,2004 Name: Signature on File D. Jeff Lords Deputy Special Trustce, Tnist Accountability Office of the Special Trustee for Amcrican Indians STATUS REPORT TO THE COURTNUMBER NINETEEN November 1,2004 - 3 6 - STATUS REPORT TO THE COURT NUMBER NINETEEN November 1,2004 Trust Data Quality and Integrity 2. TRUST DATA QUALITY AND INTEGlUTY Tntroduction The success of trust reform depends, in part, on the accuracy of data generated from the maintenance of trust assets, ownership of trust assets, distribution of trust income, and management of trust accounts. The DQ&l project focuses on accomplishing three initiatives: (1) validating/correcting current CDE to their respective source documents, (2) implementing Post-QA review processes which will help ensure that on-going updates to CDE remain accurate, and (3) providing trust transaction and real property asset statements to beneficiaries, after CDE validatiodcorrection has been completed for a location. CDE arc dcfined as those trust data elements that are needed to provide: (I) timely and accurate payments to beneficiaries, (2) timely and accurate transaction listings and asset inventories to beneficiaries, and (3) effective management of thc assets. Examples of CDE are beneficiary name, account number, tract identification number, and land ownership interests. Accomplishments and Completions During this reporting period, TPMC: Completed CDE validation on an additional 40% of the 5,882 Anadarko Agency land tracts, bringing the total completed to 99%. Completed scanning of trust documents necessary to pcrfonn CDE validatiodcorrection for the Horton Agency and Shawnee Field Office. Conducted DQ&I agency operations assessinents at the Northern, Southem, and Central California Agencies. The purpose of these assessments was to (1) collect information pertaining to the trust systems used, (2) quantify the voIume of transactions processed, (3) identify predominant sources of trust income, and (4) identify backlogs in the processing of trust rcfated documents. This information will be used for planning the implementation of the DQ&T project at these locations. In addition, as reported by OST’s contractors, the following assigned tasks, which eliminated or rcduced backlogs, were completed during this rcportiiig period: Encoded 68 additional Pima Agency probate orders into LRMS. 0 Encoded the remaining 1 1 1 Alaska Region land title chain sheets into the land title system, which completed 4,997 land chain sheet encoding tasks. At the instruction of the BlA Alaska Region, the balance of the 5,063 land title chain sheets were returned lo the region due to track status changes and encoding complexity. - 37 - STATUS REPORT TO THE COURTNUMBER NINETEEN Trust Data Quality and Tntegrity November 1,2004 Current Status The DQ&T project was expanded to the Pawnee Agency, Horton Agency, and Shawnee Field Office. Currently, the DQ&I project is being conducted at: (1) SPRO-LTRO Tor all SPRO agencylfield office locations (Anadarko Agency, Concho Agency, Pawnee Agency, Horton Agency, and Shawnee Field Officc), (2) GPRO-LTRO for the Pine Ridge Agency, (3) Pima Agency and (4) PRO-LTRO. Implementation of the Post-QA review process at ENA continues to be deferred until new office space a1 that location is made available. During the latter part of the rcporting period, seven contractor personnel received land title system write-access authority for the SPRO. This will allow the contractor to encode certain CDE corrections for SPRO-LTRO. Also, during this reporting period, the contractor continued to support: 0 Preparation of Concho Agency oil and gas lease assiplent abstracts for producing leases. At the end of the reporting period, an additional 23 1 out of 657 abstracts had been prepared. To datc, 39 1 abstracts have been prepared. 0 Encoding Pine Ridge Agency probate orders that reverse escheated interests into the land title system. At the end of thc reporting period, an additional 281 out of 1,095 probate orders had been encoded. To date, 756 probate orders have been encoded. ILCO assumed the responsibility for completing the encoding of the remaining 339 probatc orders. Encoding Palm Springs Field Office land title documents into the land title system. By the end of the reporting period, an additional 214 out of 512 identified land title documents had been cncoded. To date, 285 documents have been encodcd. Encoded 440 out of 676 Pacific Region encumbrances into the land title system. Delays and Obstacles During this reporting period, the following delays and obstacles impeded the progress of thc DQ&I projcct: Securing timcly BTA trust system logon IDS and security profile set-ups. 0 Not being allowed by BIA to implement the Post-QA review process at the PRO-LTRO. 0 Unanticipated volume of document encoding and land title certification backlogs at the PRO- LTRO. Eight contractor employees assist with backlogged land title document encoding. - 38 - STATUS REPORT TO THE COURTNUMBER NINETEEN Trust Data Quality and Integrity 0 Lack of acccss to the Internet has resulted in: (1) comniuilication delays; (2) adverse project coordination issues; (3) increased administrative program costs; and (4) the overall DQ&I project being unable to take full advantage of available information technology. November 1,2004 Assurance Statement I concur with the content of the information contained in this Trust Data Quality and Integrity section of the Status Reporl to the Court Number Ninefreen. The information provided in this section is accurate to the best of my knowledge. Date: October 22,2004 Name: Signature on File John E. White Trust Reform Officer Office of the Special Trustee for American Indians - 3 9 - 3. INDIAN FIDUCIARY TRUST TRAINING PROGRAM STATUS REPORT TO THE COURTNUMBER NINETEEN Indian Fiduciary Trust Training Program November 1,2004 Introduction Interior has a continuing responsibility to provide adequate staffing, supervision and training for trust fund management and accounting activities. Fiduciary trust training is essential to the success of Interior’s trust reform efforts and forms an integral part of all training for Interior employees who are involved in the management of Indian trust assets. Accomplishments and Completions OST offered one session of the course, Fiducimy Overview Program, presented by Cannon Financial Institute, with 27 BIA, OST, MMS and tribal personnel attending during this rcporting period. A total of 473 people have attcnded this course since March 2003. This course compares and contrasts the federal Indian trust administered through Interior with private sector trusts administered through banks and other financial institutions. Additional sessions are scheduled to be held during thc next reporting period. During this reporting period, OST training staff conducted six sessions to provide training in TFAS, Stratavision and Historical Query to 37 OST, BIA and contractor staff. The three-day course, Trust Fundamen&uls, which is a cornprehensivc orientation program tailored to meet the needs of employees in trust-related positions, was presented to BIA and OST employees in Billings and Phoenix. This course is expected to be taught three or four times a year by regional BWOST employees. OST offered the first orientation program for trust officers and deputy superintendents for trust. OST regional trust administrators, trust officers, BIA deputy superintendents for trust and a superintendent attended thc first two weeks of this three-week orientation program in Albuquerque. Goals of the prograni include providing an overview of federal Indian law and policy; introducing the participants to each other and helping them undcrstand the importance of working together; and providing the technical training necessary to perform their jobs. The third week is scheduled to be held during the next reporting period. Another thrcc-week orientation program is scheduled to begin during the next reporting period for additional participants. OST and BIA completed devclopment of two trust certification prograins in conjunction with thc Cannon Financial Institute. Specialty courses have been developed and are expected to be presented by Cannon personnel during the next rcporting period. Upon completion of the required courses, participants take a comprehensive exam resulting in the designation of Certified Indian Fiduciary Tnist Analyst or the higher-level Certified Indian Fiduciary Trust Specialist. - 40 - STATUS REPORT TO THE COURTNUMBER NINETEEN November 1,2004 Indian Fiduciary Trust Training Program Current Status As previously reported, OST has contracted for the dcvelopment of a CD version of the Fiduciary Trust Foundations: An Introduction to Trztsl Reform arid Change course. The CD version is designed to provide trust personnel with a basic understanding of the federal government’s fiduciary responsibilities. Changcs requested by SOL were completed and OST training staff received the completed product this reporting period. Training deficiencies identified in the Traiizing Inventory and Identijkation of Critical Functional Training Areasfor the Depurlrnen f of the Interior’ ‘s Indian Trusr Training Program are bcing reviewed and course development is underway. OST training staff expects to meet with senior managcmen t as courses are developed. The draft Manager’s Handhook for New Hires was circulated for comment to BIA and OST management, who suggested several modifications. The draft handbook was rcvised based on these comments and has been approved by senior rnanagcment. Final publication is expected to occur during the nex 1 reporting period. Delays and Obstacles The lack of Internet access inhibits electronic communication with other governmcntal agencies and contractors, hinders the research of training tools and potential contractors, and restncts OST’s ability to access online training programs. Assurance Statement T concur with the content of the information contained in the Indian Fiduciary Trust Training Program section of the Stulus Report to the Coourt Number Nineteen. The information provided in lhis section is accurate to the best of my knowledge. Date: October 22,2004 Name: SigJzature on File Dianne M. Moran Director, Trust Training Office of the Special Trustee for Amcrican Indians -41 - STATUS REPORT TO THE COURT NUMBER NTNETEEN November 1.2004 Risk Manaeement 4. RISK MANAGEMENT Introduction The objectives of thc risk management initiative are to design, deliver, and implement a comprehensive risk management P T O ~ I I I that includes extensive management controls for monitoring and evaluating Interior’s Indian trust asset management program. Once the risk management program has been iiiiplemented by TPMC, OTRA will monitor and evaluate it, and recommend resolutions of any management control deficiencies. Accomplishments and Completions In accordance with the previously approved project plan, the risk managcmcnt program was designed, delivered, and implemented throughout OST. OST managers completed tkcir risk self- assessments utilizing the RM-PT,US application. Current Status During this reporting period, BIA and OST agreed to defer implementation of RM-PLUS at the BIA agency pilot sites until FY2005 due to other priorities within both organizations. Delays and Obstacles The lack of Internet access complicates the implementation and use of RM-PLUS since it was designed as a web-based application. Assurance Statement I concur with the content of the information containcd in the Risk Management section of the Status Report to the Court Number Nineteen. The information provided in this section is accurate to the best of my luiowledgc. Date: November 1, 2004 Name: Signature on File D. Jeff Lords Deputy Special Trustee, Trust Accountability Office of the Special Tnistee for Amencan Indians - 42 - STATUS REPORT TO THE COURTNUMBER NINETEEN November 1,2004 Regulations, Policies and Procedures 5. REGULATIONS, POLICIES AND PROCEDURES Introduction OTP in OST was established on April 21,2003, to assist Tnterior in establishing “consistent, written policies and procedures for trust fund management and accounting” as stated in the 1994 Act. OTP oversees and facilitates the development, promulgation and coordination of trust- related regulations, policies, procedures and other materials to guide the proper discharge of Interior’s fiduciary responsibilities. OTP is separate from BIA’s PPA, which is responsible for policies, procedures and regulations affecting all BIA activities. PPA activities thus are reported in the BIA section of thc reports to the Court. Accomplishments and ComDletions 0 Additions to the virtual DO1 Fiduciary Library include: OTRA Draft Examination Handbook; 0 Congressional testimony of the Special Trustee and others on S. 1721 (the American Indian Probate Reform Act of2004), budget matters, and Trust Initiatives for the 21” Century; 0 Memo fiom AS-IA and Special Trustee on Indian Tnist Rating System. The OTP liaison group was notified of the Secretary’s approval of the “To-Be” model (now known as the Fiduciary Tnist Model}. Members were advised that implementation of the FTM would likely generate a significant increase in OTP’s workload. OTP completed work on fivc frequently-used forms and added them to the Infonet. The forms can be retrieved, completed electronically, and printed. A part of the Receipting Desk Operating Procedure was changed and approved by the appropriate officials during this reporting period. In addition, “Policy on Trust Funds Remittances” was issued. Cu men t Status OTP continues to work with OST’s OCIO to establish Sitescape as a viable information managcment and dissemination tool. During this reporting period, additional Sitescape training was conducted in Albuquerque. Several functional areas of OST are beginning lo use the program and have established their own program workspaces. Pronioting the use and functionality of Sitescape remains a priority. 25 CFR 124 - Deposits of Proceeds of Lands Withdrawn for Native Selection Under the Alaska Native Claims Settlement Act. On the advice of SOL, it was decided that this regulation was not necded. Discussions with SOL and senior Interior managemcnt continued regarding the disposition of this rule. A decision to withdraw or amend the rule is expected during the next reporting period. - 43 - STATUS REPORT TO THE COURT NUMBER NINETEEN Regulations, Policies and Procedures November 1,2004 Delays and Obstacles Lack of access to the Internet and its repository of online statutes, the Federal Register and other resources continues to present challenges to this office. Assurance Statement ~ I concur with the content of the information contained in the Office of Trust Regulations, Policies and Procedures section of the Stutus Report to the Court Number Nineteen. The information provided in this section is accurate to the best of my knowledge and belief. Date: October 29,2004 Name: Signature on File Richard V. Fitzgerald, Director Office of Tnist Regulations, Policies and Procedures Office of the Special Trustee for American Tndians - 4 4 - STATUS REPORT TO THE COURTNUMBER NINETEEN November 1,2004 Appraisal FIELD OPERATIONS APPRAISAL 1. D. Introduction The Office of Appraisal Services is responsible for the liidian land valuation program, which was cstablished to provide impartial estimates of market value for a variety of rcal property intcrcsts on land owned in trust or restricted status by individual Indians, Alaska Natives and Indian Tribes. Various regulations governing Indian trust land actions rcquire valuations. To meet this requirement, an appraisal or other valuation method is used to ensure that fair and just compensation is received on Indian land transactions. Thc typcs of land actions are varied. Major types includc commercial, industrial, recreational, agricultural and other types of leases; rights-of-way; land sales and land exchanges; grazing and range permits and assessment of trespass damages. Accomplishments and Completions The contract between NBC-ASD and OST, Office of Appraisal Services for the management of the appraisal program was signed during this reporting period. A contract for additional analysis of the former Special Master’s right-of-way report was awarded and completed during this rcporting period. The report identified weaknesses associated with the valuation standards and reporting formats used by an appraiser. A corrcctive action plan was developed. Thc plan includes remedial training for the appraiser and review of the appraiser’s future work by the Associate Director-ASD. Current Status The vacant regional appraiser position located at the Eastern Region was not advertised during this period pending a revision of all regional appraiser position descriptions. Thc new position descriptions are being revised to make them consistent with current NBC-ASD, regional supervisory appraisal positions. As previously reporled, OAS drafted a MOU with ILCO rcgarding LCP. ILCO submitted the drafl MOU to the BIA Director for review and comment. Further discussions bctween H A and OST are required in order to finalize the MOU. A meeting with ILCO and OAS is expected to be scheduled during the next reporting period to finalize the MOU. In addition to the independent review of the Special Master’s report, OST sought an independent contractor to review a selection of certain right-of-way appraisals that were completed prior to September 2,2003. The contract was awarded March 1 1,2004, and thc final report was issued during this rcporting pcriod. The report identified weaknesses associated with the valuation standards and reporting formats used by the various OAS regions. NBC-ASD is expected to rcvicw the report and develop a corrective action plan during FY2005. - 45 -