The Long Trail

The government's tallying of Indian trust money may well be the most ambitious accounting project in U.S. history. It's also the most controversial.

Mostly, the firms are adhering to something called the Accounting Standards Manual. That lengthy, oft-revised book is extremely detailed. It is also the OST’s handiwork. Thus, the accounting firms are following OST guidelines — and are not offering conclusions about their findings. As Grant Thornton noted in a letter regarding its role as quality-control
agent: “[the firm's] assessment of the quality of work performed
by…accounting teams performing the historical accounting
is based primarily on [the] Accounting Standards Manual.… This assessment is not an audit and, accordingly, we do not
express an opinion.”

The OST does note that the quality-control firm “tests for
compliance with the American Institute of Certified Public
Accountants standards.” Those guidelines, however, address the
professional conduct of consultants, and not audit standards.

Location, Location, Location

Still, the absence of a GAAP audit does not mean that the numbers
produced by the Historical Accounting Project are off. Nor
does it mean that lease money intended for Native Americans
found its way into the wrong pockets. “When I started working
with Cherokee Nation in 1972,” recalls Swimmer, “I met a lot of
BIA people. They took a lot of pride in what they did. And they
weren’t out to try and cheat anybody.”

Without a good paper trail, it’s hard to say for sure if Native
Americans have received all monies due them. DoI officials say the
effort in Lenexa is providing the necessary documentation to corroborate
transactions. In a recent court filing, the Interior Department
noted that “[w]ith few exceptions, the Indian trust records
needed for the historical accounting exist, are being located with
success, and are being used to reconcile IIM account transactions.”

Critics charge that the standards used by the OST to confirm
transactions fall far below what you’d find in the private sector.
DoI memos do reveal that the department advised accountants
working on the project to use “alternative procedures,” as well as
their own judgment, to verify transactions in the absence of moresolid
documentation. “When you peel off the veneer,” insists Rempel,
“the procedures they’re using could validate anything.”

A canceled check, for instance, is apparently not required to
prove that a payment was made by a lessee. This surprises J.H.
Cohn’s Herman: “As a fiduciary, you have the absolute responsibility
of knowing every single receipt and every single disbursement,
and you want to know every document that’s associated with it.”

The OST could have difficulty finding every document. Some
records-warehouses on reservations were little more than glorified
sheds. In 1999, Treasury reported that 162 boxes relating to
the Indian trust-fund litigation had been accidentally destroyed.
Apparently, the boxes contained government forms reflecting
disbursements made by federal agencies from 1900 to 1958.

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