STATUS REPORT TO THE COURTNUMBER FOURTEEN August 1,2003 TRUST REGULATIONS, POLICIES AND PROCEDURES I. Introduction - Office of Trust Regulations, Policies and Procedures The Office of Trust Regulations, Policies and Procedures (OTP) in the Office of Special Trustee for American Indians (OST) was established in the Departmental Manual changes signed by the Secretary on April 21,2003. OTP is responsible for ensuring organizational knowledge, access, and compliance with applicable trust-related regulations, policies, and procedures. The Office: 0 0 0 0 coordinates policies and procedures for implementing regulatory requirements participates in program audits promulgates and integrates trust policy into all business processes coordinates trust procedures with internal and external organizations involved with trust activities ensures development and implementation of OST’s own policies and procedures reviews and provides edits of all fiduciary trust policies, regulations, handbooks, desk manuals, processes and procedures of all Interior bureaus and offices performing trust related activities. An Acting Director for OTP was named during the initial reorganization of OST. Ke and his staff are developing a plan to establish the office so that it carries out its functions effectively and efficiently. OTP will assist the Secretary in establishing “consistent, written policies and procedures for trust management and accountability” as required by the American Indian Trust Fund Management Reform Act (25 USC 162 a(d)(6)). OTP will facilitate and be a clearinghouse for the Interior- wide activities that are necessary to achieve the statutory mandate. That mandate must be achieved in an efficient and timely manner. OTP will monitor that process. Current Status Since the creation of OTP in April, the office has undertaken several initiatives in the discharge of its duties. Some are housekeeping in nature, such as identifying computer software to aid in performing its work, while some missions are more substantive and involve establishing OTP staff, tools and methods of operation. OTP is assembling an Interior Fiduciary Library. Assessing Interior’s Electronic Library of Interior Policies (ELPS) is the first step in the creation of this hard-copy library and its virtual counterpart. As a universal support function, OTP will be involved with many aspects of the “To-Be” Project, so it is essential that OTP build a close and successful working relationship with the core group working on that Project. To that end, OTP staff members attended the “To-Be” Project’s Tier 1 77 STATUS REPORT TO THE COURT NUMBER FOURTEEN August 1,2003 Workshop in Portland, OR, and presented a short summary to the group about the responsibilities of OTP. Staff members also plan to attend the July workshop in Minneapolis. OTP has begun a review of OST internal policies and has identified drafts of several which need to be examined. OTP is overseeing the effort to draft criteria against which issues can be identified, priorities set, and clearing standards established for the review or creation of internal fiduciary and administrative policies. With these criteria established, OTP will work with other Interior bureaus on review of their fiduciary trust-related policies, procedures and regulations. A liaison group has been established with members from those Interior bureaus with fiduciary trust responsibilities so that the review and rewriting of fiduciary trust-related policies, procedures and regulations can be co-ordinated through this group. OTP is designing a clearing and tracking system to catalog those regulations and policies and procedures that are to be reviewed so that the Special Trustee can ensure compliance with 25 U.S.C. 4043(c)(l)(B). The system mission of the OTP Tracking System is to accurately identify and maintain all developmental phases of fiduciary trust-related laws, regulations, and directives (policies, procedures, manuals, handbooks) for all trust offices. Its purpose is to coordinate and facilitate policy and procedure development relating to Indian fiduciary trust reform activities to ensure fiduciary and legal requirements are fulfilled. Bureau of Indian Affairs It has been reported to OTP that the following initiatives have been taken by the Bureau of Indian Affairs (BIA). OTP will follow the development of these tasks. 25 CFR 151 - Navajo Partitioned Lands Grazing Permits - Thc drafting and review process was completed during this reporting period. The Navajo Hopi Land Commission and the Navajo Nation Natural Resource Comniission met and gave their verbal approval for the regulation to be published in the Federal Register with a 90 day comment period. The regulation was submitted to the Office of the Solicitor (SOL) and is still being reviewed. It is anticipated that the regulation can be published as a draft in the last quarter of CY2O03. 25 CFR 124 - Deposits of Proceeds of Lands Withdrawn for Native Selection under the Alaska Native Claims Settlement Act - Office of Trust Funds Management and SOL completed their review and comment on the draft revision of this regulation. The draft rule is still under consideration. 25 CFR 162 Subparts C & D - Residential Leases and Business Leases - BTA's Office of Trust Responsibilities (BIA-OTR) completed drafting proposed regulations. Interior's Office of Policy, Management and Budget is currently reviewing the draft for compliance with the Paperwork Reduction Act. The target date for publication of the proposed regulations in the Federal Register is August 2003. The comment period is planned to run for 90 days, during which time tribal consultation will be conducted on the proposed rule. The publication of the final rule is scheduled for May 2004. 78 STATUS REPORT TO THE COURT NUMBER FOURTEEN August 1,2003 25 CFR 216 - Surface Exploration, Mining, and Reclamation of Lands - Other mission- critical activities have delayed revision of this regulation by BLA-OTR staff. It is not expected that the rule will be revised and published before the latter part of CY2003. Internal Program Guidance Grazing Permits (25 CFR 166) Handbook - BIA-OTR staff and Tribal representatives met in December 2002, and January/February of 2003 to continue writing the handbook. An initial draft was completed in March of 2003. Once the editing and technical review of the draft is completed, appropriate comments will be incorporated, which is expected to occur during the last quarter of CY2003. The final drafi will be furnished to SOL for legal review and appropriate changes will be incorporated in the final document. The proposed printing and distribution of the handbook is expected during the first quarter of CY2004. National Environmen tal Policy Act (NEPA) Compliance Handbook -The target date for distribution of the BIA NEPA handbook for review and comment by Indian tribes and Alaska Natives is targeted for the next reporting period. At least sixty days is expected for review and comment. Indian Affairs Manual (IAM) Forestry Program Chapter - The draft chapter has been reviewed by tribes, agencies, regions and by OST. The current draft is dated May 2 1 , 2003. In the reorganization, the new BIA Office of Planning and Policy Analysis assumed responsibility for coordinating the completion of the draft chapter for review, distribution for comment, approval and distribution for incorporation into BTA’s TAM. An estimated completion date will be established as the Office of Planning and Policy Analysis surveys its responsibilities. IAM, Part 101, Individual Indian Money Accounts - This project has been assigned to the Office of Tribal Services (OTS), Human Services Division. Comments have been received from field offices. OTS is working with SOL on revisions to the IAM to ensure this manual complies with the regulations governing trust funds for tribes and individual Lndians (25 CFR 115). This part is expected to be issued by December 3 1,2003. Surface Leasing (25 CFR 162) Handbook - The final draft remains under legal review. Upon finalization of the regulations for Subparts C and D of 25 CFR 162, the handbook will be amended to reflect the changes pertaining to residential and business leases. The expected distribution of this handbook has been extended to the spring of CY2004. 79 Assurance Statement I believe that the infomation contained in the OST Trust Regulations, Policies and Procedures section of the Status Report to the Court Number Fourteen is an objective analysis as of June 30, 2003. The information provided in this section is accurate to the best of my knowledge. Date: July 3 1, 2003 Name: Signature on File Richard V. Fitzgerald Acting Director, Office of Trust Regulations, Policies and Procedures STATUS REPORT TO THE COURT NUMBER FOURTEEN August 1,2003 80 BUREAU OF INDIAN AFFAIRS V. FRACTIONATION A. Introduction Fractionation of Indian land occurs when land passes from one generation to the next, and more and more heirs or devisees acquire an undivided interest in the land. Fractionation of Indian trust and restricted lands has a long history stemming from the federal Indian policy of the 19th Century. Fractionation is a complex and potentially emotionally charged issue due primarily to cultural, historical and family association of the present Indian owners with the original owners of those lands held in trust by the United States or subject to a restriction against alienation by the Secretary of the Interior, Both Congress and the Department of the Interior (Interior) are attempting to address this complex issue. The opportunities offered by the Indian Land Consolidation Act and the Amendments of 2000 (ILCA) are important to the solution of fractionated ownership of Indian land. Additional ways of streamlining the ILCA process are being considered. The continued goal during this reporting period of the Indian Land Consolidation Program (ILCP) is to acquire small fractional interests in trust and restricted lands owned by individual Indians and consolidate the interests among individual Indians or the Indian tribes on whose reservation the interests are situated in order to lessen the number of owners. ILCP pilot programs are ongoing in the Midwest and Great Plains Region. ILCP is presently operated in two Bureau of Indian Affairs (BTA) Regions. There are five reservations under the Great Lakes Agency, Midwest Region, and one reservation under the Rosebud Agency, Great Plains Region, participating in ILCP. The Land Titles and Records Office at the Great Plains Region, provides title and recording services for the Rosebud and Great Lakes Agencies. The iniplementing official for ILCP is now the Dircctor of the Indian Land Consolidation Office (Director). Accomplishments and Completions Completed revestiture Acquired 5,094 fractional interests during this reporting period, for a total of 58,297 interests through June 2003, representing a combined total for the pilots in the Midwest and Great Plains Regions. Maintained a consistent stream of applications to sell interests and continued to seek ways to increase the number of applications. Completed 120 certified Title Status Reports (TSR) for tracts containing multiple interests identified for purchase on the Rosebud Reservation during this reporting period. Received 2 I6 requests for TSR’s for tracts containing interests targeted for purchase on the Rosebud Reservation this reporting period. of all Youpee interests at Great Lakes Agency. Subsequent STATUS REPORT TO THE COURT NUMBER FOURTEEN August 1,2003 81 0 STATUS REPORT TO THE COURTNUMBER FOURTEEN Current Status A draft national ILCP plan has been developed and takes into consideration the following: 0 Further direction from Interior leadership has been given to the Director to identify alternative methods for program financing including federal, tribal and private sources based on economic tradeoffs and long term public benefits. Among the methods that are expected to be examined during the next reporting period: Actions being taken to facilitate and strengthen the ILCP pilot sites: 0 0 0 Federal and tribal government benefits and costs of the program. Alternative approaches for targeting tracts and owners to maximize benefits. Legislative and administrative changes to enhance program effectiveness and efficiency. Methods for an aggressive marketing and acquisition program. Grants from private foundations and individuals. Federal loan program to individual interest owners in order to consolidate ownership in a tract. Tribal acquisition programs. Identifying pilot program impacts on federal trust management. Completion of the first phase in the Midwest Region, Great Lakes Agency, is expected by December 2003, signifying that majority ownership has been achieved on the first three reservations. Continuing reconciliation of ownership data on the Minnesota Chippewa Bands’ reservations and the Rosebud Reservation. Continuing to coordinate with the Rosebud Sioux Tribe’s land acquisition program to leverage federal funds with tribal funds and to prioritize purchases of land interests with the tribe. Continuing to purchase all available interests including Youpee interests from willing sellers. Delays and Obstacles 0 Expanding the program requires reconciliation of ownership records. Reconciliation efforts are expected to be improved with the implementation of Trust Asset and Accounting Management S ysteni . Qualified staff is scarce at remote locations. probates have also been posted for the Great Lakes Agency. Rosebud Agency has revested interests to heirs of the original Youpee interest holders. Completed reconciliation of ownership data on the Fond du Lac reservation in MN. 82 STATUS REPORT TO THE COURTNUMBER FOURTEEN 0 The Great Plains Regional Land Titles Records Office needs to record subsequent deceased heirs resulting from Youpee re-distributions for the Rosebud Agency in addition to existing workload. Need for the Great Plains Regional Land Titles Records Office to record the pre-Youpee probates for the five reservations under Midwest Region in addition to current workload. Assurance Statement The content of the information supplied and contained in the Fractionation section of the Status Report to the Court Number Fourteen is accurate to the best of my knowledge. Date: July 3 1, 2003 Name: Signature on File Robert R. Jaeger Director, Indian Land Consolidation Office 83 STATUS REPORT TO THE COURTNUMBER FOURTEEN August 1.2003 PROBATE B. Introduction Conducting and completing the probate of individual Indian trust assets requires the cooperative efforts of the Bureau of Indian Affairs (BIA), the Office of Hearings and Appeals (OHA) and the Office of the Special Trustee for American Indians (OST). Bringing the probate caseload current is important to the overall management of trust assets which relies on up-to-date ownership information. All probate project responsibilities are now being consolidated and will be under the direct supervision of BIA. Accomplishments and Completions Number of Cases Processed and Decided For this reporting period, BIA reports that BIA deciding officials received 327 cases and issued decisions in 216 cases; OHA reports that OHA deciding officials received 701 cases and issued decisions in 641 cases. OST distributed and closed 1,074 accounts representing 1,042 estates. The Trust Funds Accounting System (TFAS), as of the end of June 2003, contains 25,282 open estate accounts. Of these, 12,991 are classified as official deaths, as evidenced by a certified death certificate. Another 8,123 1 of these accounts are classified as unofficial deaths, where OST has received some indication of death that has not yet been confirmed by receipt of a death certificate. The rest of these accounts are classified as in the probate process or as pending final distribution of the assets. Lists of TFAS estate accounts classified as “unofficial death” were sent to all BIA Regional Directors during the reporting period so that their agencies can reconcile discrepancies and change the account status to “official death” where the deaths can be confirmed. This reconciliation is expected to occur by the end of calendar year 2003. Case Preparation by Contractors Case preparation is the gathering of infomiation and documents to enable the submission of a probate package to a deciding official. During this reporting period, the contractor continued to expand its efforts to prepare probate cases in the Midwest, Great Plains, Southern Plains, Rocky Mountain, Northwest, Pacific, Western and Navajo Regions. The contractor also developed a Central Research Team to provide research support in gathering information necessary to prepare a case for probate. During this reporting period, the contractor completed the preparation of 382 probate cases (double the 190 cases prepared by the contractor during the previous reporting period). An additional 23 summary and 84 non-summary cases previously prepared by the contractor were pending review by BIA at the beginning of this reporting period. Summary cases are those estates containing only trust cash assets with a value less than $5000, not including any interest that may have accrued after the date of death. Non-summary cases are all other cases, including any estates containing land assets. During this period, BIA reviewed and accepted 3 22 cases from the contractor to be sent to a deciding official. At the end of the 84 STATUS REPORT TO THE COURTNUMBER FOURTEEN August 1,2003 reporting period, 177 probate cases prepared by the contractor were pending BIA review for acceptance. When a probate case management and tracking system is developed (see “current status” below), it will track case preparation by both the contractor and BIA. The Department of the Interior (Interior) then will be able to report case preparation statistics for BIA as well as for the contractor. Case Preparation - Priorities A new lead person has been identified in BIA to direct BIA probate activities and to ensure contractors are available to support BIA in processing these cases. Emphasis continues to be given to closing the largest 501 open estate accounts identified in May 2002. These accounts represented only 3.4% of the estate accounts, but totaled $31 million or 65% of the estate funds. By the end of this reporting period 157 of these cases had been closed (thirty in this reporting period), totaling more than $9 million in assets distributed. Posting and Recording The contractor’s Youpee posting and recording efforts during this reporting period continued to be devoted primarily to bringing records current at the Aberdeen Land Title and Records Office in support of the pilot Indian Land Consolidation Program (ILCP) project to purchase small fractionated interests at the Rosebud Agency and in the Midwest Region. Phase I1 of the ILCP task for the Rosebud Agency was completed during this reporting period. Phase I of the contractor’s ILCP task for the Great Lakes Agency was completed during this reporting period with 820 tracts reversed and approved by BIA. Phase I1 of the ILCP task for the Great Lakes Agency was nearly completed with 935 probate distributions completed, 364 of which had been accepted by BLA. Current Status National Association for Public Health Statistics and lnformation Systems (NAPHSIS) NAPHSIS is a professional organization consisting of representatives from all of the vital records offices in the United States. Among its current initiatives is a projcct to enable electronic reporting of deaths. A meeting with the Executive Director of NAPHSIS was scheduled for July 1,2003, to begin discussions on a proposal for Interior to be notified by the states when Indian deaths are reported in their jurisdictions and for Interior to obtain death certificates fi-om the states in a more timely and direct way. Probate Case Management and Tracking System In response to the decision to discontinue efforts for a Case Location and Status database and the need for some way to manage and track the probate caseload, Interior’s Trust Architect assumed the lead in developing a probate case management and tracking system during this reporting period. A meeting was held on June 30,2003, in Washington, D.C., to begin collecting system requirements. 85 Probate Handbook A contractor delivered a second draft of the revised Probate Handbook for the current probate process on May 2,2003. The draft handbook incorporates procedures that previously were fragmented among several separate manuals and covers the probate process f?om death to distribution. The revised draft was circulated to BIA, OHA, and OST for review and comment during this reporting period. The handbook is to be further refined during the next reporting period based on comments received. Streamlining the Smallest Estates As of December 3 1,2002, there were 1,522 open estate accounts where the funds derive only from per capita or judgment payments (and not income from land interests) with a total value for all 1,522 cases of $7,193.86. The Office of Trust Review and Audit conducted a risk analysis and concluded that a more streamlined approach for probating these estates would pose little risk of erroneous distribution, while providing a benefit both to Interior and to the trust beneficiaries. A determination of procedures is expected to be made during the next reporting period. Delays and Obstacles The lack of access to the Internet, and the lack of electronic mail communications between OHA and BIA continue to inipede the ability to process and complete probate backlogs. Consequently, critical processes that used to be automated, such as the preparation of OHA-7 forms, the assignment of probate docket numbers and case counting and reporting, must be done manually. Interior’s regulations requiring certified copies of death certificates and other documents (instituted two years ago in order to facilitate the Attorney Decision Makers’ probate process) has had the unintended consequence of making case preparation more difficult, more costly, and more time consuming. BIA has brought this to the attention of Interior’s senior management and is seeking relief from this requirement. The lack of a comprehensive case management and tracking system prevents discerning the true extent of the probate caseload. Consequently, cases may be overlooked and resources may not be provided at the right time or in the right amounts to address the caseloads adequately. For example, a manual comparison of TFAS estate accounts to the cases reported by BIA to the Southwest Region Probate Specialist disclosed 44 open cstate accounts in TFAS for estates that BIA had marked “closed.” The discrepancies occurred largely because the lead agency for the estate was unaware that another agency had made deposits to the estate account in the legacy Individual Indian Money system. The increasing productivity of contractors is beginning to put a strain on BIA resources to review and accept their work. Options for addressing this problem are expected to be explored during the next reporting period. STATUS REPORT TO THE COURT NUMBER FOURTEEN August 1.2003 86 Assurance Statement I concur with the content of the information contained in this Probate section of the Status Report to the Court Number Fourteen. The information provided in this section is accurate to the best of my knowledge. Date: July 28,2003 Name: Signature on File Marinus Heymering Jr. Supervisory Trust Reform Specialist STATUS REPORT TO THE COURT NUMBER FOURTEEN Aupust 1.2003 87 STATUS REPORT TO THE COURTNUMBER FOURTEEN August 1,2003 ATTACHMENTS Jim Cason’s prepared statement 0 Section 137 of HR 2691 88 STATEMENT OF JAMES CASON ASSOCIATE DEPUTY SECRETARY DEYARThlENT OF THE INTERIOR BEFORE THE HOUSE COMMITTEE ON RESOURCES FOR THE OVERSIGHT HEARING RELATING TO I BackEround THE INDIAN TRZJST FUND LAWSUIT JULY 9,2003 Mr. Chairman, thank you for the opportunity to testify today on the issues surrounding the longstanding case that originated in 1996 as Cobell v. Babbitt and is now Cobell v. Norton. In your letter of invitation, you asked the Department to address its plan for historical accounting, the results of historical accountings conducted so far, the size of the accounts the Departnient holds in tnist for American Indians, and the likelihood of an expeditious rcsolution o f the Indian trust fund lamwit. The Department of the Interior manages about 1,400 tribal accounts and over 225,000 individual Indian money (IIM) accounts. Because the Cobell case only involves 1Th.I accounts, most of my testimony will focus on the issues related to the nianagement of those accounts. The Committee should be aware, however, that 16 tribes have filed 19 lawsuits secking an accounting. Trust asset management involves approximately 11 million acres held in trust or in restricted status for individual Indians and nearly 45 million acres held in trust for the Tribes. This land produces income from more than 100,000 active leases for about 350,000 individual Indian owners and 3 15 Tribal owners. Over $862 million is typically collected annually from leases, permits, sales, and interest income. About $226 million is distributed among the 11M accounts; $536 million is distributed among the tribal accounts. One of the most challenging aspects of trust management is the management of the very small many very srnall TIM accounts and land ownership interests. ownership interests, which result in In 1887, Congress passed the General Allotment Act, which resulted in the allotnient of some tribal lands to individual members of tribes in 80 and 160-acre parcels. The expectation was that these allotments would be held in trust for their Indian owriers for no more than 25 years, after which the Indian owner would own the land in fee. However, Congress ended up extending the trust period indefinitely once it became apparent that the goal of making the individual Indians into farmers failed. Interests in these allotted lands started to "fractionate" as interests divided among the heirs of the original allottees, expanding exponentially with each new generation. There are now over 1.3 million fractional interests of 2% or less involving 58,000 tracts of individually owned trust and restricted lands. We have to provide a range of trust services - title records, lease management, accounting, probate - to the growing number of land owricrs. We have single pieces of property with ownership interests that are less than .000002 of the whole interest. The Department is required to account for each owner's interest, regardless of size. Even though these interests today might generate less than one cent in revenue each year, each is managed, without the assessment of any management fees, and the revenues generated are treated with the same diligence that applies to all IIM accounts. In contrast, in a commercial setting, these small interests and accounts would have been eliminated because of the assessnient of routine rnanagernent fees against the account. Management costs of the IIM accounts, as well as tribal trust accounts, are covered through the general appropriations process and borne by the taxpayers as a whole, rather than the accouritholders. Past Congressional Actions Over the past 100 years, Congress has reviewed the issue of Indian trust management many times. In 1934, the Commissioner of Indian Affairs cautioned Congress that fractionated interests in individual Indian trust lands cost large sums of money to administer, and left Jndiati heirs unable to control their own land. "Such has been the record, and such it will be unless the government, in impatience or despair, shall summarily retreat from a hopeless situation, 2 abandoning the victims of its allotment system. The alternative will be to apply a constnictive remedy as proposed by the present Bill." The bill ultimately led to the Act of June 18, 1934, the Indian Reorganization Act, which attempted to resolve the problems related to fractionation, but as we now know it did not. In 1984, a Price Waterhouse report laid out a list of procedures needed to make management of these funds consistent with conimercial trust practices. One of these recommendations was considering a shift of the Bureau of Indian Affairs (BIA) disbursement activities to a commercial bank. This recommendation set in motion a political debate on whether to take such an action. Congress then stepped in and required BIA to reconcile and audit all Indian trust accounts prior to any transfer of responsibility to a third party. BIA contracted with Arthur Andersen to prepare a report on what would be recluired in an audit of all trust funds managed by BIA i n 1988. Arthur Andersen's report stated it could audit the trust finds in general, but it could not provide verification of each individual transaction. In 1992, the House Committee on Government Operations filed a report entitled "'Misplaced Trust: the Bureau of Indian Affairs' Management of the Indian Trust Fund."' That report listed the many weaknesses in the BIA rnanagement of Indian trust funds. It pointed out that the General Accounting Office's audits of 1928, 1952, and 1955, as well as 30 Inspector General reports since 1982 found fault with management of the system. The report notes Arthur Andersen 1988 and 1989 financial audits stated that "some of these weaknesses are as pervasive and fundamental as to render the accounting systems unreliable." Arthur Andersen stated it might cost as much as $281 million to $390 million in 1992 dollars to audit the IIM accounts at the then 93 BIA agency offices. The 1992 Governmcnt Operations Committee report describes the Committee's reaction: "Obviously, it makes little sense to spend so mnch when there was only $440 million deposited in the I1M trust h n d for account holders as of September 30, 1991. Given that cost and time have become formidable obstacles to completing 3 a full and accurate accounting of the Indian trust h n d , it may be necessary to review a range of sampling techniques and other alternatives before proceeding with a full accounting of all 300,000 accounts in the Indian trust h n d . However, it remains imperative that as complete an audit arid reconciliation as practicable must be undertaken.” The Committee report then nioves on to the issue of fractionated heirships. The report notes that in 1955 a GAO audit recomrnended a number of solutions including eliminating BTA involvement in income distribution by requiring lessees to make payments directly to Indian lessors, allowing BIA to transfer maintenance of IIM accounts to comrncrcial banks, or imposing a fee for BIA services to IIM accountholders. The report states the Committee’s concern that BIA is spending a great deal of taxpayers’ money administering arid maintaining tens of thousands of minuscule ownership interests and maintaining thousands of IIM trust fund accounts with little or no activity, and with balances of less than $50. H.R. J846. On May 7, 1993, Senator On April 22, 1993, the late Congressman Synar introduced Inouye introduced an identical version, S. 925. It was in these bills that Congress first included a statutory responsibility to account for Indian trust funds. Section 501 was entitled “Responsibility of Secretary to Account for the 1)ar ly and Annual Balances of Indian Trust Funds.” Senator Inouye’s bill included an effective date provision that stated: “This section shall take effect October 1, 1993, but shall only apply with respect to earnings and losses occurring on or after October 1, 1993, on funds held in trust by the United States for the benefit of an Indian tribe or an individual Indian.“ The Senate Committee on Indian Affairs held a hearing on S. 925 on June 22, 1993. Eloise Cobell in her capacity as Chairman of the Intertribal Monitoring Association, testified in strong support of the bill. The only amendment Ms. C‘obcll recommended in her oral statement, as well as her written statement, was to allow Tribes to transfer money back into a BIA-managed trust fund at any time if they so wanted. Ms. Cobell mentioned “[Wle have amendments, and we are 4 willing to work with the committee on these particular amendments. I am not going to devote any more of my time in my oral presentation to the provisions of the bill because we feel it is an excellent bill." The Navajo Nation and the Red Lake Band of Chippewa ltidians were the only tribes to subtnit testimony. They supported the bill, and did not object to the prospective application of the accounting section in their testimony. The Director of Planning and Reporting of the General Accounting Office also testified. t i e was asked if he agreed with the Arthur Andersen estimates I mentioned above. He stated the fo 1 I o w i ng : "In my statement I talked about how there are a lot of these accounts that niaybe you don't want to audit, that maybe what you want to do is come to some agreement with the individual account holder as to what the amount would be, and make a settlement on it. W e tiad a report issued last year that suggested that, primarily because there are an awful lot of these accounts that have Lxry small amounts iii t e r m of the transactions that f l o n r i n and out of them. Just to give you some gross figures, 95 percent of the transactions are under $500. One of our reports said there that about 80 percent of the transactions are under $50. So in cases where you have the small ones, maybe there's a way in which we can reach agreement with the account holders and the Department of the Interior on how much we will settle for on these accounts rather than trying to go back through many many years, reconstructing land records and trying to find all of the supporting material. It may not be worth it." [page 29 of S. Hrg 103-2251 On July 26, 1994, Congressman Richardson introduced ILK. 4833 which ultimately became the Reforin American lndian Trust Fund Management Act of 1994. The ~IOUSC report on N.R. 4833 notes that I1.R. 1846 was the predecessor bill to 1-I.R. 4833. There was one legislative hearing 5 held on M.R. 4833 by this Committee on August 1 1, 1994. There is no printed record of that hearing. There was no Senate hearing. 1I.R. 1846 and H.R. 4833 were similar in inany places. ILK. 4833 did not however include the effective date provision explicitly making the accounting rcquirement prospective only. While the report notes in a number of places why changes were made to the H.R. 1846 provisions, it is silent with respect to this omission. It may surprise Members of this Committee to note that there is no mention of the costs associated with either complying with the Act, or completing the accounting in the Committee’s fiinds report. Moreover, no analysis from the Congressional Budget Office was included in the Committee’s report. The Department sent a letter on I1.K. 1846 and an amended S. 925 that was placed in the Committee report on t1.R. 3833. Its only mention of cost is the following sentence: “We wish to note that, given current fiscal restraints, the funding for implementation of this reallocation of legislation may nccessarily have to be d e r i \ d fiom from other BIA or Department progranis.” Given the lack of cost analysis contained in the legislative history, one assume that Congress in enacting the could I993 Iiefonn Act had no idea i t may have required a mu I t i -m i 11 ion or bi 11 ion do I 1 ar accounting. Interior ’ s Hi s t o rjc a I A cc ougi t inE P 1 an Mr. Chairman, you specifically requested my testimony address the Department’s plans for conducting an historical accounting of IIM accounts. The Cobell court ruled that the 1994 to provide Reform Act requircs the Departtnent IIh4 trust beneficiaries an accounting for all funds held in trust by thc United States that are depsited or invested pursuant to the Act of June 24, 1938, regardless of when they were deposited. The D.C. Circuit Court noted that the stahite does not make clear tiow to conduct such an accounting, and it is properly left up to the Department what accounting methods to use. In the Department’s FY 2001 Appropriations Act, Congress directed the Department to submit a comprehensive report to the Appropriations Committees as to the costs and benefits of a comprehensive historical accounting. That report was submitted on July 2,2002. It looked at the costs associated with doing a transaction-by-transaction accounting and transaction-by- transaction verification for the IIM account holders. The estimate for such an accounting and verification was $2.4 billioti, and that would take ten years to complete. The feedback received from various Congressional rneiiibers and staff suggested little support for this plan given its cost, the length of time required, and the fact that such a huge sum of money would go to accountants and lawyers, not Indian people. In September 2002, Judge Lamberth, who presides over the Cobell litigation, ordered the Department to submit to the court by January 6, 2003 a proposed historical accounting plan. He also allonwl the plaintiffs in the case to submit their own proposed accounting plan. tlpes of Our proposal is to compile a transaction-by-transaction accounting with transaction verification based in part on various statistical sampling verification methods. But all IIM account holders will receive transaction-by-transaction account histories. By using these different methods, we believe IIM account holders will receive their accountings rnuch sooner. Interior plans to historiiijl accounting into three distinct separate the ilk1 accounts. Judgment and Per Capita accounts Land-based IIM accounts Special Deposit Accounts For the approxitnatcly 42,200 judgment and per capita accounts, we plan to reconcile 100 percent of the transactions i n each account and verify all transactions. For the approximately 200,000 land-based IIM accounts, we intend to reconcile 100% of transactions and verify those transactions using both transaction-by-transaction and statistical methods. We plan to verify all transactions that are equal to or greater than $5,000. For 7 transactions that are less than $5,000, we will verify transactions using statistically valid ’I’he statistically valid sampling technologies. sampling methodology is expected to resuIt in our being able to determine the accuracy rate of the historical accounting with 99 percent confidence. For the 2 1,500 Special Deposit accounts, which are in effect holding accounts, we intend to distribute the funds to the proper owners and then close those accounts. The historical accounting described in our Plan covers all IIM accounts open as of October 25, 1994, the date of the Act, or opened thereafter. The historical accounting period ends on December 3 1, 2000; transactions occurring thereafter are addressed in current accounting activities. Interior engaged 14 consulting Grrns to assist in the development of this plan, including five accounting firnis (foul of which are among the five largest firms in the United States), the largest commercial trust operator in the LJnited States, two historian firms that have specialized i n Indian issues for many years, and firms to assist in statistical matters, trust legal matters and other areas pertaining to historical accounting. TIP1 each Under our plan, at the end of the historical accounting process we propose, we intend to be in the position to proiFide account holder with a Historical Statement of Account. ‘I‘his statement will provide information on how much money was credited to each account, and the disbursements made from the account. It will also provide an assessment of the accuracy of the account transaction history. In addition, we intend to be in a position to provide land-based IIM account holders with information regarding their land assets. This information will be prepared by the BIA Land Title and Records Offices as a separate package to be provided to IIM account holders. The cost of our historical accounting plan is approximately $335 million over five years. The President’s proposed FY 2004 budget for the Department of the Interior includes money for this accounting. Our $9.8 billion budget request is the largest in the Department’s history, and represents a net increase of $344.1 million over the FY 2003 enacted appropriations. Nearly one half of the proposed increases will fund trust reform iriiproveii~ents. Included ivithin the total is 8 $1 00 million to support the Department’s plan to conduct an historical accounting for JIM accounts and $30 million to account for funds in tribal accounts. The court has not yet ruled as to whethcr it believes our accounting plan is adequate. Plaintiffs have argued vehemently that it is not. Plaintiffs argue that the 1994 Reform Act requires a full verification for all transactions since the 1880s, and that such an accounting is “impossible” because the historical records are not complete - something Congress was obviously aware of when it passed the 1994 Reform Act. In the trial, plaintiffs have offered an alternative methodology, nrhicti uses various estimating techniques to approximate the amount they contend should have come into the IIM accounts since the 1880s. ‘l’heir plan will, admittedly, not provide a n accounting to even one IIM beneficiary, but will - like a damages model - come up with an amount of money to ivhich plaintiffs as a class claim they are entitled. Press reports state that plaintiffs believe they arc owed at least $ I37 billion. 1 1 11, 11 In 11 t I 1 1 t w 1 -b 11 o -mi I I on, pot en t i a y Indian country argues that the money for this accounting or any judicial or congressional settlement should all be new money and riot conie from Indian program money. In reality, appropriators are faced with funding this accounting out of the Interior allocation, and have open 1 y stated that fund n g a i do I a r account in g i 1 I mean 1 1 in reduction tn money for other Inthan progiam priorities. a 1 Recent Reconciliations and Accountings the trust funds from 1972 to 1 The Committee also askcd that I address the results of accountings Interior has done so far. In 1990s, the BIA contracted with Arthur Andersen LLP to conduct a reconciliation of Tribal I992 in accordance with certain agreed upon accounting procedures. More than one million records provided by BIA were examined in thc reconciliation which concluded in 1996, but was augmented with additional work completed through 2001. Of the 25 1,432 transactions examined, 2 19,599 transactions \vorth $15.8 billion or 89 percent of total receipts and disbursements for 1972- 1992 of the funds were reconciled. The error rate for the reconciled transactions was far less than one percent. For the remaining 1 I pcrcent, $1.9 billion 9 in transactions shown postcd in the accounts, sufficient docunietitation was not provided to reconcile the transactions. As part of the Cobell litigation, Interior collected over 165,000 documents for the historical accounting of IIM trust fund activity tlvougli December 3 1 , 2000 for four of the named plaintiffs and 24 of their agreed-upon predecessors. Of these documents, about 2 1,000 documents were used to support the transactional histories, which dated back as far as 1914, and which included a total of about 13,000 transactions. The accounting contractor, Ernst and Young, found 86 percent of the transactions and 93 percent of the furids moving through the accounts were supported by the documentation located. The cost of this accounting was over $20 million FY in Ernst of the Pursuant to the requirement in Section 13 1 25, 2003 Appropriations Act, on March 2003, the Department of the Interior provided Congress ivitli a summary of the expert opinion of Mr. Joseph Rosetibaum, a partner arid Young, LLP. “on the historical accounting for the five named plaintiffs in Cobcll v. Norton.” This r-epoi-t describes the process the contractor went through and also contains a summary of his opinions. These conclusions included: 0 The historical IIhl ledgers n ere sufficient t o rtlloit DO1 to crtxte virtual ledgers that are sub at ant tall^ completc h r the selected accouiits The documents gathered by DO1 support substantially all of the dollar value of the transactions i n the analyzed accounts. The documents gathered by the Department of the Interior do not reveal any collection transactions not included in t h e selected accounts, with a single exception i n the amount 11 t i a t 10 ti. 1 b ions are not subs tern p o ra eou s d ociini en t of $60.94 that was paid to another account holder. An analysis of relevant contracted payments, evidenced primarily by lease agreements, shows that substantially all expected collection aniounts n’ere properly recorded and reflected 111 the IIM accoms. There is no indication that the accounts are not subst:intially accuratc, nor that the transact t a n a I y supported y con 10 The Department’s Office of Historical Trust Accounting has also performed historical accountings for 16,82 1 IIM judgment accounts established for niiriors or restricted account holders. These accounts represent $48,496,799. No errors were found regarding the collections and postings to these accounts. Only a few of these accountings have been provided to the beneficiaries or their legal representatives because the district court in Cobell found that sending them to plaintiffs is improper and has not acted on our motion for pemiission to send them to the appropriate person. Interior Trust Reform Efforts The Department has developed a comprehensive plan for the management of Indian tnist funds. The Secretary established both the Office of Historical Tnist Accounting and the Office of Indian Trust Transition. The Office of Indian Trust Transition engagcd i n a meticulous process to develop an accurate, current state model to document trust business processes. The Department, after the most extensive consultation ever held with Indian country, is well down the road of putting in place a reorganization of tnist functions In response to widespread criticism of the former tnist management structure. We have not been sitting on our hands at Interior. Trust ftcfonii has been the nurnbcr one priority for the senior ninnagement of the Department driririg this Administration. Settlement of the Ongoing Tnist Fund Litigation Recently Senators Campbell and Inouye sent letters to the parties urging a fair and equitable settlement of the Cobell case. We welcome such a settlement. Ilowever, the parties are far apart on the issue of what is fair and equitable. Although I did not work at the Department of the Interior during the previous administration, I understand that the Federal Government has made a number of cfforts to engage in settlement talks in Cobell with no success. From June 1996 to July 1997, the Department engaged in negotiations with the Cobell plaintifk on the issue of development of an acceptable accounting mechanism. The Department tried again in early 1999 before the July 1999 trial and again right before the trial. Those negotiations failed. After the July 1999 trial, Judge Larnberth asked the parties to work toward a settlement. The parties were unable to agree on an acceptable mediator, so the Judge appointed Stephen Saltzburg, a professor at George Washington University who has served as a special master in two class action cases iri the District of Columbia District Court, and serves as a mediator for the U.S. Court of Appeals for the District of Columbia. The mediation ended with no resolution in November 1999. Near the end of the previous Administration, then Special Tnistee Toni Slonaker talked directly to plaintiffs' attorneys. While agreement was reached on a number of issues, other overarching issues went unresolved, and ultitnately this effort failed. At the beginning of this Administration, the Department once again tried to enter into settlement talks in Cobell. 'l'he discussions became mired i n a variety of issues surrounding the conduct of the negotiations. No resolution was reached on those issues. Last year, the House Appropriations Subcommittee or1 Interior included language i n the Interior FY 2003 appropriations bill that wouId have liriiited the historical accounting to the period from 1985 forward. That language was removed by amendment on the 1 foitsc floor. 'I'he debate on L 991 Kefonn Act, that amendment, which was more extensive than the debate 011 the actual centered on the point that this matter should be addressed by the authorizers, not the appropriators. The appropriators urged the authorizing conitnittees to step in and come up with a legislative settlement. Members of this Committee from both sides of the aisle spoke to the need for hcarings and action on this issue. Congressman Dicks explained on the floor that it was the intent of the appropriators to try to resolve this issue so that the vast amounts of money iniiolted could go to Indian programs instead of accountants. hlore precisely he said: 12 "This thing is broken; and somehow all the people that are here today expressing their wonderful concern, there is going to be a tomorrow, and we will see if anybody really wants to stand up with the majority side obviously having to be involved and work on this. This has to be done. We have got to get something done here." And then later in the debate, "What we are trying to do is get them money in a reasonable period of time without decimating the Jnterior appropriations bill every single year. I want that $143 million to be used for other programs that will help Native Americans. I do not want to waste $ 1 billion i n going out and trying to do accounting that is not going to give us the n form a t ion 'I pre- 1 985. He also invited the authorizers to develop a settlement coinprornisc -- "[N]mv if these gentlemen who have come to the floor today to help us, if their committees would get busy and develop a compromise and do a settlement on this issue, it could be coming fi-om Congress. Somehow we have to resolve this, because m7e do not have enough money." Members of this Committee committed to engage in such a process. hlr. Young from Alaska said: "I think i t is the responsibility of Congi-ess. Recause i f we look at the trust, if nre look at what is said about Atnerican Indians, the trust belongs to the Congress. We have been neglectful in not pursuing and making sure that this issue has been solved in previous years. So I am asking us to sit down, as the gentleman . I t mentioned before, and say, let us solve this problcni . . Mr. Pallone stated "[Tlhere should be a hearing, or perhaps a series of hearings, that are being held in the Committee 011 Kesources, in the authoriring committee, not herc on the floor, when we are dealing with this larger bill." 13 Mr. Hayworth was one of the sponsors of the amendment that deleted the accounting limitation from the bill. He spoke the following on the floor: "I think it offers another compelling reason why we thank the appropriators, given the magnitude of the task, but reassert the role of the authorizing committee, and recognize thc good but challenging work that has been done thus far to try and deal with this problem." Mr. Tom Udall echoed the views of the opponents of the appropriations provision by stating: "This Congress should address these issues in a bipartisan way, and that is what we arc trying to do on the Committee on Resources . . . The gentleman from Washington raises, I think, a very good point when he says we need to move this case to settlement. I do not think there is any doubt that we need to move this case to settlement. We should be working on the settlement issue, and we should let all of the attorneys know we want to move towards settlement. The key issue here, the committee that should be working on this is the Committee 011 Resources 1 1 Mr. Rahall said "[Mlr. Chairman, I perfectly agree with the statements that have just been said. We want to scttle this. We want a settlement." Nearly a year has passed, we are now facing another appropriations cycle, and there has been no movement toward a settlement of the Cobell case. There were no hearings held by this Committee on this issue after that floor debate until today. Since that time, the court has issued a ruling and required plans for a historical accounting to be submitted; we have developed a plan for our accounting and arc moving forward with our trust reform plan; and the trial on our accounting plan as well as the plan to bring ourselves into compliance with our fiduciary obligations is wrapping up. 14 The House Appropriations Committee provided $55 million less for a historical accounting than we have requested in our budget. The House appropriations bill also directs us, when doing the accounting, to use statistical sampling for all transactions. EIowever, 1 understand the language allows the Secretary to provide fiinds to accounts from the claims and judgment fund once the statistical accounting is completed. Additionally, it prohibits any downward adjustments of accounts. Thus, if the sampling indicated that account holders have received more than their fair share of moneys, we coiiid not recover those moneys. Finally, the language authorizes the Secretary to conduct a voluntary program to buyout accounting claims of ITM account holders. On April 20 2003, Eloise Cobell sent a letter to all class rnetnbers in the Cobell case. hils. Cobell urged them not to support any effort by Congress to authorize a voluntary settlement for their accounting claims. Ms. Cobell told them, many of whom own a minute share i n one parcel of land and have accounts with throughputs under $15 annually, that the plaintiffs are about to receive "a huge many billion dollar judgment in favor of us - all Indian tnist beneficiaries." The letter also said if the voluntary program IS enacted, "tens of thousands of Indian people \ \ r i l l again be cheated by the United States government." As I mentioned above, 111 the press, the plaintiffs and their representatives have been quoted as saying they expect to rccei1.e over $130 billion. They say this even though they have conceded in court that the district court has no juIisdiction to enter such a judgment. As a result, expectations are high in Indian country. Given what we have scen as a result of the reconciliations and accountings done so far, we do not believe we can justify to the American taxpayers a settlement offer in the billions of dollars. On June 13, 2003, Senators Campbell and Inouye sent a letter to Tribal leaders asking for their help in tackling 3 major tasks that would improve the management of lridian tnist: To stop the continuing fractionation of Indian lands and focus on the core problems of Indian probate by swiftly enacting legal reforms to the Indian probate statute. 15 . To begin an intense effort to reconsolidate the Indian land base by buying small parcels of fractionated land and returning them to tribal ownership. . To explore “creative, equitable, and expedient ways to settle the Cobell v. Norton lawsuit.” We would like to work with you and the Senate Committee on Indian Affairs on all three of these tasks. Addressing the rapidly increasing fractionation on Indian land is critical to improving management of trust assets. Properly done probate rcfonn could be essential. When land is leased, RIA has the responsibility to deposit receipts from the land into the appropriate IIM account. This involves probating estates, finding heirs, and holding money for iinknown heirs. These tasks are all funded through the Department’s Indian budget. The purchase of fractional interests increases the likelihood of more productive economic use of the land, reduces recordkeeping and large numbers of small dollar financial transactions, and decreases the number of interests subject to probate. The BIA has conducted a pi lot fractionated interest purchase program in the Midwest Region since 1999. Through FY 2002, the program has acquired 47,188 ownership interests in ol’er 25,000 acres. Using the Office of Management and Budget’s Program Assessment Rating Tool (PART), we have learned there is a high level of interest and voluntary participation by willing sellers and large numbers of owners are willing to sell fractionated ownership interests. The President’s FY 2004 budget request proposes $21.0 million for Indian land consolidation, an increase of $13.0 million for a nationally coordinated and targeted purchase program. Interior believes that a national purchase program can be administered in a very cost-effective manner to target acquisitions that reduce future costs in trust management functions, such as managing land title records, administering land leases, distributing lease payments to 1IM accounts, and processing probate actions. We are developing a strategic plan and necessary infrastructure to support a major expansion of this program in 2004. Where appropriate anti to the extent feasible, the Department plans to enter into agreements with Tribes 01- tribal or private entities to carry out aspects of the land acquisition program. With respect to the third task, the settlement of the Cobell lawsuit, I can honestly say I don’t think we can get there without the involvement of Congress. This does not mean we will not continue to try. Contrary to Ms. Cobell’s letter to the class members, this case is not on the verge of being over. Even if the district court were to adopt the plaintiffs’ accounting plan -- which the Administration argues is fiindamentally improper given that this is a lawsuit ostensibly brought under the Administrative Procedure Act -- there are more stcps before the district court, and before other tribunals, that will be required before the class members receive any money. The district court has said that it does not have the jurisdiction to compel payment of money damages. It has made clear that the reason it, rather than the Court of Federal Claims, can hear the case is that the plaintiffs have stated many times that they are not seeking money damages. Without a settlement, considerable hurdles remain before anyone other than the lawyers or accountants can see any money from this suit. That concludes my prepared statement. Thank you again for giving me an opportunity to testify. I would be happy to answer any questions you might have. 17 1 0 8 ~ ~ CONGRESS 1sr SESSION IN THE on I%?iole Housc Union Calendar No. 100 Repesenta- H. R. 2691 [Report No. 108-1951 Making appropriations for the Department of the Interior and relaled agencies for t,he fiscal year ending Septemtter 30, 2004, and for other purposes. IIOIJSE OF R8E1’RESENTAl’I\%S ,JLJI,Y 10, 2003 Mr. TAYLOR of Nort ti Carolina, from the Committee on Appropriations, re- ported the following bill; whic4i was coniniittd to the Conitnittee of the the State of thc Union and ordcred to he printed BP eriactc:d A BILL Making appropriations for tht. Departnient of‘ the Interior. and related agencies for the fiscal ycar ending Septcnihcr 30, 2004, arid for other purposes. 8mnte and House by t1w United States of hacricn in qf Ootywss assembled, it tives of the 1 2 3 That the follo~vii~g sunis are appropriated, out of any 4 money in the Tt*easur-y not otht~wise appropriated, for the 5 Departmerit of the Tntcirior and related agencim for the 6 fiscal ~ ~ a r criditig Heptciiiber 30, 2004, and for other pur- 7 poses, riamely 10 1 1 12 13 14 15 16 17 18 19 20 21 22 27 24 26 25 actment of this scxction. EXPEDITED Fetleral funds made available under subsection fa) shall he not less t l m ~ 50 percent (j) TI;:r-tnirwArrIoN OE' AcTHORITY.-The the Secrttary to provide assistance under this section ter- minates on the date that, is 15 years after the date of en- 85 YROCEDCRES FOR IYDWN TRUST ACCOUNTING (a) IN GENER~~ZL --Notwithstanding SEC: 137. authority of any 86 1 historic information, and shall estimate, so as to achieve 2 a ninetyeight percent confidence level, the rate of past 3 aceountirg error, if any, for each group or categories of 4 inclividiial Tndim motley account s. The Secretary shall 5 complete a statistical sarnpling evaluation covering all sub- date ject accounts within four years of enactment OF the ( e ) CERTIFICATION -Upon completion of a statis- I<’ederal lte,vtster ~ ( 1 ) W i t hiri 180 daj-s follow~~ig a n y ccrt ific;ltioii slir211 t tip Si~i-i~tar.y adjust any t i t . ; i n j r , ;ct.roi- i;t deter- tc, 11‘ to the arerage tt-nnsactions in a n accoiint siibsectiori i t tdivitlual ctrt ificatiort. r n m t o 1 i ion, In addit (<4 i rllt101111tS ( e ) , I rldiitrl money a(mtints cover-ed ti)‘ that The S;ccri>tai-y shall base such adjust- ;tpplicat,iort of t by the statistical strnphiig trattsactiou amouiit for the Secretary rtiajc also corrsider. atiy frtc- inforimtion regardiri{; the particular- account at issrir 111 a~l~jtisting the ; r i ~ ~ ) r i r i ( t\t’(’eSS;11-7- 6 7 of this Act. 8 9 tical sampling evaiuat,iorr fur a category 01- g o u p of hi&- 10 vidtial Idiart money accounts, the Secretary shall c.er-tif3; 1 1 complet,iort of tht evaluation arid pubhsti sucli certification 13 14 1s 16 17 18 19 20 21 22 23 12 in thc ((1) 1 ~ l ) ~ J ~ J S T h I E N T 01.’ i\(’COtJN?’S tiiic1P.r minttl trial viclltial 24 2s for- a ( l p s f l?lentr; to rndl- Iidian rttonet- ~ C C O I I I I t s ~ I I X U be dc~r-ii~rtf t‘r.orrt i 8‘7 1 the claims and j i i d p e n t appropriation provided by U.S.C. 1304 in the s;tme rrianner as payment of 2 3 U.S.0. 2414. Secretary 4 5 6 may consider both positive and negative errors in esti- 7 mating a rate of past accounting error, but in no event 8 shall the Secretary adjust the balanee of an account down- 9 ward under this Act. In the event that the Secretary deter- 10 the rate of past accounting,error for an ae- 11 zero or negative, t,he Secret,ary shall rnalie an xi- 12 of zero to that accowit Such a zero adjustment 13 14 ( 1 ) Notwtkrstantlrng any other provision of law, I S 16 relief with r