Background Indian tribes and nations are recognized as “distinct, independent political  communities” that are part of the unique political structure of layered  sovereigns and internal governments that comprise the U.S. system of  government. Tribal powers of self-government are recognized by the  Constitution, legislation, treaties, judicial decision, and administrative  practice. Tribal governments have many of the same responsibilities as  state and local governments. However, tribes are generally unable to  establish a strong tax base structured around the property taxes and  income taxes typically available to state and local governments,  according to a 2016 joint report from the Native Nations Institute and the  Harvard Project on American Indian Economic Development and a 2003  report from the U.S. Commission on Civil Rights. For example, the  reports found that tribes are unable to levy property taxes on some of  their lands because of the legal status of the land. In addition, most tribes  have a limited land base. Tribes generally do not levy income taxes  because many tribal communities have disproportionately high levels of  unemployment and a lack of employment opportunities. To the degree  that they are able, some tribes use sales and excise taxes, but these do  not generally generate enough revenue to fully support tribal  governments. Therefore, some tribes rely on a combination of federal  funds and economic development initiatives as fundamental sources of  financial support for the government programs and services provided to  their communities. According to Cohen’s Handbook of Federal Indian Law, “federal services  to Indians were never mere gratuities. Instead, they were provided in  exchange for cessions of land and rights, and to achieve distinctly federal  purposes.” Generally, the programs that provide basic tribal services are  supported through tribal priority allocation (TPA) funds that Congress  appropriates. TPA funds are used to provide a wide variety of services to  tribal communities—either through BIA-administered programs or self- determination contracts and self-governance compacts—and all federally  recognized tribes are eligible to receive those funds. Bureau of Indian Affairs BIA, through its 12 regional offices and more than 80 agency offices,  administers programs that provide services and funding to tribes. For  example, BIA programs include social services, natural resources  management, economic development, law enforcement and detention  services, tribal court administration, implementation of land and water  claim settlements, repair and maintenance of roads and bridges, repair of  structural deficiencies on high hazard dams, land consolidation activities,  and electric utilities. In some cases, a BIA agency office may serve one  tribe, and in other cases, a BIA agency office may administer programs  on behalf of more than one tribe. For example, BIA’s Central California  Agency administers programs to 56 tribes, the largest multi-tribal field  office in the contiguous 48 states. These programs may also be administered by tribal governments under a  self-determination contract or self-governance compact. BIA is  responsible for administering self-determination contracts, including  negotiating and approving each contract and its associated annual  funding agreement and disbursing funds to the tribes. For instance, under  its procedures, BIA is to provide tribes that are interested in pursuing a  self-determination contract with key information about the program and  available funding. ISDEAA transfers control over programs to tribes, but  as stated in Cohen’s Handbook of Federal Indian Law, “financial  responsibility remains with the federal government.” ISDEAA provides  that tribes who decide to administer federal programs are to receive the  same funds that would have been provided had the federal government  operated the programs. BIA identifies the amount of funds available to a tribe under a self- determination contract or self-governance compact for the administration  of a federal program. In general, the most basic process for calculating  the program amount is as follows:  The program amount equals the total amount of funds Interior used to  operate a program minus residual funds. Residual funds are the funds necessary for the federal government to  carry out residual functions. Residual functions are inherently federal  functions that only federal employees’ may perform if all tribes were to  assume responsibilities for all programs that ISDEAA permits. Inherently  federal functions are not defined in Title I or Title IV of the ISDEAA, and a  1994 Solicitor of the Interior memo reports that inherently federal  functions are to be determined on a case-by-case basis when they fall  outside certain defined categories. BIA officials told us the basic  calculation is most likely to be used when a tribe is served by an agency  office that only serves one tribe and the tribe took over administration of a  program from that agency office. In cases where the total amount of funds BIA used to operate a program  serves more than one tribe, additional data and factors may be included  in the methodology to calculate the amount of funds available to  administer the program. This is needed to ensure BIA can continue to  provide services to the tribes that did not take over administration of the  program. A BIA official told us that some regions and agency offices may  divide the total amount by the number of tribes served, as shown in the  following example:  The program amount equals the total amount of funds Interior used to  operate a program minus residual funds divided by the number of  tribes served by the program. In other cases, regions and agency offices may include additional data to  weight the calculation, such as tribal population or tribal land acres. When  a tribe elects to pursue a self-determination contract, BIA is to meet with  tribal officials to discuss and negotiate the terms of the contract, including  what functions will be retained by BIA, the annual funding amount, and  terms for the frequency of disbursing funds—that is, disbursed in a single  lump sum or other intervals, such as quarterly payments. According to Interior budget officials responsible for BIA’s budget, after  Interior receives its appropriations, departmental budget officials  determine how to distribute any changes between the Administration’s  budget and the final budget among BIA offices that deliver direct services  to tribes and to tribes that contract the services through self-determination  contracts. According to Interior budget officials, they calculate changes in  the budget amounts for each contract after consulting BIA program  officials and based on statutory requirements, historical percentages, or  other distribution factors. After the budget calculations are completed, Interior officials transfer funds to BIA regional offices to distribute to BIA  agency offices and tribes. An awarding official in the regional or agency  office then provides contracting tribes an updated annual funding  agreement that identifies the amount of funds for that fiscal year. Self-Determination  Contracts and Self- Governance Compacts ISDEAA authorizes federally-recognized tribes to assume administration  of certain federal programs and functions that were previously managed  by the federal government. It is Interior policy to facilitate tribal  administration of programs through self-determination contracts and  remove obstacles that hinder tribal autonomy and flexibility to administer  such programs. Under Title I of ISDEAA, an interested tribe may request by tribal  resolution to enter into a self-determination contract with BIA. ISDEAA  requires the parties to such contracts to negotiate annual funding  agreements and determine the frequency and timing of payments under  the contract. Payments may occur throughout the fiscal year in  accordance with terms identified in the annual funding agreements as  Interior’s Indian Affairs Office of Budget and Performance Management  makes appropriated funds available. Under Title IV of ISDEAA, an interested tribe may request to enter into a  self-governance compact. Under the law, to be eligible for participation in  self-governance compacting, a tribe must, among other things,  demonstrate financial stability and management capability, which can be  evidenced by participating in a self-determination contract for at least 3  years with no material audit exceptions. Interior’s Office of Self- Governance (OSG) is responsible for administering self-governance  compacts and funding agreements for Interior programs. OSG assists  tribes that want to enter into self-governance compacts by providing  training, determining eligibility, participating in negotiations with the tribes  and Interior agencies to identify the amount of funds that will be included  in the self-governance compacts, and approving tribes to participate in  self-governance. In addition, tribes with self-governance compacts  negotiate annual funding agreements with OSG rather than BIA. OSG is  also responsible for transferring funds from Interior to tribes with a self- governance compact, ensuring audit compliance, and processing waivers  of BIA regulations. Further, OSG is responsible for preparing an annual  report to Congress on the costs and benefits of self-governance. As of  fiscal year 2016, OSG has entered into self-governance compacts that  cover 47 percent of federally recognized tribes (267 tribes). For additional information on the differences between self-determination  contracts and self-governance compacts, see table 1. Several Factors,  Including Certain  Federal Actions, Can  Affect Tribes’ Use of  Self-Determination  Contracts, Self- Governance  Compacts, and the  HEARTH Act Several factors, including federal agencies’ processes and actions can  affect tribes’ use of mechanisms that further tribal self-government such  as self-determination contracts, self-governance compacts, or leasing  authority under the HEARTH Act that further tribal self-government. Some  of these factors, such as federal training and resources, can help tribes  develop the tribal capacity needed to take over administration of federal  programs and thereby facilitate tribes’ use of these mechanisms. In  contrast, other factors, specifically federal processes and actions, can  hinder or delay tribes’ use of these mechanisms. Some of these  processes include: (1) BIA’s approach for sharing information with tribes,  (2) Interior’s process to disburse funds, and (3) Interior’s process to  review proposed tribal leasing regulations submitted under the HEARTH  Act. In addition, the adequacy of federal resources needed to administer  a program is a factor that can affect tribes’ use of self-determination  contracts and self-governance compacts, according to several tribal  stakeholders and federal officials we spoke with, government reports, our  prior reports, and other articles we reviewed. Tribal Capacity is a Key  Factor That Can Facilitate  Tribes’ Use of Self- Determination Contracts,  Self-Governance  Compacts, and Authority  under the HEARTH Act The capacity of a tribal government to administer a federal program or  manage its resources is a key factor that can affect a tribe’s decision to  enter into a self-determination contract or self-governance compact, or to  use the authority available under the HEARTH Act, according to some  reports we reviewed. For example, the Harvard Project on American  Indian Economic Development found that successful tribal assertions of  sovereignty and self-government are backed by capable institutions of  governance that contribute to tribal capacity. According to federal officials and agency training documents we  reviewed, Interior has contributed to the capacity of tribal governments by  increasing tribes’ knowledge about self-governance compacting and the  HEARTH Act. For example, Interior’s OSG provides opportunities for  tribes to learn about self-governance compacting and build capacity by  partnering with a non-profit organization to conduct training events,  including an annual week-long training program. In addition, BIA offered  several training sessions in 2014 and 2015 on the HEARTH Act to  educate tribes on the benefits of developing tribal leasing regulations.  Furthermore, Interior’s Office of Indian Energy and Economic  Development administers a grant program, Tribal Energy Development  Capacity, intended to help tribes build the capacity to enter into a tribal  energy resource agreement (TERA) or develop leasing regulations under  the HEARTH Act. Some tribal stakeholders identified the EPA’s Indian Environmental  General Assistance Program (GAP) as a model for a federal program that  helped their tribes build the capacity needed to administer environmental  programs from EPA. These tribal stakeholders also told us this capacity  benefitted the tribes as they sought to take over similar programs from  Interior. Some tribal stakeholders told us the GAP program is effective in  assisting tribal governments build capacity because it is designed to  provide consistent funding over multiple years. According to reports we  reviewed that discuss building tribal capacity, effective capacity building  efforts should both provide for sustained, consistent funding over time,  since developing capacity can be an ongoing effort that may take longer  than 1 year to achieve and facilitate a tribe’s ability to develop a program  that is responsive to each tribe’s unique conditions and priorities. Factors That Can Hinder  Tribes’ Use of Self- Determination Contracts,  Self-Governance  Compacts, and Authority  under the HEARTH Act We found that several factors can hinder tribes’ ability to use self- determination contracts, self-governance compacts, or leasing authorities  under the HEARTH Act, including: (1) BIA’s approach for sharing key  information with tribes seeking to develop a program using a self- determination contract, (2) Interior’s process to disburse funds to tribes  associated with self-determination contracts and self-governance  compacts, (3) Interior’s review of tribal leasing regulations submitted  under the HEARTH Act, and (4) BIA’s management and maintenance of  federal programs that tribes may pursue to take over under a self- determination contract. BIA’s Approach for Sharing  Key Information with Tribes According to several tribal stakeholders, BIA’s approach for sharing key  information with tribes does not always ensure that tribes have the  information they need to design programs under self-determination  contracts prior to negotiations. As a result, this has been a factor that has  hindered or delayed tribes’ use of self-determination contracts for  administering programs. Interior guidance and policy call for BIA to provide tribes information that  includes, among other things, calculations BIA uses to identify the amount  of funds available to a tribe if it takes over administration of a program. In  accordance with Interior’s policy, BIA should provide tribes with the  information necessary to design programs those tribes would like to  administer under a self-determination contract to meet the needs of their  communities consistent with their diverse demographic, geographic,  economic, cultural, health, social, religious, and institutional needs. Also  in accordance with Interior guidance, when a tribe requests to enter into a  self-determination contract with Interior, BIA should disclose information  to the tribe that identifies the amount of program funding available, the  methodology used to identify available amounts, the process used to  arrive at available amounts, an identification of the amount of funding  retained by BIA, and any other information useful to understand how  contract amounts were calculated. Moreover, Interior regulations call for  BIA to provide to tribes, for the negotiation of annual funding agreements  for self-governance compacts, a brief justification as to why specific  functions have been determined inherently federal. However, according  to several tribal stakeholders, they do not receive this information,  including calculations BIA uses to identify the amount of funds available  to tribes, prior to negotiating their self-determination contracts. Some BIA regional and agency office officials we interviewed told us they  do not generally provide information to tribes prior to negotiating the  terms of a self-determination contract because the determinations of  inherently federal functions and the amount of funding the bureau would  retain to perform such functions generally occurs during meetings with  BIA and the tribe. A tribal stakeholder told us that without documentation  on funding calculations and methodologies, tribes are at a disadvantage  and have little basis to negotiate during these meetings. A tribal  stakeholder told us that, in practice, the negotiation generally consists of  BIA informing the tribe of the amount of funds to request in its proposal  and what federal functions BIA will retain without any documentation to  support its determination of inherently federal functions or the resources  to be made available to the tribe to administer a program using a self- determination contract. BIA’s approach is not consistent with Interior’s policy of sharing  information so tribes can develop programs. By developing a process that  results in BIA’s regional and agency offices providing tribes with  documentation on calculations and methodologies to identify resources  available to administer a program using a self-determination contract, BIA  would be adhering to Interior’s policy and have greater assurance that  tribes have the information they need to design the programs that they  would like to pursue under a self-determination contract. In addition, BIA guidance states the bureau will ensure functional  consistency in the determination of inherently federal functions when the  Central Office and all regional offices are compiling that information for  negotiating annual funding agreements with tribes. We found examples  that suggest that BIA has not consistently determined whether programs  and functions are inherently federal, which can affect some tribes’ use of  self-determination contracts. For example, a BIA official in one regional  office told us that the region had previously decided all functions  associated with the Land Titles and Records Offices were inherently  federal and told tribes that BIA would not approve a self-determination  contract for those functions. However, other BIA regional offices did not  consider the functions of the Land Titles and Records Offices as  inherently federal, and some tribes in those regions had taken over  administration of those functions. BIA does not have a process that results in consistent determinations of  inherently federal functions and does not provide tribes with information  on its prior determinations. A BIA official told us that determinations of  inherently federal functions are made on a case-by-case basis because  each tribe and its circumstances are unique. However, this approach  does not provide BIA leadership with reasonable assurance of functional  consistency throughout the bureau in the determination of inherently  federal functions—consistent with bureau guidance. By developing a  process that results in consistent determinations of inherently federal  functions, BIA could have greater assurance that these decisions are  being made appropriately across the agency. BIA could also increase  transparency in the process by providing tribes with documentation on  activities and functions previously determined to be inherently federal and  the basis for making these determinations. Interior’s Process to Disburse  Funds According to tribal stakeholders we spoke with, Interior’s process to  disburse funds associated with the tribes’ self-determination contracts  and self-governance compacts is a factor that hinders expansion of self- determination contracts or self-governance compacts. Several tribal  stakeholders and federal officials we interviewed said that the process  does not ensure that tribes receive funds within the time frame specified  in ISDEAA’s Model Agreement for self-determination contracts or as  agreed to by Interior and the tribes in their annual funding agreements.  Two tribal stakeholders stated that in prior years, funds were disbursed  several weeks or months after Interior received its apportionment from the  Office of Management and Budget. We were unable to determine the extent to which Interior disburses funds  for self-determination contracts within the time frame agreed to in a self- determination contract because Interior does not systematically track the  disbursement of funds from the date it received its appropriations through  the date that it made funds available to tribes and does not compare its  actual performance to expected performance. Not tracking this  information and comparing actual performance to expected performance  is contrary to federal internal control standards, which state that agency  management should design control activities to achieve objectives and  respond to risks, such as by comparing actual performance to planned or  expected results and analyzing significant differences. This is not a new issue for Interior. Specifically, in 2015, an Interior  contractor reported on an evaluation of Interior’s process for disbursing  funds and identified opportunities for improvement. Consistent with our  findings, the report also found that, among other things, the process used  by Interior to disburse funds is a manual process that does not include a  real-time tracking mechanism. Without such a mechanism, the report  found that officials must spend time trying to determine the status of  documents and finding misplaced or lost documents. For example, the  report found that in fiscal year 2014, Interior had more than 6,000  scanned documents that required up to 6 signatures each, for a total of  up to 36,000 signatures, to disburse funds including funds to tribes for  self-determination contracts or self-governance compacts. To finalize  these documents, the report estimates that 600 hours of staff time were  spent scanning, uploading, and printing the documents. Several Interior  officials told us they conduct monitoring activities within a specific BIA  region or BIA agency office, such as tracking disbursement information  through an Excel spreadsheet, but these activities were not part of a  systematic process. An Interior official told us there are no plans to  develop a real-time tracking mechanism. Interior officials we interviewed cited several reasons why some funds  associated with self-determination contracts and self-governance  compacts were not disbursed in accordance with time frames outlined in  its Model Agreement or negotiated in funding agreements. The reasons  include the following:  Interior’s financial data management system. Interior officials told us  that the agency’s financial data management system is used for all of  Interior and is not equipped for the unique aspects of self- determination contracts and self-governance compacts—making it  difficult to properly track and monitor key actions. Prior use of an inefficient process. An Interior official told us that prior  to fiscal year 2017, BIA used several spreadsheets to coordinate TPA  information for distributions. The official stated that these  spreadsheets were over 15 years old, and they made the process  inefficient and time-consuming. To distribute funds, officials would use  one spreadsheet to gather information and another to summarize the  amounts by functional area and region. The official stated that BIA  updated the process in fiscal year 2018 and does not expect it to  delay funding in the future. Staff shortages in key positions. BIA officials in several regions told us  they are experiencing staff shortages in key positions that are  responsible for the transfer of funds from BIA to tribal governments,  such as awarding officials. Interior officials said the Office of Self  Governance also needs additional awarding officials with only one  awarding official for self-governance compacts. Interior officials stated  that the challenges from staff shortages are compounded by  Congress’ use of continuing resolutions that result in BIA repeating its  fund distribution process multiple times in a single year. Delays in receiving tribal signatures. Interior officials we interviewed  told us that they have experienced delays disbursing funds to a tribe  because they must wait for tribal officials to sign documents before  funds may be disbursed. When funds are not disbursed in a timely manner, a tribal stakeholder told  us that tribes may have to use funds from their general revenue accounts  to cover expenses for federal programs or seek other sources, such as  loans, to cover program expenses. According to several tribal  stakeholders, when a tribe has to use its own funds for the administration  of programs—even temporarily—it can adversely affect the tribe in  various ways, including lost opportunities to use tribal funds for improving  the tribes’ economic conditions, reducing other services provided to tribal  communities, and furloughing tribal government employees. In addition,  several tribal stakeholders told us that the timeliness of disbursements for self-determination contracts is a factor they consider when deciding  whether to take over additional programs under a self-determination  contract. The tribal stakeholders said that the tribe must consider if it is  able to use tribal funds or willing to obtain a loan to fund a program when  the federal government is late disbursing funds. Without establishing a  process for tracking and monitoring the disbursement of funds associated  with self-determination contracts and self-governance compacts, Interior  will not have reasonable assurance it disburses funds in a systematic way  or in accordance with agreed upon time frames. Interior’s Process for  Reviewing Proposed Tribal  Leasing Regulations Interior has not clearly documented its process for reviewing proposed  tribal leasing regulations with timeframes associated with each step of the  process. The process can often be lengthy and time consuming;  according to tribal stakeholders, this can be a factor that hinders the  tribes’ ability to make decisions about the use of tribal resources. Under  the HEARTH Act, tribes are to submit proposed leasing regulations for  Interior’s review and approval before a tribe can approve leases for the  use of tribal lands, and Interior’s review is to be completed within 120  days after the dates on which the tribal regulations are submitted to the  agency. Interior officials told us they interpret the statutory review time  frame requirements of the HEARTH Act as applying only to the agency’s  review to ensure tribes incorporated all changes identified in prior  reviews. Specifically, Interior officials told us the agency does not  consider the statutory time frame to begin until it has received a final  version of the proposed tribal leasing regulations. These officials  described the final version of proposed tribal leasing regulations as  regulations that have already undergone review by BIA and Interior’s  Solicitor’s office, have been revised by the tribe, and have been  resubmitted for additional review by BIA and the Solicitor’s office. This  process can be repeated multiple times before Interior considers the  tribe’s proposed leasing regulations to be final. In contrast, a tribal stakeholder told us that Interior’s interpretation of how  to measure the time frame is inconsistent with the tribe’s interpretation of  the statutory time frame. The tribal stakeholder told us that a tribe  considers its leasing regulations initially submitted to Interior as final,  although the tribe understands that BIA and the Solicitor’s office may  request revisions. Some tribal stakeholders told us that because Interior  is not considering the 120 days as a time frame from first submission until  approval, tribes do not know when to expect a final decision on draft tribal  regulations. We found that some of this confusion could be attributed to the fact that  Interior has not clearly documented its review process to include  established time frames associated with each step of the process. Under  federal standards for internal control, management should design control  activities, such as clearly documenting internal control in management  directives, administrative policies, or operating manuals. The HEARTH  Act seeks to expand tribal self-government and promote economic  development by shifting the authority for leasing from the Secretary to the  tribes. By developing a clearly documented review process that includes  established time frames for each step in the process for reviewing  proposed tribal leasing regulations submitted under the HEARTH Act,  Interior can better ensure that it is eliminating uncertainty and better  communicating the process for approval to the tribes. We also found that the approval process can be lengthy in some cases.  Our review of 42 tribal leasing regulations submitted to Interior for review  from 2012 through 2017 for which BIA provided us with data on the date  the tribe submitted the regulations to Interior and the date of Interior’s  approval found that 4 of the 42 leasing regulations were approved within  120 days. For the other 38 proposed regulations, the time from when the  tribe submitted the regulations to Interior to when the agency approved  the regulations ranged from 134 days to 980 days. Half of the 42  proposed regulations were under review by Interior for a year or longer,  with 5 of the 21 under review for more than 2 years. Interior’s review was  generally not continuous during the entire period; instead, these time  periods included review by BIA and the Solicitor’s office and the time  spent by the tribe revising its leasing regulations in response to Interior’s  review. Tribal stakeholders also shared with us several examples that illustrate  Interior’s lengthy review process for tribal governments’ use of the  HEARTH Act. For example, in one case, Interior received a tribe’s leasing  regulations for review and approval in May 2015. Interior approved the  tribe’s leasing regulations and published the decision in the Federal  Register in April 2018—more than 2 years later. Officials representing this tribe told us they considered the leasing regulations initially submitted  on May 18, 2015, as final, though they understood that Interior could  request revisions. These officials explained that the tribe has its own  extensive process and procedures for lawmaking and developed its  leasing regulations consistent with its Constitution, Legislative Procedures  Act, and Administrative Rulemaking Procedure, which take into account  comments from tribal members and tribal agencies and includes a judicial  review, legislative analysis, fiscal impact review, and adoption by the  tribe’s elected business committee. Tribal stakeholders told us that after each communication with BIA about  the leasing regulations, they believed the regulations were satisfactory for  approval. For example, the tribe received preliminary approval from BIA in  October 2016. Then, tribal stakeholders said in August 2017—nearly 10  months later—the tribe received correspondence from BIA stating that the  tribe needed to add several additional provisions, including language  regarding Indian irrigation projects and districts even though the tribe  does not have any irrigation projects or districts within its boundaries.  Additional correspondence took place between the tribe and Interior,  resulting in final approval in January 2018. Tribal stakeholders told us that  the lengthy review delayed the tribe’s ability to implement leasing  regulations and delayed the tribe’s ability to make decisions about the use  of tribal resources. In another case, Interior received tribal leasing regulations for review and  approval on January 17, 2014. The tribe stated in documentation  submitted to Interior that it was seeking increased decision-making  authority under the HEARTH Act because it had finalized various  construction agreements and needed to approve surface leases for an  economic development project. During the time that the tribe’s leasing  regulations were under review at Interior, BIA asked the tribe to submit  multiple versions of its leasing regulations. According to BIA documents, the bureau took approximately 2 months to  transfer the tribe’s regulations from BIA headquarters to a regional office  for its review. Once the regional office received the tribal leasing  regulations, the office conducted its review over a 3-month period and  provided comments to BIA’s headquarters. BIA’s data show that  headquarters sent the tribe’s leasing regulations to the Solicitor’s office  nearly 5 months after it received the tribal leasing regulations. Over the  next couple of years, Interior requested the tribe make changes to its  leasing regulations three more times and resubmit revised versions for  review. On March 3, 2016—more than 2 years after receiving the tribe’s leasing  regulations—Interior documented that it had “one small change” it would  like the tribe to make to the regulations. The tribe made the requested  change and resubmitted the leasing regulations to Interior via certified  mail, which showed receipt at Interior on July 1, 2016. Interior approved  the tribal leasing regulations on October 7, 2016—more than 3 months  after the tribe submitted regulations with the “small change.” Interior  approved the tribe’s leasing regulations and published the decision in the  Federal Register in October 2016—more than 2 years after Interior first  received the tribe’s leasing regulations. Interior officials told us there was not a single reason for the lengthy  review times. In some cases, Interior officials said the review times were  long because the BIA official responsible for managing Interior’s review  had left the bureau. In other cases, Interior officials told us they were  short-staffed in the Office of the Solicitor and the legal review took longer  than anticipated. However, they acknowledged that the uncertainty  associated with how long Interior’s review will take can make it difficult for  tribes to plan and execute economic development projects. For example,  a BIA official told us that a tribe was unable to pursue an economic  development opportunity because of the time it took for Interior to  complete the process to review the tribe’s regulations. In contrast, a timely review of a tribe’s proposed leasing regulations can  positively affect tribal control and decision making. For example, a tribal  stakeholder said after several months waiting for BIA to approve a  surface lease needed for a tribe to develop a wind farm, the tribe decided  to pursue authority under the HEARTH Act so that it could review and  approve the lease without waiting for BIA’s review of the surface lease.  Interior reviewed and approved the tribe’s leasing regulations submitted  under the HEARTH Act authority in 31 days. According to the tribal  stakeholder, the timely review and approval of the tribe’s leasing  regulations allowed the tribe to review and approve the surface lease  needed for construction of the wind farm to commence before the  expiration of tax credits—a key component that made the project feasible. BIA’s Past Management of  Federal Programs Past mismanagement of federal programs under the administration of BIA  is a factor that can affect tribes’ decisions whether to take over federal programs through self-determination contracts, according to several tribal  stakeholders and BIA officials. As documented in a 2003 report by the  U.S. Commission on Civil Rights, decades of general mismanagement of  infrastructure and programs under BIA’s administration can hinder a  tribes’ use of self-determination contracts. In 1999, BIA reported to  Congress that funds provided under self-determination must be used not  only for current operations but also “to repair 150 years of general  neglect” of Indian programs. In these cases, taking over programs with  long-standing neglect is a liability that some tribes are not willing to  assume. For example, a tribal stakeholder told us that its BIA agency  office neglected tribal land records for many years. As a result, the tribe  is reluctant to assume the liability associated with administering a real  estate program without accurate property records. In another example, BIA operates an irrigation project that provides  electric utility service to two tribes. Both tribes have taken over certain  functions associated with the utility service provided to their communities  through self-determination contracts, and both tribes have expressed  interest in expanding the functions they administer. However, BIA and  tribal officials said that concerns over infrastructure that needs to be  repaired or replaced and the liability associated with rights-of-way have  deterred both tribes from taking over the remaining functions of the utility.  For example, many utility poles on the project’s transmission lines are  more than 50 years old and are in need of replacement, and the project  has over 1,500 miles of transmission lines and 2,000 miles of distribution  lines. According to a BIA document, these lines might have been  extended without receiving a formal right-of-way. The report states that  “many of ’s rights-of-way are unperfected  and there are no supporting documents evidencing a legal right-of-way.”  According to tribal stakeholders these kinds of uncertainties are  significant factors they must consider in their decisions related to self- governance of BIA programs. Adequacy of  Resources Affects  Tribes’ Use of Self- Determination  Contracts and Self- Governance  Compacts The adequacy of resources is a long-standing concern that has been a  factor affecting tribal participation in self-determination contracts and self- governance compacts, according to several tribal stakeholders and  federal officials we interviewed, government reports, our prior reports,  and articles we reviewed. Specifically, a lack of adequate resources has  been a long-standing concern that can limit the number of programs  tribes take over using self-determination contracts and self-governance  compacts. For example, the U.S. Commission on Civil Rights 2003 report  noted that the authority tribes have to take over the administration of  federal programs is useful to the extent that adequate funds are made  available to the tribes to operate the program. According to Interior  officials, Interior does not have an estimate on the extent to which it can  provide adequate resources to tribes that want to administer federal  programs. For one program, BIA estimated in a report to Congress that  the dollars BIA expended in fiscal year 2013 for BIA and tribes to operate  detention and corrections centers fund about forty percent of the  estimated operating needs. Faced with funding shortfalls from the BIA budget to administer federal  programs under federal self-determination contracts or self-governance  compacts, many tribal stakeholders told us that they supplement federal  funding. Officials from one tribe told us that the tribe has supplemented all  the programs it has taken over from BIA. For example, the tribe reported  that the Land Titles and Records Program has a shortfall of about  $300,000 annually; the Law Enforcement program with about $564,000  annually; and the Probate Program with about $129,000 annually.  Officials from the tribe told us that tribes may rely on revenues generated  from economic development or tax revenue to supplement federal dollars  for programs they have taken over from the federal government. However, tribal stakeholders we interviewed told us that not all tribes are  in a position to supplement additional federal programs because of limited  economic development opportunities and tax revenue; therefore, those  tribes may not have the option to take over additional federal programs.  According to a tribal stakeholder, dual-taxation—when both a tribe and  state tax the same non-tribal members and businesses on tribal land— can significantly limit a tribe’s tax revenue because tribes must reduce or  eliminate their taxes to stay competitive and attract business and  enterprise to their lands. Furthermore, the funds tribes may use to  supplement federal programs are needed to fund other governmental  services and activities, which place tribal leaders in the position of  deciding whether to use funds to provide governmental services not  funded by the federal government or to increase self-governance by  administering additional federal programs. As we have previously  reported, when tribes supplement the federal program they take over, it  diverts funds away from other economic development opportunities and  other government functions and services they provide to their  communities and citizens. Lastly, several tribal stakeholders told us that not receiving adequate  resources from the federal government to administer federal programs  makes them reluctant to administer additional federal programs because  they believe BIA has a better chance than the tribe to obtain additional  resources that can be used to supplement program shortfalls. This is, in  part, because they believe that BIA agency offices and regional offices  have access to funding sources that are not available to tribes and  because BIA does not always make tribes aware of funds that are  available. For example, the Department of the Interior’s Self-Governance  Advisory Committee reported in 2015 that the distribution of year-end  funds is entirely within the discretion of the local awarding official and that  not all tribes are notified that these funds are available. Conclusions Interior has taken steps to assist tribes pursuing tribal self-government by  providing training opportunities focused on self-governance compacts and  the use of the HEARTH Act to help increase tribal capacity. However, several factors have continued to hinder tribes’ use of these mechanisms  to further tribal self-government. First, BIA’s approach for sharing key  information with tribes when tribes seek to administer a program using a  self-determination contract does not provide the tribes with the  information they need to understand how the self-determination contract  amounts were calculated. As a result, tribal leaders are at a disadvantage  in making sound decisions regarding the feasibility of taking over the  administration of federal programs. Second, BIA does not have a process that results in consistent  determinations of inherently federal functions and does not provide tribes  with information on its prior determinations. By developing a process that  results in consistent determinations of inherently federal functions, BIA  could have greater assurance that such determinations are being made  appropriately across the agency and BIA could increase the transparency  of the process by providing tribes with documentation on activities and  functions previously determined to be inherently federal and the basis for  the determinations. Third, Interior does not have an effective process for tracking and  monitoring the disbursement of funds associated with tribes’ self- determination contracts and self-governance compacts or as agreed to  with the tribes. Without establishing an effective tracking and monitoring  process, Interior does not have reasonable assurance that it is disbursing  funds in accordance with ISDEAA or time frames agreed to with the  tribes. Lastly, Interior has not documented its process to include established  time frames associated with each step of the process to review proposed  tribal leasing regulations submitted under the authority provided by the  HEARTH Act. This has resulted in lengthy review times—in some cases,  multiple years. By developing a clearly documented review process that  includes established time frames for each step in the process for  reviewing proposed tribal leasing regulations submitted under the  HEARTH Act, Interior can better ensure that it is eliminating uncertainty in  the process to approve tribal leasing regulations. Recommendations for  Executive Action We are making the following four recommendations to Interior: The Assistant Secretary of Indian Affairs should develop a process so  that all regional and agency offices consistently provide tribes with  documentation on calculations and methodologies to identify  resources available to administer a program using a self- determination contract. (Recommendation 1) The Assistant Secretary of Indian Affairs should develop a process  that results in consistent determinations for inherently federal  functions and to provide documentation to tribes on specific activities  and functions determined to be inherently federal. (Recommendation  2) The Assistant Secretary of Indian Affairs should establish a process to  track and monitor the disbursement of funds associated with self- determination contracts and self-governance compacts.  (Recommendation 3) The Assistant Secretary of Indian Affairs should coordinate with the  Office of Solicitor and BIA to develop a clearly documented process  with established time frames for each step in the process for  reviewing proposed tribal leasing regulations submitted under the  HEARTH Act. (Recommendation 4) Agency Comments We provided a draft of this report to Interior for comment. In its comments  reproduced in appendix II, Interior generally concurred with our  recommendations. Interior also provided technical comments, which we  incorporated as appropriate. As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 28 days from the  report date. At that time, we will send copies to the appropriate  congressional committees, the Secretary of the Interior, the Assistant  Secretary of Indian Affairs, and other interested parties. In addition, the  report will be available at no charge on the GAO website at  http://www.gao.gov. If you or your staff have any questions about this report, please contact  me at (202) 512-3841 or ruscof@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last   page of this report. GAO staff who made key contributions to this report  are listed in appendix III. Appendix I: Scope and Methodology For this report, we reviewed a range of reports, articles, conference  proceedings, congressional testimony, and other publications from federal  and tribal governments, academics, and nonprofit organizations. These  publications included general background information related to tribal self- government and tribes’ use of self-determination contracts, self- governance compacts, and the HEARTH Act, as well as historical  perspectives, successes and challenges, and identified some factors that  can affect a tribe’s decision to use one of these mechanisms. We  identified these articles and publications by searching various Web-based  databases, such as ProQuest, Scopus, DIALOG, Academic OneFile,  JSTOR, and Lexis to identify existing studies from articles, peer-reviewed  and other journals, including law review journals, and government and  academic publications. We searched terms such as tribal sovereignty,  self-governance, self-determination, and capacity, as well as relevant acts  or program names. We also asked tribal stakeholders that we interviewed  to recommend additional reports, congressional testimony, and other  articles on the topic. We did not set specific time frames for the search,  and identified more than 50 articles from 1982 to 2017. We examined  summary-level information about the literature identified in our search and  identified a few of the articles as directly related to our report. These five  publications are identified throughout this report. Other articles provided  beneficial context and historical information but did not contribute to us  identifying factors to include in this report. We reviewed relevant laws and regulations including the Indian Self- Determination and Education Assistance Act of 1975 (ISDEAA), as  amended and Helping Expedite and Advance Responsible Tribal Home  Ownership Act of 2012 (HEARTH Act). We also reviewed Interior’s policy  manual, Interior’s procedures handbook for contracting under Title I of  ISDEAA, the Interior Solicitor’s opinions on inherently federal functions,  and other guidance documents. We reviewed Interior reports and audits  related to self-determination contracts, self-governance compacts, and  the Hearth Act, including Interior budget justification reports and  evaluations of tribes’ performance with trust programs administered under  a self-governance compact. ISDEAA also allows tribal governments to  take over administration of certain programs from the Department of  Health and Human Service’s Indian Health Service. For this review, we  focused on tribes’ use of self-determination contracts and self- governance compacts to administer Bureau of Indian Affairs (BIA)  programs. To determine tribes’ use of self-determination contracts, we obtained data  from Indian Affairs’ Office of Chief Financial Officer for all current  contracts as of November 2017. The data provided included the contract  number, the tribe or tribal organization with the contract, and the program  included in the contract. To assess the reliability of the data, we consulted  with knowledgeable federal officials and found examples in one of our  prior reports that generally supported the data we obtained from the  Office of Chief Financial Officer. To determine tribes’ use of self- governance compacts, we reviewed data that Interior provides to  Congress in annual reports that cover tribal use of self-governance  compacts. To assess the reliability of the data, we consulted with  Interior’s Office of Self Governance officials and tribal stakeholders and  compared information provided to us from Interior with information  obtained from the Tribal Self-Governance Communication and Education  Consortium. We determined that the data were sufficiently reliable for the  purpose of our report. To obtain a better understanding of the information found in self- determination contracts, we requested BIA provide information from self- determination contract files. We requested contract files that would  represent a range of BIA regions and programs. We also sought to use  this information to identify examples from the contract file where BIA  documented the amount of program funding available to the tribe and  retained by BIA, and the methodology BIA used to identify available  amounts. Through our review of several contract files, we were able to  corroborate information from BIA officials and tribal stakeholders, who  told us that BIA does not systematically document the amount of program  funding available to the tribe and retained by BIA and the methodology  BIA used to identify available amounts. The findings from the contract  reviews are not generalizable to those we did not request and obtain. We  also collected information from 9 BIA regions on the number of  retrocessions (tribes that voluntarily turned back administration of a  program to BIA), reassumptions (programs where BIA took back  administration from a tribe because of noncompliance with contract  requirements), and declinations (programs that tribes requested to take  over administration but BIA declined) from 2012 through 2017. BIA does  not have a centralized data system to collect this information and through  consultations with knowledgeable federal officials, we determined that  each of BIA’s regions was in the best position to provide us with this  information. To determine tribal participation with the HEARTH Act and the extent to  which Interior’s review is consistent with the Act, we collected data from  BIA on the number of tribes that have submitted leasing regulations for  BIA’s review, and the number of tribal leasing regulations BIA approved  under the HEARTH Act. In most cases, Interior provided an internal  checklist that included, among other things, the dates tribes submitted  information and dates of Interior responses. We used this information to  identify the amount of time associated with BIA’s review of tribal leasing  regulations. In some cases, we also gathered information from tribes. We  determined that the data were sufficiently reliable for the purposes of this  report. We interviewed federal officials from Interior’s Office of Solicitor, Indian  Affair’s Office of Self Governance, Office of the Chief Financial Officer,  and Office of Budget and Performance Management. Within BIA, we met  with officials from Office of Trust Services, the Office of Indian Services  and interviewed or received written responses from regional officials in all  12 BIA regions. Through these interactions we asked officials to identify  processes associated with tribes entering into, negotiating, and  administering federal programs under a self-determination contract or  self-governance compact. We also discussed processes associated with  Interior’s disbursement of funds agreed upon in contracts and compacts.  In addition, we discussed processes for tribes to submit leasing  regulations to BIA and for BIA’s review of tribal leasing regulations. We  compared the information collected through discussions with federal  officials and federal documents with Interior guidance documents and  Standards for Internal Control in the Federal Government. We also  discussed the use of self-determination contracts and self-governance  compacts with Interior’s Bureau of Land Management and Bureau of  Reclamation, and interviewed officials from the Environmental Protection  Agency to discuss tribes’ use of existing authorities to administer  environmental programs and the agency’s efforts to build tribal capacity. To identify factors that can affect a tribe’s decision to use self- determination contracts, self-governance compacts, and the HEARTH  Act—as well as tribes’ experience with these mechanisms—we  interviewed leaders and officials from 29 federally recognized Indian  tribes and nations, the Department of the Interior Self-Governance  Advisory Committee, and non-profits representing tribal interests, such as  the National Congress of American Indians (NCAI) and the Native  Governance Center. The key factors we included in this report are those  that were most frequently mentioned and that are specifically related to  federal government policies and processes. During the review, we  identified factors that tribes may consider but that are not related to the  federal government; because these factors were outside of the scope of  this review, we did not include them in our report. We selected Indian  tribes and nations to ensure a representation of tribes with a range of  experience using self-determination contracts and self-governance  compacts, tribal size, and geographic location. We also selected tribes to  ensure we had representation from tribes that developed leasing  regulations under the HEARTH Act and those that have elected to not yet  develop or submit leasing regulations under the HEARTH Act. We also met with representatives from tribal consortia, such as the  Coalition of Large Tribes; the Great Plains Tribal Chairman’s Association;  the Department of the Interior Tribal Self-Governance Advisory  Committee; the United South and Eastern Tribes; and the United Indian  Nations of Oklahoma, Kansas, and Texas to gather additional  perspectives on factors that can affect tribal participation. To encourage  increased participation and perspectives from tribal leaders and officials,  we provided opportunities for tribes to contact us for individual  discussions by requesting that tribal consortia, as well as NCAI, include  information about our review in their newsletters or other correspondence  with tribal stakeholders. As a result of these efforts, several additional  tribes contacted us to share information about their experiences. For the purposes of this review, we refer to tribal leaders, tribal  government officials, and representatives from tribal consortia as tribal  stakeholders. Throughout the report, we use the following categories to  quantify statements made by stakeholders: “some” is defined as two to  five entities and “several” is defined as six to 10 entities. Because each of  the federally recognized tribes and nations are unique, the information  obtained in our discussions with tribal stakeholders is not generalizable,  but provides examples of tribes’ experiences with self-determination  contracts, self-governance compacts, and the HEARTH Act. It is possible  we did not identify all of the factors that can affect a tribe’s decision to use  self-determination contracts, self-governance compacts, or the HEARTH  Act and there may be other factors we did not present. We conducted this performance audit from February 2017 to January  2019 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives. Appendix II: Comments from the Department  of the Interior Appendix III: GAO Contact and Staff  Acknowledgments GAO Contact Staff  Acknowledgments In addition to the contact named above, Christine Kehr (Assistant  Director); Jay Spaan (Analyst in Charge); John Delicath, William Gerard,  Cindy Gilbert, Greg Marchand, Dan Purdy, Vasiliki Theodoropoulos, and  Leigh White made key contributions to this report.
For more than 4 decades, federal Indian policy has promoted tribal self-government—the practical exercise of Indian tribes and nations' inherent sovereign authority. Under ISDEAA, federally recognized tribes may request to enter into self-determination contracts and self-governance compacts with Interior, transferring the administration of federal programs to the tribe. Under the HEARTH Act, tribes may issue certain leases on their lands without Interior approval if such leases are executed under approved tribal regulations. GAO was asked to evaluate issues related to tribal self-government. This report examines factors affecting tribes' use of self-determination contracts, self-governance compacts, and tribal leasing authority under the HEARTH Act. GAO reviewed key legislation and regulations, relevant literature, federal and tribal documents; analyzed agency data; and interviewed federal officials at 12 BIA regional offices, 29 tribes that used at least one of these mechanisms, and 7 tribal organizations. GAO found that various factors can affect tribes' use of self-determination contracts and self-governance compacts under the Indian Self-Determination and Education Assistance Act of 1975 (ISDEAA), as amended, and tribal leasing under the Helping Expedite and Advance Responsible Tribal Home Ownership Act of 2012 (HEARTH Act). A key factor that helps tribes use these self-governance mechanisms is tribal government capacity to administer a federal program or manage these resources. Federal efforts that have helped build this capacity have included training, such as that offered by the Bureau of Indian Affairs (BIA) in 2014 and 2015 to educate tribes on the benefits of developing tribal leasing regulations under the HEARTH Act. In contrast, GAO found that other factors can hinder tribes' use of these mechanisms including: Inadequate Information Sharing. The Department of the Interior's (Interior) policy and guidance states that tribes should be provided necessary information to design programs they would like to self-administer, such as the amount of funding available to the tribes for the programs and the amount retained by Interior for inherently federal functions. However, according to several tribal stakeholders and some BIA regional officials GAO spoke to, some of this information is not made available to the tribes prior to self-determination contract negotiations, such as information on funding calculations and determinations of inherently federal functions. Without this information, according to a tribal stakeholder, tribes may be at a disadvantage when negotiating with BIA and designing programs for self-determination contracts. Delays in Disbursing Funds. According to tribal stakeholders, Interior's process does not ensure that funds associated with their self-determination contracts and self-governance compacts are disbursed in a timely manner. These funding delays can therefore be a factor that hinders their use of self-government mechanisms. Some tribal stakeholders said that disbursement delays have ranged from weeks to months. GAO was unable to determine the extent to which Interior disburses funds in accordance with ISDEAA or within agreed-upon time frames with the tribes, because Interior does not systematically track and monitor the disbursement of these funds. Lengthy Review of Proposed Tribal Leasing Regulations. Interior does not have a clearly documented process for reviewing proposed tribal leasing regulations submitted under the HEARTH Act with identified time frames associated with each step of the process. As a result, tribal stakeholders told GAO that they are uncertain about how long the process will take and how it aligns with the 120 day requirement in the Act. According to tribal stakeholders and GAO's analysis of proposed regulations submitted from 2012 through 2017, Interior's review process has resulted in lengthy review times—in some cases, multiple years. Some tribal officials told GAO that Interior's lengthy review process had delayed the tribe's ability to make decisions about the use of their resources. By developing a clearly documented process that includes established time frames for each step in the review, Interior can help eliminate uncertainty and improve the transparency of the review process for the tribes.