The Bureau of Indian Affairs can't account for $2.4 billion, or one of every seven dollars that flowed through tribal trust funds in the last 20 years, auditors say.

The money isn't necessarily missing, but documents cannot be found to show where it came from or where it was paid, officials say. Tribes are likely to ask Congress to restore some of it.

The bureau has been under criticism for years for alleged mismanagement of the trust funds, but the extent of the problem becomes clearer with completion of a five-year audit by the Arthur Anderson accounting firm.

Congress ordered the audit to figure out how much money should be n the 2,000 tribal accounts, set up over the years to handle receipts of tribal income from timber, minerals, water and land claims.

"What we've got is a mess. As far as I can tell it's an unprecedented mess." said Dan Press, attorney for an intertribal group that monitors the funds.

The funds total about $2 billion. The largest single account, valued at $400 million comprises a court's award to the Sioux nation for its loss of South Dakota's Black Hills to the United States.

Accountants studied $17.7 billion in transactions between 1973 and 1992 and found documentation for $15.3 billion, a bureau summary of the findings says.

The problem is akin to a bank being unable to provide canceled checks or deposit receipts to back up its account statements. The funds have been put under a special trustee independent of the Indian bureau.

Over the years, dozens of audits by the General Accounting Office and the Interior Department's inspector general have criticized the bureau's management of the funds. Problems cited include unreliable accounting systems and lack of security controls and competent personnel.

"They can't confirm that all the money that should have been collected was actually collected." Press said. "They can't prove that money that was collected was deposited. They can't prove that the money that was deposited was invested properly."

"If this were a private bank trustee . . . they'd be in jail right now."

Interior Secretary Bruce Babbitt has until May 31 to make recommendations to Congress for handling claims by tribes whose accounts can't be reconciled.

"That's going to be something Congress is going to have to come to grips with," said Joe Christie, the official in charge of the bureau's attempt to reconcile the accounts.

Congress set aside $3 million to reimburse tribes that are missing money. The independent special trustee, Paul Homen, said he expects the claims to exceed that.

"All of the tribes are going to be putting in claims," said Elouise Cobell, comptroller for the Blackfeet tribe in Montana. The bureau values the Blackfeet accounts at $8 million; the tribe says that's too low.

Many tribes probably will withdraw their funds from government control under a 1994 law that allows them to do so, Cobell said.

There are also 300,000 accounts, totaling $400 million, belonging to individual Indians. No attempt was made to reconcile them, because the cost doing the work is estimated at up to $250 million.

After I posted the above article to a listserv, I got the following mail. According to Mr. Henry these funds are NOT misplaced. They are in fact lost! Gone. According to him he blew the whistle on this and was summarily fired. He has written a book on this and has included the web address for information on his book.

Is what he is saying fact or just self promotion for his book? I don't know. Given the history of the BIA (and the federal government's ability to manage money in general) I have my own suspicions. Remember, this is the same BIA that was to manage the Indians' money in trust because they did not have the capability to do so. Hmmmm. In either case, I thought you all would be interested in this.

What follows this is another mail from Mr. Henry giving permission to post his mail to me on web sites or mailing list.

Toksa ake.

In response to the Associated Press Article about missing billions in BIA trust accounts, I am the former BIA employee (and CPA-auditor) who first uncoverd and reported this mess in my assigned audit reports in 1986, yes, that is ten years ago. I was of course fired as a way of silencing me on that subject, and have been "blowing the whistle" every since.

That the money "isn't necessarily missing" is not correct, there are hundreds of millions of dollars missing, perhaps as much as the current balance of two billion.

I have written a book on this subject, which recently became available on the World Wide Web. The book "Stealing From Indians" is found at:

This is a major scandal, similar to the recent Savings & Loan debacle.

You can reach me by mail also: