Copyright 2004 Chicago Tribune Company

By Maurice Possley, Tribune staff reporter.

The Bureau of Indian Affairs accounting procedures are so archaic and ineffective the bureau is unable to account for $28 million specifically budgeted over the past five years for improving its prison system, the agency's top official admitted Tuesday.

David Anderson, the assistant Interior secretary in charge of the bureau, told a Senate Finance Committee hearing that because of the haphazard accounting practices--much of the accounting was done by hand--officials have no idea how nearly 90 percent of $31.5million in supplemental funds doled out since 1999 was spent.

Anderson, who was named to his position in February, said he has spent a considerable portion of his time attempting to bring the bureau "into the 21st Century. We still have a long way to go."

Anderson was responding to a report from Earl Devaney, the inspector general for the Interior Department, which oversees the bureau.

The report detailed what he called "Third World" conditions at many of the 72 jails on Indian reservations in the U.S. Based on an investigation of 27 of the facilities, Devaney reported 11 deaths, 236 attempted suicides and more than 600 escapes in the past three years. The bureau's "neglect and mismanagement" of the detention program have resulted in payment of $850,000 to settle lawsuits. An additional $11 million in claims are pending--a "liability time bomb," Devaney said.

He told Finance Committee members that the bureau's law-enforcement division, which staffs and operates the jails, was "unable to produce any annual budget submissions" for review. "In fact, funds allocated to individual jails by BIA [law enforcement] are not even tracked," Devaney said.

Anderson said the problems facing Native Americans in the U.S. go beyond a substandard jail system. "Our housing programs are Third World," he said. Unemployment rates on reservations are "50 to 80 percent." He said dropout rates as well as rates of suicide and substance abuse among Indians are the highest in the country.

He said he had assembled a team and was attempting to devise a strategy to improve conditions and the agency itself, including a comprehensive overhaul of the accounting system.

Sen. Max Baucus of Montana, the ranking Democrat on the Finance Committee, asked Walter Lamar, the acting director of the bureau's law-enforcement services who accompanied Anderson to the hearing, whether he knew how the missing $28 million was spent.

"The money was spent by the tribes and BIA for law-enforcement programs," Lamar said.

"How do you know that?" Baucus asked.

"I don't know," Lamar said.

Baucus, who said he wondered whether the tribes would be better off if the Bureau of Indian Affairs was abolished, said the bureau's inability to track its funds was "a prescription for fraud and abuse. The BIA always has trouble accounting for the monies given to them."

Among the witnesses at the hearing was William Talks About Jr., chairman of the tribal business council for the Blackfeet Reservation, a 1.5 million-acre expanse that borders Canada's Alberta province and Glacier National Park in Montana.

"In 1970, the Blackfeet tribal jail was constructed and was condemned shortly thereafter because of a bad sewer system," Talks About said. "And to date, it is still condemned."

The jail, he said, was built to hold 45 prisoners. "At times there have been as many as 110 . . . incarcerated at the Blackfeet jail," he said.

Since 1997, the Department of Justice has provided $150 million in grants for construction of Indian detention facilities. In many instances, however, the BIA has failed to fund staff and the facilities have never opened, according to testimony.

Of the last 23 jails for which funds were set aside, two are open and nine have been built but remain closed because no staff is available to run them.