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General Memorandum 12-031

General Memorandum 12-031
FY 2013 Appropriations Request for Indian Affairs, Office of the Special Trustee and Other Interior Programs

In this Memorandum we report on the Administration's FY 2013 budget request for the major programs in the Indian Affairs (IA), Office of the Special Trustee (OST) and related agencies that are of particular interest to Indian tribes and tribal organizations. These programs are funded under the Interior, Environment and Related Agencies appropriations bill.

The Indian Affairs detailed budget information is in chart form and we discuss in the narrative only those issues that describe significant changes or may be of particular interest. We attach the chart from the IA budget justification. The page numbers in this Memorandum refer to each agency's FY 2013 budget justification. The budget describes increases and decreases relative to FY 2012 enacted levels.

INDIAN AFFAIRS (IA) BUDGET OVERVIEW

The Administration seeks an FY 2013 funding level of $2.6 billion for Indian Affairs, which is $4.6 million less than the FY 2012 enacted level. Within the total are $2.37 billion for the Operation of Indian Programs (OIP; an $11.6 million increase over the FY 2012 level) and $105.9 million for Construction (a $17.7 million decrease from FY 2012).

Highlights within the Indian Affairs budget include the following:

• Increases/Reductions/Savings. The Administration's proposed FY 2013 program increases include $6.7 million for Contract Support (total funding of $228 million); $2 million for Tribal Grant Support Costs for tribally operated schools (total funding of $48.2 million); $7.8 million for Trust-Natural Resources; and $8.4 million for Public Safety and Justice (PS&J) programs, including $1 million for tribal courts.

The program decreases total $13.2 million for OIP programs and $17.7 million for Construction programs. In addition, the Administration's budget assumes administrative costs savings ("administrative savings") will be realized under department-wide and program streamlining efforts in areas such as travel, information technology, and strategic sourcing ($19.7 million); and $13.8 million through Management efficiencies. The budget justification states:
In recognition of constrained fiscal resources and the President's call for a more efficient government, BIE will undergo streamlining reviews in all program areas with targeted cost savings projections. In addition to these efforts, achieving additional savings from management efficiencies will be a key priority of BIA in FY 2013. All of these savings are being redirected back into Indian programs to ensure that funds are directed to programs that have a direct impact on everyday lives. (IA-OVW-4)

• Pay Increases. The Administration proposes $18.6 million for the FY 2013 fixed costs for "for Indian Affairs employees, tribal (638) employees, other teachers, Working Capital Fund, Workers Compensation, Unemployment Compensation, and increases associated with rentals (both General Services Administration and direct)." This amount includes $14.3 million in pay adjustment for "increased costs for teachers salaries during the 2011-2012 school year, based on DoD comparability pay and an adjustment for 638 contracted/compacted tribal employees in FY 2012." (IA-OVW-4)

• Indian Reorganization Act – Carcieri Fix. The Administration proposes language that would provide a "clean" Carcieri fix, which would reverse the U.S. Supreme Court's 2009 decision that the Secretary of the Interior did not have authority to take land into trust for tribes recognized after 1934. The language below is identical to that proposed, but not enacted, in FYs 2011 and 2012 appropriations measures.

INDIAN REORGANIZATION ACT
SEC. 116. (a) Modification - (1) In general - The first sentence of section 19 of the Act of June 18, 1934 (commonly known as the "Indian Reorganization Act") (25 U.S.C. 479), is amended - (A) by striking "The term" and inserting "Effective beginning on June 18, 1934, the term"; and (B) by striking "any recognized Indian tribe now under Federal jurisdiction" and inserting "any federally recognized Indian tribe". (2) Effective date - The amendments made by paragraph (1) shall take effect as if included in the Act of June 18, 1934 (commonly known as the "Indian Reorganization Act") (25 U.S.C. 479), on the date of enactment of that Act. (b) Ratification and confirmation of actions - Any action taken by the Secretary of the Interior pursuant to the Act of June 18, 1934 (commonly known as the "Indian Reorganization Act") (25 U.S.C. 461 et seq.) for any Indian tribe that was federally recognized on the date of the action is ratified and confirmed, to the extent such action is subjected to challenge based on whether the Indian tribe was federally recognized or under Federal jurisdiction on June 18, 1934, ratified and confirmed as fully to all intents and purposes as if the action had, by prior act of Congress, been specifically authorized and directed. (c) Effect on other laws (1) In general – Nothing in this section or the amendments made by this section affects - (A) the application or effect of any Federal law other than the Act of June 18, 1934 (25 U.S.C. 461 et seq.) (as amended by subsection (a)); or (B) any limitation on the authority of the Secretary of the Interior under any Federal law or regulation other than the Act of June 18, 1934 (25 U.S.C. 461 et seq.) (as so amended). (2) References in other laws - An express reference to the Act of June 18, 1934 (25 U.S.C. 461 et seq.) contained in any other Federal law shall be considered to be a reference to that Act as amended by subsection (a). (p. 758, Department of Interior Appendix)

• Indian Arts and Crafts Board. The Administration proposes to transfer the Indian Arts and Crafts Board (IACB) from the Office of the Secretary to the Operation of Indian Programs account; associated funding is $1.2 million.

OFFICE OF THE SPECIAL TRUSTEE

The FY 2013 budget request for the Office of the Special Trustee (OST) is $146 million, including $26.8 million for the Office of Historical Accounting. The OST FY 2012 funding level was $152 million.

OPERATION OF INDIAN PROGRAMS

FY 2012 Enacted $2,367,738,000
FY 2013 Admin. Request $2,379,431,000

The FY 2013 proposed funding for OPERATION OF INDIAN PROGRAMS (OIP) would be a net increase of $11.69 million above the FY 2012 enacted level, including $16.6 million increase for fixed costs and related changes ("Fixed Costs," comprised of pay cost increases and rentals), $27.9 million in programmatic funding increases, a decrease of $32.9 million in administrative savings and a transfer of $1.2 million.

BUREAU OF INDIAN AFFAIRS

FY 2012 Enacted $1,572,258,000
FY 2013 Admin. Request $1,582,019,000

The Administration proposes increases for: Tribal Government (+$8.7 million), Trust-Natural Resources Management (+$4.8 million), Trust-Real Estate Services (+$1.05 million), Public Safety and Justice (+$7.6 million) and Bureau of Indian Education (+$653,000). Major reductions are proposed for Human Services
(-$1.2 million) and Executive Direction/Administrative Services (-$11.9 million).

TRIBAL GOVERNMENT

FY 2012 Enacted $519,331,000
FY 2013 Admin. Request $529,158,000

The Tribal Government subactivities are: Aide to Tribal Government; Consolidated Tribal Government Program; Self-Governance Compacts; Contract Support; Indian Self-Determination Fund; New Tribes; Small and Needy Tribes; Roads Maintenance; and Tribal Government Program Oversight. For budget details by program, see page IA-CBT-2 of the attached chart.

The proposed budget would provide $9.8 million above the FY 2012 enacted level for Tribal Government programs (including the $3.2 million for Fixed Costs) and a reduction of $2.6 million for administrative savings.

• Contract Support Costs (CSC). A program increase of $6.7 million is proposed, for total funding of $228,000,000; which is the reported amount needed for full funding of CSC.

This brings the total funding for contract support to $228,000,000 which is the amount identified in the 2010 Contract Support Shortfall Report, the most recent report, as the estimated full funding requirement. Since 2008, funding for contract support has increased by more than 50 percent. This includes indirect contract support costs, which are the costs incurred for a tribe’s or tribal organization's common services, such as financial management and accounting; and, as well as direct contract support costs, which are the costs that tribes incur but are not provided in program funding or indirect funding, such as the cost of program-specific training, and costs related to direct program salaries (i.e., unemployment taxes, workers compensation insurance, and retirement costs). (IA-TG-2)

The budget proposal also requests $2 million for the Indian Self-Determination Fund (ISD), the same as in FY 2012. The ISD Funds are for first year administrative costs related to new and expanded contracts.

• Roads Maintenance. Funding is proposed at $25.1 million, which is $320,000 less than the FY 2012 level, reflecting the Administration's "shift in identified priorities" and should have minimal impact on road maintenance activities. The budget justification states:
Preventive maintenance and rehabilitation for deteriorated roads are crucial for the IA transportation system and the current service delivery will be maintained in FY 2013. BIADOT and the tribes will continue to keep IA-owned streets, roads, highways, and bridges at the target levels for acceptable roads in accordance with the Service Level Index of 14 percent and 62 percent. Regular maintenance activities such as sealing cracks, repairing pavement, cleaning and repairing drains, fixing signals, and sweeping streets will continue in FY 2013. (IA-TG-3)

Bill Language

• Contract Support Cap. Like prior budget submittals, the Administration again proposes a statutory cap on contract support costs:
notwithstanding any other provision of law, including but not limited to the Indian Self-Determination Act of 1975, as amended, not to exceed $228,000,000 shall be available for payments for contract support costs associated with ongoing contracts, grants, compacts, or annual funding agreements entered into with the Bureau prior to or during fiscal year 2013, as authorized by such Act, except that federally recognized tribes and tribal organizations of federally recognized tribes, may use their tribal priority allocations for unmet contract support costs of ongoing contracts, grants, or compacts, or annual funding agreements and for unmet welfare assistance costs;

• Contract Support Limitation. Consistent with prior Interior appropriations acts the proposed budget would continue language that attempts to limit the ability of the BIA and IHS to fund past-year shortfalls in contract support funding from remaining unobligated balances for those fiscal years as follows:
SEC. 407. Notwithstanding any other provision of law, amounts appropriated to or otherwise designated in committee reports for the Bureau of Indian Affairs and the Indian Health Service by Public Laws 103-138, 103-332, 104-134, 104-208, 105-83, 105-277, 106-113, 106-291, 107-63, 108-7, 108-108, 108-447, 109-54, 109-289, division B and Continuing Appropriations Resolution, 2007 (division B of Public Law 109-289, as amended by Public Laws 110-5 and 110-28), Public Laws 110-92, 110-116, 110-137, 110-149, 110-161, 110-329, 111-6, 111-8, 111-88, 112-10 and 112-74 for payments for contract support costs associated with self-determination or self-governance contracts, grants, compacts, or annual funding agreements with the Bureau of Indian Affairs or the Indian Health Service as funded by such Acts, are the total amounts available for fiscal years 1994 through 2012 for such purposes, except that the Bureau of Indian Affairs, tribes, and tribal organizations may use their tribal priority allocations for unmet contract support costs of ongoing contracts, grants, self-governance compacts, or annual funding agreements.

• TPA Redistribution. The Administration proposes to continue a provision from prior Interior appropriations acts (FYs 1999-2012), which authorizes redistribution of TPA and tribal base funds to alleviate funding inequities as follows:
SEC. 105. Notwithstanding any other provision of law, the Secretary of the Interior is authorized to redistribute any Tribal Priority Allocation funds, including tribal base funds, to alleviate tribal funding inequities by transferring funds to address identified, unmet needs, dual enrollment, overlapping service areas or inaccurate distribution methodologies. No federally recognized tribe shall receive a reduction in Tribal Priority Allocation funds of more than 10 percent in fiscal year 2013. Under circumstances of dual enrollment, overlapping service areas or inaccurate distribution methodologies, the 10 percent limitation does not apply.

• Tribal Shares Language. The budget proposal would continue bill language regarding tribal shares as follows:
Notwithstanding any other provision of law, no funds available to the Bureau of Indian Affairs for central office oversight and Executive Direction and Administrative Services (except executive direction and administrative services funding for Tribal Priority Allocations, regional offices, and facilities operations and maintenance) shall be available for contracts, grants, compacts, or cooperative agreements with the Bureau of Indian Affairs under the provisions of the Indian Self-Determination Act or the Tribal Self-Governance Act of 1994 (Public Law 103-413).

• Disaster Relief Language. The budget proposal would continue previous bill language that authorizes expenditures in excess of the funded amounts in order to provide disaster assistance to Indian communities. Without the language, the Bureau would be prevented from using unobligated funds to provide additional welfare assistance, such as occurred during the 2005 Hurricane Katrina disaster. The language states:
Provided, That in cases of designated Federal disasters, the Secretary may exceed such cap, from the amounts provided herein, to provide for disaster relief to Indian communities affected by the disaster;

HUMAN SERVICES

FY 2012 Enacted $136,360,000
FY 2013 Admin. Request $135,151,000

The Human Services subactivities are: Social Services; Welfare Assistance; Indian Child Welfare Act (ICWA); Housing Improvement Program (HIP); Human Services Tribal Design; and Human Services Program Oversight. For budget details by program, see page IA-CBT-2 of the attached chart.

The proposed budget provides $526,000 in Fixed Costs but the net result is an overall $1.2 million decrease for administrative savings. No program changes are proposed.

TRUST–NATURAL RESOURCES MANAGEMENT

FY 2012 Enacted $157,245,000
FY 2013 Admin. Request $162,109,000

The Trust–Natural Resources Management subactivities are: Natural Resources; Indian Irrigation Operation and Maintenance; Rights Protection Implementation; Tribal Management/Development Programs; Endangered Species; Cooperative Landscape Conservation; Integrated Resource Information; Agriculture and Range; Forestry; Water Resources; Fish/Wildlife & Parks; and Resource Management Oversight. For budget details by program, see pages IA-CBT-2 of the attached chart.

The budget request would result in a net $4.8 million increase from the FY 2012 level for Trust–Natural Resources Management programs, including $7.8 million in program increases, $984,000 for Fixed Costs and a reduction of $3.8 million in administrative savings. The program increases include:

o Rights Protection Implementation – $3.5 million increase, for total funding of $32.6 million to increase support to Indian organizations and programs in developing conservation management plans and codes. The requested increase would be allocated to: the Chippewa-Ottawa Resource Authority (CORA) for activities related to the implementation of the Inland Consent Decree ($1.6 million); CORA beneficiary tribes and members "to protect their inland consent decree treaty-reserved rights" ($1.5 million); Salmon Marking project ($68,000); 1854 Authority implementation ($200,000); and the balance ($1.7 million) to other inter-tribal organizations, i.e., NW Indian Fisheries Commission, Great Lakes Indian Fish & Wildlife Commission, Columbia River Intertribal Fisheries Commission, U.S./Canada Pacific Salmon Treaty, and Washington State Timber-Fish-Wildlife Project.

o Tribal Management/Development Program – $2 million increase, for total funding of $9.7 million to expand tribal fish and wildlife project management capacity and contribute toward new initiatives.

o Cooperative Landscape Conservation – $800,000 increase, for total funding of $999,000 to "expand tribal involvement in the Cooperative Landscape Initiative" (IA-TNR-3) through the following:

--Tribal Grant Program ($630,000), a competitive grant program to help develop and implement climate change related projects and strategies
--Regional Office travel and related expenses to participate in Landscape Conservation Cooperatives and other climate adaptation related activities ($120,000)
--Central Coordinator ($50,000) to support outreach activities at conferences, workshops and other venues related to climate change adaptation.

o Invasive Species – $500,000 increase, for total funding of $3.9 million. Funds are provided via competitive grants to tribes and Indian Affairs agency offices for weed control efforts. The increase is expected to result in support to 100 new invasive species control projects.

o Forestry Program – $1 million increase, for total funding of $42.7 million. The focus of the Forestry Program is the protection and enhancement of Indian forest lands and natural resources through assistance to tribes consistent with tribal forest management plans or integrated resource management plans. The proposed increase would be allocated to the Forest Inventory and Planning, one of several components of the Forestry Program. The increase will aid the program in maintaining "productive levels of Forestry Inventory and Planning activities."

TRUST–REAL ESTATE SERVICES

FY 2012 Enacted $126,759,000
FY 2013 Admin. Request $127,813,000

The Trust–Real Estate Services subactivities are: Trust Services; Navajo-Hopi Settlement Program; Probate; Land Title and Records Offices; Real Estate Services; Land Records Improvement; Environmental Quality; Alaskan Native Programs; Rights Protection; and Trust-Real Estate Services Oversight. For budget details by program, see page IA-CBT-2/-3 of the attached chart.

At the request level, the Trust–Real Estate Services (RES) amount would be a net increase of $1.05 million, with programmatic increases totaling $7 million, Fixed Costs of $1.02 million and a reduction of $7 million in administrative savings.

• Trust Services – $5.5 million increase, for total funding of $15.4 million. The proposed increase would be provided to Klamath Tribes for implementation of economic activities as part of the Klamath Basin Restoration Agreement.

• Litigation Support/Attorney Fees – $1.5 million increase which is also the total funding. These funds "will provide the necessary support for the tribes to protect their tribal trust resources or treaty rights in cases where the Federal Government cannot represent Indian interests for various reasons, including conflicts of interest." (IA-RES-3)

PUBLIC SAFETY AND JUSTICE

FY 2012 Enacted $346,223,000
FY 2013 Admin. Request $353,882,000
The Public Safety and Justice subactivities are: Law Enforcement; Tribal Courts; and Fire Protection. For budget details by program, see pages IA-CFT-3 of the attached chart.

The proposed budget would provide a net $8.4 million increase from the FY 2012 level, with $8.4 million in programmatic increases, $2.4 million for Fixed Costs, and a reduction of $3.2 million in administrative savings.

Law Enforcement increases include:

o Criminal Investigations and Police Services – $3.5 million increase, for total funding of $189.6 million. Of the increase, $2 million would be allocated to tribal base funding under Criminal Investigations and Police Services, $1 million would be for BIA direct staff and initiatives to increase policing in high crime areas, and $500,000 would fund ten tribal Conservation Law Enforcement Officers (CLEO). The CLEO's purpose would primarily be to protect tribal natural resources but "are often cross-deputized with local law enforcement to provide…assistance in enforcing criminal law." The budget justification states:

Funding for this program will be managed by the BIA Trust Natural Resources Management Division in the Office of Trust Services and will be delivered to tribes with fish and wildlife resources through existing P.L. 93-638 contracts and self-governance compacts, enabling tribes to hire and provide credible certification for their CLEO personnel. No Federal FTE will be hired under this program. (IA-PSJ-8)
The FY 2012 budget request had proposed $1 million to initiate the CLEO program but Congress did not provide the funds.

o Detention/Corrections – $6.5 million increase, for total funding of $88.1 million. The budget justification estimates 70 percent of the increase would be allocated to tribal base funding and the balance for operation of Indian Affairs' detention programs. The proposed increase would address staffing shortages at five new or expanded detention facilities scheduled to come online by the end of FY 2013.
o Law Enforcement Special Initiative – reduction of $2.55 million, for total funding of $14.6 million. The decreases proposed reflect reprioritization of "available resources to address other core responsibilities to [AI/ANs]" and would be applied to: Southwest Border Initiative (-$1 million); Intelligence Sharing (-$550,000) and Incident Management Analysis and Reporting System (IMARS; -$1 million).

• Tribal Courts – $1 million increase, for total funding of $24.5 million. The increase, geared to continue improvement in the 185 Indian Affairs-funded tribal court operations, would fund hiring additional judges, training and equipment.

COMMUNITY AND ECONOMIC DEVELOPMENT

FY 2012 Enacted $34,810,000
FY 2013 Admin. Request $34,333,000

The Community and Economic Development (CED) subactivities are: Job Placement and Training; Economic Development; Minerals and Mining; and Community Development Oversight.

The budget request would result in a net decrease of $477,000 from the FY 2012 level, including $115,000 in Fixed Costs and a reduction of $588,000 in administrative savings. The administrative savings reductions would primarily be applied to Job Placement and Training (-$298,000), and Minerals and Mining (-$287,000). For budget details by program, see page IA-CFT-3 of the attached chart.

EXECUTIVE DIRECTION AND ADMINISTRATIVE SERVICES

FY 2012 Enacted $251,530,000
FY 2013 Admin. Request $239,573,000

The Executive Direction and Administrative Services subactivities are: Assistant Secretary Support; Executive Direction; Administrative Services; Safety and Risk Management; Information Resources Technology; Human Capital Management; Facilities Management, Intra-Governmental Payments; and Rentals.

The proposed budget would be an $11.9 million reduction from the FY 2012 level, with $3.5 million in Fixed Costs, a $6.4 million programmatic decrease, and a reduction of $9.7 million in administrative savings. For budget details by program, see page IA-CFT-3 of the attached chart.

• Information Resources Technology - $6.1 million reduction, for total funding of $47.5 million. The reduction is proposed as a result of the anticipated savings derived from the DOI IT Transformation initiative, which centralized common IT services such as email, data centers, servers, etc.

BUREAU OF INDIAN EDUCATION

FY 2012 Enacted $795,480,000
FY 2013 Admin. Request $796,133,000

The Bureau of Indian Education (BIE) category displays funds for the BIE-funded elementary and secondary school system as well as other education programs including higher education and scholarships. The subactivities are: Elementary and Secondary Programs–Forward Funded; Elementary and Secondary Programs (non-forward funded); Post Secondary Programs–Forward Funded, Post Secondary Programs (non-forward funded); and Education Management.

General Overview. The proposed budget would provide a net $653,000 increase above the FY 2012 level, including total funding of $645.8 million for School Operations, $131.8 million for Post Secondary Programs, and $18.4 million for Education Management. The budget proposal assumes a reduction of $4.7 million in administrative savings. For budget details by program, see pages IA-CBT-4 of the attached chart.

School Operations Overview. Highlights of the proposed budget impacting BIE schools include:
-- Tribal Grant Support Costs (TGSC) increase of $2 million for total funding of $48.2 million. The Administration estimates that the FY 2013 amount would result in tribally-operated schools receiving 65 percent of TGSC need in school year 2013-2014 (SY13-14). The estimated pay rate would still be significantly below the rate for non-school (BIA-IHS) contract support costs.

-- School Operations reduction of $4.4 million in ISEP formula funds due to a decline in student population.

-- Fixed Costs request of $4.4 million for Elementary and Secondary Programs Forward Funded and Elementary and Secondary Programs Non-forward funded programs. Fixed costs are related to pay, benefits, and rent costs.
-- Administrative Savings which are expected to result in an overall BIE savings of $1.6 million through improved efficiencies/operations in the areas of travel, fleet, contracts and awards. The Administration also anticipates $3.03 million in administrative savings from consolidation and streamlining of operations.

-- Consolidation and Streamlining of BIE Operations. Following completion of the independent study of the BIE's operations and organization currently underway, the Bureau will, in consultation with tribes, determine the organizational structure and strategies most suited to meeting tribal needs and priorities. The budget justification states:

A critical component in streamlining is the analysis of functions and identification of opportunities to reduce or eliminate duplicative functions, and the associated positions. BIE will explore the use of early retirement and voluntary separations to manage FTE reductions along with other position management techniques. Following consultation, the BIE will design and implement a plan for efficiently delivering educational services to Native Americans enrolled in BIE-funded schools. (IA-BIE-2)

-- BIE Accountability System and Index. As part of the Administration's recent decision to provide states waivers from the No Child Left Behind accountability requirements, the BIE is "exploring flexibility scenarios" and one element may be development of an "Accountability Index," requiring that BIE schools achieve a minimum of 70 points. The BIE proposal will undergo tribal and stakeholder consultation. The budget justification provides the following explanation:

The BIE is exploring flexibility scenarios and its flexibility proposal likely will feature an “Accountability Index” that runs from 0 to 100. Some states have proposed an A through F rating systems that corresponds with grading scales used in education. Similarly, BIE proposes the goal of having 100 percent of its schools achieve a score of 70 or higher on the Accountability Index.

The proposed BIE Accountability Index will consist of student participation in assessments; achievement in assessed subjects; student attendance, graduation, and drop-out rates; school improvement activities; school participation in professional development activities; and school compliance with federal mandates. These measures are far in excess of what NCLBA currently requires, but provide a clearer picture of school performance in educating their students.

Because BIE's proposed accountability system will undergo stakeholder input and tribal consultation, as well as Department of Education recommended changes, the measures outlined here will likely change to reflect the implementation of the program that replaces current AYP measures. (IA-BIE-26)

Elementary and Secondary Programs–Forward Funded
FY 2012 Enacted $522,247,000
FY 2013 Admin. Request $523,026,000

Amounts provided under the forward funded category are for use in school year (SY) 2013-2014. The proposed FY 2013 amount would be a net increase of $779,000 over the FY 2012 level. The Administration requested a programmatic increase of $2 million, $3.9 million for Fixed Costs, and a reduction of $718,000 in administrative savings. The forward funded programs and their proposed funding levels are:

o Tribal Grant Support Costs – $48,253,000 (+$2 million). Funds are for administrative costs of currently tribally-operated schools. As in FY 2012, the Administration does not seek separate funds for the transitional costs associated with schools which convert from federal to tribal operation. The proposed FY 2013 bill language would continue authorization of up to $500,000 of Tribal Grant Support Costs (TGSC) funds to be used for the initial year costs. The BIE estimates the FY 2013 request would provide only 65 percent of administrative costs need in SY13-14 and that two tribes have expressed interest in converting three schools to tribally controlled schools status in FY 2013. Considering the rising costs of administrative overhead, fiscal management, insurance and numerous other "contract support"-type expenses, the benefit from the $2 million overall increase—if Congress provides the requested amount—may not significantly impact the TGSC rate.

We note that the proposed increase is still far below what the Administration seeks to address the long-standing indirect costs shortfalls for BIA and IHS non-school contractors. For the BIA, the Administration requests an $8.8 million increase for the ongoing contract support costs (CSC) and the Indian Self-Determination Fund to pay CSC of new contractors. For the IHS contract support costs, the Administration seeks a $5 million increase.

The continuing disparity between budget requests for school TGSC and non-school CSC remains a disconcerting issue.

o Indian School Equalization Formula (ISEF) – $389,358,000. This amount reflects a $4.463 million or one percent programmatic decrease, but factoring in the $3.6 million increase in Fixed Costs and a $551,000 decrease in administrative savings, the net result is a $1.1 million decrease in ISEF funds. In SY11-12, the ISEF resulted in a weighted student unit (WSU) of $5,333.11 or $20.73 over the SY10-11. It is estimated the WSU for SY13-14 could be $5,319.41.
The Bureau states that of the total SY11-12 ISEF funding, 73 percent ($281 million) supported the basic education programs; 6 percent ($25 million) supported language development programs; 3.6 percent ($14 million) supported programs for gifted and talented students; and 16 percent of the remaining amount was spent on residential and dormitory costs.

o ISEP Program Adjustments – $5,302,000. As in prior years, the FY 2013 funding would be used for primarily for the "FOCUS on Student Achievement Project," and the balance for school safety audits, school security and police (Chemawa Indian School (OR) and Sherman Indian School (CA)). The FOCUS program targets schools that are close to meeting the annual measurable objectives set by their state achievement tests and where the additional resources could help them achieve Adequate Yearly Progress (AYP). In SY 11-12 there are 12 schools participating in the program.

o Student Transportation – $52,663,000. The FY 2013 proposed increase of $31,000 is attributed to Fixed Costs. The Bureau continues to acknowledge that an estimated 15 percent of the total BIE transportation miles are on dirt or unimproved road systems, and school buses must cover greater distances than the metropolitan areas—conditions which contribute to greater fuel and maintenance costs—yet no programmatic increase is sought again. The request amount is expected to provide a SY13-14 payment rate of $3.16 per mile, the same estimated rate for the last two fiscal years. The Student Transportation funds are also used to fund two round-trip airfares for students attending off-reservation boarding schools in addition to the operation of school transportation systems.

o Early Childhood Development – $15,388,000. The FY 2013 request reflects a $43,000 increase due to Fixed Costs. In SY11-12 these funds supported the Family and Child Education (FACE) program for pre-school children, parenting skills, adult education and family literacy services at 44 sites.

o Education Program Enhancements – $12,062,000. This reflects a $30,000 increase due to Fixed Costs. As in previous years, these funds would be used to continue targeted assistance to schools that have not achieved AYP—particularly those in restructuring status. Funds are primarily used to support BIE Reads and Math Counts programs but the Bureau has also sponsored school leadership training.

Elementary and Secondary Programs (these are the non-forward funded programs)
FY 2012 Enacted $122,534,000
FY 2013 Admin. Request $122,828,000

Amounts provided under the non-forward funded category are for use in SY12-13. Beginning in FY 2012, funding under this category includes Facilities Maintenance as well as Facilities Operations and JOM. As in FY 2012 no funds are sought for the Residential Education Placement and the Juvenile Detention Education programs. Thus the only increases are attributable to Fixed Costs while decreases are due to the anticipated administrative savings. Specifics for programs in this category are:

o Facilities Operations – $58,629,000 (+$64,000). The Facilities Operations funds are used for costs such as electricity, heating fuels, communications, GSA vehicle rentals, custodial services and numerous other vital operating expenses. For the past several years, schools have received less than 50 percent of the amount needed for Facilities Operations, a gross underfunding that will continue with this budget request.

o Facilities Maintenance – $50,913,000 (+$248,000). The Facilities Maintenance funds are intended for the preventive and routine upkeep as well as unscheduled maintenance of school buildings, equipment, utility systems and grounds.

o Johnson O'Malley (JOM) – $13,286,000 (-$18,000). JOM funds provide special academic and culturally relevant educational services to Indian students from age 3 through the 12th grade at public schools. According to the budget justification, 88 percent of the funds are distributed directly to tribes as base funding through its Self-Governance or Consolidated Tribal Government Programs.

Education Management
FY 2012 Enacted $21,971,000
FY 2013 Admin. Request $18,434,000

Education Management is comprised of two elements: Education Program Management ($11.8 million) which pays the salaries of BIE personnel who oversee elementary, secondary and post secondary education programs, and Education IT ($6.6 million), which funds the collection and analyses of school performance data. The personnel include those in education line offices, the Division of Compliance, Monitoring, and Accountability, and technical support staff. Specifics for programs in this category are:

o Education Program Management – $11,817,000 for administrative costs in performing services as State Education Agency and like those performed by a public school district for the BIE-funded school system as well as employee separation costs. The FY 2013 request reflects a $3.55 million decrease to achieve anticipated administrative savings.

o Education Information Technology – $6,617,000. The FY 2013 request reflects a $66,000 decrease due to anticipated administrative savings. Funds are used for data telecommunications to support the Educational Native American Network (ENAN, which provides Internet capability at the schools) and the NASIS, which is a web-based data collection and analysis system used by the BIE.

Bill Language

• Multi-Program Contractors. The Administration proposes to continue the provision in Interior appropriations Acts since FY 2005 that is intended to preserve the ability of tribes who operate both school and non-school programs to receive appropriate funding for administrative costs and indirect costs incurred by these multi-program contractors.

Notwithstanding any other provision of law, including section 113 of title I of appendix C of Public Law 106-113, if in fiscal year 2003 or 2004 a grantee received indirect and administrative costs pursuant to a distribution formula based on section 5(f) of Public 101-301, the Secretary shall continue to distribute indirect and administrative cost funds to such grantee using the section 5(f) distribution formula.

• Eligibility for School Operations Funding. With the reinstatement of the Jones Academy as eligible for school operations funding starting in SY12-13, the Administration proposes changes to bill text on eligibility for these funds. The strikeout language below shows the language as enacted in previous years and the text in italics is the proposed bill language.

Appropriations made available in this or any other Act for schools funded by the Bureau shall be available only to the schools in the Bureau school system as of September 1, 1996. No funds available to the Bureau shall be used to support expanded grades for any school or dormitory beyond the grade structure in place or approved by the Secretary of the Interior at each school in the Bureau school system as of October 1, 1995, except that any school or school program that was closed and removed from the Bureau school system between 1951 and 1972, and its respective tribe's relationship with the Federal Government was terminated, shall be reinstated to the Bureau system and supported at a level based on its grade structure and average student enrollment for the 2009–2010, 2010–2011 and 2011–2012 school years.

No funds available to the Bureau shall be used to support expanded grades for any school or dormitory beyond the grade structure in place or approved by the Secretary of the Interior at each school in the Bureau school system as of October 1, 1995. Appropriations made available in this or any prior Act for schools funded by the Bureau shall be available, in accordance with the BIE funding formula, only to the schools in the Bureau school system as of September 1, 1996 and to any school or school program that was re-instated in FY 2012.

Post Secondary Programs (Forward Funded)
FY 2012 Enacted $67,293,000
FY 2013 Admin. Request $69,793,000

Including a $2 million programmatic increase requested by the Administration, the FY 2013 request would be a $2.5 million increase over the FY 2012 enacted level. Funded under this account are Operating Grants for 27 tribally controlled colleges and universities; technical assistance; and endowment grants.

Post Secondary Programs (Non-Forward Funded)
FY 2012 Enacted $61,435,000
FY 2013 Admin. Request $62,052,000

Among the programs funded under this account are the Tribal Colleges and Universities Supplemental Grants; tribal technical colleges (United Tribes Technical College and Navajo Technical College); Haskell and SIPI; and Scholarships and Adult Education.

CONSTRUCTION

FY 2012 Enacted $123,630,000
FY 2013 Admin. Request $105,910,000

The Administration's proposed budget results in a net $17.7 million decrease from the FY 2012 level, including a programmatic decrease of $17.8 million, decrease of $552,000 in anticipated administrative savings, and an increase of $89,000. For budget details by program, see page IA-CBT-4-5 of the attached chart.

EDUCATION CONSTRUCTION

FY 2012 Enacted $70,826,000
FY 2013 Admin. Request $52,866,000

The Administration's proposal would continue the budgetary focus on facilities maintenance and repair at multiple sites, thus no funds are sought for the school construction program. The requested amount for Education Construction is $17.9 million below the FY 2012 level, including $178,000 to achieve anticipated administrative savings. Funding requests for the major components of Education Construction follow.

Facilities Improvement + Repair
FY 2012 Enacted $48,591,000
FY 2013 Admin. Request $48,451,000

The FI+R total would be comprised of:
o Minor improvement & repair – $25.2 million
o Program Management – $3.2 million
o Advance planning and design – $1 million
o Condition assessments – $1.3 million
o Asset Disposal (Demolition/reduction of excess space) – $3.9 million
o Emergency repairs – $3.49 million
o Environmental projects – $4.8 million
o Portable classrooms – $1.5 million
o Energy Program – $3.2 million
o Education telecommunications – $350,000
o Boiler inspections – $250,000
o Seismic safety data – $72,000

Employee Housing
FY 2012 Enacted $4,428,000
FY 2013 Admin. Request $4,415,000

The FY 2013 request reflects a $13,000 decrease to achieve anticipated administrative savings. The FY 2013 funds will be used to continue asbestos and lead-based paint abatement, along with disposal of housing units previously identified through a study. The budget justification reports that the Indian Affairs' Housing Master Plan and Management Study is undergoing final review but one finding so far is that of disparate treatment in housing assignments. Policy changes may come about as a result of the review. The budget justification states:

The Indian Affairs' Housing Master Plan and Management Study is currently under review by IA, BIE, and will be reviewed by the Assistant Secretary Indian Affairs. This study addresses all aspects of the housing program, including inventory, inventory management, occupancy and termination, priority of assignment, and entitlement in accordance with current regulations. Earlier work to determine the condition of the housing units, delineation of responsibilities, and assessment of the program’s effectiveness has been completed. Because entitlement for assignment involves policy and regulations, each step of the review process will receive intense scrutiny. Early stages of the study revealed that administration of employee housing has created disparate treatment in the assignment of employee housing across Indian Country. The final decision with regard to policy changes will be carefully reviewed and final approval of changes is anticipated in November, 2012. (IA-CON-ED-6)

Replacement School Construction
FY 2012 Enacted $17,807,000
FY 2013 Admin. Request –0–

This account funds total replacement of an existing school campus, in accordance with a priority construction list, and Advance Planning and Design activities such as the architectural and engineering services. The Bureau reports that of the 43 replacement school projects funded between FY 2001 and FY 2012, three are under construction, two are in the design phase and 37 projects have been completed.

Replacement Facility Construction
FY 2012 Enacted –0–
FY 2013 Admin. Request –0–

The Replacement Facility Construction program provides funds to replace a single building that is part of an existing school campus and was in poor condition.

Bill Language

The Administration's proposal would continue the appropriations language enacted in FY 2009 that allows the Bureau to take over a construction project from a grantee that fails to complete planning and design of a project and begin construction within 18 months of funds being appropriated.

Provided further, That in order to ensure timely completion of construction projects, the Secretary may assume control of a project and all funds related to the project, if, within 18 months of the date of enactment of this Act, any grantee receiving funds appropriated in this Act or in any prior Act, has not completed the planning and design phase of the project and commenced construction
OTHER CONSTRUCTION

Public Safety & Justice (PS&J) Construction
FY 2012 Enacted $11,311,000
FY 2013 Admin. Request $11,306,000

The proposed PS&J Construction funding total would result in level funding for the Employee Housing; Fire Safety Coordination; and Fire Protection programs. A $5,000 reduction in administrative savings is proposed for Facilities Improvement and Repair (FI+R). No funds are requested for Facility Replacement/New Construction.

Resources Management Construction
FY 2012 Enacted $32,959,000
FY 2013 Admin. Request $32,733,000

The Resources Management proposed budget includes $37,000 in Fixed Costs and a $263,000 in anticipated savings. The bulk of the savings reductions are applied to Engineering and Supervision (-$51,000), Federal Power Compliance (-$22,000) and Safety of Dams (-$181,000) programs.

Bill Language
• OST Reimbursement for Space Expansion. The proposed budget would continue bill language that allows the Office of the Special Trustee to reimburse its appropriate share of construction costs related to the expansion of space at the agency level necessitated by trust reform implementation. The bill language states:
Provided further, That this appropriation may be reimbursed from the Office of the Special Trustee for American Indians appropriation for the appropriate share of construction costs for space expansion needed in agency offices to meet trust reform implementation.

INDIAN ARTS AND CRAFTS BOARD

FY 2012 Enacted $1,279,000
FY 2013 Admin. Request $1,279,000

The Administration proposes to transfer the Indian Arts and Crafts Board (IACB) from the Office of the Secretary to the Operation of Indian Programs account, "to better align cultural programs that assist Indian communities under the Assistant Secretary-Indian Affairs." (IA-ACB-1) The IACB has responsibility for implementing and enforcing the Indian Arts and Crafts Act which contains civil and criminal penalties for combating counterfeit Indian arts and craft. It also manages three museums in the Plains Region.

NON-BIA PROGRAMS
OFFICE OF SPECIAL TRUSTEE

FY 2012 Enacted $152,075,000
FY 2013 Admin. Request $146,000,000

The proposed budget reflects a net decrease of $6.07 million for Office of Special Trustee funding but which includes $816,000 for fixed costs and some programmatic increases. The proposed OST budget reflects $9.9 million in decreases for administrative savings, streamlining and completion of certain activities.

Within the OST total are:

• Executive Direction — $2.9 million, which reflects a $2.3 million decrease due to elimination of the National Indian Program Training Center contract (which will become self-supporting through tuition charges); elimination of the Trust Regulations, Policies, and Procedures program (OST will instead work with Indian Affairs and other DOI offices to address trust regulatory needs); and elimination of the Product Development Initiative.

• Program Operations and Support — $143 million, which reflects $4.6 million decrease. Within this total are:

-- Office of Historical Trust Accounting – $26.8 million, with a $3.3 million decrease attributed to Special Deposit Account reductions, space savings, and contractor assistance reductions.

-- Program Operations – $53.07 million, with a net internal transfer of $10.6 million and a programmatic increase of $2.9 million for the Office of Audit and Review to conduct audits to ensure compliance with the Indian Trust Reform Act at OST, BIA, BLM, and ONRR to determine if they "have established and are complying with appropriate policies and procedures, and developed necessary systems, that will allow management of the fiduciary trust assets consistent with the statutory requirements."
-- Field Operations – $23.6 million, a $170,000 increase that includes $72,000 more for Program Operations.

-- Appraisal Services – $10.6 million, a net $11,000 decrease but reflects a $55,000 reduction as a result of decreases for awards, training, travel and contract services.

-- Trust Services – $28.8 million, a net $1.1 million increase but includes $331,000 in reductions comprised of: Internship program eliminated ($189,000) and anticipated cost savings ($142,000).

-- Trust Accountability — no funds are requested ($15.3 million in FY 2012); instead there is a proposed internal transfer of $11.6 million and $3.6 million in program eliminations. Programs to be transferred are: Office of Hearings and Appeals ($8.7 million) to Budget, Finance and Administration; Risk Management ($637,000) to Office of Trust Review and Audit; and Data Quality and Integrity ($2.3 million) to Trust Services. Programs to be eliminated are Trust Training ($1.7 million) and Trust Program Management Center ($1.8 million).

Bill Language

• Statute of Limitations. The proposed budget would continue language to extend the statute of limitations on filing tribal and individual Indian mismanagement claims. The provision reads:
Provided further, That notwithstanding any other provision of law, the statute of limitations shall not commence to run on any claim, including any claim in litigation pending on the date of the enactment of this Act, concerning losses to or mismanagement of trust funds, until the affected tribe or individual Indian has been furnished with an accounting of such funds from which the beneficiary can determine whether there has been a loss

• Other. The budget proposal would also continue the following provisions related to the trust programs—

o Authorize use of unobligated balances from prior appropriations acts for OST or BIA for trust management reform, other than activities related to historical accounting, which is limited to the appropriated amount. (Sec. 104)

o Pay private attorneys for the costs of legal representation for employees and former employees incurred in connection with Cobell v. Salazar. (Sec. 106)

NATIONAL PARK SERVICE

The FY 2013 budget request for several National Park Service (NPS) programs are as follows:

o Tribal historic preservation grants –$8.9 million, level funding. These funds aide tribes in assuming the State Historic Preservation Office (SHPO) duties on tribal lands. The NPS estimates the FY 2013 funds would result in awards of "140 grants to support Tribal Historic Preservation Offices (THPOs), with approximately 25 competitive individual project grants."

o Native American Graves Protection and Repatriation Act (NAGPRA) grants – $1.7 million, level funding. Funds are for tribes and Native Hawaiian Organizations to document repatriation requests and for museums to meet inventory and other NAGPRA requirements.

FISH AND WILDLIFE SERVICE

State and Tribal Wildlife Grants
FY 2012 Enacted $61,323,000
FY 2013 Admin. Request $61,323,000

These funds are used for the development of wildlife conservation plans and on-the-ground conservation projects to stabilize, restore, enhance, and protect species and their habitats. The FY 2013 budget proposes $4.2 million of the total for the tribal competitive grants program, same as in FY 2012.

OFFICE OF NAVAJO AND HOPI RELOCATION

FY 2012 Enacted $7,737,000
FY 2013 Admin. Request $8,400,000

Funds are used for activities related to the settlement of a northern Arizona land dispute between the two tribes.

INSTITUTE OF AMERICAN INDIAN AND ALASKA NATIVE
CULTURE AND ARTS DEVELOPMENT

FY 2012 Enacted $8,519,000
FY 2013 Admin. Request $9,369,000

Funds are used to support the operational costs of the Institute, a multi-tribal higher education center focused on the study, application, preservation and care of Indian arts and culture.

Please let us know if we may provide additional information or assistance regarding the FY 2013 budget request for programs in the Indian Affairs or other programs covered in this Memorandum.

# # #

Inquiries may be directed to:
Marie Osceola-Branch (mosceola-branch@hobbsstraus.com)

Available Documents for Download ( any referenced attachments are included in download )


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