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WEDNESDAY, JUNE 11, 2003

The Department of Interior took disciplinary action against three employees who falsified data for an Indian trust audit but not before one was given a cash award for "creativity," according to a recent internal investigation.

The Minerals Management Service (MMS) "did not adhere to high levels of integrity and professionalism" in carrying out its trust duties, the department's Inspector General concluded in a March 2003 report. When MMS officials were unable to locate an audit file for a Navajo lease, they "improperly recreated working papers," investigators discovered.

But instead of informing DOI of their activities, the employees acted as if nothing happened. "MMS only admitted that they had reconstructed the working papers after we confronted them with questions about the quality of the recreated working papers," wrote Anne Richards, an investigator for the Inspector General.

"MMS then granted a cash award, citing 'creativity,' to the auditor who reconstructed the working papers," Richards also noted.

The IG's review turned up numerous problems, leading Richards to conclude that "MMS auditors did not always meet the standards for conducting their audits with due professional care." Files were missing, or sometimes incomplete, and audits weren't always documented, investigators found.

The IG's findings have prompted Alan Balaran, the special master in the Indian trust fund case, to launch his own probe of MMS, which is responsible for monitoring the annual collection of $6 billion in royalties and fees for minerals produced from federal and Indian lands. In a June 5 letter, he said court orders may have been violated by the falsification of trust data.

"I am confident that had the OIG not uncovered this problem in the course of performing its audit, the loss of the Navajo trust information would not have come to light," he wrote.

Also concerned is Perry Shirley, assistant director of the Navajo Nation Department of Minerals, who said he was "surprised" to learn not just about the falsified data but the report itself. Although it was completed more than two months ago, the tribe wasn't notified of the outcome until last week.

"When we read of these instances in an IG report about how audits were conducted by the MMS -- especially if it involves Navajo tribal leases -- it kind of leads to questions as to how they are conducting the audits of our leases," he said in an interview. "Maybe they are missing things."

Nicolette Humphries, a Washington, D.C., spokesperson for MMS, acknowledged that the Navajo Nation wasn't told about the recreated data. "Since there was no additional money due to the Navajos, MMS did not feel it was necessary to report to the Navajos," she said.

Humphries also said MMS policy does not forbid the recreation of lost documents. "But if that happens, you are supposed to identify the documents as copies, not the original," she said. "That is standard MMS procedure. They didn't do that in this case."

The employees who were disciplined were not identified in the IG report and Humphries, citing privacy concerns, could not release the information. The cash award given to one employee was not revoked, she said. It was only "partially" related to the recreation of the lost documents, she said.

The report was discussed last week during a meeting of DOI's State and Tribal Royalty Audit Committee. Shirley attended the meeting, which was held in Thermopolis, Wyoming.

Relevant Documents:
Audit of the Minerals Management Service Audit Offices (March 2003) | Special Master Letter (June 6, 2003)

Relevant Links:
Minerals Management Service - http://www.mms.gov
Indian Trust: Cobell v. Norton - http://www.indiantrust.com

Related Stories:
Navajo leaders criticize upheaval at trust fund office (05/09)
DOI removes director of Navajo trust fund office (05/07)
Norton said to muzzle employees on trust (02/14)