Introduction

Self Governance negotiations have been a dynamic, evolving, and Tribally-driven process. The negotiations are conducted on a government-to-government basis as each Tribal situation is unique. Negotiations require careful review and deliberation to ensure that each Tribe receives fair consideration. With each additional year's experience, refinements are being made and difficulties and obstacles which have been encountered are being resolved.

The Self-Governance Tribes have developed the organic documents for negotiations. These documents include the Compact the Annual Funding Agreement, and other associated financial worksheets. The Compact of Self-Governance basically defines the government-to-government relationship between the Tribe and the Federal Government. The roles and responsibilities of each government are outlined. A model Compact of Self-Governance is available in the Appendix. Although most Tribes have adopted or modified the model Compacts, each negotiating tribe has the option to negotiate its own terms and conditions for its written agreement.

The Annual Funding Agreement documents the actual BIA/IHS "programs, services, functions and activities" to be transferred to the Tribe and their respective funding levels, programs retained by the BIA and IHS, method of payment, and assurances that other Tribes are not adversely affected. A model Annual Funding Agreement is also available in the Appendix. This agreement is negotiated annually as the BIA/IHS shift budget levels and Congress adds or reduces specific appropriations. The BIA/IHS must specifically document the programs and funds transferred for allocation purposes, and a record needs to be retained in case a Tribe should choose to retrocede or allow the BIA/IHS reassume any or all of the programs. This agreement will likely have identical requirements for all Tribes.

The Tribe should establish a checklist for the negotiations that includes all issues and objectives of the Tribe to be incorporated into the Compact and Annual Funding Agreement. Included in the checklist should be a determination prior to the negotiations of precisely which programs or parts of programs the Tribe intends to assume and those programs, if any, it expects the BIA or IHS to retain.

The draft Compact and Annual Funding Agreement should be produced on computer disc to facilitate modification in the negotiations. A computer and printer should be available for the negotiation sessions. Tribal policy makers, Self Governance Coordinators, technical budget staff, and as appropriate, Tribal lawyers should be present at the negotiations. Finally, records should be kept on the negotiation proceedings.

Steps for Determining Tribal Shares in the Negotiation Process

Although the negotiations are conducted on a government-to-government basis, the technical steps listed below should be undertaken during the process:

1. Identify each program and budget amount

2. Identify residual amount, if any

3. Calculate amount available for Tribal share distribution (Total budget amount less residual)

4. Determine Tribal share distribution formula (allocation methodology)

5. Calculate Tribal share based on distribution formula

6. Tribe determines which programs to Compact under Self Governance

The following section provides further information on each of these steps.

Budget information at all levels, (including BIA Central, Area, and Agency Offices and IHS Headquarters, Area, and Service Unit) should be collected and analyzed. A complete identification of current P.L. 93-638 contracts by program and amount should also be prepared.

The BIA and IHS each submit an Annual Budget Justification to Congress which outlines Agency funding requests for the next fiscal year by programs, services, functions, and activities. This book is part of the President's Budget (The BIA version is commonly termed "The Green Book,"). These publications are the basic budget document utilized to determine actual program funding levels and funds available for negotiated transfer consideration. In as much as the Budget Justification does not contain detailed Central/Area/Agency/Local Service Unit budget information, Tribal representatives will have to depend on budget information produced by the BIA and IHS Central/Area/Agency budget officer(s). This information should be reviewed for significant changes with emphasis for each program the Tribe intends to negotiate for in their Agreement.

Prior to negotiations, the BIA/IHS staff at all levels should prepare a program-by-program listing of funding available for the next fiscal year. This information should include:

• Program Title and Description Total Budget Amount
• Identification of Residual
• Justification of Residual
• Identified Tribal Share
• Basis for Determining Tribal share (Distribution Formula or Allocation Methodology)

In order to allow adequate time for Tribal review and evaluation of the program and budget information, these materials should be prepared and submitted to the participating Tribes at least 90 days in advance of the final negotiation deadline. Standardized formats have been developed during the Self Governance demonstration period to assist in streamlining collection of this information.

In theory, the underlying factual materials should be shared and agreed upon early in the negotiations process. When the facts cannot be agreed upon, they become issues for negotiation. For the Self-Governance negotiations, the operative facts are the complete budgets for all levels of the BIA and IHS. These budgets should have been presented to the Tribes with both sides presenting budget figures for justification and negotiations.

Identify Residual Amount

During the Self Governance negotiations, much debate, discussion, and confusion has surrounded the definition and identification of residual. In the simplest terms, the residual is defined as "the amount of funds necessary to maintain those activities which by law must be carried out by Federal officials. The residual is used for calculating theoretical Tribal shares if all Tribes were to compact or contract for all programs, activities, functions, and services". For example, the preparation of the President's budget is asserted to be an example of a residual function which must be performed by a federal official. The identification of residual should include an outline of those federal functions to be retained by the Agency and the identification of personnel and budget amount related to performance of those functions.

It should be emphasized that the amount identified as residual is not made available for distribution to Tribes or Tribal Organizations under an Indian Self-Determination Act contract or a Tribal Self-Governance Demonstration Project Compact. This amount remains with either the BIA of IHS to perform those identified federal functions. A clear understanding and outline of those retained residual functions should be included in the final negotiated documents.

Determine Tribal Share Distribution Formula

A "Tribal Share" is the proportionate share of an BIA or IHS program, activity, function, or service which a Tribe is entitled to receive under a Compact. The "Tribal Share Methodology" is the allocation formula which is used to calculate a Tribe’s or Tribal Organization's share of an program, activity, function, or service.

The basis of these allocation formulas are generally determined by the nature of the activity and should have a functional and reasonable relationship to the particular funding category to which they are applied. For example, the number of acres may be used in an allocation formula for BIA programs such forestry or agriculture; population served or Tribal Enrollment may be used for social services and education programs; or the number of Tribes in the Area or Agency may be relevant for administration and executive direction activities.

A key determination about the use of any particular factor is whether or not the resources and cost required to adequately develop, verify and maintain the necessary data on a national basis is justified. This cost may be too high or yield little value. However, some factors such as geographic isolation may be so significant that they require adjustments to the basic formulas. Some programs and proposed formulas may require application of several factors. This task is complicated by the fact that over 550 Tribes can be affected and each Tribe has different demographic and Tribal service/system characteristics. However, simplicity in allocation formulas serves to reduce confusion as well as Tribal, BIA, and IHS costs associated with determining and verifying workload statistics. Proposed allocation formulas continue to be refined as negotiation experiences increase.

Tribe determines which programs to Compact under Self-Governance

Once a Tribal share has been determined for each program, a Tribe then elects to Compact all or part of that program, or leave that program or part thereof, with the BIA or IHS. The Annual Funding Agreement should clearly specify funding levels, describe services to be provided, the functions to be performed, and/or the activities and responsibilities of the Tribe or Tribal Organizations and the Secretaries pursuant to the Agreement.

Negotiations Issues

Negotiations for multi-Tribal Agency and Service Units, and divisibility of small BIA/IHS programs can present difficulties during the negotiations process. Factors related to these difficulties include the following:

1. BIA Agency and IHS Service Unit program budgets, in most instances, are seriously under-funded;

2. The negotiations by law cannot reduce funds, contracts, or services that neighboring Tribal governments or Tribal organization contractors are entitled to receive;

3. Divisibility of programs for partial transfer involving one or two federal personnel are often not practical;

4. The BIA and IHS Budget Justification does not provide details of internal Area/Agency budgets;

In order to avoid theoretical or meaningful reductions in services to non-participating Tribes, allocation formulas should be fair, objective, and consistently applied to all Tribes. Additionally, it is essential that the BIA or IHS begin restructuring efforts and other creative methods of providing services in order to fund the negotiated Tribal shares associated with the transfer of programs and responsibilities to Tribal governments.

Shortfall/Supplemental Funding