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MISSOULA - As Native America anxiously awaits a presidential appointment to the Interior Department, a congressional watchdog agency has told President-elect Barack Obama's transition team that Indian trust fund reform is a key issue before the department.

"The soul of Indian Country is at stake," said Sally Willet, an administrative law judge and Indian Land Working Group consultant. "And the soul of Indian Country is the land base. Trust reform under the current administration has been elimination of programs, services and funding. Nothing has been improved for landowners except possibly getting the wrong balance faster."

A Government Account-ability Office overview lists six primary concerns before the new Interior secretary, including management of Indian trust funds and collection of oil and gas royalties.

"While Interior has taken significant steps in the last 10 years to address weaknesses in certain Indian programs, it is still in the process of implementing key trust fund reforms, including preparation of a timetable for completing remaining activities, to effectively manage more than 300,000 trust fund accounts with assets of more than $3 billion," according to the overview to the presidential transition team.

The GAO described the department's trust fund management efforts as an "internal control weakness."

The American public will expect Obama to hire an experienced leader who can effectively manage federally owned land and administer American Indian programs within the department, said Elouise Cobell, the lead plaintiff in a class action lawsuit against the department.

In 1994, Congress passed the American Indian Trust Fund Management Reform Act to revamp the department's historically mismanaged trust fund system, which is used for leasing and collecting billions of dollars in natural-resource income on 55 million acres of Indian trust lands.

"The Interior Department has failed in managing the money," said Cobell, a former treasurer of the Blackfeet Nation in Montana.

She filed suit against the Interior Department 12 years ago. A federal judge ended the case in August. The decision is being appealed by both Cobell lawyers and the Interior Department.

The appeal is still pending before the Court of Appeals in Washington, D.C.

Cobell is among those watching to see who Obama appoints to head Interior. Several people are being suggested, including Montana Gov. Brian Schweitzer.

"Schweitzer ought to stay in Montana as governor," said Cobell, noting that his continued leadership is needed in the state where Democratic

candidates won key federal and state positions in the Nov. 4 election.

She said the next secretary should be able to "hit the ground running" and have a deep understanding of what it means to be a trustee for Indian people.

She suggested a candidate list that includes former South Dakota Sen. Tom Daschle, Rep. Nick Rahall, D-W.Va., Sen. Bryon Dorgan, D-N.D., and Rep. Dale Kildee, D-Mich.

During his campaign, Obama said he would work toward fixing the Interior Department's Indian trust fund system, a task that falls upon several departments, including the Minerals Management Service, the Bureau of Land Management and the Bureau of Indian Affairs.

"The hope is the Interior Department will find collaborators like the Indian Land Tenure Foundation to work in concert rather than work against the overall benefit of trust reform," said Howard Valandra, the foundation's vice president of programs.

"It would allow tribes and individual Indians to take their land and assets and better manage them. We should all try to get on the same page. We have worked with the Office of Special Trustee and the BIA, but the coordination hasn't been absolute. So, we've had to work independent."

The GAO has made two recommendations regarding the department's reform efforts. Auditors said the department should provide Congress with a timetable for completing current trust fund reform plans and make a plan for future trust fund operations. Second, department officials should develop a plan that details staff and financial needs once trust reform is completed.

As part of the reform process, a sweeping new set of federal regulations is being developed by the Interior Department to better manage Indian lands, including probate reform. The regulations have not yet been approved.