cited Interior's inability to forcefully represent Guam's case in Treasury decisions on arbitrage bonds and other tax policies. Some territory officials believe Interior is no longer well suited to meet their needs, especially economic development needs. They cite Interior's main areas of interest--land management, parks, and minerals as inappropriate for the territories. Others said Interior represents the "colonial" past when the federal government was in direct control of the territories. They believe a new organization is needed to erase this past image and to establish a more forward-looking approach to the territories. Interior trying to develop a partnership relationship with the territories Interior officials recognize that their authority is some- what limited in dealing with other federal agencies. Nonethe- less, they believe they can keep lines of communication open between the territories and the federal establishment and facilitate territorial needs through technical assistance, economic development initiatives, and advocating the removal of legislative and program constraints. They believe that Interior is the best agency to deal with overall territorial matters because of its record of experience and expertise built up over the years. OVERSIGHT ROLE: A REFLECTION OF UNCERTAINTY IN THE FEDERAL-— TERRITORIAL RELATIONSHIP Interior, through its Office of Inspector General, performs an audit function for all the territories except Puerto Rico. This role in relation to Interior's overall administrative re- sponsibility has led to questions about the appropriate degree of federal oversight in light of increased territorial autonomy. Officials from the Office of Inspector General believe Interi- or's responsibility for financial and program oversight is not well defined. At issue is Interior's authority to enforce actions by the territorial governments in response to audits, to ensure that the governments spend monies according to federal guidelines, and to improve management of local and federal programs. These officials believe that OTIA is not exercising an effective oversight role due in part to an inability to enforce compliance with audit recommendations by the territories. Interior Inspector General officials believe a confiict exists between exercising oversight versus supporting greater autonomy for the territorial governments. Interior officials believe that the level sight is a policy question which should be Congress and that more definitive guidance is 5000233 46 of federal over- addressed by the needed to specify

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