0472 1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA 2 3 ELOUISE PEPION COBELL, : Civil Action 96-1285 et al. : 4 Plaintiffs : : Washington, D.C. 5 V. : Monday, October 15, 2007 : 6 DIRK KEMPTHORNE, Secretary : of the Interior, et al. : 7 : Defendants : MORNING SESSION 8 TRANSCRIPT OF EVIDENTIARY HEARING 9 DAY 3 BEFORE THE HONORABLE JAMES ROBERTSON 10 UNITED STATES DISTRICT JUDGE 11 APPEARANCES: 12 For the Plaintiffs: DENNIS GINGOLD, ESQUIRE LAW OFFICES OF DENNIS GINGOLD 13 607 14th Street, NW Ninth Floor 14 Washington, DC 20005 (202) 824-1448 15 ELLIOTT H. LEVITAS, ESQUIRE 16 WILLIAM E. DORRIS, ESQUIRE KILPATRICK STOCKTON, L.L.P. 17 1100 Peachtree Street Suite 2800 18 Atlanta, Georgia 30309-4530 (404) 815-6450 19 KEITH HARPER, ESQUIRE 20 JUSTIN GUILDER, ESQUIRE KILPATRICK STOCKTON, L.L.P. 21 607 14th Street, N.W. Suite 900 22 Washington, D.C. 20005 (202) 585-0053 23 DAVID C. SMITH, ESQUIRE 24 KILPATRICK STOCKTON, L.L.P. 1001 West Fourth Street 25 Winston-Salem, North Carolina 27101 (336) 607-7392 0473 1 For the Defendants: ROBERT E. KIRSCHMAN, JR., ESQUIRE JOHN WARSHAWSKY, ESQUIRE 2 MICHAEL QUINN, ESQUIRE J. CHRISTOPHER KOHN, ESQUIRE 3 U.S. Department of Justice 1100 L Street, N.W. 4 Washington, D.C. 20005 (202) 307-0010 5 JOHN STEMPLEWICZ, ESQUIRE 6 Senior Trial Attorney 7 U.S. Department of Justice 8 Commercial Litigation Branch 9 Civil Division 10 Ben Franklin Station 11 P.O. Box 975 12 Washington, D.C. 20044 13 (202) 307-1104 14 15 16 Court Reporter: REBECCA STONESTREET 17 Official Court Reporter 18 Room 6511, U.S. Courthouse 19 333 Constitution Avenue, N.W. 20 Washington, D.C. 20001 21 (202) 354-3249 22 23 24 Proceedings reported by machine shorthand, transcript produced 25 by computer-aided transcription. 0474 1 2 3 4 5 6 C O N T E N T S 7 8 WITNESS DIRECT CROSS REDIRECT RECROSS 9 10 MICHELLE HERMAN 11 By Mr. Quinn 479 -- -- -- 12 13 14 15 E X H I B I T S 16 17 NUMBER ADMITTED 18 19 20 DEFENSE: 21 22 152 - 158 571 0475 1 P R O C E E D I N G S 2 COURTROOM DEPUTY: This is Civil Action Number 96-1285, 3 Cobell versus Kempthorne, et al. 4 THE COURT: Good morning, Mr. Quinn. 5 MR. QUINN: Good morning, Your Honor. I would like to 6 continue if I could with my examination of Ms. Herman. But 7 before we call her back to the stand, I just would like to 8 clarify one thing that I understand the Court has ordered with 9 respect to Privacy Act material, that we're free to proceed with 10 that and the public display of the information. 11 I think that's fine in terms of the overall 12 presentation of the witness' testimony in showing exhibit data 13 on the screen. I just would like to inform the Court that in 14 some sections of the DCV reports - I believe it's primarily all 15 in Part D of the regional reports - there are some pages that do 16 disclose name and Social Security numbers, and I wanted to 17 advise the Court of that fact. 18 I don't think it's a problem, I don't intend to show 19 those pages today, but when we get to the point of offering the 20 material into evidence, I just wanted the Court to be aware of 21 that. 22 THE COURT: All right. Thank you. 23 MR. QUINN: Could we recall Ms. Herman to the stand, 24 please? 25 MR. SMITH: Your Honor, if I could address one 0476 1 administrative matter. 2 THE COURT: Mr. Smith, yes. 3 MR. SMITH: Your Honor, you may recall that you gave 4 the defendants leave to file an additional exhibit on the 30th 5 of September. It was actually produced to us October 3rd. And 6 that is the DCV that Mrs. Herman has been talking about. 7 When she was testifying on Thursday, we actually 8 discovered the government's version was different than ours. 9 The Bates stamp numbers were off. We have reconciled that; they 10 immediately give us a new copy. 11 However, on Saturday night, about 10:00 o'clock, we 12 were served with a new version, and there are two significant 13 changes to that. Number one, there's a category of documents 14 that have been changed; a sentence has been added, there are 15 calculation changes, some of them minor, some of them 16 significant. 17 Number two, there's an additional 1,750 pages to that 18 document which were not originally produced. The original 19 document had about 10,000 pages; now we have another 1,700 or so 20 pages. 21 Interesting on -- we looked at some of the underlying 22 codes for those pages, and some of those documents were created 23 the day trial started. Some of those documents were created 24 immediately after Ms. Herman testified. So we're not talking 25 about documents that were just omitted; some of them were 0477 1 actually created while this trial was proceeding. 2 Your Honor, we've discussed this with Mr. Quinn. And 3 number one, we've agreed that because it's impossible for us to 4 look at all these documents - they're not categorized, they're 5 interspersed within the original document - that Ms. Herman will 6 come back. We'll go as far as we can, and she will come back 7 when we have an opportunity to look at those additional 1,700 8 pages, if that's satisfactory to the Court. 9 THE COURT: That's exactly the right resolution of it. 10 Thank you. 11 MR. SMITH: The other concern we have is whether these 12 pages are simply inserted in the original exhibit, or they are a 13 new exhibit. And our concern with simply inserting these in the 14 original exhibit is, that changes the Bates stamp numbers. And 15 we've already got our documents on the system, we already have 16 our exhibits. We would have to go back through and identify 17 where our documents are in their new exhibit, and that would be 18 an extreme task at this late date. 19 Plus the fact that we're dealing with a new document. 20 The original exhibit was dated September 30th; now we're dealing 21 with a document that is really October 13th and has changes to 22 it. 23 So our suggestion is, this new document with the 24 corrections be simply identified as a new exhibit instead of 25 trying to intersperse pages in the original exhibit, if that's 0478 1 satisfactory. 2 THE COURT: Any problem with that, Mr. Quinn? Makes 3 sense to me. 4 MR. QUINN: There's one distinction, Your Honor, with 5 respect to the additional pages versus the corrected pages. I 6 think the corrected pages number 14 to 17. The underlying data 7 was all in the report. What happened is, the numbers and 8 information being transposed to the overall text, in some cases 9 the incorrect number was put in or a statement was left out that 10 should have been in. But it's all based on the underlying 11 material that's in all the work papers that make up the overall 12 component of the DCV reports. 13 The additional pages are pages actually that are -- 14 were in the September 30 binder set that FTI produced. The 15 problem was, when it was electronically transmitted to the 16 Department of Justice for production, certain components of tabs 17 didn't get into the electronic version that was sent to us. 18 So to say that those pages weren't part of the 19 September 30th report is absolutely incorrect. There are some 20 corrected pages, but they're less than two dozen. And -- 21 THE COURT: All right. I don't hear Mr. Smith dwelling 22 on the blame part of this. He's dwelling on the fix. 23 MR. QUINN: I understand, Your Honor. But I believe 24 that the exhibit that we had marked, and we were prepared to 25 originally use when we started with Ms. Herman on Thursday, 0479 1 should contain these additional pages that were inadvertently 2 omitted from our set that we produced. 3 The corrected pages, I guess I would be willing, at 4 minimal, to treating those separately as corrected pages to the 5 September 30th report, because that's in fact what they were. 6 THE COURT: I thought his suggestion is, make the whole 7 thing a new exhibit. Right? 8 MR. SMITH: Your Honor, if we could have the original 9 one they produced to us originally as an exhibit, and then have 10 the corrected version, that way we wouldn't have to go try to 11 match up Bates stamp numbers with the new version we just got. 12 THE COURT: What's wrong with that? 13 MR. QUINN: No problem, Your Honor, we can do that. 14 THE COURT: So one is Exhibit 10 and the other 15 Exhibit 10-A or something like that. 16 MR. QUINN: That's fine, Your Honor. We'll work on the 17 numbers over a break. 18 THE COURT: All right. Good. Ms. Herman? 19 CONTINUED DIRECT EXAMINATION OF MICHELLE HERMAN 20 BY MR. QUINN: 21 Q. Good morning. 22 A. Good morning. 23 Q. When we broke on Thursday, we were just beginning to talk 24 about the data completeness validation reports that you and FTI 25 had prepared. And I would like to go back and just begin there 0480 1 in terms of the overall reports, and review with the Court how 2 they're organized and effectively what they contain. Okay? 3 MR. QUINN: Could we have defense table, please? 4 BY MR. QUINN: 5 Q. Is it up on your screen? It's not on mine. Is it on your 6 screen, Ms. Herman? 7 A. No, it's not. 8 MR. QUINN: May I approach, Your Honor? 9 BY MR. QUINN: 10 Q. All right. Can you see that cover page, Ms. Herman? 11 A. Yes, I do. 12 Q. And it's identified as DX-152, and page 152-1. Can you 13 identify what that cover page refers to? 14 A. It's the cover page to our overall report. 15 Q. Okay. If you would briefly describe for the Court what the 16 overall report contains and how it relates to the regional 17 reports? 18 A. The overall report contains a summary of all the work that 19 we've done on all 12 regions to date. It covers both the data 20 sets that we've used, how much information we've restored to the 21 record to this point in time, a summary of our transaction 22 mapping, and account number analyses. 23 Q. So if you wanted to find out information about a region that 24 doesn't yet have a regional report, is this where you would 25 look? 0481 1 A. Yes, you would. 2 Q. And I would like to just briefly identify each of these 3 reports for the record, if you would, Ms. Herman. I've put up 4 another slide of a cover. 5 Could you identify this is Defendant's Exhibit 153, 6 page 153-1? 7 A. That's our Alaska regional report. 8 Q. That's one of the six regional reports? 9 A. Yes, it is. 10 Q. Defendant's Exhibit 154 is now on the screen at page 154-1. 11 Could you describe and identify that document? 12 A. That's our Pacific region report. 13 Q. It says, "Sacramento area." Could you explain what that 14 little subheading is? 15 A. Currently in TFAS they're referred to as regions, and in 16 IRMS the data was referred to as areas. So Pacific refers to 17 the name within the TFAS system, and Sacramento within the IRMS 18 system. 19 Q. So you've included the corresponding names from the two 20 computer systems for that area of the country? 21 A. Yes. 22 Q. Put up on the screen next, Ms. Herman, a slide of Defense 23 Exhibit 155. It's 155, page one. That's another cover. Could 24 you describe and identify that for the Court? 25 A. That's our western region report. 0482 1 Q. And it mentions Phoenix area. Again, is that a cross 2 reference? 3 A. Yes, it is. 4 Q. And the next slide I have on the screen, Ms. Herman, is 5 Defendant's Exhibit 156 at page 156-1. Could you identify that 6 for the record, please? 7 A. That's our Northwest region Portland area report. 8 Q. Could you identify Defendant's Exhibit 157, please, at page 9 157-1, for the record? 10 A. That's our Great Plains region Aberdeen area report. 11 Q. And Defendant's Exhibit 158 is next, at page 158-1. Could 12 you describe that, and identify it for the Court? 13 A. This is our Rocky Mountain region Billings area report. 14 Q. Is that the six? Did we cover all six? 15 A. Yes, we have. 16 Q. If we could go to the next slide. 17 Ms. Herman, I put on the screen Defendant's Exhibit 154 18 at page two. 19 MR. QUINN: And could we zoom in to the title of that 20 page, please? 21 BY MR. QUINN: 22 Q. Could you identify this document for the record? 23 A. This is the index to our Pacific region Sacramento area 24 report. 25 Q. And what does this part of the regional report tell the 0483 1 reader? 2 A. Each one of the regional reports is set up in the same 3 fashion and broken down into these same sections, and it's just 4 an overview of what's included at each tab. 5 Q. And the summary of findings, what would you find in the 6 summary of findings part? 7 A. An overview report for the region. 8 Q. A narrative report similar to what's in the overall report? 9 A. Yes, exactly. 10 Q. But for that specific region? 11 A. Correct. 12 Q. Tab B is titled "Data availability by agency." What does 13 that address? 14 A. It addresses the months and years that we have data for each 15 one of the agencies within the region. 16 Q. And Part C, "Data completeness," and the regional reports. 17 What does that address? 18 A. It summarizes the transactions that we've restored to the 19 database to this point in time, as well as a summary of the 20 accounts that are and are not in balance. 21 Q. So it's a status report of where you are on doing those 22 tests? 23 A. Yes, it is. 24 Q. And Part D is titled "Account number analyses." What does 25 that contain? 0484 1 A. This contains the summary of our status with each one of our 2 account number tests. As we discussed on Thursday, we have a 3 reused account number analysis test. We look at accounts that 4 have multiple names that we don't feel have been reused. Any 5 accounts that we have not yet resolved would also be included in 6 this section. 7 Q. And the next part, Part E, "Transaction mapping." What does 8 that contain, that part? 9 A. This contains a summary of where we stand with our 10 transaction mapping analysis, both what we've completed and 11 what's undone, as well as any potential posting errors that 12 we've identified to date. 13 Q. Okay. This might be a good place to talk about the types of 14 transaction mapping results you've had overall. 15 When you talk about a potential posting error, what are 16 you referring to? 17 A. This would be the result of looking at the transfers and 18 reversals within the system. So typically, you would expect a 19 transfer transaction to sum to zero. If we identified 20 situations where that didn't occur and we couldn't find 21 supporting documentation to support why that had happened, we've 22 reported it as a potential posting error. 23 Q. Could you describe a little bit more about what you're 24 saying, what you're looking for when you're saying it should sum 25 to zero? What are you comparing that should cancel out? 0485 1 A. Typically, if you debit an account or reduce an account, 2 let's say a Special Deposit Account, by $100 when you're 3 transferring lease income, you would expect that you would 4 credit that same $100 to one or more individual accounts. In 5 some instances, we found that that did not occur. 6 Q. So in your example with $100, there's $100 in a Special 7 Deposit Account that's to be put into an individual IIM account? 8 A. That's correct. 9 Q. So as part of the bookkeeping entry, there's a debit, then, 10 to the Special Deposit Account? 11 A. That's correct. 12 Q. And then you're looking to see that there's credit to the 13 IIM account? 14 A. Yes, one or more credits that would add up to $100. 15 Q. And then when you put those two together, they should offset 16 one another? 17 A. Exactly. 18 Q. Besides potential posting errors, what's one of the other 19 types of results you can find when you get a discrepancy and 20 don't find offsetting bookkeeping entries? 21 A. In some instances - and this you'll see in Section E2 - we 22 have something we refer to as mapped exceptions. 23 Q. Could you explain what that is for the Court? 24 A. These are examples where the group that we've associated 25 does not sum to zero, but we've reviewed documentation that 0486 1 tells us that, at the end of the day, that was the correct item 2 to post. 3 Q. Let's see if I understand. You find two bookkeeping entries 4 that don't cancel each other out. Right? That's what you're 5 claiming here? 6 A. Correct. 7 Q. But you've found other documentation that somehow explains 8 that? Is that what's going on? 9 A. Yes. The most typical example of a situation like that 10 would be a partial reversal. So let's say you posted initially 11 $1,000 to the system, but you meant to post $800 to the system. 12 In some instances, instead of reversing the initial posting and 13 then reposting the correct $800, they would simply post a 14 negative $200. 15 Q. And do you have an example of that to show the Court? 16 A. Yes, I do. 17 Q. We'll cover that later this morning. 18 And in that same E section, there's another one in the 19 table of contents titled, "Unresolved transactions." Is that 20 also a possible outcome of a transaction mapping? 21 A. Yes. These are transactions that were still in process, so 22 potentially we have documents on request with the AIRR. 23 Q. And moving on to finish out the index for the regions, 24 Part F is "Descriptive statistics." Could you summarize for the 25 Court what's contained in that part of the reports? 0487 1 A. These are simply summary tables that give you information at 2 an agency level. So the first, for instance, would tell you the 3 number of credits, debits, associated dollars for that 4 particular agency. 5 Q. As part of the data completeness validation work that you've 6 done, how many individual transactions has FTI examined? 7 A. Just over 113 million at this point. 8 Q. If we could go to one of our examples. We were talking 9 briefly on Thursday about account number changes and reused 10 account numbers. And I would like to walk through an example or 11 two for the Court as to how you've come across these and how you 12 attempt to resolve them when you do. 13 MR. QUINN: Could we have the Exhibit 156? 14 BY MR. QUINN: 15 Q. Now, before we talk about this, could I just ask you about 16 where you are in terms of the account name and reused account 17 information? In terms of doing that analysis, how far along are 18 you? 19 A. We performed this analysis on a subset of the accounts in 20 the system, the land-based and judgment per capita accounts. 21 We've analyzed approximately 645,000 accounts so far, and we 22 have 786 left to resolve. 23 Q. 786? 24 A. That's correct. 25 Q. Do these accounts -- is this account set that you've checked 0488 1 broader than what is part of what's been called the accounting 2 reconciliation population? 3 A. Yes, it is. 4 MR. QUINN: If we could zoom in a little bit on the 5 summary of that page. 6 BY MR. QUINN: 7 Q. This is DX-156, at page 109. Could you identify that 8 document for the Court? 9 A. This is an excerpt from the account number section of our 10 northwest region Portland area report. 11 Q. So this is from one of the regional reports? 12 A. Yes, it is. 13 Q. And this summary sheet, is this something that is a common 14 component of the DCV reports? 15 A. Yes. For each one of the reused accounts that we've 16 identified, there's a summary similar to this. 17 Q. Okay. And could you review for the Court -- we have a 18 couple of account names that appear in this table. And could 19 you describe what the problem is that you detected in your 20 analysis? 21 A. Initially, if you'll look to the second column in the table 22 section, you'll see that all of the lines have the same account 23 number associated with them and the same agency, but there were 24 four different names associated with this account over time. 25 Q. How did you find the four different names associated with 0489 1 the account over time? How did you discover that? 2 A. As I mentioned on Thursday, we took all of the available 3 names within the system, both from the IRMS master file, the 4 IRMS transaction file, and the TFAS account file, and we 5 combined them into a single table so we could analyze all of the 6 names for a given account. 7 Q. So you took all of these names, and then compared them 8 against the account numbers to see if the names match? 9 A. Exactly. 10 Q. So these two names, you have Ms. Pichette and Ms. Paddock. 11 Right? 12 A. Correct. 13 Q. What did you find out about these two names and this account 14 number? 15 A. In this instance, we requested a -- 16 MR. SMITH: Your Honor, object to this testimony. 17 Ms. Herman has not been designated as an expert witness. She's 18 not an accountant, she's not qualified to reconcile things to 19 perform accounting. 20 We're getting into the area of opinion testimony, and 21 she has not been designated to testify about that. 22 THE COURT: I don't think I hear an expert opinion 23 coming out of this. Overruled. 24 BY MR. QUINN: 25 Q. Go ahead and describe what you found. 0490 1 A. In this instance, we requested a jacket file from the AIRR. 2 And within that jacket file we reviewed a death certificate, 3 which has been referenced in the summary information. 4 Q. Could I just stop you right there? 5 Describe for the Court what the jacket file is. What 6 are you talking about when you refer to a jacket file? 7 A. A jacket file is typically kept in a file folder. And each 8 agency maintains jacket files in different fashions, but some of 9 the information that you might find within a jacket file would 10 include an account ledger, a birth certificate, a death 11 certificate, potentially a marriage or adoption certificate, 12 sometimes financial documents. It really varies. 13 Q. And you referred to finding a what in the jacket file? 14 A. In this particular instance, a death certificate. 15 Q. I think we have a slide of that. 16 MR. QUINN: Will you put that up on the screen? 17 BY MR. QUINN: 18 Q. Okay. This is -- for the record, this is DX-156, 156 at 19 page 00110. And zoom in so we can see what the document is. 20 All right. Before I talk about the document, 21 Ms. Herman, I see a series of numbers up at the top of this 22 sheet, and included in there is an "http:" component. Could you 23 describe what that number string is at the top? 24 A. We have access to the accounting reconciliation tool within 25 our Los Angeles office, and as we pull up documents through that 0491 1 tool, this is the information that would appear. 2 Q. Does this number coding at the top of the page indicate at 3 all that this information is available over the Internet? 4 A. No, this is a private line to our office in Los Angeles. 5 Q. Why is the http symbol there, if you know? 6 A. Because we opened the document through the Internet 7 Explorer. 8 Q. So you used that browser protocol? 9 A. Yes. 10 Q. Is that right? 11 A. Yes. 12 Q. Now, if we could talk about the actual document. Could you 13 just identify the document for the record? 14 A. This is a death certificate for one of the account holders 15 on the previous page. 16 Q. Okay, Ms. Pichette. Where did this come from, this death 17 certificate? 18 A. It was found within the jacket file. 19 Q. And how did this inform you in terms of the account number 20 and names that appear on the summary sheet? 21 A. As you can see, the birth date for Ms. Pichette is 22 March 15th, 1910. And if you flip back to the summary table. 23 Q. Okay. 24 A. Within the master file, we had had a birth date for Rose 25 Paddock, and Rose's birth date was September 28th, 1937. 0492 1 So that's demonstrating to us that these are in fact 2 two different people, not the same account holder. 3 Q. So once you were able to determine that, what did you do? 4 A. So you can see in the first column on the page, we discussed 5 briefly on Thursday the NAAN, the N-A-A-N. And we've now at this 6 point assigned two different numbers to this account, such that 7 when we go to issue a statement, you would only print the 8 transactions associated for Cecelia; and then secondly, the 9 transactions associated with Rose. 10 Q. So in this case, even though these two names originally had 11 the same account number, you've now been able to identify them 12 separately. Is that right? 13 A. Yes. 14 Q. And have you provided this information to the Office of 15 Historical Trust Accounting? 16 A. Yes, I have. 17 Q. Let's look at one other name example, and then go on to some 18 of the other data tests, if we could. 19 I've put up on the screen another slide from DX-158. 20 This is page 158 -- page 158. Could you identify that document 21 for the Court, please? 22 A. This is an excerpt from our Rocky Mountain region Billings 23 area report. 24 Q. And at the top there it says, "Account associated with 25 multiple individuals." Is this another reused account issue? 0493 1 A. This is a situation where the account has multiple names 2 associated with it, but we don't feel that's multiple account 3 holders. 4 Q. And describe for the Court, if you would, how you came to 5 the determination that it's not multiple account holders. 6 A. Again, in this instance we requested a jacket file and 7 reviewed the information contained within the jacket file. 8 MR. QUINN: Can we put up the next page, please, in the 9 slide? Thanks. 10 BY MR. QUINN: 11 Q. And this is DX-158, 158-159, for the record. And could you 12 identify what that document is? 13 A. This is an IIA change order. 14 Q. And do you have an understanding, after working with the 15 documents over almost a decade with the Department of Interior, 16 what that document pertains to? 17 A. This is a document that was used to update names, dates of 18 birth, and other types of similar information within the IRMS 19 master file. 20 Q. And what did this document tell you with respect to the 21 account that you were researching? 22 A. This particular document is showing the change from Beverly 23 to Thomas, and if you scroll further down, the date of that 24 change. 25 Q. And it has a signature there? 0494 1 A. Correct. 2 Q. From the superintendent? 3 A. Exactly. 4 Q. We have another slide, I think, related to this. 5 For the record, this is -- we've now put on the screen 6 DX-158, page 160, I think that is. Let me just double-check. 7 Yes, 160. 8 Is this another document you found in researching the 9 name information on this account? 10 A. Yes. This is a letter that the account holder sent to the 11 agency. 12 Q. And what did this tell you in terms of which names were 13 appropriately associated with the account? 14 A. Essentially, the account holder is indicating that Beverly 15 Piper, who was the first name on the account, was his mother, 16 and that, while he was a minor, that she received his checks. 17 And asking to update his account name and address. 18 Q. And where was this document found, this handwritten note? 19 A. Again, within the jacket file. 20 Q. And this came from Interior's records relating to this 21 individual? 22 A. Yes, it did. 23 Q. Okay. Now, you have a summary table on this worksheet, and 24 again, for the record, page reference here is 158 of 25 Exhibit 158. 0495 1 Could you describe what the table is recording here? 2 It says "Results," but what is that table recording? 3 A. In the top, similar to the first report we have, it's just a 4 summary of what it was that we reviewed and the conclusion that 5 we reached. 6 And then in the results section you'll see that in this 7 instance there's only one man, meaning we didn't separate these 8 accounts. The account number, the agency, again all the names 9 associated with the account over time. And then there's an 10 exclude mark next to Beverly's name. 11 Q. What does that mean? 12 A. That -- from our perspective, that this is Thomas' account 13 and that the account statement should be issued to him. 14 Q. And I take it that information is based on the records that 15 were located connected to this account? 16 A. Yes. 17 Q. And what do you do with this information? 18 A. Again, this information is provided to OHTA as a component 19 of our reporting. 20 Q. And you expect that it will be used -- 21 A. I'm sorry, we provide the information to OHTA, similar to 22 the first instance. The Office of Historical Trust Accounting. 23 Q. Do you have an understanding how OHTA would use this 24 information? 25 A. The most current name, so the last name in this instance, 0496 1 Thomas W. Piper estate, will appear on the historical statement. 2 Q. So when the statement is issued, that would be the person or 3 entity to whom it would be directed? 4 A. Exactly. 5 Q. Okay. Now, when we were looking at the index, the table of 6 contents, if you will, to the regional reports, you talked 7 briefly about the transaction mapping and what you find in the 8 course of transaction mapping. You have different possible 9 results based on your examination of the record. 10 Could we go on and talk about a couple of examples with 11 respect to transaction mapping? But before we do, just what are 12 the possible outcomes that can occur when you map a transaction, 13 just briefly? 14 A. There's a possibility that we'll leave it in the unresolved 15 bucket as we're waiting on documentation; there's a possibility 16 that we'll map the transaction; there's a possibility that it 17 will be in the explained difference section of the report, 18 meaning the sum of the transactions is not zero. 19 There's a possibility that it will be categorized as a 20 potential posting error, or that we'll identify missing data. 21 Q. And after looking through these bookkeeping entries and 22 mapping them, do you know offhand how many of these transactions 23 have been mapped so far? 24 A. I would have to refer to our report, but I believe it's 25 around 93 million. 0497 1 Q. If we could, let's walk through an example for the Court of 2 the transaction mapping and talk about an explained exception. 3 MR. QUINN: Could we have Exhibit 154? 4 BY MR. QUINN: 5 Q. On the screen, I've just put a slide from Defendant's 6 Exhibit 154. For identification, it's page 188. 7 Could you identify that page for the Court, please? 8 THE COURT: Mr. Quinn, I have to tell you that as I'm 9 listening to this, part of my mind is involved with the numbers 10 100-and-some-million and 93 million. And I would appreciate 11 your taking a little detour and having the witness explain to me 12 how on earth 93 million transactions get mapped: Who's doing 13 it? Is it being done by a computer? Do you have five million 14 people sitting out there in a cave? How is this being done? 15 MR. QUINN: Sure, Your Honor. I would be happy to walk 16 through it. 17 BY MR. QUINN: 18 Q. Ms. Herman, could you describe overall what role you and FTI 19 play in terms of transaction mapping, and how that gets 20 implemented, how that gets conducted? 21 A. We initially took the transactions and broke them into 22 different groups of related transactions, so reversals and 23 transfers fundamentally. 24 And then within the transfer bucket -- 25 THE COURT: No, no, no. I'm talking who does it, using 0498 1 what kind of equipment, what kind of data. Let's get down to 2 the weeds here. 3 THE WITNESS: Yes, Your Honor. That's what I'm going 4 to explain. 5 So, for instance, once we have that transfer bucket -- 6 THE COURT: What is the transfer bucket? 7 THE WITNESS: Transfers the funds between accounts. 8 THE COURT: But I mean, is it a database? Is it -- 9 it's not a bucket of chips. 10 THE WITNESS: No. We have a database, Your Honor, and 11 we try to separate first the transactions into associated groups 12 so we can write a program to deal with each one of those groups. 13 So the important thing to start with is to create small 14 enough groups so you that have similar transactions to evaluate. 15 So the first step in the process is to take all of your 16 transactions and break them into smaller groups. 17 So, for instance, you have different types of 18 transfers. You have transfers from a Special Deposit Account to 19 individual accounts; you have transfers from one region to 20 another region; you may have transfers within an account from 21 the income portfolio to the principal portfolio. 22 So we try to create smaller buckets of transactions, 23 and then we write a program that addresses the particular 24 characteristics of those smaller buckets. But at some point in 25 time, we do have to go through a manual review process; but not 0499 1 until those buckets are much smaller. 2 MR. QUINN: Does that help, Your Honor? 3 BY MR. QUINN: 4 Q. In terms of the computer system, let's talk about the 5 database that you're using. And describe for the Court where 6 you're drawing the information that you're analyzing. Let's 7 start with that. 8 A. We have a database that we maintain in SQL server, and we 9 combined all of the transactions into one single file. 10 Q. And when you say one single file, this information is coming 11 from where? Where are you sourcing the data? 12 A. We combined the IRMS transactional data and the TFAS 13 transactional data into one table. 14 Q. And the IRMS transaction information is, generally speaking, 15 the older electronic information? 16 A. That's correct. 17 Q. And that goes from roughly what periods of time, covers what 18 periods? 19 A. 1985 through March of 2000. 20 Q. So you have that data set. And then, for later periods, you 21 have the TFAS transactional information? 22 A. Correct. 23 Q. And all this is combined into one database? 24 A. That's correct. 25 Q. Then when you try to identify, as you say, groups of 0500 1 transactions to analyze, are you writing a program that culls 2 through the database and identifies the appropriate transactions 3 for further study? Is that what's happening? 4 A. Initially, we use some of the codes within the data and some 5 of the information contained within the reference to create 6 those smaller groups of transactions. And at that point is when 7 we would write a program. 8 Q. Okay. Could you give the Court an example or two of the 9 types of bits of information you would look for to identify a 10 particular transaction type? 11 A. Typically, we would analyze the IRMS transactions and the 12 TFAS transactions separately, because the codes within the 13 system change. 14 One of the groups that we would analyze, for instance, 15 is a journal voucher transaction, so that would have a code 16 within the system of 13. So we could use the computer to pull 17 out all of the Code 13 transactions, and we would do that one 18 region at a time, because with that particular type of 19 transaction, the rule for the computer system was, it had to 20 stay within the same region. 21 And at that point we would take the reference field, 22 which you can see in the example that's on the screen. 23 MR. QUINN: Zoom in on this slide. It's from 154, page 24 188. 25 A. So as I mentioned earlier, here you can see the type column. 0501 1 So the type that I was talking about was a Type 13. And then 2 you can see the reference column. And the reference column is a 3 freeform text field within TFAS, meaning the data entry operator 4 could have put whatever they liked into that field. 5 BY MR. QUINN: 6 Q. Did you have something like that -- I'm sorry. Did you have 7 something like that, a reference field like that from IRMS? 8 A. Yes. This is from IRMS, this particular reference. 9 Q. Okay. 10 A. And so we would use the information contained in that field. 11 And in this particular example you can see that all four 12 transactions have the same first component to the reference. 13 Where it says, "CVJ 53-205," that's a document number. 14 And so we would extract that information from that 15 field, and we would have the computer search for the 16 transactions related with the same component of the reference, 17 and that's how we would do our first pass to link transactions 18 together. 19 Q. When you've identified groups of transactions for analysis 20 as part of the data completeness project, what's the normal 21 review process that goes on, in confirming that you've joined 22 the appropriate entries, bookkeeping entries, together for 23 study? 24 A. It depends on the type of transaction that's being 25 processed. So as I mentioned, transaction type 13s have to be 0502 1 within the same area; they have to be processed on the same day; 2 they have to sum to zero. And so that gives you enough rules 3 that you can tell the computer: Go in and find transactions 4 processed on the same day, in the same area, with the same 5 reference, that sum to zero. 6 Q. So the computer does that part of it. And I think you 7 mentioned that some of the review is manual. Describe for the 8 Court if you would what the manual part of the review is, who 9 undertakes it, and how it's checked out. 10 THE COURT: Before you get to that, I'm assuming from 11 what you've told me that the vast majority of this process has 12 to do with matching up transactions using the computer, the 13 database in the computer? 14 THE WITNESS: Yes, it does, Your Honor. 15 THE COURT: And what we're about to learn about is the 16 manual work that is done for those things that jump out 17 unresolved? 18 THE WITNESS: Correct. And the computer process -- 19 THE COURT: Now, how long has it taken to do all the 20 computer work that is reflected in these reports? 21 THE WITNESS: It took several years, Your Honor. I 22 couldn't tell you definitively. 23 THE COURT: And how many people? 24 THE WITNESS: Our team has varied over time. 25 Typically, that team has approximately four to eight people. 0503 1 THE COURT: Four to eight people? 2 THE WITNESS: Full-time. 3 THE COURT: Three or four years? 4 THE WITNESS: Yes. 5 THE COURT: 113 million transactions? 6 THE WITNESS: The computerized ones were clearly much 7 faster than the manual review population. That's why the 8 remaining regions will take longer, because we're down to the 9 manual review component of the population. 10 THE COURT: Okay. Go ahead. 11 BY MR. QUINN: 12 Q. Could you describe the manual component of that review 13 process for the Court? 14 A. The computerized process actually is iterative, so you start 15 with your larger groups and you continue to narrow down. But at 16 some point you don't necessarily have large patterns left 17 anymore within the data. At that point, you have to aggregate 18 your transactions into related groups. 19 So another example, for instance, would be a debit memo 20 transaction. It has a code of 14. Sometimes the reference for 21 the debit transaction isn't similar in nature to the credit 22 transaction, and so you have to do a manual review of the 23 unmatched transactions in the system to try to identify the 24 appropriate match. 25 Q. Based on your experience in working through these various 0504 1 data completeness validation tests, could you describe what the 2 typical steps are that are involved in the manual review? You 3 say you try to figure these out. But specifically, what are you 4 looking for? What sources do you draw on to research the 5 problem, to make sure you have the proper match? 6 A. The first thing we would do is, there's still some kind of 7 pattern within the system. So a Type 14 debit always is 8 associated with a Type 01 credit. So we would look at groups of 9 related credits and try to determine, using the electronic data 10 first, could we find the appropriate offset. Because in many 11 instances they don't post on the same day, so the debit and 12 credit transactions post on differing days. 13 And then we typically would request a sample of 14 documents, once we felt that we had identified the appropriate 15 pattern, to confirm that what we had found was correct. 16 Q. Okay. So in your example, you want to confirm that the 17 entries are correct, that the coding is correct. So you said 18 you put a request in for documents. Who are you requesting 19 documents from, and where does that request go? 20 A. We request documents from OHTA, and it gets forwarded to the 21 AIRR. 22 Q. That's in Lenexa, Kansas? 23 A. Yes, it is. 24 Q. Once your request gets to Lenexa, what happens next? 25 A. There's approximately 20 searchers that have been allocated 0505 1 to our project, and they would search for the appropriate 2 document. 3 Q. How many requests have you submitted over all? 4 A. I believe over 80,000. 5 Q. Does that include the accounting reconciliation, or is that 6 just DCV? 7 A. That's just the DCV. 8 Q. And do you know approximately how many document requests are 9 pending for DCV at this moment? 10 A. I believe about 35,000. 11 Q. So how long is it, once you've placed the request for a 12 document to check out this information, before you get the 13 document? 14 A. It can be as short as a week, or over a year. 15 Q. And how does the document find its way to you? Once the 16 research has been done at Lenexa, how does it get to the person 17 doing the data analysis? 18 A. The information is imaged while at the AIRR, and then it's 19 added to the ART machine, which we have access to in 20 Los Angeles. 21 Q. We're going to talk in more detail about the ART machine 22 today in court. But could you first specify what ART stands 23 for? 24 A. I'm sorry, the Accounting Reconciliation Tool. 25 Q. We talk about sometimes shorthand as ART. Right? 0506 1 A. Yes. 2 Q. But ART is not a person in this instance. Right? 3 A. No, it's not. 4 Q. It's a software program. Okay. 5 How does a document get into the ART? 6 A. The E-Compex team in the AIRR images the document -- 7 THE COURT: The what? 8 THE WITNESS: E-Compex is one of OHTA's vendors. They 9 work in the AIRR, and they image the documents. 10 THE COURT: Where is that glossary I asked for? 11 MR. KIRSCHMAN: Actually, Your Honor, the parties have 12 worked on that. Mr. Harper might want to address that. 13 MR. HARPER: Your Honor, I think we're very close to 14 agreement on a glossary -- 15 THE COURT: It may be too late by the time you get it 16 to me. 17 MR. HARPER: We had a couple of issues. In light of 18 some of the testimony, though, I think we're going to need to 19 include some of the contractors that we haven't yet included. 20 MR. QUINN: I'll try to review this when we introduce a 21 new term, Your Honor. 22 BY MR. QUINN: 23 Q. Who is E-Compex? 24 A. I'm sorry. E-Compex is an imaging and coding vendor for 25 OHTA. 0507 1 Q. If you can spell it -- could you spell it for the Court 2 Reporter? 3 A. It's E-dash-C-O-M-P-E-X. 4 THE COURT: I think somebody mentioned E-Compex earlier 5 on. Go ahead. 6 BY MR. QUINN: 7 Q. And what is it they do? 8 A. They image the documents that are located in the AIRR, and 9 then they code summary level information like the document's 10 title, date, things of that nature. 11 Q. And where is this done? 12 A. In the AIRR. 13 Q. So E-Compex has employees at -- 14 THE COURT: The American Indian Records Repository. 15 And in the ether, I suppose. 16 MR. QUINN: It actually starts below ground, Your 17 Honor. 18 BY MR. QUINN: 19 Q. The AIRR, would you just describe that for the record so we 20 have a clear record? The AIRR is the American Indian Records 21 Repository? 22 A. Yes, it is. 23 Q. That's what you're referring to? 24 A. Yes, I am. 25 Q. That's the facility in Lenexa, Kansas? 0508 1 A. Yes, it is. 2 Q. And could you briefly describe -- you've been there? 3 A. Yes, many times. 4 Q. Could you describe what that facility looks like, just 5 briefly? 6 THE COURT: We've seen a slide show. 7 MR. QUINN: Oh, okay. 8 BY MR. QUINN: 9 Q. And E-Compex has staff working at that location. Is that 10 right? 11 A. Yes, they do. 12 Q. And you mentioned that they image the documents. So are 13 these scanned pictures of the documents? 14 A. Yes, they are. 15 Q. And I think you testified that they then code the documents. 16 Before I ask you about what the they're coding, where are they 17 sending this information? Where is this information going that 18 they're coding? 19 THE COURT: I think that I've heard most of this from 20 Ms. Ramirez. 21 MR. QUINN: I just want to make sure -- 22 THE COURT: I was listening. Sometimes I need a little 23 refreshing when you say something like E-Compex out of the blue, 24 but go on. 25 BY MR. QUINN: 0509 1 Q. The E-Compex puts the information in, and then how do you 2 retrieve it? 3 A. Through the ART in Los Angeles. 4 Q. And once that document is accessible by you or your staff, 5 what's done with it? 6 A. Similar to the example that we reviewed previously, we'll 7 review the documentation for whichever tests that had been 8 requested for. 9 Q. So in the account names example, the handwritten note, that 10 would be something that would have been imaged and sent to you 11 electronically? 12 A. Yes, loaded into the ART. 13 Q. And then that's how you refer to the document and examine 14 it? 15 A. Yes. So the references within our report are to the 16 document ID from the ART. 17 Q. I would like to go back to our example. 18 MR. QUINN: Does the Court have any other questions 19 about the process? 20 THE COURT: I just have a question of my courtroom 21 deputy. 22 (OFF THE RECORD.) 23 THE COURT: Go ahead, Mr. Quinn. 24 MR. QUINN: Thank you, Your Honor. 25 BY MR. QUINN: 0510 1 Q. I can't remember now whether we identified this for the 2 record, but it's DX-154 at page 188. Could you tell the Court 3 what this document is? 4 A. This is an excerpt from our Pacific region Sacramento area 5 report. 6 Q. And zoom in on the top part of that table there, get in a 7 little closer maybe. Okay. 8 We're going to be talking, I think it's primarily about 9 the tab one. Or is this all one exception that we're working 10 through? 11 A. No, this report lists each one of the exceptions for this 12 region, and then the associated documentation follows behind. 13 Q. Okay. So at tab one there, the first item in the table, 14 those are referring to different cases of exceptions? 15 A. Yes. 16 Q. And let's talk about the example at tab one. What did you 17 find there? What was the problem? 18 A. So all of the related transactions in this particular 19 instance add up to $18.30. And as I mentioned earlier, our 20 typical rule is that transactions of this nature should add to 21 zero. 22 Q. Okay. So that's how it came to your attention in the first 23 instance? 24 A. Exactly. 25 Q. Because they weren't offsetting transactions. Okay. 0511 1 And in working through the problem, what does the table 2 tell us happened? 3 A. So the first column in the table you'll see is a record ID. 4 That's a number that our firm assigns so that we could uniquely 5 identify each transaction in the system. 6 Q. Stop right there for a second. That number identifies a 7 specific bookkeeping entry? 8 A. Yes, it does. 9 Q. Go ahead. 10 A. And as you move across the table, the account is the account 11 number to which the transaction was posted, the agency where the 12 transaction was posted; in this instance, the Palm Springs field 13 office. 14 Q. Is that what "J-53" means? 15 A. Yes, it does. 16 Q. Okay. 17 A. Then the next column is the date the transaction was posted. 18 The next column tells you the type of transaction that was 19 posted. So an 01, for instance, means a collection of money, 20 and a 11 means a reversal of a collection. 21 The next column tells you the type of revenue. So in 22 this instance, a 099 is miscellaneous revenue. 23 The next column, as I mentioned -- 24 Q. There's a code there a little bit down. You have 099 and 25 then you have 199. What's the 199? 0512 1 A. The 099 is a miscellaneous credit, and the 199 is a 2 miscellaneous debit. 3 Q. Okay. 4 A. The next column is the reference that we discussed earlier. 5 So this is a freeform text field, meaning the person who is 6 entering the transaction decided what to enter into this field. 7 Q. Okay. And the first part has a letter and code, a number 8 combination, JVJ (sic) 53-205. Does that mean anything to you? 9 A. CV is the abbreviation that's typically used for a bill for 10 collection. J-53, as we saw, is the agency where the 11 transaction was posted, Palm Springs. And this would have been 12 the 205th bill within that fiscal year. 13 Q. So that's the account within that agency? 14 A. Yes. And then the tax refund is just what the clerk decided 15 to type in with that transaction. 16 Q. And then in the first line the amount is 18.50. Right? 17 A. Yes. 18 Q. What does the source code tell us, the source column tell us 19 after the dollar amount? 20 A. This is the number that we've assigned to this group of 21 transactions as a result of our transaction mapping. 22 Q. Then you have a series of, I assume related transactions 23 below that. First one, we've just reviewed in the column, and 24 we'll come back to the category one entry in a moment. 25 But what is going on in the next three entries in that 0513 1 table? 2 A. The reason this group of transactions was analyzed in the 3 first place is, you can see in the last two records they say, 4 "Type 11." That means that this is a reversing transaction. 5 And so one of our steps in our transaction mapping was, any time 6 you have a reversal, you need to identify the initial 7 collection, and those two things should sum to zero. 8 Q. So you're expecting if something was entered and then you 9 reverse it, you would wind up with a zero result? 10 A. That's our presumption, yes. 11 Q. In this case, you didn't? 12 A. Correct. 13 Q. So that led to the research that you talked about, doing 14 different steps requesting documents? 15 A. Exactly. So in this instance, we would have requested the 16 bill for collection based on the reference. 17 Q. That's the CVJ number? 18 A. Exactly. 19 Q. Did you find a document? 20 A. We didn't actually search for the document, but yes, it was 21 found. 22 Q. I mean, you put in a request to search for the document? 23 A. Yes, exactly. 24 MR. QUINN: If you'd put up the next slide? 25 BY MR. QUINN: 0514 1 Q. Now, this is for the record DX-154 at page 199. Could you 2 identify what this is, for the record? 3 A. This was attached to the bill for collection that was 4 provided to us. 5 Q. So this is one of the documents you got back? 6 A. Yes, it is. 7 Q. And what is this? What does it indicate to you? 8 A. You can see in the middle of the check is the account 9 holder's name, and it has the dollar amount $18.30. 10 Q. United States Treasury check? 11 A. Yes, it is. 12 Q. And did you encounter this frequently, finding tax refund 13 money going into the IIM account of an individual? 14 A. Not necessarily tax refund money, but in some instances we 15 saw stocks that had been negotiated or other types of 16 miscellaneous income posting to the system. 17 Q. The next slide I put up on the screen is from the same 18 exhibit, DX-154, at page 200. Could you identify this document 19 for the record? 20 A. This is the bill for collection that we requested for this 21 transaction group. 22 Q. So someone in Lenexa went researching and found the 23 associated document? 24 A. Yes. 25 Q. Could you tell the Court what information you were able to 0515 1 glean from this bill for collection that you had found? 2 A. If you can scroll down just a tiny bit. You can see, each 3 one of the numbers that you saw in the posting on the first tab 4 are recorded somewhere on the bill. So the 18.50, which was the 5 first transaction that we saw posted, is recorded in the amount 6 column, with the 30 pennies understood beneath it. And then in 7 the center of the bill you can see the 1850 transaction, the 8 1830 transaction, and the 3680 transaction. 9 Q. So let me go back to the summary sheet. Then, after 10 examining these documents, what were you able to conclude about 11 this nonzero credit/debit transaction pair? 12 A. That while it took four postings, the correct posting was 13 the $18.30, which is the net amount of those four postings. 14 Q. So in a layman's sense, what's the story behind these 15 documents, based on your review of the documents? What happened 16 here? 17 A. Unfortunately, the first time the clerk posted the 18.50, 18 and you can see one of the reversals is for 18.50. The second 19 time they posted 36.80 incorrectly, and then they reversed an 20 additional 18.50. So the net of those four transactions is the 21 correct posting amount. 22 Q. So they started off giving the wrong credit, but eventually 23 got down to the correct amount? 24 A. Correct. 25 Q. $18.30. 0516 1 So the net error that occurred there was $0.20 in the 2 original postings? 3 A. Yes. 4 Q. Do you have a sense, from your experience in the review that 5 was involved and researching documents, that the work to figure 6 out these bookkeeping entries costs a little bit more than 7 $0.20? 8 A. Absolutely. 9 Q. Costs more than perhaps the amount of the tax refund check? 10 A. Yes, it did. 11 Q. Do you have a sense -- I may have asked you this, and I beg 12 the Court's indulgence if I've already covered this with you, 13 but how many nonzero situations FTI has investigated? 14 A. I can't recall, but there have been thousands. 15 Q. Let's talk about potential mis-postings that you found in 16 the course of your data analysis. 17 MR. QUINN: If we could put up the next set of slides. 18 For the record, this is Defendant's Exhibit 158, at page 2126. 19 Let me zoom in just a little bit on the table. 20 BY MR. QUINN: 21 Q. Ms. Herman, can you see that okay? 22 A. Yes, I can. 23 Q. Could you identify what that page is? 24 A. This is an excerpt from our Rocky Mountain region report. 25 Q. So we're on to a different region among the examples? 0517 1 A. Yes. 2 Q. Can you describe -- this is another transaction that you 3 investigated? 4 A. Yes, it is. 5 Q. Could you describe what this table is telling you, 6 summarizing? 7 A. As I mentioned earlier, typically a journal voucher 8 transaction was processed using a code of 13, which forced the 9 transaction to balance within the system. But in this 10 particular instance, as this was processed through a 11 distribution program, instead of using a Type 13, a Type 21 was 12 used, which is a check code. 13 The associated credits show up as Type 01, and you can 14 see that the sum of those transactions does not equal zero. 15 Q. Okay. Now, I also note that in the second -- you have the 16 first line, and that has 583.26? 17 A. Yes. 18 Q. The next group of five, those appear to be different account 19 numbers. Can you describe what those entries reflect? 20 A. The fourth character in the account number typically tells 21 you what type of account is receiving the income. In this 22 particular instance, a U means an unallotted account, an 23 unallotted Indian. 24 Q. Would this be an individual IIM account? 25 A. Yes, it is. 0518 1 Q. So the next set, if you will, rows of five entries in your 2 summary sheet refer to transactions in different accounts? 3 A. Yes, they do. 4 Q. So what was the problem here that sparked your 5 investigation? 6 A. A journal voucher transaction should sum to zero, and in 7 this instance it did not. 8 Q. And is that reflected in the total, where you have $9 at the 9 bottom -- 10 A. Yes. 11 Q. -- of the accounts? Okay. That's under the amounts. 12 So did that lead to you requesting documents in 13 connection with these bookkeeping entries? 14 A. Yes, we did. 15 Q. Did you find documents after you requested them? 16 A. Yes. The journal voucher was provided to us. 17 MR. QUINN: Could we go to the next slide? For the 18 record, this is Defendant's Exhibit 158 at page 2127. 19 BY MR. QUINN: 20 Q. And Ms. Herman, could you identify that document for the 21 record? 22 A. This is the journal voucher that we had requested and 23 received. 24 Q. And what does this journal voucher tell us about the series 25 of transactions? 0519 1 A. If you look at the journal voucher, the postings actually 2 match the detail in the journal voucher, meaning the debit is 3 posted in agreement with the $583.26; and each one of the 4 credits is posted in agreement with the journal voucher itself. 5 However, the dollar amounts don't sum up to the correct posting. 6 Q. So if you were to add the credit column with the five 7 entries, that should be off by -- 8 A. $9. 9 Q. It's off by $9. That's why you had the nonzero -- 10 A. Exactly. 11 Q. So what does that lead you -- what did you determine from 12 investigating and looking at this document? 13 A. That this was a mis-posting due to the fact that the clerk 14 entered what was on the bill, but the transaction should still 15 sum to zero at the end of the day. So one of these credit 16 postings is incorrect. 17 Q. So somewhere along the line someone made a mistake and 18 didn't credit $9? 19 A. That's correct. 20 Q. And let's go back to the summary sheet again, if we could. 21 So in this example on the potential mis-posting, are 22 the accounting records, the data information you're looking at, 23 there? Is it a problem with the data being missing or the 24 bookkeeping being wrong? 25 A. In this instance, the bookkeeping is wrong. 0520 1 Q. And what do you do when you find a category where there's a 2 mis-posting like this? What do you do with the information? 3 A. This information would be provided to OHTA, and would be 4 reported on the statement of known difference. 5 Q. A statement of known difference? What is that? 6 A. It's a statement that's going to accompany that historical 7 accounting statement. 8 Q. Okay. So if there's a -- are you saying that if there's an 9 error found in the bookkeeping for a particular account in the 10 course of your DCV work, that the Office of Historical Trust 11 Accounting would take that into account when it prepares the 12 historical statements of account? 13 A. Yes, they will. 14 Q. And then that information would appear where on the 15 historical statement? 16 A. In the statement of known differences. 17 Q. Why wouldn't it appear in the transactional part of the 18 report? 19 A. Because these are transactions -- the transactions as 20 actually posted will be reflected in the historical statement, 21 and then the differences that we've noted will be reflected in 22 the statement of known difference. 23 Q. So when bookkeeping mistakes are found in the course of your 24 work, that information will find its way ultimately to an 25 explanation section within the historical statements of account? 0521 1 A. Yes, they will. 2 Q. Let's do one more mis-posting example for the Court. 3 MR. QUINN: If we could go to the next set of slides. 4 BY MR. QUINN: 5 Q. For identification purposes I put up a slide, Ms. Herman, of 6 Defendant's Exhibit 156. And that's 156-2849. Could you 7 identify this for the record? 8 A. Yes. This is an excerpt from our northwest region report. 9 Q. And this is -- it says at the top there, "Potential 10 mis-postings." So this is a similar kind of result, similar 11 category of result -- 12 A. Yes, it is. 13 Q. -- to the last example. Okay. 14 Could you describe what the nonzero problem was that 15 led you to investigate these series of transactions? 16 A. These transactions were initially investigated because of 17 the third transaction in this group, the 14. Because typically, 18 debit memos are either transfer or reversal transactions, and in 19 this particular instance, when we pulled up the information in 20 the account, we found four entries with the same reference, 21 "original ledger balance." 22 Typically, this is the reference, or a similar one to 23 this, that was used to post the beginning balance from the 24 ledger card into the IRMS system. 25 Q. Could you describe historically what that process was that 0522 1 you're referring to? 2 A. Each agency came on to IRMS at a slightly different point in 3 time. But as the agency converted from the manual ledger cards 4 that were used to the IRMS system, the beginning balance 5 transaction had to be posted to their account. 6 Q. So this is going into -- beginning into the computer age, if 7 you will, for the IIM accounts? 8 A. Yes, it is. 9 Q. Taking the old ledger card information, the paper. Is that 10 right? 11 A. Correct. 12 Q. And then moving to electronic? 13 A. That's correct. 14 Q. And was this a common reference that you encountered in your 15 research of the data? 16 A. Something similar to this, or conversion to computer. A 17 similar type of reference. 18 Q. So what was the problem here? I see there's a nonzero total 19 there at the bottom of $166.31. 20 A. In this particular instance, it appeared that the Type 14 21 transaction was serving as a reversal. But as you can see, that 22 transaction is $3,651.01, and neither of the first two 23 transactions are that same dollar amount. 24 Q. It doesn't match up. And then there's another entry after 25 that. Correct? 0523 1 A. Correct. 2 Q. Okay. So you had this nonzero set of transactions. And 3 that, I take it, led to a request for documents from Lenexa? 4 A. Yes. In this instance, because the reference didn't have a 5 specific document number associated with it, there was no bill 6 for collection or journal voucher that we could request. So in 7 this instance we started by requesting the jacket file again. 8 Q. This is the general file that the Department of Interior had 9 with respect to IIM beneficiaries? 10 A. Yes, it is. 11 Q. Did you -- were you able to obtain a copy of an associated 12 jacket file? 13 A. Yes, we did. 14 MR. QUINN: Could we go to the next slide? 15 BY MR. QUINN: 16 Q. This is on the screen. I put Defendant's Exhibit 156 at 17 page 2850. Could you identify what this document is for the 18 record, please? 19 A. This is a ledger card, an individual Indian account ledger. 20 Q. Is this a copy of the document that was sent to FTI as a 21 result of the research request for this series of transactions? 22 A. Yes, it is. 23 Q. There's a lot of information on this individual Indian 24 account ledger. What information guided you to an answer in 25 terms of these account entries? 0524 1 A. The relevant question for us with this transaction was: 2 What was the ending ledger balance for this account? 3 So if you scroll to the bottom of the card, you can see 4 that the second-to-last transaction, the balance is $3,389.17. 5 And if you flip back to the earlier slide, you can see that the 6 first two transactions that were posted match that 7 second-to-last transaction on the ledger card. 8 Q. The 3,389.17? 9 A. Exactly. 10 The third transaction that was posted matches the final 11 transaction on the ledger card, the $3,561.32. 12 Q. Go back to the summary page. Okay. That's the reversal? 13 A. Correct. The $267.68 transaction -- I'm sorry, if we can go 14 back to the ledger card. You can see that that transaction 15 doesn't appear, but based on our review, it looks as if the 16 interest transaction that posted after the initial balance, plus 17 the differential, was what they were trying to post. 18 But when you sum all four of those transactions 19 together, it should equal the 3,561.32, and that was the final 20 balance on the ledger card. 21 Q. And that's what should have been captured? 22 A. Correct. And so what this schedule is reflecting is the sum 23 of the transactions that were posted, the transaction that 24 should have been posted, and the difference between those two. 25 Q. And the end result of all these bookkeeping entries? 0525 1 A. The account holder was shorted in the initial IRMS beginning 2 balance by $166.31. 3 Q. And what did you do -- what do you do with this information 4 when you come to that conclusion? 5 A. Again, this would be represented on the statement of known 6 difference. 7 Q. So that you would provide the information to OHTA, and then 8 that would be part of -- become part of the report to the 9 beneficiary? 10 A. Yes, it would. 11 Q. And that's another potential mis-posting type? 12 A. Yes, it is. 13 Q. Let's talk about another situation where accounts don't roll 14 forward. Describe what rolling forward means in the mapping 15 context. 16 A. As I mentioned earlier, one of the tests that we perform is 17 the comparison between the available balance files for an 18 account and the transactions for that same account. And we 19 compare those two files at each point where we have a balance to 20 compare. 21 So in some accounts, that may be one balance that's 22 available to us; in other accounts, that could be in excess of 23 100 balances that are available to us, and we compare at each 24 one of those points to see if the sum of the transactions on a 25 given day matches the balance on that day. 0526 1 Q. And what if it doesn't match? 2 A. Then we need to investigate that account to determine 3 whether or not there's missing data. 4 MR. QUINN: Can we put up the next slide, Defendant's 5 Exhibit 154? For the record, this is Defendant's 154 on the 6 screen at page 44. 7 BY MR. QUINN: 8 Q. Could you identify this, Ms. Herman, this document? 9 A. This is an excerpt from our Pacific region report. 10 Q. So this is another page within the DCV report set? 11 A. Yes, it is. 12 Q. And what is this table summarizing, what kind of 13 information? 14 A. These are the remaining 31 accounts in the Pacific region 15 where the balance file and the transactions do not agree. 16 Q. So this is the list of what mismatches you have left to look 17 at? 18 A. Yes, it is. 19 Q. Okay. Let's look at the first account listed there. Zoom 20 in a little bit on line one. 21 Could you explain to the Court what each column is, and 22 the entries with respect to the first account listed there? 23 A. Again, the first column is the NAAN, the identifier that we 24 associate with the account. The second is the first account 25 number, if there were multiple for that particular account. In 0527 1 this instance, the fourth letter code, the N, stands for 2 "non-enrolled Indian." 3 The next column is the agency. J tells you that this 4 is a Pacific region account, and 52 would tell you the 5 particular agency within the Pacific region. The next column is 6 the name for the account; in this instance, Aurelia Raglin. The 7 next column is the fiscal year where we feel that the data is 8 missing, and the final column is the net amount of information 9 that we believe is missing. 10 Q. Okay. How did you make the determination that $812.96 is 11 missing? 12 A. That would be the difference between the balance file and 13 the transaction file. 14 Q. Now, you go down through -- 15 THE COURT: Does a negative number mean it's in the 16 government's favor or the account holder's favor? 17 THE WITNESS: That would be in the government's favor, 18 Your Honor. 19 THE COURT: So the account holder has been shorted by 20 $812? 21 THE WITNESS: These differences, I don't believe are 22 actually transactions that weren't posted. The difference has 23 arisen because the balance in the system doesn't equal the 24 transactions in the system, and we have an excerpt of one of 25 these accounts to show you. 0528 1 THE COURT: These are all 1986. What's the 2 significance of that? 3 THE WITNESS: Typically, there was more data missing 4 from the system in earlier years than in later years. 5 BY MR. QUINN: 6 Q. When you say "missing from the system," are you referring to 7 the IRMS/IIM subsystem? 8 A. Yes, I am. 9 Q. Could you scroll down to the bottom of that exhibit? 10 So from this table, the number 31 is the number of 11 accounts affected here, the number of accounts where this issue 12 has arisen? 13 A. Yes, it is. 14 Q. And the net result is $34,139.08? 15 A. Yes, it is. 16 MR. QUINN: If we could bring up the next slide, 17 please. This is Defendant's Exhibit 154, at page 45. 18 BY MR. QUINN: 19 Q. Now, the table we just had on the screen was at page 44, and 20 this worksheet is at page 45. As you organized the DCV reports, 21 did you keep the associated supporting documentation adjacent to 22 the summary sheets that are in the reports? 23 A. It depends on the section of the report. This one would be 24 just following this sheet. 25 Q. Could you identify and explain what this table shows us? 0529 1 A. This is a summary of all of the transactions that were 2 posted to the particular account that was on the summary page. 3 So as you can see on the top again is the NAAN number that we've 4 assigned, the account number, and the account holder's name. 5 Q. And what about the reconstruction of the account? What does 6 this adjusting entry mean? 7 A. So the first column, as I mentioned earlier, is the record 8 ID. And the one thing that I would like to highlight is, you 9 can see that system of the record IDs start with a four, and 10 some of the record IDs start with a three. 11 MR. QUINN: Before we go on, could you zoom in on that 12 a little bit more, please, so we can see it clearly? Thank you. 13 BY MR. QUINN: 14 Q. Go ahead. 15 A. So transactions that have restored to the data set have been 16 given a record ID that start with a four. So as you can see, 17 there were quite a few transactions that were initially missing 18 from this particular account. 19 Q. Can we stop right there for a second? Describe what you 20 mean by "restored transaction." 21 A. This would have been a situation where we turned to a hard 22 copy document, either a transaction register, a bill for 23 collection, a journal voucher, something similar to that, to 24 re-enter the transaction back into the data set. 25 Q. So when you say "missing data," are you talking about 0530 1 missing completely from the information records that the 2 Department of Interior has available to it? 3 A. No, missing from the electronic ledger. 4 Q. And when you talk about restored data, are you talking about 5 making up data that just fits into the computer record? 6 A. No. These would have been transactions that we found, as I 7 mentioned, either on a transaction register - which is a 8 printout of what happened - posted historically, or from a 9 financial document. 10 Q. So in these instances you've put in search requests for 11 documentation? 12 A. Yes, we have. 13 Q. Describe for the Court what would have been involved in 14 trying to resolve some of these Code 4 record ID transactions. 15 What kind of documents would you look for to research this 16 information? 17 A. It depends on how much information was missing. If we had a 18 large gap in the data, we would have started by requesting a 19 transaction register. And those are, as I mentioned, hard copy 20 printouts from the IRMS system; and it includes all of the codes 21 and values and references as they had been posted historically. 22 Q. Where are those located? 23 A. Some of them are located in the AIRR in Lenexa, and 24 occasionally we have located them in one of the field offices. 25 Q. You say transaction record, transaction registers. 0531 1 Physically, what are they? 2 A. They're green bar printout reports from the IRMS system. 3 Q. Green bar. That takes me back in time, shows my age. I 4 actually understand what this means. Green bar refers to what? 5 A. It's a specific type of paper -- 6 THE COURT: I'm old enough, too. 7 A. -- that would have been printed out from the computer 8 system. 9 THE COURT: With the holes on the side of the paper, 10 too. Right? 11 MR. QUINN: That's, right, Your Honor. 12 THE WITNESS: Exactly, Your Honor. 13 MR. QUINN: Old style computer printer? 14 THE WITNESS: Exactly. 15 MR. QUINN: If we could get away from this exhibit just 16 a moment, and flash those slides on the screen. 17 I tried to bring some transaction -- 18 THE COURT: Let the record reflect that the air 19 conditioning has just come on at 10:48 a.m. 20 Go ahead, Mr. Quinn. 21 MR. QUINN: Before the morning break, Your Honor. 22 BY MR. QUINN: 23 Q. I had tried to bring, actually, some green bar in here to 24 show you physically, but they wouldn't -- and Lenexa didn't want 25 to let these out of their grasp. So we took -- did the next 0532 1 best thing: Took a few pictures. I'm not going to offer any of 2 these into evidence, but this just is what physically you might 3 have been looking at in doing some of this investigation. 4 The slide that's on the screen, is this sort of hard 5 copy paper that you're referring to? 6 A. Yes, it is. 7 Q. We can go to the next slide. 8 Sometimes they're big fat things like is in this 9 photograph? 10 A. Yes, they are. 11 Q. Tall batches of pages. 12 MR. QUINN: Go to the next line. And this one, let's 13 just zoom in on that. 14 BY MR. QUINN: 15 Q. Now, the time periods that are covered by these registers, 16 how far back do they go? 17 A. They would go to the beginning of IRMS for that particular 18 agency, which as I mentioned would vary from agency to agency. 19 Q. How early could they go? How early have you found some 20 going back? 21 A. I believe some of the earliest that we've entered have been 22 from the late '70s. 23 Q. Can we go back to our exhibit. 24 So when you request the information of transaction 25 registers, Lenexa is not shipping you a big batch of hard copy? 0533 1 A. No, these would be imaged just like the other documents. 2 Q. Let's go back to the slide. 3 So is that what happened here? You went back to some 4 transaction registers to try to sort through this? 5 A. In this particular instance, I would have to look at what 6 document IDs we had referenced. As I mentioned, we used 7 transaction registers, bills, account statements, different 8 financial documents. 9 Q. And what is the code 13? Is there anything significant 10 about the code type 13? 11 A. Yes. 13 is a journal voucher transaction, and the system 12 enforced that those would balance. So that could have been the 13 reason we started investigating these particular transactions. 14 Because, as you can see, the first three are positive entries, 15 and then the check disbursement, a subsequent check, a reversal 16 of the check, and then another credit into the account. 17 Q. And what is the conclusion that you draw after investigating 18 these transactions and having restored transactions to the data 19 set? 20 A. I believe there's one additional disbursement missing from 21 this account. 22 Q. And that's reflected in the adjusting entry? 23 A. Yes. And as you can see, there's no record ID associated 24 with that transaction because we've not added that back into the 25 record set. It's just where I feel that there is a transaction 0534 1 missing. 2 Q. Okay. But how did you get to the determination that that's 3 where there's a missing entry? 4 A. Based on the pattern within the account. So as you can see, 5 the first three transactions that were entered, a check was 6 disbursed the same day as the final transaction. An additional 7 check was disbursed, but then subsequently reversed. Interest 8 was posted, which is the -- 025 is a manual interest posting. 9 And the entries below the blue line are additional collections 10 into the account, and a subsequent disbursement. 11 So it's a review based on the patterns within the 12 account. 13 Q. So having looked at the pattern of transactions, you came to 14 the conclusion there was an entry of 812.96 that was missing? 15 A. Yes. 16 THE WITNESS: And I misspoke earlier, Your Honor, that 17 the missing number was not posted. So this would appear that 18 the account holder has more money in their account than they 19 actually do. 20 BY MR. QUINN: 21 Q. Did you consider whether any money was misappropriated or 22 taken, as opposed to data being missing? 23 A. No. It appears, based on the balance file, that the 24 disbursement record was not -- that it's still missing from the 25 record set. And as you can see, all of the transactions 0535 1 previous to that had to be restored as well. 2 Q. Let's talk about one other type of data analysis that you 3 conducted on check disbursement mapping. 4 Could you describe for the Court what the check 5 disbursement mapping involved? 6 A. The Treasury Department provided OHTA a copy of the CP&R 7 file, which is the Check Payment and Reconciliation system for 8 symbol 4844, which is the individual Indian money check symbol. 9 Q. To your understanding, what is the CP&R? 10 A. It's a listing of the checks from -- our earliest record is 11 March of 1987 through December of 2002, that were issued from 12 the IIM system. 13 Q. And this information is provided by? 14 A. The Treasury Department. 15 Q. Was there other check information that you used as part of 16 the check mapping? 17 A. The Treasury Department also provided a file called Pacer, 18 which is a listing of electronic disbursement. 19 Q. Electronic disbursements? 20 A. Yes. 21 Q. So this would be like an ECF? 22 A. EFT, yes. 23 Q. EFT, there we go. Another acronym. 24 How did you use this information in the check mapping? 25 A. We reviewed the information in the Treasury file, the CP&R 0536 1 file, and matched those records back to the IRMS and TFAS 2 system. 3 Q. Do you recall offhand about how many checks you looked at? 4 A. There were over six million. 5 Q. Have you looked at all six million? 6 A. No. We still have, I believe approximately 300,000 to 7 review. 8 Q. So you've looked at almost six million so far? 9 A. We've looked at over six million. I can't recall how large 10 the file is, if it's 6.4 million or somewhere around there. 11 Q. Oh, somewhere around 6.4 million. And you've looked at over 12 six million at this point? 13 A. Yes, we have. 14 MR. QUINN: Could we put up the next slide, please? 15 BY MR. QUINN: 16 Q. Now, actually, before I get into -- 17 MR. QUINN: That's not it. Just leave it. 18 BY MR. QUINN: 19 Q. The checks that you looked at, the six million checks that 20 you've looked at, and the rest that you're going to look at, are 21 those all checks from the accounting samples? 22 A. No, these are -- this was an evaluation of the complete file 23 that we received from the Treasury Department. 24 Q. So every check that was in that file over that time period 25 was part of your data analysis. Is that right? 0537 1 A. Yes, it was. 2 Q. It wasn't restricted to the accounting population? 3 A. No, it was not. 4 Q. What did you find in your check mapping? 5 A. One of the primary ways we used that file was to identify 6 checks that had not been negotiated. And once we had done that, 7 we wanted to confirm that there was a re-credit to one of the 8 accounts for that beneficiary. 9 Q. And do we have an example to show the Court about check 10 mapping? 11 A. I believe we're going to show that through the LSA project 12 examples. 13 Q. When we get into account reconciliation? 14 A. Yes. 15 Q. Did you detect -- in looking at the six million check 16 disbursements, did you detect any pattern of fraud or 17 irregularity in the disbursements? 18 A. That's not really something you can detect with that test. 19 Q. What proportion of the six-plus million that you've looked 20 at so far have mapped correctly? 21 A. The dollar amounts, we used several fields within the 22 Treasury file: The check number, the issue date, and the dollar 23 amount fields to perform that matching. There were several 24 instances where the check range was off by one between the 25 Interior and Treasury file. 0538 1 Q. Off by one in terms of the numbering? 2 A. Exactly. 3 Q. All right. 4 THE COURT: Can you just leave that there? I don't 5 know what that means, "number off by one." 6 THE WITNESS: For instance, Your Honor, if it was 7 recorded as check number one in the IRMS system, it was recorded 8 as check number two in the Treasury file. 9 THE COURT: And they did that all day long, so you have 10 thousands of checks that have the wrong number on them? 11 THE WITNESS: For that particular day. 12 BY MR. QUINN: 13 Q. The amounts match up otherwise? 14 A. If you were to match the file offset by one, all of the 15 amounts matched, yes. 16 Q. Could you describe, in terms of the data completeness 17 validation work you've done, what part of your work has involved 18 an examination of Special Deposit Accounts, how you've looked at 19 Special Deposit Account information? 20 A. Those accounts would have been evaluated through the 21 transaction mapping, as well and the account roll-forward test. 22 I'm sorry, the transaction mapping and account roll-forward 23 test. 24 Q. More specifically, can you give an example of how you've 25 looked at Special Deposit Account information in the course of 0539 1 your DCV work? 2 A. We would have mapped each one of the debits from the Special 3 Deposit Account if it were a transfer or reversal. If there 4 were checks issued from that Special Deposit Account, those 5 would have been matched, as I mentioned, to the CP&R file. 6 THE COURT: CPN? 7 THE WITNESS: The Check Payment and Reconciliation 8 file, from Treasury. 9 BY MR. QUINN: 10 Q. So in the course of looking at the data set, is it 11 reasonable to say that you also were looking at the transactions 12 in and out of the Special Deposit Accounts from that time 13 period? 14 A. Yes, we evaluate all of the accounts in the system. 15 Q. And that includes the Special Deposit Accounts as well as 16 individual IIM accounts. Right? 17 A. Yes, it does. 18 Q. Let's go through one more example on your data completeness 19 validation work. 20 MR. QUINN: If we could put up Exhibit 154. Did we do 21 that already? Are we done with that? Okay, yes. Defendant's 22 Exhibit 154 at page 58 for identification, and could you zoom in 23 on the table a little more? 24 BY MR. QUINN: 25 Q. Ms. Herman, could you identify this document? 0540 1 A. This is another one of the 31 accounts from the Pacific 2 region that don't roll forward. 3 Q. And can you describe what is happening in connection with 4 this account? 5 A. Again, as you can see, the first several transactions were 6 restored to the record set based on the 4 series record ID. 7 Q. Let me just break this down a little bit. The record ID 8 with the leading number 4 tells you what? 9 A. That it was a restored transaction. 10 Q. And when you say restored transaction, you're referring to 11 what process? 12 A. That it was data entered from a support document, a 13 transaction register or journal voucher, another financial 14 document. 15 Q. Is that information that you or people working for you at 16 FTI loaded on to the system? 17 A. Some of the transactions were rekeyed by our firm, and some 18 were rekeyed by other firms. 19 Q. Okay. How did you determine who is rekeying what? 20 A. We have an identifier in the table that stores these 21 transactions. 22 Q. I mean, who assigned the work in terms of rekeying the 23 information? Who made a decision about what was being rekeyed? 24 A. It was as a result of identifying the gap, the work that we 25 had done. 0541 1 Q. So you know from the first two entries, based on the number, 2 the record ID is a re-entered transaction. Right? 3 A. Yes, it is. 4 Q. And the reference information is coming from where in those 5 first two lines? 6 A. If this was entered from a transaction register from that 7 particular field. If this had been entered from a journal 8 voucher, while this particular reference may not appear on the 9 journal voucher, we would have looked first to other 10 transactions from that journal voucher that had been posted so 11 that we could use the same reference. 12 Q. And what did you find with respect to this account? 13 A. So in this particular account, it's a little bit different 14 than the first account that we evaluated. If you look to each 15 one of the disbursement items in this account, you can see that 16 all of them have the same code, a 31. The 31 code in the IRMS 17 system is an auto-disburse code. 18 So each time the account received money, in this 19 instance you can see that a check was issued on the same day. 20 And so the one we're missing in this account, $1,129.05 21 disbursement, which is the sum of the two credits that we 22 restored on July 1st. 23 Q. So based on this pattern of -- 24 MR. QUINN: I think we have another slide to go to, if 25 we could, the next page. 0542 1 BY MR. QUINN: 2 Q. Based on that pattern, what did you conclude? 3 A. That we're still missing one disbursement from this account, 4 on July 1st. 5 MR. QUINN: I'm sorry, go back to the previous slide. 6 We're not quite there yet. 7 BY MR. QUINN: 8 Q. And that's the third line where it says, "Adjusting entry"? 9 A. Yes, it is. 10 Q. Could you describe how you came to that conclusion that 11 there was an adjusting entry that was required there? 12 A. As I mentioned, we would have been evaluating this account 13 because the balance file and the transactions don't agree. And 14 each time there's a credit into this account on a particular 15 day, there's also a disbursement issued on that same day. And 16 we had to restore the first two transactions to this account on 17 July 1st, the sum of those transactions being $1,129.05. 18 Q. So you're expecting, based on the auto-disbursement, that 19 there was a disbursement of 1,129? 20 A. On that same day, yes. 21 Q. And with respect to this adjusting entry, are you still 22 looking for a document, documentation to support the 23 disbursement? 24 A. Yes, we are. 25 Q. So this might change. In the course of the follow-up 0543 1 research, they may find a document that indicates -- or confirms 2 your expectation? 3 A. Yes, that's possible? 4 MR. QUINN: If we can go to the next slide, please. 5 BY MR. QUINN: 6 Q. That dollar figure shows up on this next page. This is 7 Defendant's Exhibit 154 at page 44. 8 Could you describe what this document is? 9 A. As I mentioned earlier, this is a summary of the 31 accounts 10 that still are not in balance in the Pacific region. 11 Q. So this is the document we looked at before. The line one 12 is the Raglin example we talked about? 13 A. That's correct. 14 Q. So now we're down, looking at number 12. So this is another 15 number of the one that's -- account entry -- an account that 16 doesn't roll forward, in other words? 17 A. That's correct. 18 MR. QUINN: Go to the next slide. 19 BY MR. QUINN: 20 Q. On the screen I put up Defendant's Exhibit 154 at page 42. 21 Could you identify this document for the record? 22 A. This is an excerpt from our Pacific region report. 23 Q. Okay. And what does this table tell us? 24 A. This is one of the tests that we used to measure 25 completeness of the IRMS data that we have available to us. 0544 1 So the first column is from a balance file report from 2 the system. 3 Q. Let me just stop you there. 4 MR. QUINN: Could we zoom in a little bit more on the 5 upper end and get the titles of these columns captured? That's 6 a little bit too much. I want to see the whole document, but I 7 want to be able to read the titles. I mean, I want to see the 8 whole column set. I guess we can't do that. Scroll across. 9 Thanks. 10 BY MR. QUINN: 11 Q. All right. You started to describe the IM500 beginning 12 balance. Could you describe what that is? What is the IM500? 13 A. The IM500 is an IRMS system report that records balances at 14 a point in time. 15 Q. Is that electronic or paper? 16 A. It's a paper report. 17 Q. So it's something that the Department of Interior printed 18 out at the time? 19 A. Yes, it is. 20 Q. And what's the information in the IM500 that you use? 21 A. That report gives you a balance, as I mentioned, at a 22 particular point in time, by general ledger account. So we used 23 the sum of that in this schedule. 24 Q. Is that for a specific agency or region or what? 25 A. Most of the report is from an agency basis, so you would 0545 1 have to add all of the agency reports to get the regional total. 2 Q. And did you do that in these instances? 3 A. Yes, we did. 4 Q. And that's what's reflected in column A, the one that's 5 listed as column A? 6 A. That's correct. 7 Q. And what is column B? 8 A. Column B is a sum of all of the credits in the Pacific 9 region by fiscal year. 10 Q. It says, "Original collections." What does that mean? 11 A. It's truly a sum of credits, not just collected dollars. 12 Q. So in addition to dollars, what else could be in that 13 number? 14 A. This column would include double counting. So every credit 15 within the system would be added in this column. 16 Q. So if a credit came into an SDA account and then was 17 disbursed to individual IIM accounts, and those accounts were 18 credited, would the SDA credit and the IIM credit both show up 19 in this number? 20 A. Yes, it would. 21 Q. Column C says, "Original disbursements." What are those? 22 A. It's a sum of all of the debits by fiscal year for this 23 region. 24 Q. And the calculated balance tells you what? 25 A. It's the beginning balance, plus the original collections 0546 1 column, minus the disbursement column. 2 Q. And then column E, you have the IM500 ending balance. What 3 does that information tell you? 4 A. That's where we're going to compute -- where we're going to 5 compare our calculated balance to the balance that we found in 6 the hard copy report. 7 Q. So you've calculated -- column D, if you will, is the 8 calculated credits and debits. Right? 9 A. That's correct. 10 Q. So you have a balance from the IRMS. Right? 11 A. That's correct. 12 Q. And then column E is the balance reported from the paper 13 IM500? 14 A. Yes, it is. 15 Q. Okay. What is column F, "Original variance"? 16 A. That's the difference between the balance that we calculated 17 and the balance in the system report. 18 Q. So that's the disparity between the two balance reports. 19 Right? 20 A. That's correct. 21 Q. And column G tells us what? What does that involve? 22 A. Column G is a summary of all of the transactions that had 23 been restored to that region for that particular fiscal year. 24 Q. And by restored, are you speaking of where you found the 25 paper record and have re-entered the information? 0547 1 A. Yes, I am. 2 Q. So I guess then you're taking that number off of the 3 original variance? 4 A. This is how we're going to determine if we found all of the 5 information that's missing. So... 6 Q. And then column H is what? 7 A. That's from the schedule that we just looked at previously. 8 We realized that we had 31 accounts that are still out of 9 balance, and that's the summary of the 31 accounts that are 10 still out of balance. 11 Q. So having identified the source of the variance, then the 12 final variance in the last column is checked off, essentially? 13 You've identified where the variances are. Is that right? 14 A. Correct. That's the sum of the original variance, the net 15 amount restored, and what we know is still remaining to restore. 16 THE COURT: Is this a good time for the mid-morning 17 break? 18 MR. QUINN: This would be a perfect time, Your Honor. 19 THE COURT: We'll be in recess for about 10 minutes. 20 (Recess taken at 11:11 a.m.) 21 MR. QUINN: Ready, Your Honor? 22 THE COURT: All right, sir. 23 MR. QUINN: Thank you. 24 BY MR. QUINN: 25 Q. Ms. Herman, we were talking about different aspects of the 0548 1 data completeness validation tests that you and people working 2 with you at FTI have done. And examples taken from your DCV 3 reports. 4 I'd like to just recap and go over with you some of the 5 information in your report on an overall basis to give a sense 6 of the size of this undertaking. 7 MR. QUINN: If we could put up 152-20. 8 BY MR. QUINN: 9 Q. I put up a slide from Defendant's Exhibit 152 at page 20, 10 and I think we want to focus on the table. 11 But could you identify what this page is for the 12 record? 13 A. This is an excerpt from our overall report. 14 Q. So this is in the first volume of the set? 15 A. Yes, it is. 16 Q. And what is this table summarizing? 17 A. This is a summary of the transactional data from the IRMS 18 and TFAS systems. 19 Q. And in our last example, we were looking at an example from 20 the Pacific region. Is that right? 21 A. That's correct. 22 Q. And as you go across, could you describe what each column is 23 indicating in the table? You have it broken down in two pieces; 24 first of all, IRMS transactions and TFAS transactions. How is 25 that grouping, what is that grouping? 0549 1 A. I'm sorry, those are the number of transactions for each of 2 those systems for that particular region. 3 Q. And under IRMS transactions, original data, what does that 4 reflect? 5 A. This is the original transactions provided to us by OHTA. 6 Q. This is a tally of the number of transactions? 7 A. That's correct. 8 Q. Then you have a column that says, restored pre-2/85, what 9 does that mean? 10 A. Those are transactions that have been restored to date for 11 the paper ledger era for IRMS. 12 Q. Why is that work going on? Why is there pre-February '85 13 restoration work going on? 14 A. To restore the ledger for the paper time frame for the 15 accounting. 16 Q. So this column indicates work that's commencing on the paper 17 ledger era work? 18 A. Yes, it does. 19 Q. The next column says, restored post-2/85. What does that 20 column reflect? 21 A. Those are transactions that have been restored to the 22 electronic ledger era IRMS data. 23 Q. And is that something of the sort of the example you gave 24 where you had the code 4 transaction? 25 A. That's correct. 0550 1 Q. That something had been re-entered into the data set? 2 A. That's correct. 3 Q. So this table sums the number of re-entered transactions? 4 A. Yes, it does. 5 Q. I notice there's one for Alaska and 135,000 for 6 Great Plains. So there's some difference as you go across 7 regions? 8 A. Yes. Great Plains is a much larger region than Alaska, and 9 the majority of the December '89 data from Great Plains was 10 missing from the original records set. 11 Q. But you were able to find it? 12 A. Yes. On transaction registers. 13 Q. And then you have a total column summing up those three 14 columns? 15 A. Yes. 16 Q. And what does that total represent? 17 A. The total currently available electronically IRMS data. 18 Q. And if you go and sum across the regions down to the bottom 19 of the page, you see a number there, 56,881,225. And what does 20 that reflect? 21 A. The total IRMS transactions available currently 22 electronically. 23 Q. And the next grouping, I'm assuming this is the same 24 corresponding information from the TFAS system? 25 A. Yes, it is. 0551 1 Q. So it's summing the actual TFAS count, but it references 2 different periods. Why do you have two columns for two 3 different periods? 4 A. The first represents the historical accounting time frame 5 and the second are transactions to present. 6 Q. But they're all from the same system? 7 A. Yes, they are. 8 Q. This doesn't reflect data reentry or rekeying? 9 A. No, it does not. 10 Q. And then you have a total there, and that's total for all 11 the TFAS transactions through current? 12 A. That's correct. 13 Q. And then the last is a grand total of all transactions? 14 A. Yes, it is. 15 Q. Broken down by region. Right? 16 So if you go down to the very bottom column and row in 17 that table, the 113,892,296 number is the grand sum total of all 18 transactions presently? 19 A. Yes, it is. 20 Q. Of available in the electronic database? 21 A. Yes. 22 MR. QUINN: If we could go to 271. Yes, thank you. 23 BY MR. QUINN: 24 Q. On the next table, this is, for identification, Defendant's 25 Exhibit 152 at page 271. Could you identify that page for the 0552 1 Court? 2 A. This is a summary from our overall report of our account 3 roll-forward analysis. 4 Q. Okay. And you have -- this table is broken down into two 5 parts. You have account NAANs with a balance file. What is 6 that? 7 A. As I mentioned, IRMS balance files are only available 8 electronically beginning in February of 1986. In order to find 9 earlier balances, we've had to turn to hard copy balance files 10 and account statements. So we currently do not have a balance 11 for every account within the system. 12 Q. Is that work ongoing? 13 A. Yes, it is. 14 Q. Are there people continuing to research documents to find 15 transaction registers and rekey data? 16 A. In order to find a balance file, you'd search for either an 17 account statement, a master file printed in hard copy, a trial 18 balance report. There are several different reports that we 19 use. 20 Q. So you have alternatives to look for? 21 A. Yes, we do. 22 Q. And then the second half of the table refers to accounts, or 23 NAANs with a balance file transaction balances. What is that 24 describing? 25 A. I'm sorry, the first column -- 0553 1 Q. I need to zoom in more, I think, on the screen. 2 With no balance file transactions. What is that part 3 of the table telling us? 4 A. So these are the number of accounts for which we do not have 5 a balance file. 6 Q. And going -- 7 MR. QUINN: Go to the first half of the table, if you 8 would. 9 BY MR. QUINN: 10 Q. And then this is separated by -- reported by region. 11 Correct? 12 A. That's correct. 13 Q. So if you look at the first half, the "no difference" 14 column, what is that indicating? 15 A. That when you compare all of the available balance files and 16 the transactions at each point in time, there's no difference 17 between the balance files that are available and the transaction 18 file. 19 Q. So those check out completely? 20 A. Yes, they do. 21 Q. And then "no difference calculated beginning balance." 22 What's that indicating? 23 A. As I mentioned, the first electronically available IRMS data 24 we have is February 1985. As many of the regions converted to 25 IRMS prior to that date, we'll have to compute a balance as of 0554 1 February 1985. 2 So in order to do that, we look for balance files from 3 1985 and roll back to compute a beginning balance. 4 Q. And "one or more differences" column refers to what? 5 A. That means for those accounts we do have a balance file, 6 and, as I mentioned, we check at each available point where we 7 can check. So you may have one difference when you do that test 8 or you may have more than one difference. 9 So these are accounts where we're either still missing 10 a beginning balance or we're missing transactions within the 11 span of the account. 12 Q. So if you go down to the total for all the regions, you have 13 418,603 accounts? 14 A. Where we have a balance file and can perform the test. 15 Q. And then 55,436 are the ones that have a balance that need 16 to be investigated further? 17 A. Yes. 18 MR. QUINN: If we can go to the second half of the -- 19 BY MR. QUINN: 20 Q. Can you describe what we're seeing here with respect to the 21 second half of the accounts with no balance file? 22 A. We've broken this into two different buckets; accounts that 23 have a zero balance at the end of the day and accounts that have 24 a nonzero balance at the end of the day. 25 Q. Why is that important? 0555 1 A. If the account has a nonzero balance, we're either missing a 2 beginning balance or we're missing transactions within the span 3 of the account. 4 Q. And if you go over to the final column, that's the total 5 across all accounts, total account count? 6 A. Yes, that's the total number of accounts that we analyzed. 7 Q. So in terms of your investigation, data completeness 8 validation, you've looked at a grand total of 559,831 accounts? 9 A. For this test, yes. 10 Q. And that leaves about 100,000 or so to complete your 11 analysis in terms of the balances? 12 A. Yes. I believe many of the accounts that are still 13 remaining are a result of beginning balances that we don't have 14 yet. 15 MR. QUINN: Can you slide back to the beginning of the 16 columns a little bit? 17 BY MR. QUINN: 18 Q. So in terms of the differences, like in Great Plains, 19 looking in column three, "one or more differences," 13,400, 20 what's your expectation with respect to those that remain 21 outstanding in terms of your work? 22 A. Actually, two weeks ago, account statements were located at 23 the area office for these accounts, so my expectation is that 24 we'll go and review those to determine what the beginning 25 balance is for those accounts. 0556 1 Q. So you recently have discovered further documentation that 2 will aid you in examining these accounts? 3 A. Yes, we did. 4 MR. QUINN: If you could go to the next slide, please. 5 BY MR. QUINN: 6 Q. If you could look at what's been put on the screen as 7 Defendant's Exhibit 152 at page 276. Could you describe what 8 that document is showing us? 9 A. This is a summary of our account number analyses that we 10 were discussing earlier. 11 Q. These are the account name issues -- 12 A. Yes, they are. 13 Q. -- that you're working on. Okay. 14 And the bottom right-hand corner reports a number, 15 grand total of 645,691. What does that represent? 16 A. The number of land-based and judgment per cap accounts that 17 we've analyzed. 18 Q. And how many NAANs out of the 645,691 are still under 19 review? 20 A. 786. 21 Q. That's what you have left to try to resolve? 22 A. As you can see, we've broken that into two buckets. There 23 are 751 that we're working on and 35 that we've asked for 24 assistance from OHTA for. 25 MR. QUINN: Can we go to the next slide, please? 0557 1 BY MR. QUINN: 2 Q. I put up one more slide from your report, Defendant's 3 Exhibit 152 at page 280. Could you identify this page for the 4 Court, please? 5 A. This is another summary from our overall report. 6 MR. QUINN: Could you scroll up just a bit so we can 7 get the title? Thank you. 8 BY MR. QUINN: 9 Q. This is the transaction mapping summary? 10 A. Yes. Through December 31st, 2000. 11 Q. So this is through the period -- 12 THE COURT: What page is this again, Counsel? 13 MR. QUINN: If you go back to the number. It's 280, 14 Your Honor, Exhibit 152. 15 THE COURT: Thank you. 16 BY MR. QUINN: 17 Q. You have -- the first half of the table is broken down by 18 region, and it has a heading, "mapped transactions." Could you 19 describe what this is reporting? 20 A. These are the number of transactions that we've grouped 21 together similar to the examples that we reviewed today. 22 Q. And at the bottom of the first column you have a number 23 53,451,065. And what does that represent? 24 A. That's the total number of transactions that we've grouped 25 together at this point. And again, only through 2000. 0558 1 Q. Right. Through 2000. 2 Is there another table in the report that covers 3 through 2007? 4 A. Yes, there is. 5 Q. I believe -- is it the next page in the report, or the page 6 before, possibly? 7 A. One of the two, yes. 8 Q. It's nearby? 9 A. Nearby. 10 Q. The second column reports a percentage. What does that 11 represent, the 80.8 percent through the period of December 31, 12 2000? 13 A. That's an overall percentage of the number of transactions 14 mapped relative to the total number of transactions. 15 Q. Great. And "dollars throughput," what does that represent? 16 A. That's if you were to add up all of the absolute value of 17 the credit and debit dollars. 18 Q. Is that the throughput that we were talking about on 19 Thursday, where you're double counting the money by tracing each 20 bookkeeping entry? 21 A. Yes, it is. 22 Q. So the 9.4 billion down there does not represent a real net 23 sum total of money flowing through the IIM system? 24 A. This represents the flows of money, not the new money in and 25 the money out. 0559 1 Q. The bookkeeping -- 2 THE COURT: Why would 80.8 percent of all transactions 3 only yield 28.2 percent of the throughput? 4 THE WITNESS: Typically, Your Honor, if you look, for 5 instance, at Rocky Mountain and at Great Plains, you can see 6 that a large percentage of the transactions are actually 7 transfers and reversals. And one of the examples we're going to 8 show you from the accounting process will demonstrate how you 9 start with $6,000 and end up posting very small transactions. 10 And so oftentimes when you're distributing this money, 11 you have very small credits associated with those transfers. If 12 you had a large credit, it would mostly likely deposit directly 13 into an individual's account, so it wouldn't be mapped. 14 BY MR. QUINN: 15 Q. Let's walk through that. You have a receipt come in of 16 money from a large pasture that's been leased. Is it likely to 17 have more than one owner in the pasture? 18 A. Typically a range unit is going to compose multiple 19 allotments, and each one of those allotments would have multiple 20 owners. 21 Q. Is that what's known as fractionation, when you say multiple 22 owners for an allotment? 23 A. Yes, it is. 24 Q. To your understanding, is that due to the inheritance over 25 time and the bequests to generations that follow the original 0560 1 allottee? 2 A. That's my understanding. 3 Q. So you may have one allotment that has several owners. 4 Right? 5 A. That's correct. 6 Q. And then within a pasture or a range agreement, you might 7 have one allotment that makes up several as part of an overall 8 range agreement with a commercial farmer? 9 A. Yes. Typically, you would have multiple allotments as part 10 of a range unit. 11 Q. So if the money comes in on the rental from that range 12 example, what happens next? How does Interior go about 13 distributing the money? 14 A. In that type of example, it would be posted to a Special 15 Deposit Account and then distributed from that Special Deposit 16 Account to the owners. 17 Q. To your understanding, why does it get posted first to the 18 Special Deposit Account? What happens there? 19 A. In this particular type of example, it's typically because 20 there are so many people that are going to receive the benefit 21 of that money. 22 Q. So the Interior needs to figure out where it's going -- 23 A. Exactly. 24 Q. -- how to divide it up? 25 So you have the mapped transactions through 2000, and 0561 1 you've got almost 81 percent of 53-plus million, 53-and-a-half 2 million, almost, transactions mapped. Right? 3 A. Yes. And you wouldn't expect at the end of the day that you 4 will map all of the transactions in the system, because some are 5 initial postings and disbursements from the system. 6 Q. Could you go over that a little bit again to make that 7 distinction between the original posting and how that fits into 8 the mapping work that you've been doing? 9 A. In the example that we just used, the original posting would 10 be the credit to the Special Deposit Account. That transaction 11 would never be mapped because that's the first time you see the 12 money in the system. 13 Q. So when it first hits the system, that's not part of your 14 analysis? You're looking at how it flowed through the system? 15 A. Exactly. 16 MR. QUINN: Could we slide over, scroll over to the 17 right? 18 BY MR. QUINN: 19 Q. The next breaking, grouping here in this table refers to 20 transactions to map. And what is that reporting? 21 A. These are the transactions that we believe still should be 22 mapped within the system. 23 Q. And so you have -- you go across all the regions, you have 24 that first column. Is that the total number left you think 25 should be mapped? 0562 1 A. Yes, it is. 2 Q. And what's -- the third column refers to number of docs. 3 What does that mean? 4 A. Similar to the example that we saw initially at the tax 5 refund situation. There were four transactions in that example 6 that all had the same document reference, and so in that 7 instance, you would count four transactions and one document. 8 Q. I see. So in terms of what's left to map, there's really a 9 group, 192 -- 10 A. Groups of transactions. 11 Q. -- thousand groups of transactions to look at. Is that 12 right? 13 A. Exactly. 14 Q. And that represents a grand total of 568 million, little bit 15 more than 568 million? 16 A. Yes. And again, those are absolute dollars. 17 Q. You're double counting calculation of throughput? 18 A. Yes. 19 MR. QUINN: Let me go over to the last part, that group 20 right here. 21 BY MR. QUINN: 22 Q. And then the last column just sums everything for the two 23 types, both transactions that are mapped and transactions left 24 to map? 25 A. No, this is a summary of all of the transactions for that 0563 1 particular region. 2 So as I mentioned, we don't expect at the end of the 3 day that we'll map every transaction in the region. 4 Q. So this is a grand total of every bookkeeping entry in the 5 system, including those that aren't part of the mapping 6 protocol? 7 A. Yes. 8 THE COURT: Just so we don't lose this in the record, 9 Ms. Herman, when you say absolute dollars, you mean dollars 10 that -- they may actually all be the same dollars, but they've 11 been recorded several times as debits and credits? 12 THE WITNESS: Yes. And you -- 13 THE COURT: And every time they're recorded in a 14 transaction, the spreadsheet considers it an absolute dollar. 15 Right? 16 THE WITNESS: Yes. And instead of considering a debit 17 as a negative amount, you'd consider it as a positive amount. 18 So if you had a positive 100 and a negative 100, you would count 19 that as 200 absolute dollars. 20 THE COURT: So I would say they're absolute dollars, 21 but they're absolutely not dollars? 22 THE WITNESS: That's correct, Your Honor. 23 THE COURT: All right. 24 MR. QUINN: I think we have another summary table to 25 conclude on data completeness validation. 0564 1 BY MR. QUINN: 2 Q. On the screen I put up -- our next table is from Defendant's 3 Exhibit 152, again, the overall report at page 281. Is this the 4 same thing? 5 A. This is the same chart, but through July 31st, 2007. 6 Q. So we did have the 2001 in here. 7 MR. QUINN: Go back to that page reference again so 8 we're clear on where this is coming from, if we could. 9 BY MR. QUINN: 10 Q. This is 152 at page 281. And this is the same table we just 11 looked at, but it covers the data all the way through 2007? 12 A. Yes, it does. 13 Q. And so the numbers, the grand total numbers, are a little 14 bit different in terms of the size? 15 A. That's correct. 16 MR. QUINN: So scroll to the right at the very end 17 there. 18 BY MR. QUINN: 19 Q. So here the -- all transactions, this is again where it's 20 the 113 million -- 21 A. That's correct. 22 Q. -- number that you've looked at? 23 A. Yes. 24 Q. Or you're looking at as part of this? Okay. 25 MR. QUINN: Can we have the next slide, please? 0565 1 BY MR. QUINN: 2 Q. This is also from the overview report, Defendant's 3 Exhibit 152 at page 37. 4 MR. QUINN: And could we back out a little bit so the 5 witness can identify it for the record? 6 BY MR. QUINN: 7 Q. If you can read that, can you identify what that is? 8 A. This is an excerpt from our overall report. 9 MR. QUINN: And if you could highlight the middle 10 paragraph that begins with the Treasury CP&R? Thank you. 11 BY MR. QUINN: 12 Q. In the middle of that page, just before the heading, 13 "population specific data validations," there's a short 14 paragraph that refers to the Treasury CP&R data, and it says, 15 "includes 6,413,240 records of checks." 16 And that's what you were describing earlier? 17 A. Yes, it is. 18 Q. And it reports that it covers a period from March 1987 19 through December 2002 relating to IIM Trust? 20 A. Yes, it does. 21 Q. And it indicates here that "FTI has successfully mapped 22 6,278,229 of these records, or 97.9 percent, back to the 23 corresponding record." 24 Does that reflect the successful mapping of the check 25 distribution records? 0566 1 A. That's where we've tied the Treasury record to the IRMS or 2 TFAS record. 3 Q. And that's the percentage that have checked out at this 4 point? 5 A. Yes. 6 MR. QUINN: Let's go back. Let's look at this for a 7 second. 8 BY MR. QUINN: 9 Q. Ms. Herman, I showed you this chart on Thursday when you 10 began your testimony from Defendant's Exhibit 152 at page 16. 11 MR. QUINN: We need to go up to the chart. There we 12 go. Okay. 13 BY MR. QUINN: 14 Q. And the Court was asking you a moment ago about a great 15 number of transactions only accounting for a small amount of 16 throughput. Is that reflected also in this chart? 17 A. Yes, it is. 18 Q. Can you describe how it's reflected, how it's represented? 19 A. The blue columns in the chart represent the number of 20 transactions, and the green columns is the number of dollars. 21 Q. And they're stratified, right, by dollar value group? 22 A. Yes, they are. 23 Q. So the big green bar at the end of this chart is 24 representing what? 25 A. The number of dollars in the "greater than $10,000" 0567 1 category. 2 Q. And the little, itty-bitty line next to it is representing 3 what in the far right side? 4 A. The number of transactions associated with those dollars. 5 Q. So a small number of transactions in effect accounting for a 6 large percentage of the money? 7 A. Yes. 8 Q. This is everything, though. Right? I don't want to mislead 9 anybody. This is your data completeness validation, so it 10 includes Special Deposit Accounts and everything else in there? 11 A. Right. This is just noninterest credits, though. 12 Q. Noninterest credit. So you filtered out credit 13 transactions? 14 A. That's correct. 15 Q. So just looking at actual dollars of some kind of earnings 16 or revenue or deposit, you get a small number of accounts 17 reflecting a large amount of the value of what's flowed through 18 the IIM Trust during this time frame. Right? 19 A. A small number of transactions, yes. 20 Q. And at the opposite end, the blue bars being much higher and 21 actually visible compared to the far right, telling you what? 22 A. There are a large number of transactions in the small dollar 23 amount. So in the first column, which is zero to $1, you have 24 $9.1 million transactions. 25 Q. Between zero and $1? 0568 1 A. Yes. 2 MR. QUINN: Could we go to the next line. 3 BY MR. QUINN: 4 Q. During the opening statements -- 5 MR. QUINN: This is from plaintiffs' exhibit set, but 6 actually it had been used in the 1.5 trial, Your Honor. It's a 7 chart used in opening statements. 8 BY MR. QUINN: 9 Q. Have you seen this chart before? 10 A. Yes. I created it. 11 Q. You prepared it? 12 A. Yes, I did. 13 Q. About when did you prepare this chart? 14 A. It was several years ago, for the 1.5 trial. 15 Q. Is this chart intended to reflect some of the same 16 information that's in your data completeness validation report 17 chart? 18 A. Yes. It's a similar chart, just slightly different buckets. 19 Q. The numbers are laid out a little bit differently. 20 MR. QUINN: Could you go to the next slide? 21 This was also used in the course of opening statements, 22 and it's another one of plaintiffs' marked exhibits for this 23 hearing. But it was marked by defendants in the 1.5 trial. 24 BY MR. QUINN: 25 Q. Have you seen this chart before? 0569 1 A. Yes, I have. 2 Q. And could you describe what it is for the Court? 3 A. It's the number of debit transactions for the February '85 4 through December 2000 period broken down by dollar stratum. 5 Q. And what is this bar graph showing? 6 A. That you have a larger number of debits in the 10 to $100 7 bucket, and that's a result of the auto-disbursement that 8 typically happens at $15. 9 Q. Can you describe the auto-disbursement, to your 10 understanding what that is? 11 A. Many accounts, those that are established for people who are 12 deemed to be competent adults, have the funds distributed 13 automatically when it reaches $15 in a balance. And more 14 frequently for oil and gas payments. 15 Q. So if it was a $10 balance in an account, it would sit there 16 idle until it hit 15? Is that your understanding? 17 A. That's my understanding, yes. 18 Q. In terms of your overall work in the data completeness 19 validation, do you have any particular observations about this 20 data that you've looked at? 21 A. The data is very complex, as it differs by region. But we 22 have been able to find answers to most of the items that we've 23 investigated so far. 24 MR. QUINN: I think we have one more slide, the 25 conclusion slide. Can you bring that up? No, that's later. 0570 1 Excuse me, Your Honor, one moment. 2 (OFF THE RECORD.) 3 BY MR. QUINN: 4 Q. Wrapping up here, Ms. Herman, let me just go over a couple 5 of things overall in terms of documents that you collected that 6 are reflected in the DCV reports. 7 Those documents, the source documents that you used to 8 examine some of these transactions, are they, to your knowledge, 9 records of the Department of Interior? 10 A. Yes, they are. 11 Q. Records maintained by the Department of Interior? 12 A. Yes, they are. 13 Q. Are they documents that to your knowledge were created in 14 the ordinary course of Department of Interior's operations and 15 administration of IIM accounts? 16 A. Yes, in addition to the file we received from Treasury. 17 Q. For the check information? 18 A. Yes. 19 Q. Okay. 20 MR. QUINN: Well, at this time, Your Honor, defendants 21 would like to move the data completeness validation report into 22 evidence that begins at Defendant's Exhibit 152 and continues 23 for the next six exhibits, the regional and the overall reports. 24 MR. SMITH: Your Honor, we would object to that on 25 these grounds: Number one, again, Ms. Herman has not been 0571 1 designated as an expert witness. This report contains 2 conclusions, opinions; she's done testing, someone has done 3 testing and arrived at opinions based on that testing. For 4 that -- 5 THE COURT: It will be received, Mr. Smith. Your 6 objections will go to weight. 7 MR. SMITH: Thank you. 8 MR. QUINN: Thank you, Your Honor. 9 THE COURT: They will be received, the Exhibits 152 10 through 158. 11 MR. QUINN: Yes, thank you, Your Honor. 12 (Defense Exhibits 152 through 158 were moved into 13 evidence.) 14 BY MR. QUINN: 15 Q. Before we move into the next area and talk about the account 16 reconciliation work that you've done, let me go back just for a 17 moment and review some history with respect to the data sets 18 that you were analyzing for the data completeness validation. 19 When was the first time that you began to work at all 20 with the IRMS IIM subsystem information? 21 A. In early 1997. 22 Q. And under what circumstances did you obtain access to that? 23 A. We received a copy of the IRMS data up and through that 24 point in time from Justice. 25 Q. And do you know whether -- from your involvement in that, 0572 1 whether anyone associated with the plaintiffs obtained access to 2 that data? 3 A. At the time, Price Waterhouse was working for plaintiffs, 4 and I believe they received a copy of that data as well. 5 Q. Are you aware of any analysis performed by plaintiffs on 6 that data set? 7 A. Initially we were working cooperatively. I don't know if 8 additional analysis has been done. 9 Q. You have not seen any? 10 A. Not that I've personally seen. 11 Q. Okay. 12 MR. QUINN: We have that conclusion page? Great. 13 Can we identify it for the record? This is Defendant's 14 Exhibit 152, now in evidence, at page 38. 15 BY MR. QUINN: 16 Q. And if you can read it, Ms. Herman, can you identify it for 17 the record, please? 18 A. This is the final page of our overall report. 19 Q. And in there you report a few observations about the data. 20 And in particular you describe in the second paragraph that one 21 of the complicating factors you encountered in doing the 22 analysis, that many of the individual regions use systems in a 23 way that were internally consistent but inconsistent across 24 regions. 25 Can you describe that experience for the Court? 0573 1 A. Different regions over time had different processes that 2 they implemented. So perhaps an easy example is range, again. 3 The Great Plains region used a different distribution program 4 than the Rocky Mountain region used, and so as a result, the 5 postings are reflected differently in the system. 6 Q. Does that mean that the data is in error or can't be 7 compared? 8 A. No, it just made it more time-consuming for us because we 9 had to learn how each region processed their transactions before 10 we could evaluate them. 11 Q. Did you sometimes have to learn how even a particular agency 12 might process transactions? 13 A. Yes. And some of that changed over time from the beginning 14 of the IRMS system through the conclusion of the system and the 15 movement into TFAS. 16 MR. QUINN: If you can scroll down a page there. 17 BY MR. QUINN: 18 Q. You mention in -- that paragraph begins, "it should be noted 19 that each of the analyses described above are dependent on one 20 another, with the results of one analysis impacting several 21 other analyses in an iterative cycle." 22 What do you mean by that? 23 A. I think perhaps the easiest example is an overlap between 24 our transaction mapping and our NABN example. 25 Q. That's the Native American Beneficiary Number? 0574 1 A. That's correct. 2 So one of the things we evaluate in that analysis is 3 whether or not there are transfers between two accounts, because 4 that might be an indication that those are accounts that belong 5 to the same individual. 6 So as we map new transactions, we have new transfers to 7 analyze for our account number analysis. 8 Q. And so in the course of doing the analysis, you may identify 9 still, even going from where we are now today, other accounts 10 for particular individuals. Is that right? 11 A. Yes. 12 Q. And then what happens with those newly identified individual 13 accounts? 14 A. It's not that the account is newly identified, it's that we 15 now know that all of those accounts belong to the same person. 16 Q. What does that do in terms of the reconciliation work? What 17 impact does it have on that? 18 A. At this particular example, it wouldn't impact the 19 reconciliation work; what would is if we identified transactions 20 that weren't a part of the population when the sample was drawn. 21 Q. And why is that important? 22 A. Because the sample was drawn from the group of transactions 23 that was available at that point in time. 24 So to the extent that we add transactions after that 25 point in time, the statisticians will need to evaluate those. 0575 1 Q. To your knowledge, is the Office of Historical Trust 2 Accounting taking that into consideration, if there are new 3 information added to the group, population of accounts for 4 transaction analysis? 5 A. It's my understanding that they are. 6 Q. Thank you. We'll talk a little bit about your account 7 reconciliation work. 8 As part of the -- and I believe you testified already 9 on Thursday that you've been involved in conducting account 10 reconciliation? 11 A. Yes, I have. 12 Q. Is this also known as the litigation support accounting? 13 A. Yes, it is. 14 Q. And how does the reconciliation work compare with the data 15 completeness validation work that we've been discussing up to 16 this point? 17 A. The reconciliation work is focused around determining the 18 accuracy of a given transaction as posted; whereas the data 19 completeness project is focused more on determining the 20 completeness of the historical record relative to today, 21 relative to what existed historically. 22 Q. So what kinds of accounts were being examined as part of the 23 litigation support accounting? 24 A. Land-based accounts. 25 Q. And as part of the overall reconciliation, were other types 0576 1 of accounts being looked at? 2 A. Yes. Judgment and per capita accounts. 3 Q. What guidelines -- well, let me ask you this: Does the 4 Office of Historical Trust Accounting have any guidelines that 5 it's adopted with respect to the conduct of the reconciliation 6 work? 7 A. Yes. The Accounting Standards Manual. 8 Q. Is that mentioned in the 2007 plan, do you know? 9 A. I believe it is. 10 MR. QUINN: Could we put up slide AR-556? We're 11 jumping ahead a little bit. 12 BY MR. QUINN: 13 Q. I'm sorry, you referred to the Accounting Standards Manual? 14 A. Yes. 15 Q. Could you describe what that is for the Court? 16 A. The manual contains several components to it; one are 17 guidelines to the firms performing the reconciliation; one are 18 documents that are documents to be used in support of the 19 accounting; and at the end of the document, there's a work 20 program that firms use while performing the accounting. 21 MR. QUINN: I've put up on the screen here what's a 22 piece of the administrative record, Your Honor. And this is 23 identified as document AR-566 for purposes of indexing. 24 BY MR. QUINN: 25 Q. Ms. Herman, if you would look at that first page and tell us 0577 1 whether you've seen this document and can identify it for the 2 record? 3 A. I believe this is a component of what we refer to as the 4 green plan, or the current 2007 plan. 5 MR. QUINN: And could we go to page nine? And can we 6 just zoom in on the bottom part of that page, if we could? 7 BY MR. QUINN: 8 Q. Here on page nine under the heading, Ms. Herman, it refers 9 to the Accounting Standards Manual. Is that the document you 10 were just speaking of? 11 A. Yes, it is. 12 Q. And according to the plan here, the plan rationale refers 13 to -- second sentence, "the ASM supports the accuracy objective 14 of the historical accounting by creating, in advance, definitive 15 standards as a guide to performing and reviewing the 16 reconciliations." 17 It says that the -- it goes on to say that, "the ASM 18 was developed by Interior, working with the accounting firms 19 engaged for the historical accounting, and continues to be 20 updated." 21 Did you participate at all in the development of the 22 ASM? 23 A. Yes, I did. 24 Q. What was your role in developing the ASM? 25 A. My primary role was in identifying documents that had been 0578 1 used historically in support of the different transactions that 2 we were going to be analyzing. 3 MR. QUINN: Could we go to AR-08? 4 I've put up on the screen here a document also from the 5 administrative record identified as AR-008. 6 BY MR. QUINN: 7 Q. And Ms. Herman, can you identify what that document is? 8 A. This is the cover page to the Accounting Standards Manual. 9 Q. And that's the manual you were referring to that you 10 participated in developing? 11 A. Yes, it is. 12 MR. QUINN: If you go to the next page and zoom in on 13 the preface. 14 BY MR. QUINN: 15 Q. Look at the preface page. You see a number of firms there. 16 Do you recognize those are the firms that were involved in 17 helping to develop the ASM? 18 A. Yes, they are. 19 Q. And is your firm among those? 20 A. Yes, it is. 21 Q. That's the FTI Consulting? 22 A. Yes. 23 MR. QUINN: And if we could look at the -- zoom in 24 on -- this is the table of contents page from the ASM. If we 25 could just go through this. 0579 1 BY MR. QUINN: 2 Q. Principally, what does the ASM contain? 3 A. As I mentioned, it contains policies and procedures in terms 4 of conducting a historical accounting, the guidelines, the 5 standards, the documents to be used in support of the 6 accounting, and then a work program for actually performing the 7 reconciliation. 8 Q. Did you refer to the ASM when you were working on the 9 litigation support accounting? 10 A. Yes, I did. 11 Q. Did other members of your staff refer to the ASM? 12 A. Yes, they did. 13 Q. How about the other accounting firms that were doing 14 reconciliation work, would they refer to that? 15 A. All of the firms were to use the ASM. 16 Q. You mentioned you participated in helping to develop the 17 Accounting Standards Manual. Are you a certified public 18 accountant? 19 A. No, I'm not. 20 Q. Are you an accountant by training? 21 A. No, I'm not. 22 Q. So what contribution were you able to make to the Accounting 23 Standards Manual? 24 A. As I mentioned, mine was primarily focused around 25 identifying the documents that had been used by Interior 0580 1 historically. 2 Q. And in terms of the accounting standards that are adopted or 3 reflected in the Accounting Standards Manual, who participated 4 in the decisions on adopting particular standards to govern the 5 conduct of the reconciliation work? 6 A. The majority of the manual was written while our team was at 7 KPMG, and we had on our team CPAs, as well as our professional 8 standards practice, evaluate the standards implemented in the 9 manual. 10 Q. So CPAs, certified public accountants, who were trained in 11 this area participated in the standards review? 12 A. Yes, they did. 13 MR. QUINN: If you could go to the next page on the 14 slide on this. I want to get to the introduction page, if we 15 could. Okay, there you go. Just zoom in on this. 16 BY MR. QUINN: 17 Q. Has the Accounting Standards Manual gone through changes 18 over time since it was first adopted? 19 A. Yes, it has. 20 Q. And why is that? What kinds of changes have been made to 21 the manual? 22 A. Complete chapters have been added to the manual, as well as 23 documents in support of particular types of transactions. 24 Q. Those changes in the ASM are made in response to what? 25 A. Any one of the firms involved in the accounting, or OHTA 0581 1 themselves, can propose changes to the manual. 2 Q. Do those often grow out of the experience that you have in 3 actually conducting reconciliation work? 4 A. Yes, it does. 5 Q. Would it involve changes that are made based on kinds of 6 documents you're finding? 7 A. Yes. 8 Q. And I believe you testified that FTI has done some of the 9 work with the reconciliations? 10 A. Yes, we have. 11 Q. Before we get to that and get into the meat of the account 12 reconciliation work that you've done, I would like to talk about 13 a couple of tests just briefly that I could, about tests that 14 did not appear in the data completeness validation, and review 15 those with you for the Court. 16 I think on Thursday you mentioned a test referred to as 17 the land-to-dollars test. Do you recognize that term? 18 A. Yes, I do. 19 Q. And what does that term describe? 20 A. The test that's being performed going from outside the 21 system, basically starting with the land, and determining 22 whether or not funds that should have been collected were posted 23 to the system. 24 Q. Who designed the land-to-dollars test? 25 A. Several of the firms working at OHTA designed the test. 0582 1 Q. Have you had any involvement with the land-to-dollars 2 testing? 3 A. Yes. In evaluating the leases that had been selected and 4 whether or not the funds posted to the system. 5 Q. Could you explain for the Court what the land-to-dollars 6 test does, what the steps are in the test and what its aim is? 7 A. Some of this is based on my review of documents prepared by 8 NORC. But you start with creating a map of all of the 9 allotments for a given reservation managed by an agency, and 10 then once you have that map, you sample allotments from within 11 that reservation. 12 Once you had sampled your allotments, you create a 13 revenue history for that particular allotment. So if it had had 14 leasing from 1985 to 2000 consistently, you would have each one 15 of those data points represented. 16 And then they selected particular collection periods 17 that the accounting firms would review. 18 Q. Did you participate in looking at any of those, any of those 19 land-to-dollar transaction tests? 20 A. Yes, I did. 21 MR. QUINN: If you can put up, if you can locate it, 22 AR-435. 23 BY MR. QUINN: 24 Q. I believe you referred to a NORC memo. Is this the memo 25 you're referring to? 0583 1 MR. QUINN: Zoom in on the top of it, please. 2 THE WITNESS: This is one of the memos that I've seen, 3 yes. 4 MR. QUINN: And for the record, this is a March 31, 5 2000 memorandum, and it's indexed and part of the 6 administrative -- indexed at AR-435. Okay? 7 BY MR. QUINN: 8 Q. This is a memorandum - reading the document, now - from 9 Susan Hinkins, project manager, to Jeffrey Zippin. Do you know 10 who Ms. Hinkins is? 11 A. She's a member of the NORC team. 12 Q. And who is Mr. Zippin? I guess he's the deputy executive 13 director? 14 A. Yes, he is. 15 Q. You worked with him in the course of your work on the 16 historical accounting? 17 A. Yes, I have. 18 MR. QUINN: If we can scroll down the page here. 19 BY MR. QUINN: 20 Q. This lays out a number of options for conducting 21 land-to-dollars test. 22 MR. QUINN: If you go to the next page, and zoom in on 23 the part with the heading in the middle of the page, if you 24 would? 25 BY MR. QUINN: 0584 1 Q. This refers to the Horton Agency and selection of the Horton 2 Agency. Is that a land-to-dollars test that you participated 3 in? 4 A. Yes, it is. 5 Q. I'm sorry, it is? 6 A. Sorry. Yes, it is. 7 Q. Do you need some water? 8 A. No, I'm fine. Thank you. 9 Q. Did you participate in the selection of the Horton Agency? 10 A. No, I did not. 11 Q. Describe what it is that you did at FTI. 12 A. I was provided with the lease periods that had been sampled 13 to determine whether or not the postings were made to the IRMS 14 and TFAS systems? 15 Q. So you were given particular leases to check out? 16 A. Yes, that's correct. 17 Q. And those were selected by, as far as you know, NORC? 18 A. Yes. 19 Q. And then what did you do with that information? 20 A. We looked to the IRMS and TFAS data to determine whether we 21 could find a posting of the collection off of the lease. 22 MR. QUINN: Can you scroll down, next page, I think. 23 BY MR. QUINN: 24 Q. This third page here refers to 21 allotments that were 25 randomly selected. Those are the allotments you're referring 0585 1 to? 2 A. As I mentioned, we actually received particular lease 3 periods that we were testing. 4 Q. Within those allotment groups? 5 A. Yes. 6 MR. QUINN: And scroll down the page, please. 7 BY MR. QUINN: 8 Q. And then the memorandum at page three goes on to say, "the 9 following list summarizes the findings for the 21 selected 10 allotments." 11 Did you participate in the investigation leading to 12 these findings? 13 A. No, I did not. 14 Q. What information did you provide for purposes of the Horton 15 land-to-dollars test? 16 A. We actually evaluated the sampled items and reported back 17 whether or not we found postings in the system for those sampled 18 items. 19 Q. Is that reflected on here somewhere? 20 MR. QUINN: Go down, scroll down. More, next page. 21 THE WITNESS: It's discussed in the 33 cases. 22 BY MR. QUINN: 23 Q. On this page at bullet point, refers to, "accountants tested 24 33 cases to verify that the revenue was received by all the 25 listed owners." And it has a couple of findings underneath 0586 1 that. "One case was found to be out of scope." What does that 2 mean, out of scope? 3 A. This test was designed for the electronic ledger era, so 4 this would have been money prior to February of '85. 5 Q. Not necessarily out of scope for the accounting, but out of 6 scope for the purpose of the test? 7 A. Yes. 8 Q. And the next bullet point is, "32 expected payments were 9 successfully traced to the IIM accounts." Can you describe for 10 the Court what that means? 11 A. This is where we actually found the postings in the IRMS and 12 TFAS systems reflecting the leases that had been provided. 13 Q. So in this study, the land-to-dollars, you were given 33 14 lease transactions to try to find? 15 A. Yes. 16 Q. And one was not within the test term, within the scope of 17 the test, but all the other 32 that you tested you found entries 18 in the IRMS data? 19 A. Or the TFAS system, yes. 20 Q. Or the TFAS system. All right. 21 Did anyone -- was there anybody else doing work similar 22 to you on this Horton test, looking at other leases? 23 A. No. This was -- only our firm worked on this test. 24 Q. So the results of this test is: Everything that was in the 25 scope of the time period for the test, you were able to find a 0587 1 transaction record that recorded the information? 2 A. Yes, I was. 3 Q. Do you know whether the Office of Historical Trust 4 Accounting plans to conduct further land-to-dollars tests? 5 A. I believe they are, yes. 6 Q. Do you know, are there any underway at this moment? 7 A. Yes, there are. 8 Q. Are you working on any at this moment? 9 A. No, I'm not. 10 Q. They're in other regions? 11 A. Yes, they are. 12 Q. And other accounting firms are working on those? 13 A. Yes, they are. 14 Q. Do you know how many agencies with land-the-dollars test 15 that Interior plans to examine? 16 A. I believe one per region. 17 Q. So this is not an overall -- this is kind of a spot check on 18 the information? 19 A. I don't know how the sample was selected. 20 Q. Thank you. 21 MR. QUINN: Your Honor, the next part of my examination 22 of Ms. Herman involves a live demonstration, with the Court's 23 indulgence, of the account reconciliation software, the ART 24 software you've heard mentioned earlier today. 25 THE COURT: Are you suggesting that you're ready for 0588 1 lunch? 2 MR. QUINN: I'm ready for lunch any time, Your Honor. 3 But we do need to set up her laptop, which will take about 4 five minutes or so. We can do that now if you like, or we can 5 do that over lunch. 6 THE COURT: All right. We'll take -- it's a little 7 earlier than usual, but we'll take a lunch break now. Let's be 8 back here at, let's call it 1:30. 9 MR. QUINN: Thank you, Your Honor. 10 (RECESS taken at 12:16 p.m.) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0589 1 CERTIFICATE OF OFFICIAL COURT REPORTER 2 3 I, Rebecca Stonestreet, certify that the foregoing is a 4 correct transcript from the record of proceedings in the 5 above-entitled matter. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25