Yet tribal governments, including those in Utah, are excluded from major sources of child welfare funding.
Due to these financial, and other barriers, tribes find themselves in a situation where they can only "manage" crises - putting children at risk of harm and families at risk of having their children removed from their care, the report's authors conclude.
The research was released Monday by the National Indian Child Welfare Association and the Kids Are Waiting campaign, a project of the Pew Charitable Trusts.
The report calls upon states to adopt legislation to give tribes direct access to Title IV-E money, the largest source of federal foster care and adoption funding.
While federal law bars such access, four states pass through money to tribes. Utah is not among them.
But Duane Betournay, director of the state Division of Child and Family Services, is exploring the option, possibly starting with the Navajo Nation and then expanding it to include other tribes.
To improve outcomes for American Indian children, the state hired an Indian child welfare specialist, said Betournay. The state also has struck agreements with area tribes that guide caseworkers in culturally sensitive practices.
The ultimate goal is to ensure kids stay culturally tied to their tribes, said Betournay, said he isn't satisfied with Utah's track record.
Utah is not among states with the highest number or percentage of American Indian children in foster care. But it ranks ninth in disproportionality.
In 2005, 297 American Indian children were placed in foster care, making up about 6 percent of all foster children. But they represent only 1 percent of the state's total child population.
That means 31 of every 1,000 American Indian children fall into state custody.
Betournay said, "We won't have a dent on the number of kids in custody until tribes can provide good prevention and early intervention."
And that, said Betournay, won't happen unless the tribes can access federal money.
A pass-through arrangement would mean a funding cut for Betournay's division. But the real obstacles are federal sanctions that states can face if the money is misused, he said.
"We're responsible for making sure they provide social services the way that the feds expect you to," he said. "There's not a lot of motivation for states when you can't control the casework or outcomes."