CORRECTIVE ACTION PLAN March 13, 2026 Chickahominy Indian Tribe - Eastern Division respectfully submits the following corrective action plan for the year ended December 31, 2024. Name and address of independent public accounting firm: Brown, Edwards & Company, L.L.P. 1909 Financial Drive Harrisonbur...
CORRECTIVE ACTION PLAN March 13, 2026 Chickahominy Indian Tribe - Eastern Division respectfully submits the following corrective action plan for the year ended December 31, 2024. Name and address of independent public accounting firm: Brown, Edwards & Company, L.L.P. 1909 Financial Drive Harrisonburg, VA 22801 Audit period: December 31, 2024 The findings from the December 31, 2024 Schedule of Findings and Questioned Costs (the "Schedule" ) are discussed below. The findings are numbered consistently with the number assigned in the Schedule. FINDINGS- FINANCIAL STATEMENT AUDIT 2024-001: Payroll Tracking and Allocation (Material Weakness) Condition The client was unable to provide a payroll allocation by fund that agreed to the payroll registers. Criteria Payroll allocations were not supported by adequate documentation and were not consistent with methods used in the prior year. Cause The prior CFO had created an allocation method in which the existing employees could not follow . After the CFO's departure, emailed allo cat ions were sent which only specified which funding source the payroll expendit ures would be paid from, not the fund the expenditures were incurred in. Effect Material audit adjustments were required. Recommendation We recommend that payroll allocations be supported by a logical method and be allocated by fund. Corrective Action The Tribe has implemented corrective actions to strengthen internal controls over payroll allocations including: • Development and implement ation of a standardized payroll allocation model beginning with payrolls processed from September 2024 forward. • Preparation of documented allocation schedules for each pay period reconciling payroll costs to payroll registers and accounting records. • Use of standardized spreadsheet templates to support calculation and documentation of payroll allocations across funding sources . • Direct upload of payroll allocation entries into the accounting system to reduce manual entry and improve reconciliation accuracy. These procedures have established a consistent and supportable methodology for allocating payroll expenditures by fund and maintaining documentation sufficient to support financial reporting and audit requirements. The payroll allocation model was implemented beginning September 2024 and was further refined during 2025. The corrective action is considered implemented. 2024-002: Material Audit Adjustments (Material Weakness) Condition In fiscal year 2022, the Tribe elected to convert from the cash basis of accounting to governmental accrual accounting. During 2024, the Tribe continued to function on a cash basis and did not record most accruals. Criteria Financial information provided shou ld be accessible and materially correct. Cause Tribe has not consistently used the accounting software and has relied on program specific spreadsheets. The Tribe did not fully switch to accrual basis for internal reporting. Effect Material audit adjustments were required. Recommendation We recommend that monthly reports be generated from Abila and reviewed for accuracy. Any discrepancies between Abila reports and program-specific spreadsheets should be reconciled or adjusted. These reports should be reliable and able to be used to present to Council as part of monthly financial reporting. Corrective Action The Tribe has taken steps to strengthen the use of the accounting system as the primary source of fi nancial reporting and to improve the reliability of financial reports generated for internal management purposes including: • Continued use of the accounting system (Abila/ M IP) as the system of record for all financial t ransact ions. • Development and implementation of a revised chart of accounts structure to improve financial reporting and fund tracking. • Comprehensive review and correction of historical accounting activity to improve data integrity within the accounting system. • Use of spreadsheets as supplemental tools for monitoring estimated fund balances and grant acti vit y where necessary. • Ongoing efforts to customize financial reports generated direct ly from the accounting system so they align with the reporting format requested by Tribal leadership. The Tribe is currently working to finalize customized accounting system reports that will allow monthly financial reports to be generated directly from the accounting system in the format required for Tribal Council repo rt ing. Substantial improvements were implemented during 2025. Full implement atio n of customized accounting system reporting will be completed in the second quarter of 2026. 2024-003 : Budget Approval and Adherence (Material Weakness) Condition The budget was not approved until February 2024 and did not contain sufficient detail nor was it an accurate reflection of financial operations. Criteria Budgets should be developed with sufficient detail to track organizational performance throughout the year. Budgets should be approved by Council prior to the start of the fiscal year. Cause Unqualified staff or lack of attention to the budgeting process. Effect A budget was approved after the fiscal year and was not measured to actual performance during the year. Recommendation A thorough and detailed budget should be developed at the fund and entity level and adopted by Council prior to the start of the fiscal year. We also recommend Council meetings include a formal discussion of budget to actual results, thus giving Council an opportunity to question variances. Corrective Action The Tribe has taken steps to strengthen its budgeting process and improve financial oversight by Tribal leadership including: • Development of a detailed fiscal year 2025 operating budget at the fund and entity level to improve monitoring of financial activity across funding sources. The FY2025 budget was adopted by Tribal Council on February 8, 2025. • Development of a detailed fiscal year 2026 operating budget at the fund and entity level. This budget was presented to Tribal Council on December 19, 2025 and formally adopted with minor revisions at the January 12, 2026 Council meeting very near the start of the fiscal year. • Implementation of enhanced monthly financial reporting for Tribal leadership to support improved financial monitoring and oversight. • Ongoing development of budget-to-actual comparison reporting to support regular review of financial performance by Tribal Council. Budget development improvements were implement ed during fiscal years 2025 and 2026. Full implementation of budget-to-act ual repo rting will becompleted in the second quarter of 2026. 2024-004: Segregation of Duties (Material Weakness) Condition Certain key financial operational responsibilities are not sufficiently segregated. Criteria Proper segregation of duties shou ld be in place detect of irregulariti es in a timely manner. Cause Small staff size combined with significant turnover. Effect Segregation of duties could not be maintained in several signi fi cant rol es during the year. Recommendation Management should review the current process and implement changes to better separate responsibilities so that no one individual is responsible for a transaction cycle. Where proper segregation is not possible, mitigating controls can be put into place to detect errors. Corrective Action The Tribe recognizes the importance of segregation of duties as an internal control and has taken steps to strengthen oversight and implement mitigating controls where full segregation is not feasible due to staffing limitations including: • Increased oversight of financial transactions and accounting activit y by the Director of Finan ce. • Implementation of improved documentation and reconciliation procedures for key accounting processes. • Development of standardized processes and templates to improve consistency and transparency in financial transactions. • Implementation of enhanced financial reporting to Tribal leadership to support independent review offinancial activity. • Ongoing review of financial responsibilities and workflows to identify opportunities for improved separation of duties as staffing capacity permits. Where complete segregation of duties is not possible due to organizational size, the Tribe will continue to rely on management review and reconciliation procedures as compensating controls that have proven effective in detecting errors and irregularities. Mitigating controls were implemented during late 2024 and throughout 2025 and will continue to be refined as staffing capacity allows. 2024-005: Grant Tracking and Reporting (Material Weakness) Condition Poor financial record keeping and lack of thorough grant expenditure and status tracking. Criteria Grant funding should be recorded in separate GL accounts and be reconciled to any ext ernal spreadsheets or drawdown requests and grant reporting. Cause Turnover and unqualified staff. Effect Some grant funding sources were drawn down without documentation of qualifying expenditures, while others appear to have had qualifying expenditures that did not have matching drawdowns. Recommendation Accounting systems should be properly uti lized to track expenditures incurred under each grant and be reconciled to external reporting and spreadsheets. Once a grant is fully expended, the grant shou ld be closed out by ensuring revenues match expenditures. If expenditures are greater than the revenue provided by the grant, a transfer from the general fund would be needed. If revenues are greater than expendit ures , it could be an indication of improper drawdowns or expenditures have not been properly recorded. Corrective Action The Tribe has taken steps to strengthen grant financial management and improve reconciliation between accounting records, grant expenditures, drawdown activity, and monitoring of fund balances including: • Implementation of a revised chart of accounts structure to improve tracking of grant revenues and expenditures within the accounting system. • Continued use of the accounting system as the system of record for all financial transactions associated with grant programs. • Review and reconstruction of grant financial records to ensure expenditures, drawdow ns, and grant balances are properly documented and reconciled. • Use of standardized tracking spreadsheets as supplemental tools to monitor grant activity and reconcile grant balances to the accounting system. • Implementation of improved financial reporting and reconciliation procedures to ensure grant revenues, expenditures, drawdo wns, and balances are reviewed on a regular basis. Beginning in 2026, the Tribe has established a process to perform grant drawdowns monthly to ensure that drawdowns are aligned with recorded expenditures and that grant balances are monitored on an ongoing basis. Corrective actions began during late 2024 and continued throughout 2025. Monthly grant drawdown and reconciliation procedures were implemented in the first quarter of 2026. FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAM AUDIT 2024-006: Bureau of Indian Affairs -105(1) Leases ALN 15.048 and Pandemic Relief Activities: Local Food Purchase Agreements with States, Tribes, and Local Governments ALN 10.182, Late filing of Data Collection Form Condition The Tribe did not file the data collection form for the years ended December 31, 2022, 2023, or 2024 timely. Criteria Under the requirements of the Uniform Guidance and the Office of Management and Budget (0MB), all entities are required to file the annual data collection form with the Federal Audit Clearinghouse the earlier of 30 days after the issuance of the entity's annual audit or nine months after the entity's fiscal year-end. Management did not complete and certify the auditee portion of the form before the deadline. Questioned Cost N/A Repeat Finding Yes RecommendationManagement should take steps to ensure that the form is filed timely Corrective ActionThe Tribe has taken steps to ensure timely completion and submission of the annual data collection form going forward including: • Assignment of responsibility for preparation, review, and submi ssion of the auditee portion of the data collection form to the Director of Finance. • Establishment of a formal process to complete and certify the annual data collection form immediately upon completion of the annual audit. • Implementation of internal tracking procedures to monitor audit timelines and ensure compliance with Federal Audit Clearinghouse submission requirements. • Coordination with external auditors to ensure timely communication regarding audit completion and reporting deadlines. This corrective action has been implemented and the tribe anticipates comp liance in all future audit reporting periods beginning with FY202 5. 2024-007: Bureau of Indian Affairs -105(1) Leases ALN 15.048, Lack of Approvals (Material Weakness) Condition Criteria Cause Questioned Cost Repeat Finding Perspective Information Recommendation Corrective Action There were several instances of lack of approvals for disbursements. Federal grant recipients are required to maintain effective internal controls over federal awards, as out li ned in 2 CFR §200.303. Turnover and inadequate staffing. N/A N/A Nine of 27 tested. All disbursements should have one approval and ensure the expenditure is eligible under the grant. The Tribe has taken steps to strengthen internal controls over disbursement approvals and ensure that all expenditures are properly reviewed and documented including: • Establishment of a standardized disbursement approval process requiring documented approval prior to payment for non-routine/recurring expenditures. • Implementation of procedures to ensure all disbursements are reviewed for allowability under applicable grant requirements before payment is issued. • Maintenance of supporting documentation, including approval evidence, within the accounting records. • Ongoing review of disbursement procedures to ensure compliance with internal control requirements under 2 CFR §200.303. These measures are designed to ensure th at all disbursements are properly authorized, documented, and compliant with applicable grant requirements. Corrective actions began implementation during throughout 2025. These procedures are currently in place and will continue to be refined as part of ongoing internal control improvements. If the Federal Audit Clearinghouse has questions regarding this plan, please call Tim Emery, Director of Finance at 804-488-9392. Respectfully submitted, r Chief