Finding 561003 (2023-001)

Federal Awards Finding 2023-001: Tribal Council Leadership & Oversight Criteria or Specific Requirement The Tribal Council is responsible for providing oversight on behalf of the Community Council, management, personnel and contractors, for ensuring that internal controls are established and effective in protecting the financial health and assets of the Rancheria. The Council is responsible for maintaining accurate financial reporting systems, maintaining compliance with applicable laws and regulations, and making certain that resources are used for their specified purposes. Finding/Condition Those charged with oversight of the Rancheria’s financial accounting and reporting system have not adequately implemented a system to ensure that it is properly utilized for Rancheria operations. The weaknesses in the system are as follows: 1. A system has not been completely developed and implemented to allow for centralized grant management, ongoing monitoring of program budgets or other tribal activities. 2. Accurate financial reporting is not being completed for the Tribal Council at regular Council meetings. Context The Rancheria operates with financial and internal control systems that are not adequately designed, maintained and monitored. Effect The Rancheria is at risk for misappropriation of assets, mismanagement of tribal resources, and material misstatement of financial statements. Cause A historic dominance of management and governance by the Rancheria’s prior CFO resulted in a decline in effective governance by the Tribal Council, as well as lack of training and resources available to management of the Rancheria. Recommendation The Rancheria leadership should continue the process of overhauling the financial accounting and reporting system. A new system will require full implementation of the accounting system to allow for complete grant management, as well as timely financial reporting. Views of Responsible Officials and Planned Corrective Action Governance and management concur with this finding, and are implementing corrective measures.