Audit: Tsé Lichii lost track of vehicle, gave housing money to relatives
Tsé Lichii Chapter failed to inventory a $67,000 SUV, and gave housing discretionary funds to the chapter president’s spouse (who is also related to the community services coordinator) and other potential relatives of chapter personnel without disclosing potential conflicts of interest, the Navajo Nation Office of the Auditor General found in its recently released internal audit of the chapter.
Among other findings for the year ending June 30, 2020, the chapter did not properly document either receipts or disbursements, overpaid employees and officials for travel, kept sloppy payroll records and failed to investigate conflicts of interest.
The chapter also failed to give monthly financial reports at chapter meetings, the auditors charged.
In its response to the findings, Tsé Lichii accepted the findings and said it will proceed with the recommended corrective action plan; in fact it had already implemented some of the recommendations.
Most of the abuses were relatively minor in terms of value; other than the SUV, the questionable expenditures totaled a little over $20,000.
But with a population of only 1,824 at the last Census, $20,000 could go a long way in Tsé Lichii, located south of Gallup. Including the SUV, the amount in question represents about 19% of the chapter’s 2020 budget of $454,000.
Perhaps the most egregious finding concerned the four-wheel-drive vehicle, which the chapter purchased in February of 2020. The mileage at time of purchase was 25.
The vehicle was never placed on the chapter’s physical equipment inventory, and “no documentation is available to document the vehicle was registered, is insured, has an applicable policy and procedure resolution, or that a monthly mileage log is in place,” according to the audit.
“Approximately 3,113 miles had been added to the vehicle based on a screenshot of the odometer provided with no documentation available to support these miles were for chapter business,” the audit said.
A $2,500 computer also was never inventoried, and “we were made aware of the possible existence of a 1977 John Deere motor grader” that also never appeared in any documentation, the audit states.
Small housing discretionary disbursements of $500 were made to an employee serving as the primary signatory of the check as well as the chapter president’s spouse and another individual potentially related to a chapter official or employee.
While that in itself is not illegal — after all, most people in small chapters are related to one or more chapter officials — the chapter should have issued a memorandum justifying the grants and disclosing the potential conflicts of interest, the audit states.
Two housing disbursements were not backed up by any paperwork at all, and one check stub was marked “void” but there was no evidence the check was voided.
Monthly cash receipts were not reported to chapter members or were reported late, according to the audit.
Some disbursements were made before getting chapter approval; some exceeded the approved amount; and some were not supported by invoices or did not agree with the vendor’s invoice.
Two of the nine travel reimbursements were made with no expense report, mileage log or trip report.
Payroll was another mess. Five of the 25 payroll transactions reviewed were made with no time card or the wrong time card. One transaction was unsigned.
The auditors recommended the chapter tighten up on its paperwork and start a conflict of interest file, requiring chapter officials and employees to disclose any relationships that may cause a conflict of interest, and removing themselves from any purchase or disbursement involving a related party unless they can provide written justification for being involved.