Auditors find mixed results at 6 chapters
The Office of the Auditor General in recent weeks released the results of seven audits with Kaibeto Chapter officials and staff, as well as those for the Dilkon Chapter, with both Arizona chapters getting good marks for the way they were conducting chapter finances.
However, four other chapters — Standing Rock, New Mexico; Round Rock, Arizona; Nahata Dziil, Arizona and Sanostee, New Mexico — were found to still be experiencing problems of one sort or another that need to be corrected.
This is exactly the third audit done on Kaibeto finances in the past three years. The first one, done in 2017, found three major problems. Two years later, the auditors checked in and found that only one of these concerns was corrected.
The Budget and Finance Committee gave the chapter three months to implement the recommendations on the other two concerns and the third audit found the chapter was able to make the necessary changes.
The auditors discovered that the chapter’s community services coordinator position was vacant, thus leaving the chapter’s accounts management specialist responsible for the chapter’s finances.
The earlier audits found weak controls in the chapter’s cash disbursal system and a lack of consistent monitoring of financial matters by the chapter’s secretary-treasurer. Both problems have now been corrected, according to the audit report.
The Sanostee Chapter was facing a similar situation with the first audit finding numerous problems. A second audit was done in July of 2019, which found 10 of the 18 areas of concern had not been addressed.
The Budget and Finance Committee gave the chapter four months to implement the necessary changes but the audit found two of the concerns still needed to be addressed.
Most of the problems that were resolved after the second audit dealt with housing problems with auditors discovering that $112,000 of funds given to chapter members for housing renovations may have been used for other purposes.
Auditors also discovered that housing funds were given to ineligible recipients and in four cases, the recipients received more than was allowed.
The latest audit found chapter officials had taken steps to make sure only eligible recipients received housing funds and had begun checking to make sure housing funds were used for the purposes intended.
The two areas that still need to be addressed revolve around the posting of the chapter’s fixed assets and the posting of revenue and expenditures.
Nahata Dziil Commission(sub)
This audit was done in association with Newberry and Associates, a public accounting firm in Gallup.
The audit, which covered the commission’s activities for the last six months of 2018 and the first six months of 2019, found nine areas that needed to be addressed by the commission. Most of the concerns dealt with money paid to employees.
The auditors discovered that some employees were being paid more than the allotted amount allowed. One employee was being paid $1 per hour more than their salary called for while another was paid $4 more per hour during one pay period.
On two occasions, according to the auditors, the commission manager was paid overtime, which is improper because under tribal policy the manager is not eligible for overtime.
The auditors found that advances were given to employees and commission members for non-emergencies. Instead, the money went to pay for personal travel and vehicle repairs.
The commission issued a response to address these concerns, saying that a work session was held in mid-January to correct these problems in the future.
This audit was done in association with Heinfield Meech, an outside firm. The auditors found several problems in how the chapter documented cash expenditures for things like travel and payroll.
There were a number of problems with time sheets, according to the audit, including the fact that many were not signed by the employee. Employees were not paid time-and-a-half nor given compensatory time when they filed for overtime pay.
Travel authorizations were not tracked, resulting in some employees being paid in excess of what should have been going to them. In some cases, employees were paid more for lodging and meals than was allowed under chapter policy.
Some cash disbursements were not supported by documentation, the audit stated. Auditors also discovered that cash receipts were not deposited in a timely manner or, in some cases, did not agree with supporting documentation.
The audit also revealed a couple of conflicts of interest including one case of an employee with authority over expenditure being related to a vendor. Neither of these was reported as required by tribal policy.
Johnny Johnson, the chapter’s president, responded to the audit by saying corrective actions are now being undertaken.
It took the chapter more than three years to correct some 25 concerns found by tribal auditors back in 2016 but an audit done in 2019 found the chapter’s finances to be in perfect order.
The earlier audit found the chapter management making purchases without the proper documents or not seeking competitive bids. Cash was not being deposited in a timely manner.
The auditors also saw problems in how the chapter made payments from various accounts, such as the one to help veterans, without getting the supporting documentation.
The auditors reviewed more than $300,000 of expenditures made in the last six months of 2018 and the first six months of 2019, finding seven areas of concern.
There were a number of problems found in the way the chapter rented out its heavy equipment, including not requiring those who rented it to have insurance in case they broke it or even making sure they knew how to operate the equipment properly.
As a result, the chapter had to use more than $4,000 of its own funds when equipment was turned in inoperable.
Professional services totaling more than $60,000 were obtained without seeking competive bids. As a result, the chapter may have paid more for these services than they had to.
Sensitive files, such as personnel records, were not secured properly.
For example, the auditors found that the secretary’s computer was located in the meeting room and was open allowing anyone in the room to have access to all chapter records.
Some travel applications were not approved beforehand and did not have supporting documentation to justify payment.
Gayla James, the community services manager for the chapter, said chapter officials are in the process of taking corrective action to resolve the problems.