Controller reasserts fiscal authority, blocks budget transfers

WINDOW ROCK

Internal memorandums obtained by the Navajo Times reveal that Controller Sean McCabe moved swiftly to restore fiscal control and reinforce spending compliance within the Navajo Nation government just before his firing.

The documents, dated Oct. 23, detail enforcement measures, a budget transfer ruling against the Office of the President and Vice President and the reversal of actions tied to a court dispute over control of the Office of the Controller.

The memos were issued the same day McCabe formally regained operational authority through a court order, following what he described as an “unauthorized and irregular intervention” into his office’s management.

The Navajo Times obtained the documents through an investigation as part of its continuing coverage of McCabe’s dismissal and the growing political conflict over the Nation’s financial administration.

In one memorandum titled “Notice of the Use of Business Unit Budgets,” McCabe warned all Navajo Nation divisions and departments that his office would “no longer honor expenditures made from other business units’ budgeted funds.” The order prohibits cross-division spending for travel, promotional materials, advertising or any other expense not tied to the approved budget of the responsible division.

“This restriction applies to all divisions and departments without exception,” McCabe wrote. “This notice is consistent with established budget regulations and fiscal control standards, and it reinforces the Navajo Nation’s commitment to accountability, transparency, and responsible stewardship of financial resources.”

He said the directive was prompted by increased audit findings and risks uncovered during the 2024 financial audit. The memo further warned that any attempts to bypass the restriction through purchase cards, or P-cards, would result in immediate suspension of privileges pending review. Exceptions may only be granted for legitimate cost-sharing arrangements preapproved in writing by the controller’s office, as stated in the memo.

A second memo, “Notice of Non-Compliance,” found that a recent budget transfer within Business Unit 103001 – associated with the Office of the President and Vice President – violated financial policy and governing law. McCabe determined that $229,451 in contractual services funds had been moved into travel, supplies, utilities and special transactions without Navajo Nation Council approval, which he ruled noncompliant under Title 12 of the Navajo Nation Code.

Citing the Nation’s accounting policy, McCabe wrote that committed fund balances “can only be used for specific purposes, pursuant to constraints imposed by formal action of the government’s highest level of decision-making authority – the Navajo Nation Council.”

To correct the violation, he directed the Office of Management and Budget to reallocate $250,000 from BU 103001 into a new N-account classified as a committed non-capital project for the Missing and Murdered Indigenous Relatives initiative.

“All related encumbrances and disbursements will not be honored,” he wrote, instructing that the reclassification be confirmed in writing to both the Office of the Controller and the Budget and Finance Committee.

The third document, titled “Notice Regarding WR-CV-113-25,” referred to a Window Rock District Court order that restored McCabe’s authority as controller after former Office of Management and Budget employee Alva R. Tom, whom Nygren had attempted to appoint as interim and later acting controller, and other parties tried to intervene. McCabe declared all actions taken under that intervention “null and void,” citing the damage caused to the Nation’s financial stability and reputation.

“These actions, which constituted an unprecedented and improper disruption of the Office of the Controller, have unfortunately resulted in significant disruption to operations and undue stress on employees,” McCabe wrote.

He said the episode led to “heightened concerns from bondholders, external auditors, and federal oversight agencies.” He contributed to “a measurable loss of public confidence in the Nation’s financial management functions.”

The memo ordered all staff to disregard any instructions or authorizations issued under the unauthorized intervention. It confirmed that all operational authority, fiscal controls and reporting structures were restored as directed by the court. McCabe added that a comprehensive review was underway to document the impact and correct all affected records.

“These actions are taken to protect the integrity of the Nation’s financial operations, restore proper internal control, and reaffirm the Navajo Nation’s commitment to fiscal responsibility, transparency, and restoration of public trust,” he wrote.

The three memorandums highlight the mounting tension surrounding the Nation’s financial governance in the weeks before McCabe’s removal.

The Navajo Times continues to investigate the circumstances of McCabe’s firing and the ongoing implications for the Nation’s financial transparency and accountability.

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