Cedarville RancheriaTribal Government

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.

Federal Awards Finding 2023-004: Noncompliance with Federal Award Program Requirements Criteria or Specific Requirement The Uniform Guidance states that the auditee is responsible for “maintaining internal control over Federal programs that provides reasonable assurance that the auditee is managing Federal awards in compliance with laws, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its Federal programs.” Specifically, this Finding applies to the following Compliance Requirements outlined in the 2023 Compliance Supplement: 1. Activities Allowed or Unallowed & Allowable Costs/Cost Principles 2. Procurement, Suspension & Debarment Finding/Condition We noted the following deficiencies: 1. The Rancheria was unable to provide supporting documentation for the allocation of expenditures reported for federal award programs. 2. The Rancheria was unable to provide actual time records for employees, supporting payroll expenditures claimed as expenditures for federal award programs. 3. The Rancheria was unable to provide documentation to show that it complied with the procurement standards required in 2 CFR 200.318. Additionally, the Rancheria does not have a procurement policy which complies with those standards. Context 1. 4 of 31 transactions tested 2. 2 of 31 transactions tested 3. 1 of 31 transactions tested Effect The Rancheria has possibly misstated federal expenditures between federal programs. Cause The Rancheria has not implemented a grant management system or procurement policy which is in compliances with 2 CFR 200.318. Recommendation The Rancheria should implement a grant management system, and also develop a process for capturing the correct allocation of expenditures for programs. Additionally the Rancheria should adopt and implement a new procurement policy.

CEDARVILLE RANCHERIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS DECEMBER 31, 2021 Federal Awards Finding 2021-001: 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 is not set up to allow for centralized grant management. 2. A system is not setup for approving and ongoing monitoring of program budgets or other tribal activities. 3. Regular and accurate financial reporting is not being completed for the Tribal Council at regular Council meetings. 4. Financial policies and procedures are outdated, and to some extent, not implemented for the Rancheria. 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 begin 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.

CEDARVILLE RANCHERIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS DECEMBER 31, 2021 Federal Awards Finding 2021-002: Prior Year Auditor was not Independent Criteria or Specific Requirement Generally Accepted Auditing Standards, Government Auditing Standards, and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Finding/Condition For the year ending December 31, 2020, the Independent Auditor?s Report and Financial Statements with Supplemental information, as well as the Single Audit, were performed by Pete Magee, CPA who was not independent with respect to Cedarville Rancheria. Mr. Magee also functioned as the Rancheria?s CFO for that year. Context December 31, 2020. Effect The Rancheria did not receive an independent Single Audit, or financial statement audit. Cause The Tribal Council and management were not aware that the prior CFO?s position would compromise his independence, and ability to perform the audit. Recommendation The Rancheria leadership and management should receive regular training on federal reporting compliance requirements and receive training on effective and appropriate tribal governance and management. Views of Responsible Officials and Planned Corrective Action Governance and management concur with this finding, and have already attended trainings and conferences, and plan to continue to do so.

CEDARVILLE RANCHERIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS DECEMBER 31, 2021 Federal Awards Finding 2021-006: Financial Reporting for Federal Award Programs Criteria or Specific Requirement The Uniform Guidance states that the auditee is responsible for ?maintaining internal control over Federal programs that provides reasonable assurance that the auditee is managing Federal awards in compliance with laws, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its Federal programs.? Finding/Condition We noted the following deficiencies: 1. The Rancheria was late in filing the financial reporting required by the Federal government. 2. The Rancheria was unable to provide supporting documentation for expenditures reported for federal award programs, and how they were allocated between programs. 3. The Rancheria was unable to provide actual time records for employees, supporting payroll expenditures claimed as expenditures for federal award programs. Context All Federal financial reporting of expenditures, of an unknown amount. Effect The Rancheria misstated federal expenditures. Cause The Rancheria has not implemented a grant management system. Recommendation The Rancheria should implement a grant management system, and also develop a process for capturing the correct allocation of expenditures for programs. Views of Responsible Officials and Planned Corrective Action Management agrees with the recommendation and has begun work on a new process.