PICAYUNE RANCHERIA OF THE CHUKCHANSI INDIANS

Criteria or Specific Requirement ? To ensure that expenditures charged to the program are allowed by the grant agreement and to comply with 2 CFR Part 200, subpart E, the Tribe must have established internal controls over compliance requirements to ensure only costs that are considered to be allowable are charged to a federal program. For a cost to be considered allowable to a federal program, among other allowability factors in accordance with 2 CFR 200.403, the costs must be necessary and reasonable for the performance of the federal award. Condition and Context ? We selected 32 transactions from the full population of non-payroll Indian Housing Block Grant (IHBG) expenditures to test that the Tribe had controls in place over the disbursements and the costs were allowable per the grant. Of the 32 items selected for testing we found the following: ? 28 selections ? no exceptions noted. ? 1 selection - the Tribe was not able to provide support that the payment was approved. The Tribe was able to provide support to show the cost was allowable to the program. ? 1 selection - there was a lack of segregation of duties between the approver of the payment and the payee. The cost was otherwise adequately supported and the Tribe provided support to show that the cost was allowable to the program. ? 2 selections - no support was provided. Questioned Costs ? Known questioned costs are $818 related to the two selections that management was unable to provide support for as noted above. Likely questioned costs are approximately $31,770 and are calculated by multiplying the error rate to the total population of non-payroll expenditures charged to the grant. Cause ? The Tribe does have policies and procedures in place over disbursements, however, there has been significant turnover at the Tribe since 2020. As a result, the Tribe was unable locate and provide requested support. The turnover also resulted in a breakdown in the controls for approval of purchases where the cost was either not approved, not properly approved as demonstrated by a lack of segregation of duties, or documentation was not retained. Effect ? There is an increased risk of payments being made for unallowable charges to each program. Furthermore, lack of sufficient internal controls over costs charged to major programs, including document retention, leads to an increased risk of fraud and abuse. Repeat Finding ? This was not previously reported as a finding. Recommendation ? We recommend the Tribe document and maintain records to show that costs charged to the grant are properly reviewed and approved prior to payment. There should be segregation of duties between who authorization, custody, recordkeeping, and reconciliation, so that no one person can perform multiples of these processes for the same transaction. Documentation should support the amount charged to the grant as well as show segregation of duties between the authorization and custody of funds. Management?s Response ? Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.

Criteria or Specific Requirement ? The Department of the Treasury provided guidance in their Frequently Asked Questions (FAQ) updated as of October 19, 2021, detailing that CRF payments are subject to the following requirements in the Uniform Guidance (2 C.F.R. Part 200): 2 C.F.R. ? 200.303 regarding internal controls, 2 C.F.R. ?? 200.330 through 200.332 regarding subrecipient monitoring and management, and subpart F regarding audit requirements. Condition and Context ? The Tribe established a program to provide emergency relief payment to members. Each round of payments was approved by the Tribal Council as documented in their meeting minutes. The first payment, authorized by Tribal Council on May 1st 2020, was provided to all tribal citizens as a result of the temporary closure of the Tribe?s casino and resulting reductions in per capita payments to Tribal members. Subsequent payments, authorized by Tribal Council on July 2, 2020, and November 12, 2020, were subject to additional FAQ guidance issued by the Department of the Treasury, and required each tribal member to submit an application to document that there was an individual need and they had suffered a financial hardship as a result of the COVID-19 pandemic. We selected 60 disbursements from the full population of 4,902 payments to test that the Tribe had controls in place over emergency relief payments. ? May 1st Assistance Payments ? Our sample included 21 payments to members from the initial relief program. Since no application was required to receive this payment, eligibility was determined and verified by comparing to the Tribe?s membership listing prior to disbursement. Although all payments tested were determined to be made to eligible individual tribal members, the Tribe was unable to provide support to document evidence that a review of the list had been completed prior to disbursement. ? July 2nd and November 12th Assistance Payments ? Our sample included 39 payments to members from these additional relief programs. Of the 39 tested we noted 1 payment where an application was provided by the Tribal member to support eligibility in the program, but there was no documentation of approval or evidence of review of the application. Questioned Costs ? As an internal control over compliance finding, there are no questioned costs. Cause ? The Tribe did not adequately document controls over the May 1st assistance payments. For the other assistance payments, the Tribe established controls, however, they did not effectively monitor those controls to ensure a review of the application was documented prior to disbursing funds. Effect ? There is an increased risk of payments being made for unallowable charges to each program. Furthermore, lack of sufficient internal controls over costs charged to major programs, leads to an increased risk of fraud and abuse. Repeat Finding ? This was not previously reported as a finding. Recommendation ? We recommend the Tribe document and maintain records to show that costs charged to the grant are properly reviewed and approved prior to payment. Documentation should support the amount charged to the grant as well as show segregation of duties between the authorization and custody of funds. Management?s Response ? Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.

Criteria or Specific Requirement ? As permitted under NAHASDA (25 USC 4133(d)), the Rancheria has adopted written policies governing the eligibility, admission, and occupancy of families for housing assisted with grant amounts. The written policies require that tenant files should be complete with proof of tribal enrollment or other documentation if exception is made, income verification, verified social security number, annual recertification, and annual inspections. Condition and Context ? We selected 9 tenant files from the population of 44 participants. The following exceptions were noted: ? 1 recertification was not completed due to staffing issues and COVID-19 constraints. ? 1 recertification was not provided, however, income verification was completed and provided. ? 4 recertification applications were provided, however there was no documentation that the applications were reviewed by housing department personnel. There was also no documentation of income verification provided. Questioned Costs ? N/A. Cause ? Due to COVID-19, resources to perform and approve recertifications were limited. Program managers are either not following the Rancheria?s written policies and procedures or not retaining documentation to show that the policies and procedures are being followed. Effect ? By not adhering to the Rancheria?s policies, some tenants may be receiving housing who would otherwise be ineligible. Repeat Finding ? This is a repeat finding from the prior year. See prior year finding 2019-01. Recommendation ? We recommend that the Tribe adheres to program policies and procedures as documented and the files are reviewed annually for completeness. Management?s Response ? Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.

Criteria or Specific Requirement ? Federal regulations and grant and contract conditions require that financial and programmatic reports are filed in a timely manner and should be supported by accurate supporting documentation, such as general ledger or other reports. The Department of the Treasury has established that each prime recipient of the Coronavirus Relief Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020 and ending on December 30, 2020) to Treasury?s Office of Inspector General. Each prime recipient shall report this quarterly information mentioned above into the GrantSolutions portal. The Prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Condition and Context ? IHBG ? The Tribe was required to submit four SF-425 reports for their IHBG and one SF-425 report for their IHBG CARES supplement Grant. They were also required to submit one Annual Performance Report (APR) for each grant. We selected 4 SF-425 reports for testing and both APRs. The Tribe was able to provide three SF-425s and the APR for the IHBG that we requested; however, they were unable to provide support to show segregation of duties in preparing and approving the reports or support for the amounts included in the reports. We were unable to reconcile amounts reported to the general ledger. For the IHBG CARES Supplement, the Tribe was not able to provide documentation for the one SF-425 report selected or for the APR. CRF ? The Tribe was required to submit 3 quarterly Financial Progress reports for the period beginning March 1, 2020 and ending December 30, 2020. The Tribe was unable to provide documentation to show they submitted their report as of June 30, 2020. For the reports for the periods ended September 30, 2020, and December 30, 2020, they were unable to provide support to show segregation of duties in preparing and approving the reports or support for the amounts included in the reports. Questioned Costs ? There were no questioned costs associated with this finding. Cause ? Policies and procedures have not been implemented properly to ensure compliance with federal reporting requirements. There was significant turnover at the Tribe and the Tribe did not have an effective control system in place to ensure that documentation was retained to support amounts originally reported. Effect ? The Tribe may be out of compliance with federal reporting requirements and amounts reported to federal agencies may be inaccurate. Repeat Finding ? This was not previously reported as a finding. Recommendation ? The Tribe should improve the controls over the reporting function, which includes the documentation, review, and approval of all required reports, and effective controls over the preparation of reports, as well as a monitoring function to ensure that controls are in place and operating effectively for report submission. Management?s Response ? Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.