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Clean audits a key tool to increasing tribal funding

Jan 25, 2017 By Daniel Bendtsen, Staff Writer

For the first time in some years, the Northern Arapaho received a "clean" audit in 2016, with no findings of concern.

As the Northern Arapaho Business Council looks to increase the federal funds it receives each year, it will need to ensure its records are clean.

Former council members have said poor audits in recent years have been an obstacle to the tribe, which receives far less in federal grants than most tribes in the United States.

The tribe received two disclaimed audits -- one in 2009 and one in 2010. Since then, there have been numerous findings in each year's audit, and Donham & Associates has noted that the tribe does not qualify as a "low-risk auditee."

In 2016, there was a breakthrough: The tribe received a clean audit with no findings.

Chief financial officer Tracey Beckler's eye for revenue generation is being debated, but former council member Ryan Spoonhunter credited her with cleaning up current financial records.

Spoonhunter and other council members said they hope that the work that's been done in the past four years will free the tribe to pursue more funding in the future.

Lingering issues

Others are concerned that lingering accounting issues could cause trouble for the tribe if they aren't solved.

For example, after writing off $200,000 in water bills in 2015, Beckler listed $441,474 as accounts receivable, meaning she still expects to collect those water bills.

Before becoming the tribe's CFO, Beckler had previously been the accountant for utilities when programmatic funds were more decentralized. In that position, she was encouraged by other accountants nearly a decade ago to write off a larger portion of those bills.

Despite the fact that she listed nearly three years of unpaid water bills as collectable, Donham & Associates did not issue a finding.

Charles Donham said that choosing not to issue a finding for the utilities department is a normal "judgment call" made by an auditor.

"In a perfect world, it would be true" that Beckler should write off those bills, he said, but doing so would require the tribe to issue an IRS 1099 form to customers, which would require already hard-pressed tribal members to pay taxes on those bills.

"It puts everyone in an odd situation. Now they'd have to deal with the IRS," Donham said. "I haven't run into a tribe that would be willing to do that."

During the period of the audit, the financial reports also indicate the tribe had $1.7 million in federal grant money it needed to spend. However, the report did not show that the available cash had been allocated to individual programs to pay bills. Instead, the money was held in the general fund.

Holding funds

An accountant who specializes in cleaning up fiscal mismanagement in Indian Country said that situation has sometimes led federal agencies to order repayment from tribes.

Donham disagreed that holding self-determination funds being held in the general fund is poor practice but acknowledged that "there's disagreement on that depending on who you ask."

Given the number of individual programs that the tribe operates, having separate bank accounts for each one would be "pointless," he said.

"The accounting system has enough cash to track that," he said. "If they didn't have enough cash, then it would be a finding."

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