OKMULGEE, Oklahoma – Mvskoke Media previously reported that required internal audits for the Muscogee (Creek) Nation Fiscal Years 2021, 2022, and 2023 filings had not been completed on Aug. 31.
On Sept. 6 Mvskoke Media received a response to an earlier request for the audits from MCN Controller Patricia Kilian. According to Kilian’s email,
“The following information is being provided in response to your email inquiry, dated 8/16/23, regarding the Nation’s Audits. In regard to the status of the Audits, the FY 2020 audit was completed in August of 2022, the FY 2021 audit was completed on August 29, 2023, and the FY 2022 audit is currently being processed and is expected to be completed by January of 2023. In regard to your request for copies of Audits, this office must process such requests for information in compliance with MCN Title 37, Chapter 9, of the Freedom Of Information Act (“FOIA”). For your convenience, I have attached a copy of the FOIA form that is available on the MCN Attorney General’s website.”
On the same day, Mvskoke Media filed a Freedom of Information Act request with the Muscogee Creek Nation Attorney General’s Office for copies of the FY 2020 and FY 2021 audits. According to MCN Code Title 37, the MCN Attorney General’s Office now has 20 business days to respond to the request.
Also on Sept. 6, Mvskoke Media received an email from a concerned citizen that contained a copy of the FY 2021 audit sent to this citizen by an MCN employee. Mvskoke Media contacted the employee and was able to verify that the document was authentic. The MCN employee wished to remain anonymous out of fear of retaliation.
The FY 2021 audit covers a time span from Oct. 1, 2020 to Sept. 30, 2021 and contains a compliance report that details the tribe’s internal controls over financial reporting and compliance for each major federal program.
According to the audit,
“The Nation’s controls were not operating effectively over financial reporting. During the audit,
there were significant adjustments provided subsequent to the original trial balance, which materially affected year-end balances, primarily impacting federal grant revenue recognition, as well as allocation of the internal service funds to governmental activities and business-type activities. This also resulted in untimely financial reporting.
Recommendation: We recommend the Nation refine controls in place around the year-end financial statement close process to ensure the accounting and financial reporting are accurate, timely and in accordance with applicable standards.
View of responsible officials: Management agrees with this finding.
Corrective Action Taken: Due to delays in issuing the Nation’s 2020 audited financial statements, the Nation did not begin preparing for the current 2021 financial statements until late 2022. However, the Nation has made changes in key positions and employed the use of outside consultants to assist the Nation with meeting its reporting goals in subsequent periods.”
The audit also details noncompliance in MCN Departments handling U.S. Department of Transportation, U.S. Department of Interior Tribal Self-Governance, and U.S. Department of Health and Human Services funding.
The audit states,
“The Nation’s controls were not operating effectively to support the Nation and had verified suspension and debarment as no documentation is maintained that can provide evidence the Nation had verified any entity receiving more than $25,000 in federal grant funds was not suspended or debarred prior to providing them with federal funds.”
The required suspension and debarment paperwork was also missing in the Covid-19-Emergency Rental Assistance Program. A total of $4.1 million of this program’s federal money was also misclassified as Coronavirus State and Local Fiscal Recovery Funds.
In addition, the audit also details that during this period the nation did not conduct the required physical inventory of equipment within the two-year window. This made the Nation non-compliant with federal grant requirements. A total of $158,000 of U.S. Department of Transportation expenditures and $808,000 of U.S. Department of Interior Tribal Self-Governance expenditures that exceeded the micro-purchase threshold did not have the required price or rate quotation documentation.
According to the audit,
“The Single Audit package was not submitted to the Federal Clearinghouse within the required time period.
Criteria: Uniform Guidance 2 CF 200.512(a) requires that organization’s audit must be completed and the data collection form and reporting package should be submitted within the earlier of 30 days after receipt of the auditor’s report or nine months after the end of the audit period.
Condition: The Single Audit package for the Nation’s year ended September 30, 2020 should have been submitted to the Federal Audit Clearinghouse by December 31, 2021, factoring in the 6-month COVID-19 related extensions, approved in OMB memo M-20-26 dated June 18, 2020.
Cause: The audit was not completed until August 2022 due to resource constraints at the Nation.
Effect or potential effect: Potential suspension of funding provided by federal agencies”
The audit lists several more non-compliance issues. Mvskoke Media has listed the most severe here, for the sake of brevity.
Mvskoke Media will have ongoing coverage of this developing story.