Chapters remain under sanction

Copyright © 2008
Gallup Independent
By Kathy Helms
Diné Bureau

WINDOW ROCK — Red Valley Chapter will continue to remain under sanction and have 10 percent of its General Fund appropriations withheld as a result of not completing its corrective action plan. The chapter was sanctioned in January 2006.

The Office of the Auditor General reported last week to the Budget and Finance Committee that it conducted a supplemental follow-up review in June at the chapter’s request.

Auditors found that four of four corrective measures in Finding I, pertaining to the chapter’s accounting and internal control systems, had not been implemented. However, the chapter has fully implemented measures to resolve Finding II, relating to the effective administration of construction projects.

But Red Valley is not the only chapter under sanction. Sawmill was sanctioned in 2003, Kayenta in 2004, and Bodaway-Gap in 2007. All are working on their corrective action plans and were not ready for follow-up reviews, auditors said. Sanctions were lifted Aug. 4 against Nageezi Chapter and on June 30 against Churchrock Chapter.

In addition, the Navajo-Hopi Land Commission Office and Design and Engineering Services had implemented their corrective action plans and had their sanctions lifted Aug. 4. Navajo Election Administration sanctions were lifted in May and a follow-up review is ongoing for Insurance Services Department.

Sanctions implemented in March against Navajo Area Agency on Aging, and in 2003 against the Capital Improvement Office, remain in place.

Regarding Red Valley, auditors said that although chapter staff maintain fund ledgers for all chapter funds, the ledgers do not reconcile to the bank balances. As of June, there was a variance of approximately $10,000 that the chapter was unable to explain.

Auditors said all indications are that the variance has been in place prior to the hiring of current staff. A new community service coordinator and an office specialist were hired in November and June, respectively. They inherited accounting records with various discrepancies and many of the supporting records were missing, auditors said.

“The previous chapter administration and officials, as well as the Local Governance Support Center, failed to address this deficiency in a timely manner. Consequently, the current staff and officials are unable to provide reasonable assurance that the fund ledgers are accurate and can be relied upon to effectively monitor the chapter finances,” auditors said.

The current staff indicated that to properly reconcile its accounting books, it needed the assistance of the LGSC senior accountant, and despite repeated requests, LGSC assistance has not been provided in a consistent and effective manner.

In an April 25 letter, LGSC committed to have the senior accountant or the community involvement specialist assist the chapter two days per week from April through June in an effort to remove the chapter from sanctioned status.

The chapter indicated LGSC did not keep its commitment and auditors found that records provided by LGSC confirmed the chapter’s claim. The last technical assistance provided was in December 2007, records show. Auditors said the lack of proper training and technical assistance by LGSC was a contributing factor in the chapter’s inability to implement its CAP.

Phil Harrison, a Navajo Nation Council delegate representing Red Valley, told Budget and Finance Committee that he was a chapter president during some of the period covered by the audit.

“There are some issues that were there that we inherited, and that has been worked on all these years. The biggest two factors that we’ve had since then was that we had five chapter presidents in the last eight years. We had personnel clashes within the chapter, and all the energy was spent answering to those clashes.

“The other thing is there is a chronology of work that was done with LGSC. We have met with them in the past,” Harrison said, but added that it was not consistent. “LGSC staff were not being kept on permanent. They were more or less temporary. They would help us and then somebody else would come in,” he said. “But I have every confidence now in the staff to fix this, the corrective action plan.”