Auditor's Report states there may be widespread fraud at LCO

Our tribal council hired an audit firm on June 12, 2013, to review the actions of Norma Ross as the tribe's comptroller over the years. Their job was to see if Norma's actions had done any detrimental financial damage to the tribe or to see if she had performed any actions for personal gain.

Forensic Solutions LLC found upon review of available documents and interviews that Norma had damaged the tribe but had found no evidence that she had gained personally. The auditors did say that the tribe's finances had greatly improved because of the changes made when Norma as removed from her position.

The audit report did show possible fraud widespread throughout the tribe from management right down to employees, but, from what I understand, the council only hired the auditors at a certain amount to do a certain job and it would have cost a lot more for them to actually investigate where they found that possible fraud and to prove it. The auditors had no doubt that fraud was taking place but they wanted more money to investigate further. The tribe had only hired them to do an examination of our finances to a certain extent.

What they did recommend was that the tribal comptroller at the time, Norma, not be put back into control of any tribal money ever again and then what happened? She was elected to the tribal council and chosen by the new leadership to be the secretary-treasurer in charge of overseeing the tribe's money...in direct contrast to expert recommendations. Granted, the final recommendations of the audit report weren’t submitted to the council until after she was chosen for the position, but, the council was well aware of the investigation taking place in regards to her actions as the tribal comptroller.

The audit report is very long and extensive, but a must read for all of our tribal members. This blog will be long because I’m going to give you an overview of the whole report, and reprint some parts that I feel are the most important. If you’d like the full report emailed to you in PDF format, please contact me through my website votejoemorey.wix.com/votejoe or Facebook message.

It’s very important that as many of you make yourselves familiar with this document as possible because it paints a clear picture of just how mismanaged our tribe really is. If the fraudulent behavior wasn’t for personal gain, then it was simply such bad management that we can’t afford not to make changes this year…before we don’t have a tribe left!

During the years in question, the same group of leaders we currently have were on the council at this time. Those included Little Guy, Mic, and Rusty, as well as our former chairman Louis Taylor and secretary treasurer, Brian Bisonette. Norma was the Executive Director of the tribe and in charge of tribal finances. This was throughout the 2000’s. I’d like to point out that in my personal opinion, it was this whole group that participated in this mismanagement, not just Norma, though she was at the helm of the tribal financials, so she gets the blame. If there was any personal gain, it wasn’t Norma alone, but with other members of the tribal council. That’s just my opinion anyways, after reading through this report. The sheer scope and size of this fraudulent behavior shows that she wasn’t acting alone. And keep in mind how quickly the new leadership of Mic and Rusty, along with Little Guy, were to put Norma in as secretary-treasurer of the tribe in charge of the tribe’s finances even though she was under scrutiny of a tribal audit at the time. I’m not saying this is true, but one could be lead to believe they were covering their tracks.

Just a few of the things that took place during this time included transferring of federal grant monies between different bank accounts without tribal council signature approvals; sixty-two bank accounts opened when not nearly that many were needed; excessive NSF bank charges; grant dollars mishandled jeopardizing future grants; use of employee health insurance premiums to pay for non-related expenses; thousands of vendor addresses matching employee and other vendor addresses; gift cards purchased and charged to federal grant funds; several outstanding loans that had no originating documentation; and hundreds of thousands of gas vouchers given away.

It’s all these above things that will be examined in this blog, as well as the full reprint of an interview conducted by the auditors with Norma Ross. We’ll review their findings and recommendations as well. Like I said before, this report is a must read, and it shows just how bad things got over the years, and is still getting under the same old leadership style we have today. Things must change!

There's been many times through the paper that I've challenged our leadership when I disagreed with something they've done. Whenever I did speak up, it was for the people of the tribe because they had no voice. Have you ever noticed that during the years when I wasn't publishing a newspaper, it seems the most widespread corruption (or bad political and business decisions) took place? Most of these events from the audit report built up from 2003 to 2008, when I wasn’t doing the paper. It's because when there isn't a tribal newspaper or watchdog, tribal leaders are free to do anything they want without any checks and balances. The membership of the tribe isn't even aware of the mismanagement when there isn't anyone to shine a light on it.

Take for example those years I mentioned above was when the terrible bond deal was made in 2006 that has us in a bind today as the payment increases to an amount we are unable to pay, and the casino defaults. Did they think of those things back then? From what I've learned, our so-called expert council members at the time didn't even consult a bond attorney and made the decisions on their own. And now we're in trouble!

Let’s get on with the audit report and its findings. The auditors made a list of 17 findings as a result of their investigation, which clearly show the mismanagement of our tribe’s finances. Remember, after Gordon made some changes, things improved, but Gordon was only given two years as chairman and then the same group got control of our tribal administration again, with Mic as chair and Norma as secretary-treasurer, and now we are on the same path again...maybe even worse off today!

Finding #1

“A review of the LCO Tribe’s management response to the CPA financial audits for the years 2009-12 indicated a consistent failure to appropriately respond to their findings as outlined in our report titled Management’s response to audit findings 2009-12”

In a letter dated August 13, 2013 (exhibit 2) to LCO leadership, the auditor, Thomas Buckhoff, said that after reviewing the Independent Auditor’s Report and Special Revenue Fund Financial Statements (reports) for our tribe for the years ending 2009-12, management consistently failed to respond to their findings and recommendations. He went on to cite examples of this such as managements failure to provide Management’s Discussion and Analysis supplements to each of the four years as this is required by the Governmental Accounting Standards Board because it helps to place the financial statements in an appropriate operational, economic and historical text. The auditors pointed this failure out and yet management refused to provide this supplement to its financial statements.

Buckhoff wrote in the letter that there were several conditions reported in 2009 that were unresolved as well, including the tribe’s failure to record matching requirements of funds provided; indirect cost proposals weren’t submitted in time to receive new rates; five different instances in 2008 where legally-required reports were not submitted; property records are incomplete and not being updated when new purchases are made; four different instances in 2008 where required report reconciliations weren’t done; and in 2008, the tribe did not have sufficient cash in the special revenue funds to cover deferred revenue from major program grants and contracts. The insufficient grant funds continued on throughout the four year period.

For the year 2011, it was found that accounts payable balances weren’t properly maintained and that a lack of proper record keeping existed over procurement of goods and services. These same problems persisted into 2012 as well.

Finding #2

“The concerns of the Midwest Professionals CPA firm were expressed in two letters dated June 30, 2011 and July 16, 2012. No action was ever taken on the issues in those letters; however in a LCO Tribe response dated June 29, 2013 those issues and many others were addressed.” 

In the first letter of June, 2011, Midwest Professionals told our tribal council that after interviewing various employees they were concerned about widespread fraud, but they didn’t investigate them and couldn’t provide any assurance as to whether the instances of fraud listed here did actually occur. They said these were areas of potential risk, which included missing clinic money at the tribal office, petty cash money missing, employees illegally spending tribal money without having to pay it back, forged signatures to draw down federal grant money, and more.

1.       Early Headstart was not built to code and is not being licensed by the state (cannot enroll in the food program) and is using food commodities received by the Headstart program.

2.       There is concern surrounding the use of Early Headstart playground money (they do not believe that it was all used towards construction of the playground).

3.       The Headstart director does not have a degree in early childhood education as required in the Headstart policies and procedures.

4.       Blank transfer forms are pre-signed without actual authorization from the signers (i.e. digital signatures). Deposits delivered to the tribal office from the clinic have gone missing (with emphasis being on the tribal office as the perpetrator).

5.       There was an indication of forgery of approval signature on federal grant draw-downs.

6.       Individuals that were caught spending money for personal purposes and charging it to the program (I.H.S.) were not required to pay the money back.

7.       There were indications that money is being stolen from petty cash funds, and that persons with access to the accounting software are reducing amounts that they owe.

8.       The tribe is not recognizing fair labor laws for overtime.

9.       The health director assigned authorized signers that are under his control and then uses these signers to pay for personal expenditures.

10.   There has been theft by credit union employees. Staff at the Quick Stop/IGA are stealing meat and cigarettes and they will pay for their personal bills with the company checkbook.

11.   A staff member on a committee for fundraising receives donations and spends the donations on personal expenses. This same person borrows money from the petty cash fund and doesn’t pay it back, and has outstanding debt with many programs that he/she does make payments on.

12.   At Headstart Christmas bonuses were only given to upper management and not to every employee that has worked longer than 90 days as stated in the policy.

Then in July of 2012, Midwest Professionals delivered another letter to our tribal council indicating a few more areas of concern, which included;

1.       Christmas party donations received were not delivered to the Christmas party committee.

2.       Use of credit cards is not monitored close enough and several different responses indicated that the credit cards are being used for personal purchases.

3.       Multiple staff attending the same conferences/training each claim mileage for reimbursement while actually car-pooling to the event.

4.       Deposits from the Medical Records department are taken to the accounting department and have “disappeared.” Some medical records cash is not turned in on a regular basis and has been taken without proper authority by employees for personal use.

5.       Medical Records cash “borrowed” and on a couple of occasions not recovered from Tribal administration accounting office.

After reading through those letters, you really start to see the big picture of how much fraud is occurring throughout our reservation, from the top down. Is it still occurring? I don’t know but I think it’s safe to assume that it is.

The tribal council responded in June of 2013 with a five-page letter addressing these concerns, and basically, in summary, the tribe stated that they have no knowledge of fraud and that transactions are being properly recorded and that “the effects of the uncorrected financial statement misstatements are immaterial, both individually and in the aggregate, to the special revenue funds financial statements.”

The tribal council responded in their letter with statements like this; “We have no knowledge of any allegations of fraud or suspected fraud affecting the entity received in communication from employees, analysts, regulators or others.”

But, they also said, “We have taken timely and appropriate steps to remedy fraud, illegal acts, and violations of provisions of contracts or grant agreements, or abuse that you have reported to us.”

To read this letter in full, along with the entire audit report, contact me for an emailed PDF copy.

Finding #3

“The large number of bank account transfers and commingling of tribal funds, the lack of funds, and the excessive NSF bank charges placed the LCO tribe in a precarious financial position. It was also found that vendor checks occasionally were prepared but not mailed or otherwise delivered to the vendor for over a year. Some grant funds that required stricter accounting were not drawn upon but those grants that did not require the stricter accounting were drawn down and sometimes those grants were overdrawn. The collective actions placed the LCO tribe not only in a precarious financial position but placed them in danger of losing future grants if those actions had continued.”

Under statutes from Title 42 of the Code of Federal Regulations, once our tribe commingled our funds, state funds and federal funds, all the funds are treated as federal funds. So any mishandling of these funds becomes the mishandling of federal funds.

There were over three dozen bank accounts set up all over the place and money was being transferred between them, without proper authorization, creating a mess where some grants were overdrawn while others weren’t completely drawn down. What a mess. And why were so many accounts set up? While this was all happening, we had incurred $300,000 in excessive bank overdraft fees.

Finding #4

“The recent changes outlined in this report indicate a vast improvement in the LCO Tribe’s current financial position. Because of the improved financial position the BIA is considering the removal of the high-risk financial status that the LCO Tribe has been constrained by for years.”

I wonder if we actually got removed from this high-risk status, or did our conditions deteriorate again over the past couple of years.

Finding #5

“A review was conducted of the bank authorization transfer forms for a randomly selected 20-month period covering the fiscal years 2010, 2011, and 2012. The LCO Tribal policy is two original signatures are required on the form prior to initiating the bank transfers. During the 20 months, a total of 312 transfer forms were reviewed with the finding of 214 transfer forms having two original signatures while the remaining 98 financial transfer forms had at least one photocopied signature. The number of photocopied signature forms represented a 31.4% of the total forms.”

In the audit report, the auditors provided two exhibits, one is a photocopy of the photocopied signatures and the other is a summary of bank authorization transfer forms. Also, you’ll find copies of bank transfer authorization forms, NSF charges and general ledger account transfers. For an emailed PDF version of this report with these documents go to my website votejoemorey.wix.com/votejoe and visit the Contact Joe page and send me a message requesting it.

What this finding shows is that Norma had transferred federal funds between bank accounts 98 times during that 20-month period without the required two tribal council member signatures. I know Brian Bisonette defended her on some of these occasions saying that he authorized her over the phone to stamp his signature. How do we know who exactly knew what money was being transferred when, where and why? One out of every three bank transfer of funds wasn’t approved by the tribal council in the appropriate way.

Finding #6

“A review of the general ledger found a total of $491,385.46 in NSF charges for the fiscal years 2010, 2011 and 2012. The amount breakdowns per fiscal year are: 2010-$58,187.75; 2011-$115,741.09; and 2012-$317,456.62. Included in these amounts are normal bank charges but those bank charges are minimal.”

There are copies of the summaries of bank charges for these years mentioned above in the PDF copy of the audit report.

Keep in mind that over this past year our tribe was approaching a quarter of a million in overdraft fees once again. So, it didn’t take long and it seems we are on the same path.

Finding #7

“A review of the general ledger found a significant number of account transfers for the fiscal years 2011 (1032 transfers); 2010 (2228); and 2009 (1323). The sheer number of transfers and commingling of funds and accounts makes it nearly impossible to follow the trail of money and the eventual disposition of those funds.”

Exhibit 7 of the audit report is a document highlighting the transfers in the general ledger.

Finding #7 clearly questions the need for so many bank transfers and so many different open bank accounts. This is how massive amounts of fraud, if occurred, could be covered up, by creating confusion and a pretty sloppy paper trail. And then to top it off, this type of management of the tribe’s finances was under the direction of Norma Ross, who the auditors recommended never be in charge of the tribe’s finances again…was chosen to be secretary-treasurer…overseeing the tribe’s finances from a position of even more superior authority.

Finding #8

“Health Insurance Premiums have been deducted from tribal employee paychecks for a number of years to supplement the cost of health insurance premiums. A review of this account indicates numerous financial transfers from the employee health insurance account to other tribal accounts to pay expenses not related to health insurance.”

There are spreadsheets of transfers from the Health insurance account viewable in the PDF copy of the audit report. Remember, visit my website votejoemorey.wix.com/votejoe and go to the Contact Joe page to send me a message if you’d like a copy of this audit report emailed to you.

Finding #9

“A review of employee addresses to vendor addresses was conducted. This comparison was performed to ensure there were no conflicts of interest between the employees and the vendors. The data mining found the following: 18,743 of 28,528 (or 65.7%) vendors had no Taxpayer ID listed (EIN or SSN); 1,909 of 28,528 (or 6.7%) vendors had no address listed; 23,604 of 28,528 (or 82.7%) vendors had no phone number listed; 1,791 of 28,528 (or 6.3%) vendors had all three of the above irregularities; It is common and prudent business practice to require a Taxpayer ID number, an address, and a phone number before paying vendor invoices. The absence of basic vendor contact information creates a fertile breeding ground for vendor fraud schemes.

There is an urgent need to update the vendor files in order to ensure no suspicious activity between employees and vendors. The files will not be exhibited due to the sensitive nature of the information.”

Thomas Buckhoff provided a letter to the tribal council dated July 22, 2013, in regards to the data mining of vendor and employee listings. In that letter, Buckhoff said he attempted to determine if any vendors shared addresses either with other tribal vendors or with tribal employees.

“I sorted both the Vendor Listing and Employee Listing by the address data field and began an “eyeball” comparison between the two listings. Given the extremely large number of vendors (28,528), this task became tedious and would have taken hours to complete. Based on this task, I estimate there are thousands of vendors who share addresses with other tribal vendors and/or with tribal employees. This irregularity indicates a high risk of fraud.”

Finding #10

“A review of the LCO Tribe’s employee payroll information was performed in order to determine there are no unauthorized employees on the payroll. The review did not indicate any unauthorized employees. Again, the files will not be exhibited due to the sensitive nature of the information.”

Finding #11

“A large amount of gift cards were purchased on the Citi Government Credit Card and possibly charged to federal grant funds. The LCO Tribal accounting office is currently reviewing the use of the credit cards and will be establishing new guidelines for the future purchase and use of gift cards.”

Finding #12

“Each Governing Board Member is allowed to give their constituents approximately $1,800 per year in the form of gas vouchers. One council member gave away $60,000 in gas vouchers. In her interview, Norma Ross stated she charged the gas vouchers to the Medical Donations Account and the Governing Board had an “oh well” reaction when informed of the amount.”

It was Little Guy who had given out $60,000 in gas vouchers for the year 2013 and for the year 2012 he had given out over $40,000. It was after this report was produced specifying the amount that he had given out, the tribal council put a freeze on gas vouchers. Whether this has actually been stopped, I don’t know. For me, this abuse is sad because there are people who truly need the help with gas vouchers, such as medical emergencies and when families have to get up to Duluth. Those people shouldn’t be cut off from gas vouchers because of the abuse of others.

Finding #13

“Pineview Funeral Home procedures and selected files were reviewed. The two employees at the funeral home were also interviewed. Death benefits received from insurance companies and paid to Tribal Members were also selectively reviewed. There were no findings in our review.”

Finding #14

“There were several outstanding loans where the accounting office could not explain or provide any originating documentation for those loans. After an unsuccessful visit to a local financial institution it was requested a Tribal resolution be prepared to acquire that account/loan information. Those records request are currently underway.”

There is a document in the audit report showing the tribe’s outstanding loans at that time.

Finding #15

“There were five banker boxes containing files that were retrieved from Norma Ross’s officer after her dismissal. There were no significant findings in the review of those boxes.”

Finding #16

“During the interview with Norma Ross, she admitted that “she felt pressure” all the time and she would get the job done at any cost.”

After the listing of finding #17, I will conclude this week’s blog with a reprint of the Norma Ross interview in its entirety.

Finding #17

“Since Norma Ross left her position the following changes in financial position have taken place:

1.       Over 30 bank accounts had been closed.

2.       $4,000,000 in grant funds was drawn that had been dormant.

3.       A change in the casino’s operating procedures produced $900,000 in savings.

4.       Bank NSF charges have been reduced by $300,000.

5.       A pay down on current loans saved an estimated $850,000 in interest.

6.       The BIA is considering the removal of the high-risk category.

7.       The travel use of the Government Citi credit card has been strengthened.

8.       A new policy for the purchase of gift cards has been implemented.

9.       Internal controls over cash have been implemented.

10.   The profits of the enterprise businesses have increased.

11.   Cash on hand in the bank account has increased.”

Keep in mind this was the auditor’s findings two years ago. Here is what there concluding remarks were:

“Some actions taken by Norma Ross were financially detrimental to the LCO tribe. Since her departure the actions taken by the accounting office have greatly improved the financial outlook of the LCO Tribe. We found no evidence indicating that Ross exploited her position for personal gain. However, the LCO Tribal Governing Board should be cognizant of past financial malpractices in order to prevent a return to those past tribal financial transgressions.”

And what happened….

The same group in charge then is in charge now!

The remainder of the blog today is the interview that Forensic Solutions LLC conducted with Norma Ross on August 14, 2013. At this time, Norma was a tribal governing board member having been elected just two months prior. The interview is in regards to her time as Tribal Comptroller for LCO.

How long have you been employed by the LCO Tribe and in what capacities? Started in July 1980. 3 years k-12 school – took a year off back then as a contract officer. In 1995 became Tribal Comptroller and Executive Director of the Tribe. July 2, 2013 elected to Tribal Governing Board and selected as Treasurer.

What high school did you graduate from? Do you have a college degree? What college did you graduate from and what degree did you earn? Graduated from South High School in Minneapolis. Attended Macalester College, which is a liberal arts school, for one year.

Have you attended any Technical colleges? She attended St. Paul Vo Tech College in St. Paul, Minnesota where she studied accounting but didn’t earn a degree. She hasn’t taken any other accounting courses or classes. Since then she has only attended BIA workshops and seminars.

When you were initially hired as the cash manager what were your duties & responsibilities and how many people were you supervising? Involved overseeing and supervising from 9 to 12 individuals in the department. She performed audit duties, overseeing and directing different programs and sometimes working without a program. She also monitored programs.

How have you maintained or improved your financial skills? She assisted the instructor with a couple grant writing classes approximately 7 years ago at the LCO community college.

How many financial loans have you initiated that were never brought to the attention of the outside auditor firms? None. She stated she always obtained a borrowing resolution from the Tribal Governing Board prior to any loans being obtained and that information would be in the governing board’s minutes. She could recall 3 to 5 loans from the Chippewa Valley Bank and a couple more for the school. Didn’t recall any loans from Associated Bank.

Rebuttal: We have not reviewed the Governing Board Minutes due to the lack of information in the accounting office on the loans and their origination dates. Payments are and have been made but the accounting office is not aware of the loan details and purpose of origination.

What was the purpose of the People’s Bank of Wisconsin $495,000 loan initiated on February 24, 2004? Who signed and co-signed for this loan? She initially couldn’t recall the loan or purpose. After being advised that the loan was reissued on February 24, 2004, she thought the purpose of that loan was for health insurance and was approved by Tribal Resolution in 2000.

Upon review of the prior Tribal financial audits we noticed they found financial mismanagement, fraudulent issues and overall lack of internal controls. Why weren’t these issues addressed and corrected by you in a timely manner? She stated she addressed those concerns every year and they went over the audit issues and attempted to implement corrective action. She thought she provided oversight and that John Larson was the CFO and he was told by the Tribal Governing Board to take over cash management, so it was his responsibility.

Rebuttal: In our review there was no evidence of any corrective action taken and John Larson refused to take over cash management due to the state of cash management at that time.

In a letter dated July 12, 2012 by a CPA firm listed their concerns about fraudulent issues. Why were there no oversight/internal controls during your tenure? She stated she never saw this letter.

What is your understanding of the legality of comingling Federal Grant Monies with Tribal Funds? She stated it was not allowed and she doesn’t recall ever reading an auditor’s report stating they were comingling funds. She was never authorized checks for a 3^rd party – except for death benefits. Checks came from the Tribal checking account after the Director of a Program submitted a proposal or whoever was in charge of a program.

Rebuttal: There is ample evidence to show comingling of federal and tribal funds and she admitted to comingling funds when she felt it was justified.

Why did you prevent the auditors from examining Tribal Enterprise Businesses? She stated she never prevented auditors from examining any records and never turned down any requests for records from auditors. She didn’t remember any CPA letter stating they didn’t have access to any records.

Rebuttal: The prior CPA audit did not review Tribal funds which means they were not provided and can be further concluded that a decision was made not to provide such records. The current CPA audit is reviewing Tribal funds.

What is the policy on Tribal Gift Cards? She stated Grants will have a provision within them allowing the purchase of gift cards, otherwise she knew nothing about purchasing gift cards from Grants not having the gift card provision. Members were required to turn in receipts for purchases made with gift cards and some gift cards were used for funeral benefits.

Rebuttal: We found no oversight/guidelines for the use of gift cards.

Were grant payments ever used for Tribal Gift Cards? Yes.

What is the policy on Tribal Gas Cards? (Policy is only $1,800.oo per year for all gas cards) She stated they tried to place a limit on Tribal Gas Cards but it didn’t work out, as no one adhered to the limit. She stated gas cards could be more than $20 per card. The way the Tribal Gas Cards are used is determined by each individual Governing Board Member as to how much they will spend.

Rebuttal: There appears to be no Tribal policy or oversight in the use of gas vouchers. Tribal Council member’s use of gas vouchers range from less than $2,000 to over $50,000.

What account was the $60,000 in gas cards charged to? That particular charge came out of the Medical Donations Account. She kept a line item for each Governing Board Member to show how much each was spending. When the Governing Board Members reviewed the line items their response was “Oh well.”

What pressures were you experiencing with your job? (Staying late, not taking vacations, trying to do everything yourself) She felt pressure all the time to get everything done that people wanted done. She stated that sometimes she would get the job done at any cost. She spent a lot of hours at her position trying to accommodate everyone from the Governing Board. She rarely took vacations.

Explain the photocopied signatures. (You did state to the tribal members that it happened only once or twice.) She initially answered that question with a question as to where these records were reviewed and then stated the records were probably “tainted”. She used photocopied signatures on some transfer sheets but didn’t believe she did 31% of the transfer sheets with photocopied signatures. She made daily transfer sheets and they all needed two signatures and sometimes Governing Board Members wouldn’t be around. Sometimes there were emergency situation in her opinion that needed immediate action. She would always make an effort to notify the member that she used their signature authorization on the transfer sheets.

Explain the excessive number of transfers. She stated the BIA wouldn’t transfer the money into the proper accounts and that caused problems necessitating the transfer of funds. She further advised the worse program was the HIS water and sewer system program, as funds were coming in from USDA, EPA, HIS and went into four different types of accounts for construction, etc. She concluded by stating, “I was just trying to keep up with the bank.”

Rebuttal: Current accounting records indicate the numbers of transfers have been greatly reduced.

What is the purpose of the payments to Peoples Bank of Wisconsin? She thought the loan was for Health Insurance Premiums but couldn’t exactly remember at the moment.

Rebuttal: Awaiting the bank to supply requested loan information.

What is the purpose of the Lake City, MN account at the American Alliance Bank? Couldn’t recall the loan or what its purpose was.

Why have so many checking accounts (62) when fewer would have been better? (Several accounts such as Special Trust Account, Sales Tax Recovery, Land fees, Land savings could have been handled out of the Tribal Bank Account as an example) She stated the Tribal Governing Board approved all of them and some were used in Payroll for cash dispersements. She admitted some accounts were used as “cash on hand savings accounts” for times when cash was short – she would transfer funds into accounts needed for bill paying.

Rebuttal: The current number of accounts has been reduced approximately by half.

Explain the NSF charges for the past 3-years of your tenure. She initially stated the CFO was responsible for the NSF charges, as she never noticed any significant NSF charges and she never received anything from the banks showing NSF charges. She just did the money transfers and the CFO was responsible for the rest.

Rebuttal: She did admit to reviewing the bank accounts daily and was aware and concerned about the NSF charges.

Why did you not implement the Midwest Professionals CPA recommendations for changes outlined in a letter dated June 30, 2011? She stated she never saw this letter.

Rebuttal: It’s her professional responsibility to be aware of such issues.

Did you ever request assistance in your job? She said yes she did but the help assigned to her were never satisfactory in her opinion, so she did everything by herself. She would have liked to recruit her own help, as she would make sure they had the qualifications for the position.

Rebuttal: It’s her professional responsibility to recruit and/or train personnel.

Health Insurance Premiums-explain your policy on employee contributions and the eventual use of those funds? She stated that policy was formulated from recommendations of the Health Task Force. Funds from HIP account, worker’s compensation claims and health premium payments went into the account. Some of the funds were used to pay back members who had been overcharged for health insurance. Only funds coming from other accounts and deposited into that account would be withdrawn and transferred into the account it came from.

Rebuttal: Tribal employees had payroll deductions for health insurance premiums based on a sliding salary scale to supplement their health insurance premiums. There is ample evidence that indicates these premiums were transferred into other tribal accounts that were used to pay other tribal expenses.

Do you feel that there is a conflict of interest between you and the tribe regarding your ownership of a florist shop? She replied no. She advised she brought the floral shop to the attention of the Governing Baord on many occasions and it didn’t matter to them. It was the only floral shop in the area for a long time and the shop was owned by her husband and sister-in-law. She stated she did their books.

Do you feel there was a conflict of interest in your position at the credit union and arranging for tribal employee loans? She stated no, as she had nothing to do with tribal member loans, as that was handled by the loan officer. She only became involved if it was a Credit Union Board Member.

What do you hope to achieve as the Tribal Treasurer that you were unable to accomplish in your previous position? She stated she would like to see full accountability and present more information to the membership as to where Tribal Funds are being spent. She would like to oversee Federal Programs to make sure the funds are available. She believes the most pressing upcoming issue is the Casino Bond issue, as the LCO won’t be able to make their payments in 2016 without restructuring the current bond.