1. How do we request an audit from the Navajo Nation Office of the Auditor General?
To request an audit, the requesting party should:
(a) Submit a letter to the Office of the Auditor General requesting an audit detailing the reasons, concerns or issues that need to be addressed in the audit.
(b) Chapters may provide a resolution to the Office of the Auditor General requesting the audit detailing the reasons, concerns or issues that need to be addressed by the audit. Any supporting documentation is also helpful.
2. What will happen to my department or chapter after the audit report is issued?
After the issuance of an audit report, the audited program (department, chapter, etc) begins the corrective action plan process by following these steps:
(a) The audited program will develop a corrective action plan (CAP) to address each audit finding noted in the audit report and submit the CAP to the Office of the Auditor General within 30 days. Audited Programs are encouraged to consider the audit recommendations outlined within the audit report when developing their CAP.
(b)
The Office of the Auditor General will review the audited
program's CAP to determine whether the CAP will effectively
resolve the audit findings. Once the CAP is accepted, the
CAP and the audit report will be presented
to the Budget and Finance Committee for review and approval.
(c)
Once the CAP is approved by resolution, the audited program
is held responsible for implementing its CAP to resolve the
audit deficiencies outlined within the audit report.
(d)
Generally the Office of the Auditor General will conduct a
follow up review of the audited program 12 months after the
audit report and corrective action plan have been approved
by the Budget and Finance Committee, to determine whether
the corrective actions were implemented in resolving the audit
findings.
(For additional information refer to the flowchart for an overview of this process.)
3. What is the Local Governance Act (LGA)?
A Navajo Nation law that was passed by the Navajo Nation Council on April 8, 1998, codified under Title 26 of the Navajo Nation Code. The purpose of the LGA is to:
- Recognize governance at the local level by granting local authority over local matters to the governance - certified chapters.
- Define the legislative and executive functions of Chapter Officials and staff.
- Improve community decision making.
- Require Chapters to govern responsibly with accountability.
4. Can chapters choose not to adopt the Local Governance Act (LGA)?
No. The Local Governance Act is Navajo Nation law applicable to all Navajo Nation Chapters. LGA specifically requires all Chapters to adopt and operate under a Five Management System. Upon adoption of the LGA, the Navajo Nation Council repealed the uniform Chapter Plan of Operation, thereby, abolishing its use.
5. Is there a sample five management system manual I can use for my chapter?
A standard manual has been developed by the Division of Community Development, Local Governance Support Center. If you would like a copy of the manual, request one from the Local Governance Support Center within the agency your Chapter is located. The Chapter can use the sample manual as a guide to develop its Five Management System policies and procedures manual. The chapter officials and staff should note that the Office of the Auditor General Local Governance Certification review entails an on-site evaluation to verify the actual implementation of the policies and procedures.
6. What does the Office of the Auditor General require to initiate a LGA Certification Review?
(a) A letter from the chapter requesting for LGA certification review. The letter should also assert the chapter has been operating effectively under its Five Management System for at least 3 months.
(b) Financial statements for the recent three months:
1. Balance Sheet
2. Statement of Revenues, Expenditures, and Changes in Fund Balances
3. Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget vs. Actual
(c) A copy of the chapter’s Five Management System policies and procedures manual
(d) Chapter resolution approving/adopting the chapter’s Five Management System.
(e) Chapter meeting minutes documenting that the Five Management System policies and procedures was read into the record.
7. What are internal controls and Generally Accepted Accounting Principles?
A: Internal controls are policies and procedures, established by an organization to provide reasonable assurance that:
- Objectives are achieved,
- Operations are in compliance with laws and regulations,
- Financial reports and records fairly reflect financial transactions, and
- Assets are safeguarded.
B: Generally Accepted Accounting Principles (GAAP) is a combination of authoritative standards for accepted accounting practices. Basically, GAAP is a set of accounting principles, standards and procedures. These principles, standards and procedures provide the foundation for accountability and financial reporting.
8. What is an accounting system?
The accounting system consists of the methods and records established, to identify, assemble, analyze, classify, record and report transactions and to maintain accountability for related assets and liabilities.
9. What type of chapter accounting system is acceptable by the Office of the Auditor General?
The Local Governance Act requires Chapter accounting system should be established and maintained in accordance with Generally Accepted Accounting Principles (GAAP) for government entities. As such, GAAP ideally considers "fund accounting" as the framework for public-sector accounting and financial reporting. Fund accounting allows governmental entities to segregate their financial resources to ensure that monies are spent only for approved and legitimate purposes.
10. Can Chapters use computerized accounting software?
Yes. Accounting software is considered an accounting tool available for Chapters to use in establishing and maintaining their accounting system. Ideally, the accounting software should meet fund accounting requirements. Considering the various types of software on the market, the Chapters should consider accounting software that meets their needs and is cost-beneficial.
11. What can I do if I become aware of an illegal activity and want to report it?
You can contact one of the following Navajo Nation Offices:
- Office of the Auditor General (928) 871-6303
- Navajo Nation Prosecutor’s Office (928) 871-7658
- Ethics and Rules Office (928) 871-6369.
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