The Southern Ute Indian Tribe’s audit for the fiscal year ended September 30, 2014 was completed by December 19, 2014 and presented to Tribal Council on January 14, 2015. The Tribal Constitution requires a comprehensive annual audit, with the audit firm selected and hired by Tribal Council. The audit was conducted by a nationally recognized Certified Public Accountant firm, Grant Thornton, who has been engaged to conduct the Tribe’s annual audit for the past seven years.
A successful audit requires a collaborative effort from three key bodies: Those Charged with Governance (Tribal Council, Growth Fund Management Committee), Management (Business Entity Presidents, Chief Financial Officers and Controllers), and the audit firm. The audit requires involvement of all aspects of the Tribal Organization, not just the Accounting and Finance groups. For example, Reservoir Engineering at Red Willow helps develop oil and gas reserve data; the A-133 (grant audit) touches most departments of the Tribal Government; real estate evaluations are prepared by the asset managers; and the Casino’s operational procedures are reviewed.
What an audit affords to the Tribe is reasonable assurance that the financial statements do not contain material misstatements (none were reported for the 2014 audit). The audit is conducted under the guidance of professional standards as established by Generally Accepted Government Auditing Standards (Tribal Government and Casino) and Generally Accepted Auditing Standards (for the Growth Fund) and financial reporting standards that are set by the Governmental Accounting Standards Board and Financial Accounting Standards Board.
Separate audits are performed for various segments of the Tribe. The Tribal Government includes a financial audit and an A-133 audit (grant funded programs). The Growth Fund, includes individual financial audits for Red Willow, Red Cedar, Aka Energy, GF Private Equity and GF Properties and three separate reports for subsidiaries which are combined with all other operations of the Growth Fund to be included in a Growth Fund combined audit report. The Casino includes a financial audit and an agreed upon procedures report for compliance with internal control minimum procedures. After all these individual audits are complete, a Tribe-Wide Audit report is prepared that combines all the tribal entities into one audit report.
The scope, magnitude, and complexities of the tribal government and businesses require the efforts of a large audit team with significant expertise in all the various industries in which the Tribe operates. Grant Thornton serves the Tribe with 53 staff members coming from six offices throughout the nation and spends approximately 8,000 hours in completing the audit.
The Tribe’s audit is completed in less than three months, and follows a timeline similar to what publicly traded companies use. This requires the accounting staffs to work diligently throughout the year, and especially during the months of October through December. Information must be presented and discussed with Grant Thornton timely and completely in order to keep the audit process as scheduled.
The internal controls of all the reporting entities are evaluated by Grant Thornton. Using the experience of many audits, Grant Thornton will provide comments on the controls if they find them lacking. Grant Thornton had no comments on the most recently completed audit. This is a rare occurrence, especially for a private company.
“Even though the Growth Fund is a private company, it has been my experience that the Growth Fund management runs their financial reporting processes similar to that of a public company, which is to say with a lot of discipline and purpose. It is far above what we normally see in a private company”, said Harris Smith Grant Thornton Engagement Partner.
The Tribe employs many well-trained and experienced accounting professionals which helps ensure that the financial statements are presented fairly, accurately and timely to management and Tribal Council.