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Blue Stone Gives Report on Tribe's Accounting Department

By Joe Morey News Editor

As Blue Stone Strategy Group continues to plan for the future of the Lac Courte Oreilles Tribe, two of their specialists met with members of the tribal accounting department, and then presented some of their findings to the Lac Court Oreilles Tribal Governing Board (TGB).

Blue Stone’s representative, Sean McCabe, owner of McCabe CPA, conducted a financial assessment of our tribe. He spent two days doing the assessment then met with TGB.

“I took a look at the financial department and where things stood,” McCabe said. “You have a great accounting team. I’ve been all over Indian Country and your team is great as far as helping out.”

McCabe said the tribe is currently changing over from MOMS to MIPs accounting software. On July 15, the department went through a specific training of MIPs.

“There is a fear of the unknown but the training is critical,” McCabe explained. “Your accounting department needs the training.”

Some of the critical items McCabe indicated need addressing include audit issues and lack of reconciliations.

“A far amount of clean-up has to be done to make the books in a state of audit,” McCabe said. “If these are not done, you lose reliability. You are in a state of transition between the two softwares. Currently, MOMS is used for payroll and MIPs is used for accounts payable and deposits.”

McCabe said there hadn’t been any bank reconciliations for months.

“It’s really difficult to do a bank reconciliation with two systems. You are nine months behind,” McCabe said.

McCabe strongly recommended the tribe transfer payroll to MIPs and work on one system before the end of the fiscal year on September 30.

“MIPs will help once it’s in place but it’s more about how it’s administered,” McCabe said. He explained that under MOMS the tribe had too many accounts and it can and should be simplified. “It’s hard to monitor with so many accounts. MIPs can do it but the design of the chart of accounts must be simplified. What’s important is how we design it so that it’s simplified and easy to monitor.”

McCabe said deferred revenue shows $9.6 million over the course of years not spent.

“This is money received but hasn’t been spent so it should be there but it’s not in the bank,” McCabe said. He said over the course of five years there has been an accumulative 2.9 million dollar IDC overrun or overspend that the tribe isn’t going to get back. It’s going to have to be covered by the general fund, McCabe explained.

“This is pieces of overspend over the course of years, it’s not one overspend action,” McCabe said. “Your tribe is already in high-risk status and your funding changes when you are in this status. They are not sure what you are doing.”

McCabe continued, “All this mixes into a perfect storm of a cash flow problem. We have to get this under control.”

McCabe said another important issue is the policy and procedures manual needs to be updated. It hasn’t been updated since 2011.

His recommendations to the TGB included the following implementations over the next 90 days to insure being complete prior to the next fiscal year beginning on October 1.

“Get help and convert to MIPs. Simplify your chart of accounts and get MIPs running all accounts,” McCabe said. “Once proper accounts in place, bring over beginning balances and all this should be done in the next 45 to 60 days.”

Once that is complete, McCabe said to reconcile all accounts. Over the next 30 to 45 days reconcile and audit preparation, McCabe stated.

“You pull this off in 90 days and it will cure reconciliation issues,” McCabe said.

McCabe said the tribe is operating under two-year old audits which took one year to get done but with the new system in place, all statements will be auditable and there’s no reason why this shouldn’t be done by December.

Rose Gokee, former TGB member, stated the costs incurred by Blue Stone are going to be well worth it in the long run. “They’re going to save the tribe a lot of money. They’re going to get us on the right track.”

McCabe said, “We really want you to know how much we appreciate being able to help our Native peoples. That’s the premise we are built upon."


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