Special Review of The 2012 Northern Navajo Nation Fair

LEGISLATIVE SUMMARY SHEET
Tracking No. Ql50 - B

DATE: May 18,2013
TITLE OF RESOLUTION: PROPOSED STANDING COMMITTEE RESOLUTION, AN
ACTION RELATING TO BUDGET AND FINANCE; ACCEPTING THE SPECIAL REVIEW
OF THE 2012 - 101 ST NORTHERN NAVAJO NATION FAIR SUBMITTED BY THE OFFICE
OF THE AUDITOR GENERAL AND APPROVING THE CORRECTIVE ACTION PLAN
SUBMITTED BY THE NORTHERN NAVAJO NATION FAIR BOARD
PURPOSE: The purpose of the resolution is to accept "A Special Review of the 2012 - 101sl
Northern Navajo Nation Fair" submitted by the Office of the Auditor General and Approving a
Corrective Action Plan submitted by the Northern Navajo Nation Fair Board.
This written summary does not address recommended amendments as may be provided by the standing
committees. The Office of Legislative Counsel requests each Council Delegate to review each proposed
resolution in detail.
13-333-1
QAYBlL
1E/DATE: -fII'
lNAlURt

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Budget &Finance mmlttee
SED STANDING COMMITTEE RESOLUTION
22
0d
NAVAJO NATION COUNCIL - Third Year, 2013
INTRODUCED BY

(Sponsor)
TRACKING NO. D(50-18
AN ACTION
RELATING TO BUDGET AND FINANCE; ACCEPTING THE SPECIAL REVIEW OF THE
2012 - 101
ST
NORTHERN NAVAJO NATION FAIR SUBMITTED BY THE OFFICE OF THE
AUDITOR GENERAL AND APPROVING THE CORRECTIVE ACTION PLAN
SUBMITTED BY THE NORTHERN NAVAJO NATION FAIR BOARD
BE IT ENACTED:
1. The Navajo Nation hereby accepts the Audit Report No. 13-07 "A Special Review of th
2012 - 101
st
Northern Navajo Nation Fair," attached hereto as Exhibit A, and approve
the Corrective Action Plan submitted by the Northern Navajo Nation Fair Board, attache
as Exhibit B.
2. The Navajo Nation hereby directs that copies of "A Special Review of the 2012 -lOIS
Northern Navajo Nation Fair" be provided to the Office of the President/Vice Presiden
as part of their oversight responsibility for the Northern Navajo Nation Fair Board.
3. The Navajo Nation hereby directs the Northern Navajo Nation Fair Board to submit
written status report on their progress in implementation of the corrective action plan t
the Office of the Auditor General six months after the approval of this resolution.
4. The Navajo Nation hereby directs the Office of the Auditor General to review the writte
status report to be submitted by the Northern Navajo Nation Fair Board and report to th
Resources and Development Committee, as well as the Budget and Finance Committee.
5. The Navajo Nation hereby directs the Office of the Auditor General to conduct a follow
up review twelve months after the approval of this resolution to verify the action
claimed to have been taken by the Northern Navajo Nation Fair Board, to issue a writte
Page 1 of2 13-333-1
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follow-up report indicating the Northern Navajo Nation Fair Board's progress
implementing the corrective action plan, and to make recommendations to the Resource
and Development Committee, as well as the Budget and Finance Committee.
Page 2 of2 13-333-1
EXHIBIT "A"
EXHIBIT
'--4
OFFICE OF THE AUDITOR GENERAL
The Navajo Nation
A Special Review
of the
2012 - 101st Northern Navajo Nation Fair
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.\lldltOl' <:','IH'1'<11
March 29, 2013
Sophina Tyler, Chairperson
SHIPROCK FAIR BOARD
P.O. Box 4454
Shiprock, 87420
Dear Ms. Tyler,
The Office of the Auditor General herewith transmits Report 13-07, A Special
Review of the 2010 - 101
s1
Northern Fair with findings and
recommendations.
If you have any questions regarding this report, please call our office at (928) 871-6303.
Sincerely,

Auditor General
Enclosure
Chrono
P.O. BllX 70S / WinLh", ROLk,:\L 8ti515 / ['h. (928) 871-6303, 630-l / F..lX (Y28) 871-hU54;, E-mdil' dudilorgL'IWraliynavdjol)rg
TABLE OF CONTENTS
SUMMARY 1
FINDING I: Lack of Controls over Revenue
FINDING II: Lack of Adequate Management
over Fair Events 10-14
INTRODUCTION AND BACKGROUND 2
OBJECTIVES, SCOPE AND METHODOLGY 4
and Expenses 5-9
CLIENT RESPONSE 15
SUMMARY
The Office of the Auditor General has conducted a special review of the 2012 - 101st
Northern Navajo Nation Fair events managed by the Northern Navajo Nation Fair
Board and the Navajo Nation Fair Office. This special review provides the results of the
2012 - 101st Northern Navajo Nation Fair. The review shows the Northern Navajo
Nation Fair made a profit of $36,576. The profit indicates that the $428,230 revenues
were sufficient to cover the $391,654 cost of operating the Fair. Although the Fair made
a profit, we noted deficiencies in the Fair operations that need improvement.
Finding I: Lack of Controls over Revenue and Expenses
Controls over the Fair revenue and expenses were inadequate; as a result we identified
the following deficiencies:

The Fair Board did not capitalize on all revenue generating activities, resulting in
$65,000 in lost revenue.

Unpaid vendor rental fees and parade entry fees totaled $14,400.

Poor documentation of revenues resulted in no assurance that all revenues are
accounted for and reported to the Fair Board.

Lack of documentation to support the validity of Fair expenses, specifically an
$8,000 cash withdrawal from the bank account.
Finding II: Lack of Adequate Management over Fair Events
The Fair events were not adequately managed; as a result we identified the following
deficiencies:
Poorly supervised Indian Market resulted in frustrated vendors.
Disorganized and ill-planned parade resulted in angry and disappointed parade
participants.
Poor management of Rodeo and 4-H events resulted in incomplete
documentation and reporting of event activities.
The Fair Board did not verify the accuracy of the close-out report provided by
the Fair Office.
Key responsibilities specified in the Memorandum of Understanding were not
performed by the Fair Office.
The Fair Board did not report wages, stipends, prize monies, and contractual
payments as required by the Internal Revenue Service guidelines.
In addition to the findings summarized above, the audit report contains
recommendations for improving future Fair operations.
1
INTRODUCTION AND BACKGROUND
The Office of the Auditor General has conducted a special review of the 2012 -101
st
Northern
Navajo Nation Fair (Fair) events managed by the Northern Navajo Nation Fair Board and
Navajo Nation Fair Office. At the request of the Navajo Nation Budget and Finance Committee
the special review of the Fair was initiated. This special review provides the financial results of
the 2012 Fair events.
Purpose and Authority
The Fair was started over 100 year ago by the community people of the Northern Navajo Nation
Agency and Bureau of Indian Affairs. Since its creation, it has operated in Shiprock, New
Mexico, with the participation of all Navajo citizens of the Navajo Nation. Over the years, the
annual event has grown and presently includes activities such as parade, concerts, carnival,
rodeos, pow-wow, Indian market, and Yei Bi Chei ceremony. Most of the activities provide the
promotion and preservation of the Navajo (or Dine') heritage by showcasing Dine' agriculture,
arts and crafts, and cultural entertainment. The Fair is held the first weekend in October.
On August 21, 2012, the Northern Navajo Nation Fair Board's (Fair Board) amended Plan of
Operation was approved by the Resources and Development Committee of the Navajo Nation
Council via resolution number RDCAU-81-12. The Fair Board has ultimate authority, control
and decisions relating to any Fair event. The Fair Board members consist of 19 registered
members of the Northern Navajo Nation Agency chapters. The Fair Board meets at least once
each quarter and members are paid a stipend of $150. The Fair Board is required to provide a
financial report to the Northern Navajo Nation Agency Council and Resources and
Development Committee on or before the 15
th
of January each year.
On September 26, 2012, the Fair Board and the NavajO Nation Executive Branch signed a
Memorandum of Understanding and agreed on the administration, management and operation
of activities related to the 2012 - 101
st
Northern Navajo Nation Fair. According to the
agreement, the Navajo Nation Fair Office (Fair Office) is responsible for managing the Fair.
The Fair Office would work closely with the Fair Board event coordinators on any fair event;
however the Fair Board will have the overall responsibility in the production of the Northern
Navajo Nation Fair. The Resources Committee of the Navajo Nation Council has legislative
oversight over the Fair Board/Office.
Results of the 2012 -101st Northern Navajo Nation Fair
The Fair Board bank account had an ending cash balance of $62,182 as of December 14, 2012.
Our review of the revenues and expenses for the 2012 - 101
st
Northern Navajo Nation Fair
showed a net income of approximately $36,576. The profit indicates that the $428,230 revenues
were sufficient to cover the $391,654 cost of operating the Fair.
Table Ion the following page illustrates the financial results of the 2012 -101
st
Northern Navajo
Nation Fair.
2
Table 1
2012 -101SINorthem Navajo Nation Fair
Revenue, Expenses, and Net Income
Revenues
Ticket
$ 184,919
Carnival
75,000
Indian Market
60,680
Rodeo
41,879
Sponsors
l 29,100
Parade
27,112
Horticulture
4,425
Poster Sales
2 2,443
Baby Pageant
1,800
4-H
872
Total Revenues: $ 428,230
Expenses,
Prizes-Rodeo, Pow-wow, Other
3
$ 100,344
Workers
4
63,356
Sanitation/ Utilities 39,233
Contractors 33,717
Advertising/Gifts/ Awards 26,299
Indian Rodeos 26,271
Security 34,025
Equipment Rentals 15,931
Building/Trailer/Fair Ground 14,618
Supplies/Insurance 16,302
Food/Carering/Lodging 7,924
Unidentified Expense 8,050
Other Activities/Events 5,225
Undeposited Monies 359
Total Expenses
5
: $ 391,654
Net Income: $ 36,576
SOllrce: office of tile Auditor General Compilation of 2012 - 101
5
' Nortllern NllVajo Nation Fair revel/ue and expenses from Nortllenl NllVajo
Nation Fair Board CIlecking account, FMIS, premium book, cash receipt tickets, and Rodeo clerk reports.
Note 1: The $29,100 sponsors include $8,500 contributions from Navajo Nation departments.
Note 2: The $2,443 poster sales include 2011 Poster sales totaling $315,
Note ]: The breakdown of the $99,844 prize monies includes Rodeo-$56,089; Pow-wow-$27,505; and Other-$16,750.
Note : The $63,356 wages paid to workers includes $20,577 stipends paid to the Fair Board members,
Note 5: The $391,654 in expenses does not include outstanding payables (i.e. Waste Management). If the payables are recognized as
expenses, it will reduce the net income.
3
Objectives, Scope and Methodology
The following objectives were established for this special review:
1. To determine the financial results of the 2012-101
s1
Northern Navajo Nation Fair.
2. To determine whether the Fair Board/Office fully accounted for the Fair revenues and
expenses.
3. To determine whether the Fair Board/Office adequately managed the Fair events.
In meeting our objectives, we performed the following procedures:
1. Reviewed Fair Board plan of operation and meeting minutes.
2. Reviewed Fair Board/Office Memorandum of Understanding.
3. Reviewed the Fair Office records to compile revenues and expenses.
4. Reviewed Fair Board/Office procedures in collecting, recording and reporting of revenues.
5. Reviewed Fair Board/Office procedures in classifying and reporting of expenses.
6. Selected a sample of expenses to verify proper approval, supporting documents, and two
signatures on checks. Samples were selected by judgmental sampling.
7. Interviewed Fair Office staff and Fair Board members.
8. Interviewed Northern Navajo Nation Fair event coordinators.
9. Observed Northern Navajo Nation Fair operations.
10. Reviewed the Carnival agreement.
11. Obtained documentation from the Carnival contractor, Fair Board, and Navajo Nation
Accounts Payable Section.
12. Identified payments recorded in the Navajo Nation accounting system (FMIS) to the
Northern Navajo Nation Fair.
Government Auditing Standards
This special review was conducted in accordance with Government Auditing Standards issued
by the Comptroller General of the United States. The standards require that we plan and
perform the audit to afford a reasonable basis for our judgments and findings regarding the
entity under audit. An audit includes assessments of applicable internal controls and
compliance with requirements of laws and regulations when necessary to satisfy the audit
objectives. We believe our audit provides a reasonable basis for our findings.
The Office of the Auditor General and staff express their appreciation to the Fair Board
members and Fair Office staff and all other entities who contributed to this audit for their
cooperation and assistance throughout the audit.
4
FINDING I
Lack of Controls over
Revenue and Expenses
Controls over the Fair revenue and expenses were inadequate. The Fair Board did not
capitalize on all revenue generating activities, resulting in approximately $65,000 in lost
revenue. Also, we identified unpaid vendor rental fees and parade entry fees totaling $14,400.
In addition, the Fair Board/Office did not ensure revenues are fully documented. There is no
assurance that all revenues are accounted for and reported to the Fair Board. Lastly, we could
not verify the propriety of expenses that lacked documentation. The validity of these
undocumented expenses, specifically an $8,000 cash withdrawal from the bank account is
questionable.
Approximately $65,000 in lost revenue
Criteria
The Fair Board should capitalize on all revenue generating activities during the Fair. For
example, the Indian Market coordinator should ensure all available vendors spaces are rented
out during the Fair. The sale of Fair posters should be publicized and the posters adequately
displayed to attract buyers. Issuance of passes should be limited to reduce loss revenues.
Condition
The Fair Board did not capitalize on all revenue generating activities during the Fair. We found
the following deficiencies:
Indian Market-315 spaces were available for rent, ranging from $300 to $500 depending
on the type of space. We calculated that the Indian Market should have generated
$104,600 in revenue, if all vendor spaces were rented. During the Fair, we noted
vendors looking for available spaces. We also observed available spaces for rent on
Saturday and Sunday. However, a sign was posted in the Fair Office mid-Saturday
stating all vendor spaces were sold out. Furthermore, the Indian Market coordinator
was unreachable to assist vendors looking for available spaces. Our compilation of
vendor applications and cash receipt tickets found $60,680 revenue generated from the
Indian Market. This amount translated to 183 spaces rented out. As a result, 132 vendor
spaces were not sold or approximately $43,920 loss revenue.
Fair posters-2,500 Fair posters were ordered during the Fair. 2,000 Fair posters were
available for sale and 500 posters were given to the Fair poster designer free of charge.
Our compilation showed 304 posters were sold at $7/ poster which translated to $2,128
revenue. We calculated 1,696 posters were not sold, which translated to $11,872 loss
revenue. We observed the only place the Fair posters were being sold was at the Fair
Office, not easily accessible to the public. The posters could have been sold at the
entrances, exhibit halls and on the fairground where they were readily available to the
public.
Fair Passes-The Fair Office reported the following free passes issued for the Fair: 456
walk-in passes at $10/each, 117 parking passes at $20/each, 20 VIP passes at $50 each,
and 32 4-day Walk-in passes. We calculated 625 free passes issued during the Fair,
which translated to approximately $9,000 loss revenue.
5
Cause
The sign posted at the Fair Office that all spaces were sold out although there were
available spaces misled prospective vendors wanting to rent space.
The Fair Board did not ensure fair posters were properly displayed to the public. The
posters were only displayed at the fair office, which was located inside the fairgrounds
and not easily accessible to the general public. Further, poster sales were not advertised
to inform the public.
The Fair Board did not have guidelines in place to limit the issuance of free passes. The
free passes were arbitrarily issued as requested by the Fair Board.
Effect
The inability of the Fair Board to capitalize on all revenue generating activities led to
approximately $65,000 in lost revenue.
Recommendations
1. An office should be set up at the Indian Market for the event coordinator who should be
available during the duration of the Fair to assist vendors wanting to rent space.
2. The Fair Board should advertise and sell posters in key locations inside and out of the
fairgrounds. For example, at the entrance gates, Indian Market, Parade route, etc.
3. The Fair Board should establish guidelines to limit the issuance of free passes.
$14,400 in uncollected revenue
Criteria
Prudent management ensures collections are reconciled to recorded sales to identify
outstanding receivables and initiate collection efforts in a timely manner.
Condition
The Indian Market event coordinator did not reconcile recorded vendor spaces rented out
against vendor fees collected. The Parade event coordinator did not reconcile parade entries to
the parade entry fees collected. The lack of reconciliation resulted in the following:
$7,400 of unpaid Indian Market vendor space fees was not collected.
$7,000 of unpaid Parade entry fees was not collected.
Cause
Indian Market event coordinator did not maintain adequate records to enable
reconciliation of vendor space applications against actual fees collected. We identified
approximately 40 vendors did not pay the full amount of the space fee. Nevertheless,
the vendors were allowed to occupy the space for the duration of the Fair.
Parade event coordinator did not properly document and collect parade fees. We
identified 12 floats in the parade line-up that had no record of application or payment
(12x$250=$3,OOO). In addition, we identified 8 political candidate entries that had no
record of payment (8X$500=4,000).
Effect
The uncollected revenue led to loss of income of approximately $14,400 for the Fair Board. The
possibility of collecting the unpaid fees from the vendors and parade participants is remote.
6
Recommendations
1. The Fair Board should ensure the Indian Market and Parade event coordinators develop
an organized method, such as a spreadsheet, to keep track of vendor/parade records
and related data (applications, cash receipt tickets, reconciliation forms, etc.).
2. The Indian Market and Parade event coordinators should ensure collections are
reconciled daily to recorded cash receipt tickets and applications to timely identify
unpaid fees.
3. The Indian Market and Parade event coordinators should ensure full payment is
received from vendors/parade participants prior to the start of the Fair.
Poor documentation of revenue
Criteria
Proper accountability of revenues requires complete accounting of transactions such as
documenting sponsorship (Gold, Silver, and Bronze) on a packet (name/business, type,
amount, payment received, and event sponsored). Tickets to be issued for the carnival,
entrance, and parking should be inventoried prior to the start of the Fair. Cash receipt ticket
books should be assigned by revenue source for easier compilation of revenue.
Condition
The Fair Board/Office did not ensure Fair revenues are fully documented. We found the
following deficiencies:
Sponsors were not fully documented. Records show $24,100 in sponsorship monies
were deposited into the Fair Board bank account. However, there was no assurance all
sponsors were identified and sponsorship monies were deposited due to lack of
documentation.
Carnival tickets were not inventoried at the beginning and end of Fair. Consequently,
we cannot verify the accuracy of the reported ticket sales by the carnival contractor.
Entrance tickets sales could not be verified. Our compilation of tickets sales based on
documentation provided by the Fair Office showed a lower amount than the report
provided by the finance manager.
Rodeo cash receipt tickets were torn out of the cash receipt books.
Cash receipt ticket books issued were not documented and segregated by revenue
source, making it difficult to compile revenue.
Cause
Fair Board/Office did not maintain complete records of sponsors; sponsorship packets
were not on file.
Fair Board did not assign a coordinator to ensure carnival tickets were inventoried.
The inventory list of tickets for sale is incomplete. In addition, the Fair Office ran out of
tickets during the Fair but continued to collect entrance fees without issuing tickets.
The rodeo clerk tore out cash receipt tickets from the book without regard to pre
numbered tickets.
The Fair Board haphazardly issued cash receipt books to temporary workers without
documenting the names of the workers and cash receipt book numbers issued.
7
Effect
We were unable to categorize the type of sponsors, the amounts and events sponsored. In
addition, we could not verify the accuracy of reported sponsorship monies, carnival ticket sales,
entry ticket sales, and rodeo entry fees. Furthermore, there is no assurance that undocumented
cash receipts were turned into the Fair Office. There is a risk that not all revenues are accounted
for.
Recommendations
1. The Fair Board/Office should maintain complete records of sponsors. Sponsorship
packets should be on file and a summary list should be developed to compile all
sponsors by type of sponsors, the amounts and events sponsored.
2. The Fair Board should assign a coordinator to ensure carnival tickets are inventoried
prior to the start and the end of the Fair.
3. The Fair Board should consider using a computerized ticketing system to eliminate
running out of tickets in the middle of the Fair event. Computerized ticketing system
will also eliminate the inventory of tickets.
4. The rodeo clerk should not tear out cash receipt tickets from the book. All cash receipt
tickets should stay in the book.
5. The Fair Board should issue cash receipt books based on revenue source and document
the issuance of the book.
Inadequate controls over expenses
Criteria
The Fair Board plan of operation requires all Fair expenses be properly approved by the board,
have appropriate documentation (i.e. invoice and/ or contract), and two signatories
(Board/Fair) on each check. Direct cash withdrawals from the Fair Board's bank account are
prohibited.
Condition
The Fair Board/ Office did not exercise adequate controls over Fair expenses as follows:
$4,620 rodeo expenses did not have documentation to support the expenses.
$35,806 operation expenses selected for review did not have proper documentation to
support the expenses.
9 out of 11 checks amounting to $45,646 were not co-signed by the Fair Board/Office.
$8,000 cash withdrawal did not have documentation to support the withdrawal.
Cause
The Fair Board/Office did not ensure all expenses are adequately documented and checks have
two signatories. Further, the Fair Board disregarded policies prohibiting cash withdrawals.
Effect
We could not verify the propriety of expenses that lacked documentation. Consequently, we
question the validity of these undocumented expenses specifically the $8,000 cash withdrawal
from the bank account.
8
Recommendations
1. The Fair Board/Office should ensure all expenses are adequately documented prior to
signing the check.
2. The Fair Board/Office should ensure all checks have two signatures.
3. The Fair Board should not allow cash withdrawals from its bank account.
9
FINDING II
Lack of Adequate Management
Over Fair Events
The Fair events were not adequately managed. The Indian Market was poorly supervised
resulting in frustrated vendors. The parade was disorganized and ill-planned resulting in
angry and disappointed parade participants. In addition, the Fair Office did not remit
approximately $16,500 of Fair revenues due to the Fair Board. Also, key responsibilities
specified in the Memorandum of Understanding were not performed by the Fair Office. Lastly,
the Fair Board did not report wages, prize monies, stipends, and contractual payments as
required by the Internal Revenue Service guidelines.
Poor supervision of the Indian Market event
Criteria
Proper supervision for the Indian Market event includes developing a clear, properly scaled
Fair map for all rental spaces (i.e. fairgrounds, Indian Market and Yei Bi Chei areas), general
vendor map posted at rental space sites for directory purposes, and vendor information cards
(i.e. vendor, days rented, space number, etc.) displayed on spaces. In addition, vendor
applications should be uniform to avoid inconsistency of vendor information and payment.
Further, vendors should be required to sign the waiver forms to avoid liability if damage or
accident should occur.
Condition
The Indian Market event was poorly supervised that led to the following:
There were no clear measurements that dictated space allocation with respect to the
other events such as the carnival. The carnival was allowed to take up more space
than initially allocated thereby reducing the space allocated to vendors of the Indian
Market event.
There was no clear indication of the measurement of each space on the Indian
Market area. Initially there were 20x25 and 12x20 spaces marked on the map;
however we observed various sizes of spaces throughout the grounds.
Two poster board maps were developed for the fairground and Indian Market
vendor spaces; however a map for the Yei Bi Chei was not created.
Poster board maps were utilized to document all rented spaces. However, this
practice became unmanageable when vendor space became available on days not
rented.
The Indian Market utilized three different versions of vendor applications. The
information documented on the applications resulted in varying due dates, duplicate
space rental, and different payments and food/ product safety requirements.
No monitoring of temporary workers who assisted the vendors with the application,
payment, and space rental.
No on-site help to direct the vendors to the assigned space or to help with vendor
related problems.
No waiver forms were signed by the Indian Market vendors.
10
Cause
The Indian Market event coordinator was not experienced in planning an event as
complex as the Indian Market event.
The Indian Market event coordinator was also assigned to coordinate the Entertainment
Tent. All indications were the Entertainment Tent was a priority rather than assisting
the vendors.
The Indian Market event coordinator did not ensure applications and waiver forms were
complete and accurate.
Effect
Overall, poor supervision of space rentals resulted in a chaotic vendor space layout that led to
irate vendors. Further, lack of monitoring over temporary workers contributed to mishandled
payments and applications. Lastly, the lack of a signed waiver form poses a risk of liability to
the Fair Board in the event of accidents in the Indian Market.
Recommendations
1. The Fair Board should assign an experienced Indian Market event coordinator to
supervise the event.
2. The Fair Board should not assign other events, like the Entertainment Tent, to the Indian
Market event coordinator.
3. The Indian Market event coordinator should be readily available to guide vendors as
they are setting up their area.
4. The Indian Market event coordinator should ensure vendor applications, payments, and
waiver forms are complete and accurate.
Disorganized Parade event
Criteria
An organized Parade event includes taping off the parade route and identifying the starting
point of the parade to properly line up the participants. In addition, assigning numbers and
categorizing participants by commercial, marching band, business, royalty and political entries.
Furthermore, judges should be provided judging sheets in advance of the event.
Condition
People were allowed to camp out where the parade line up was supposed to start. The plan to
line the participants by assigned numbers and categories at 4 a.m. did not materialize. Rather,
the parade number assignments were mixed up and participants were not lined up by
categories. The Parade event coordinator did not show up on time and parade judges were not
properly instructed on their tasks. The judging sheets were misplaced and the plan to have
2
nd
"Best of Show" and 1
st
, , 3
rd
and 4
th
place awards in various categories such as commercial,
marching band, business, royalty and political entries were not awarded.
Cause
The Parade event coordinator was not trained, lacked experience and was not given enough
time to plan the event. According to the parade assistant, due to the fair office being ill
equipped with office equipment, copies of the waiver forms for Parade participants, judging
sheets and the Parade line up plan were not made.
11
Effect
Parade participants expressed frustrations over the disorganized parade line up. Also,
participants were disappointed that only 1
st
, 2
nd
and 3
rd
place ribbons were given considering
the high fees charged to the Parade participants.
Recommendations
The Fair Board should:
1. Pre-plan the event route and tape off the Parade line-up.
2. Pre-print all necessary documents such as applications, plans, judging sheets and
liability waivers.
3. Pre-number the applications and use the application number as a tool to categorize
and line up the Parade participants.
4. Make sure all applications are complete; liability waivers are signed, and verified by
the Fair Office staff.
5. Choose a Parade event coordinator that is experienced and will dedicate the time to
plan the Parade event.
6. Order prizes early for the Parade event.
Poor management of Rodeo and 4-H events resulted in incomplete reporting of event activities
Criteria
Rodeo and 4-H events are required to provide accurate and complete documents and reports of
event activities as prescribed in the Fair Board Plan of Operation. Also, the Rodeo contestants
should be required to sign waiver forms to avoid liability in the event if an accident occurs.
Furthermore, the 4-H event should remit all revenues to the Fair Board to properly account for
all revenues collected from the event.
Condition
Rodeo applications and/ or cash receipt tickets were not provided by the Rodeo event
coordinator for the Bull riding, Sr. Rodeo, Women's Rodeo, Open Show Rodeo and
Junior Rodeo events. We found the Jr. Rodeo event used $4,299 in entry fees to pay its
winners. The cash receipt tickets for the $4,299 entry fees were not provided for our
review. As a result, we could not verify the accuracy of entry fees collected from Rodeo
contestants.
The rodeo clerk did not provide reports for the Bull riding, Sr., and Women's Rodeo
events.
Waiver forms were not signed by Rodeo contestants.
The 4-H event generated $872 entry and parking fees, however the 4-H event
coordinator did not provide documentation to the Fair Board. As a result, the Fair
Board does not have an accounting of revenues generated by the 4-H event.
Cause
The Rodeo event coordinator and rodeo clerk disregarded the Fair Board Plan of
Operation requiring accurate and complete documents and reports of Rodeo activities.
The Rodeo event coordinator and rodeo clerk did not ensure waiver forms were signed.
The 4-H event coordinator collected and deposited revenues into a separate 4-H bank
account.
12
The Fair Board did not receive documents and reports from the Rodeo and 4-H events. There is
a risk that revenues from entry fees are not fully accounted for. Further, the lack of a signed
waiver form for Rodeo events poses a risk of liability to the Fair Board if an accident occurs.
Recommendations
1. The Rodeo event coordinator and rodeo clerk should provide the Fair Board accurate
and complete documents and reports of rodeo activities.
2. The Rodeo event coordinator and rodeo clerk should ensure waiver forms are signed.
3. The 4-H event coordinator should provide reports and tum in collected revenues to the
Fair Board.
Fair Office Close-Out Report was not verified
Criteria
The Fair Board is required to verify the close-out report by the Fair Office at the end of the Fair
to ensure revenues generated and expenses incurred is accurately reported.
Condition
The Fair Board simply accepted the Fair Office financial report listing revenues collected and
expenses paid without verifying the accuracy of the report.
Cause
The Fair Board trusted that the Fair Office provided accurate close-out report after the receipt of
$73,830 check from the Fair Office.
Effect
The Fair Board was not aware of the underpayment by the Fair Office of approximately $2,800
net revenue.
Recommendations
1. The Fair Board should verify the accuracy of the Fair Office financial reports.
2. Request the Fair Office to remit approximately $2,800 underpayment to the Fair Board.
Key responsibilities specified in the Memorandum of Understanding were not performed
Criteria
The Memorandum of Understanding (MOU) calls for the Fair Office to be exclusively
responsible for overseeing and managing the following activities: a) operating as a central point
of contact, b) making and contracting for infrastructure improvements, c) contracting with all
vendors including security and police, d) hiring of temporary employees by contract, e)
managing and coordinating the parade, f) managing and coordinating the Indian Market, g)
managing and coordinating the Rodeo, h) fundraising activities with sponsors and providing
exclusivity agreements, i) collecting gate receipts and parking fees, and j) accounting for all
receipts and expenses from Fair event activities.
Condition
Based on our observation of the Fair Office's management of the Fair, the Fair Office did not
perform key activities required by the MOU such as: contracting with all vendors, hiring of
13
temporary employees, managing and coordinating the parade, the Indian Market, the Rodeo,
fundraising activities with sponsors, and accounting for all receipts and expenses.
Cause
The Fair Office stated the activities they were required to perform already occurred before the
MOD was signed, therefore their responsibilities were already completed by the Fair Board and
event coordinators.
Effect
The Fair Office did not fully oversee and manage all Fair events that contributed to the lack of
controls over revenue and expenses and ill-planned events.
Recommendation
The Fair Office should ensure the terms of the MOD are implemented.
Non-compliance with Internal Revenue Service guidelines
Criteria
Internal Revenue Service (IRS) guidelines state that wages and stipends paid should be reported
on the IRS Form W-2. In addition, payments over $600 to contractors and monetary prizes over
$600 paid to winning contestants should be reported on the IRS Form 1099.
Condition
The Fair Board did not comply with IRS guidelines. IRS Forms W-2 and/or 1099 were not
issued by January 31, 2013. We identified 35 winners that each received prize monies over $600,
35 workers that were paid wages and stipends, and 18 contractors that were paid over $600
were not issued IRS Forms W-2 and/ or 1099.
Cause
The Fair Board and event coordinators did not require winners, workers, and
contractors to fill out IRS Form W-9. Consequently, there is no tax information to issue
IRS Forms W-2 and/ or 1099.
The Fair Board did not compile a list of winners and contractors that were paid over
$600 in order to issue IRS Form 1099.
The Fair Board did not compile a list of workers that were paid wages and stipends in
order to issue the IRS Form W-2.
Effect
There is a risk that the Fair Board will be penalized for non-compliance with IRS guidelines.
Recommendations
1. The Fair Board and event coordinators should ensure IRS Form W-9 is filled out by
winners, workers, and contractors.
2. The Fair Board should compile a list of winners and contractors to identify those that
were paid over $600 and issue IRS Form 1099 by January 31
st

3. The Fair Board should compile a list of workers that were paid wages and stipends then
issue IRS Form W-2 by January 31
st

14
-----------------------_.. _._.
CLIENT RESPONSE
1. Manuelito Wheeler, Director, Navajo Nation Museum
2. Sophina A. Tyler, M.B.A., Chairperson, Northern Navajo Nation Fair Board
15
BEN SHELLY PRESIDENT
THE NAVAJO NATION
REx LEE JIM VICf PRESIDEN'r
Navajo Natioll Mltseum - p.o. Box 1840 - Window Rock, AZ 86515 - Phone: (928) 871-7941- Fax: (928) 871-7942
March 28,2013
MEMORANDUM
:,' "
. ,
, ,
1, j
TO: Elizabeth Begay, Auditor General
Office of the it r General
MAR 28 2013
\
i
,
, I
'
FROM: ..-, ._.. ,-,..,., , , , - ~ )
Manuelito Whee Director I
Navajo Nation Museum
Division of Natural Resources
SUBJECT: Response to Audit Findings
RE: 2012 Northern Navajo Nation Fair
Attached is the response of the Navajo Nation Museum, on behalf of the Navajo Nation Special Events
Section, regarding the audit findings of the 2012 Northern Navajo Nation Fair.
Should you require additional clarification, please contact me directly at (928) 871-7941. Thank you.
XC,' Department Files
Page 1 of6
Although the Special Events Section (aka... Fair Office) under the Navajo Nation Museum was
given full authority (through an official Memorandum of Agreement) to manage all aspects of the
2012 Northern Navajo Nation Fair, we felt that imposing drastic measures (such as replacing all
coordinators and eliminating established procedures) would only create further confusion and
dissention among all affiliates. As the annual event is governed by an official board, our intent
was to provide technical assistance and support for improvement purposes. We offered
recommendations and solutions. We also introduced specific procedures for accountability and
reporting requirements. The Fair Office personnel made every reasonable attempt to effectively
coordinate and communicate with board members, event coordinators, production staff and the
general public, however; we encountered resistance from a few, which complicated our
purpose. Nonetheless, we completed our last minute assignment with honesty, professionalism
and integrity.
FINDING 1
Lack of Controls over Revenue and Expenses
*Approximately $65,000 in lost revenue.
Select members of the board were designated to coordinate certain events/tasks and we trusted
that each would perform to the best of their ability to ensure a successful and profitable
production.
Therefore; we accepted the coordinator's verbal confirmation that all spaces were "full"
on a given day. There were instances where spaces were paid for, however; due to
unknown reasons, the vendor did not occupy the space, which may have led to the
appearance that it was available for rent. Further, the coordinator was constantly
tending to customerslvending matters, which caused the delay of services to others. We
do agree with the recommendation of establishing an on-site office to better
accommodate customers. Budget permitting, we also suggest additional personnel to
address all inquiries/issues as efficiently as possible.
The fair poster logistics were developed and approved prior to us getting involved,
therefore; we had no choice but to proceed with the commitment. The tasks to sell and
market the posters were assumed by the board president and opted not to intervene. To
our understanding, posters were sold in various public locations such as Chapter
locations, convenience stores and local offices. The Fair Office was granted a certain
quantity and those were sold only at the Fair Office to ensure that posters and proceeds
were accounted for. Unfortunately we did not have extra personnel to assign the task of
selling posters throughout the fair grounds. We agree with the recommendation of
selling posters at the ticket booths/entrance gates, which needs to be coordinated with
the Finance and Payouts Manager prior to the start of event.
Fair passes were distributed to select individuals and organizations for various purposes
(such as land owners who were apparently promised free entrance to any events held
on the fairgrounds for an x number of years, board members for distribution at their
discretion, dignitaries and special guests). However; we do agree that too many passes
were freely distributed. We recommend that a specific number of passes be identified
and set aside for such purposes and that the number is not exceeded for any reason.
Page 2 of6
*$14,400 in uncollected revenue
Again both revenue generating events (Indian Market and Parade) were coordinated by board
members. As we recommended/instructed, we trusted that each would fulfill their obligation of
reconciling applications and payments to ensure that all possible revenue was collected.
On the final day of the event and during a board meeting, where the official exit report
was presented to the fair board, the Indian Market coordinator was informed that an
official event exit report was necessary to account for all leased spaces. Since we would
no longer be involved in the NNNF production logistics, we encouraged the fair board to
seek the reports and any unpaid fees to be absolutely certain that all possible revenues
were collected. We agree with the recommendation of implementing an automated
financial spreadsheet to maintain all space rental details and payments, which should be
reconciled frequently (more than once a day if necessary). Further, allowing vendors to
occupy a space without securing a full payment should be strictly prohibited and
enforced.
Again, during the final day of the event and when the official exit report was presented,
the fair board was encouraged to seek a close-out report from the event coordinator
including any unpaid fees to be absolutely certain that all possible revenues were
collected. We agree with the recommendation of implementing an automated financial
spreadsheet to maintain parade entry details and payments, which should be reconciled
frequently (more than once a day if necessary). Further, an individual(s) should be
designated to verify the credentials of every vehicle at the start of the parade route.
*$2,050 unaccounted cash revenue
This is the first time that we have received notice of missing funds. We are uncertain as to how
this figure was determined. Further, all event coordinators were instructed by the Fair Office
personnel to submit any and all cash to the Finance and Payouts Manager (Alta Bowman),
which is the normal practice. The services provided by Finance and Payouts are completely
separate from the financing tasks conducted by the Fair Office Accounting personnel. Ms.
Bowman has always verified and documented funds received from each event coordinator,
therefore; we are surprised by this finding. The auditors indicate that an exchange of funds was
observed and we may be able offer a better explanation if a specific situation is identified. We
agree that all funds received (cash, checks, money orders, etc) should be verified and
documented for reporting purposes.
*Poor documentation of revenue
The Fair Office personnel did their best to document and account for all revenue, however;
there were instances where certain details/documents were not shared with our office, which
could indeed translate to loss revenue.
Page 3 of 6
The Fair Office personnel were never informed of a $4,299 sponsorship for the Junior
Rodeo event. In fact, hardly any information relating to this event was disclosed.
Although we made multiple requests for various documents, they were not provided.
Sponsorship funds that were deposited by the Fair Office were documented and are on
file. Those that were deposited prior to our arrival and by other board members during
the event were not confirmed by the Fair Office. This was conveyed during the official
exit report. We recommend that before an event coordinator is selected, guidelines of
what is expected/required should be conveyed and acknowledged with a signature.
Further, all sponsorship initiatives should be handled solely by the sponsorship
coordinator for accountability purposes.
It is true that carnival tickets were not inventoried at the beginning and end of the event.
This was an unintentional oversight on our part. We believed that the contract terms
were fully discussed with the board president and did not realize that the carnival ticket
numbers were not included. We recommend that a specific carnival coordinator be
designated to monitor those logistics.
ALL entrance tickets were inventoried by the Finance and Payouts Manger (Alta
Bowman) prior to distribution. We are assuming that the ending report provided by Ms.
Bowman is more than what the Fair Office's documentation confirmed, as the number of
tickets that were initially ordered was exceeded by sales during one evening of the
event, causing the ticket sellers to manually record each type of sale, after all tickets had
been sold. We recommend that an additional 25% be added to the number of tickets
being ordered in case of unanticipated sales. Otherwise, budget permitting, a
computerized ticketing system would be beneficial.
We have no explanation of why receipts were torn out of the rodeo cash receipt books.
These books are issued by the Finance and Payouts Manager to the event coordinator,
therefore; he and/or the rodeo secretary should be consulted for clarification on the
purpose of removing pre-numbered receipts.
We agree that the cash receipt books issued by the fair board were not clearly labeled
and contained multiple types of transactions, which was indeed confusing. We
recommend that separate and clearly labeled receipt books be issued for each event.
Further, the practice of documenting the beginning and ending receipt numbers from
each book should be enforced for accountability purposes.
*Inadequate controls over expenses
The Fair Office Accounting personnel did their best to obtain supporting documentation for all
expenses. We are surprised with most of the findings and if possible, would like the opportunity
to review and clarify each expense that was sampled for the audit.
We are unclear of the unsupported expenses totaling $4,620 for the rodeo event. If
given the opportunity to review the audit samples, we may be able to provide additional
clarification.
Again, we are surprised at the large figure of unsupported expenses. We felt that we
were stringent in making sure that support documents were provided before checks
were written.
Page 4 of 6
The Fair Office was not aware of the stipulation in the NNNFB Plan of Operation, which
states that all two signatories were required on each check. We apologize to all
concerned for the inadvertent oversight. We support this security measure and had we
realized the proper procedure, we would have acted accordingly.
The Fair Office was not aware that cash with drawls were prohibited. Given the
opportunity, we are certain that the $8,000 with drawl can be accounted for. The Fair
Office no longer has access to the NNNF board checking account, therefore; would
require the assistance of the current account manager(s)/board members to research
the matter for clarification purposes.
FINDING 2
Lack of Adequate Management over Fair Events
*Poor supervision of the Indian Market event
The Indian MarkeWending Coordinator, also serving as a board member, was designated prior
to our involvement. We agree that certain aspects of the event were poorly executed, however;
we did not intervene to avoid further confusion and discord among all involved. Instead the Fair
Office personnel did their best to assist the coordinator with the neglected logistics that were
brought to our attention.
The exact carnival area should be determined and clearly identified/outlined prior to their
arrival. The remaining area intended for vending should also be measured and divided
appropriately with clear markings and numbers.
We agree that vending spaces/area should be thoroughly prepared prior to the start of
the event. Each space should be clearly outlined and numbered.
Poster board maps were created for all areas, however; they were destroyed or
vandalized, which was repeatedly reported to the on-site security personnel.
The poster board maps used to document the rented spaces did indeed become
unmanageable. The suggestion to automate the information was conveyed to the
coordinator, but there was simply no time as the event was in full production. We again,
recommend that the vending layout be automated to eliminate confusion when changes
occur.
The "vending application" was developed and implemented prior to our involvement. We
did not want create additional confusion, therefore; we did initiate any changes. Further,
we were not aware that multiple versions of the application were accepted. We agree
that only "1" version of the application should be approved and disseminated.
The temporary workers were selected by the event coordinator. He was informed that it
was his responsibility to manage each individual. We trusted that he would fulfill his
obligations without incident, however, we too observed occasions when they were left
unattended for a long duration of time. The Fair Office personnel assisted as necessary.
There were occasions where all vending personnel were occupied tending to the
numerous customers causing others to wait, which may have caused the appearance
that there was no on-site assistance. Again, the Fair Office personnel assisted as
necessary and all concerns were addressed.
~ .

Page 5 of 6
The Fair Office was under the assumption that waiver forms were included with the
application packet. We agree that this is a necessary measure that should be strictly
enforced.
Coordinating an event as involved as the Indian Market requires extensive planning and
preparation. Unfortunately, we agree that the designated coordinator did not possess
the necessary experience to manage an event of this magnitude, as there were
numerous deficiencies identified. We recommend that a qualified individual be selected
early on to allow adequate preparation time. Further, this individual should be
thoroughly orientated on the expectations and requirements of the position.
It is true that the Indian Market coordinator was also given the responsibility to
coordinate the Entertainment event, which definitely proved to be a challenge, as he was
being pulled in separate directions, causing certain aspects of each event to be
neglected. Therefore; in the best interest of each event, we recommend a different
coordinator for each event.
Prior to our departure and during the official exit report, we encouraged the fair board to
seek close-out reports from all event coordinators for accountability purposes. We
stressed the fact that the revenue generating events should be a priority, as we felt that
all revenues were not collected. Further, we conveyed the importance organizing and
reconciling all application packets to avoid additional audit findings.
*Disorganized Parade event
The Parade event coordinator, also serving as board member, accepted the assignment as the
event was fast approaching and a coordinator had not yet been identified. Although he was not
experienced in organizing an event such as the Parade, he felt obligated to assist as needed.
Unfortunately, there were some concerns with how the event was arranged and executed.
Coordinating an event of this magnitude requires a vast amount of planning and commitment.
Therefore; in the best interest of the event, it is crucial that an individual with experience is
selected to address the numerous details involved.
*Poor management of Rodeo and 4-H events resulted in incomplete reporting of event
activities
Although the Fair Office management made every reasonable attempt to communicate and
collaborate with each event coordinator, certain details/instructions were disregarded. We did
not want cause any animosity, which would negatively affect the outcome of the event,
therefore; we did not aggressively press the issue.
Repeated requests were made to the Rodeo event coordinator to provide documentation
relating to all aspects of the event. Some documents were provided and others remain
outstanding to date. The fair board was informed during the exit report that the event
"books" had not been submitted and verified. We also advised that an official close-out
report be sought from the event coordinator, who was also serving as a board member.
Without the report, it would be impossible to determine the actual expenses and
revenues of all rodeo events.
Page GofG
Again, the event coordinator was asked to retrieve all pertinent documents from the
Rodeo Secretary, however; we did not receive the requested information prior to our
departure.
The Fair Office announced on more than one occasion that waiver forms were
absolutely necessary and required for liability purposes. Why some coordinators chose
not to enforce this policy is beyond us.
Although all event coordinators were informed of the proper procedures, as related to
revenues, not all complied with our instructions. Revenues from the 4-H event parking
were not verified by the Fair Office, as we were unaware of the event coordinators
intentions of collecting parking fees. Further, we had no knowledge of a separate bank
account for the 4-H event. We recommend that all event coordinators be subjected to
submit close-out reports prior to any compensation for services rendered.
*Approximately $16,500 was not remitted to the Fair Board
Upon conclusion of the production, the Fair Office remitted revenue (a check) in the amount of
$73,829.85 to the NNNF board, after all expenses were accounted for. The auditors were not
aware of expenses (totaling $15,398.89) that were charged to the Fair Office Accounts on
behalf of the NNNF. After providing copies all supporting documents, we determined that the
correct amount owed to the fair board is actually $2,853.11. This is the remaining balance from
a $7,000 Purchase Order that was issued to Home Depot of Farmington during the event. The
Fair Office will initiate the necessary measures to revert the remaining balance to the NNNF
board as efficiently as possible.
*Key responsibilities specified in the Memorandum of Understanding was not performed
The audit findings indicate that the key responsibilities in the MOA were not performed,
however; we strongly disagree. The Fair Office was given a very last minute assignment, by the
NN President, to assist with the planning and execution of the 2012 NNN Fair. Under the
circumstances, we feel that we did our best to circumvent all issues and concerns that were
imposed upon us. We went in with the intention of helping make this event a reality for the
benefit of the Navajo people. Staff went above and beyond to ensure that all production
logistics were addressed. Although we provided technical assistance and guidance in all areas,
we encountered some opposition, leading to discrepancies in certain events. Indeed the Fair
Office could have interjected on many matters, however; we did not want to create conflict,
which would ultimately compromise the success of the fair. The Navajo Nation Museum, out of
good faith, invested manpower, travel costs, operational materials and personal time. Further,
we put our normal responsibilities/duties aside to help make this event happen. Such sacrifices
should be recognized and rewarded, rather than being scrutinized for situations beyond our
control.
*Non-compliance with Internal Revenue Service guidelines
During the exit report, the fair board was informed of the IRS reporting requirements. The fair
board treasurer was later reminded that 1099 Forms were necessary for all individuals
(including but not limited to; event winners, temporary employees and board members) that
received funds in excess of $200. We indicated that this task had to be completed before
January 31, 2013. We have no explanation as to why this was not done.
Post Office Box 2120 Shiprock. NM 87420' Website: northernnavajonationfair.org Email: nnnfair@gmail.com
March 29, 2013
NNNF-2013-004
The Navajo Nation
Office of the Auditor General
Attn: Elizabeth O. Begay, CIA, CFE
P.O. Box 708
Window Rock, AZ 86515
Dear Mrs. Begay,
On behalf of the Northern Navajo Nation Fair Board ("NNNFB"), I would like to thank you and
your staff in conducting the Special Review Audit during the 2012 Northern Navajo Nation Fair,
fonnally known as the Shiprock Navajo Fair. It is my understanding that this is the first time in
history an audit has been conducted. I am truly appreciative of the hard work and dedication
presented by your staff. Although the report identified deficiencies in the fair operations, the
NNNFB accepted this report on a positive note with confidence that corrective actions will be
executed. This report will be used as a tool to implement new strategies under my leadership that
will further enhance the overall fair operations.
Please find the attached written response made by the NNNFB regarding the audit findings of the
2012 Northern Navajo Nation Fair event. If you have any questions, please feel free to contact
me at (505)860-2577 or via email atsodatyler77@hotmaiI.com.
Sincerely,
Sophina A. Tyler, M.B.A., Chairperson
Northern Navajo Nation Fair Board
cc: Northern Navajo Nation Fair Board Members
Post Office Box 2120
Shiprock, New Mexico 87420
RESPONSE
to the
Special Review
ofthe
2012 -IOlst Northern Navajo Nation Fair
March 29, 2013
A. INTRODUCTIONIBACKGROUND
The Northern Navajo Nation Fair ("NNNF") is an annual event held during the Fall Season
in Shiprock, New Mexico. It has successfully operated over 100 years of annual fair
celebrations. It is managed by a board of nineteen (19) members representing the chapters
within the Northern Navajo Nation Agency. The board is referred to as the Northern Navajo
Nation Fair Board ("NNNFB"). They were established, created and confirmed by the
Resources and Development Committee of the Navajo Nation Council as an entity of the
Navajo Nation and the Northern Navajo Nation Agency Council. The nineteen (19) members
consists of the following chapters:
)00 Aneth )00 San Juan
)00 Beclabito )00 Sanostee
)00 Burnham )00 Sheepsprings
)00 Cove )00 Shiprock
)00 Gahii' ahi )00 Tolikan
)00 Mexican Water )00 Teecnospos
)00 Nenehnezad )00 Tse' Daa' Kaan
)00 Newcomb )00 Two Grey Hills/Toadlena
)00 Red Mesa )00 Upper Fruitland
)00 Red Valley
The NNNF is the oldest and most traditional of all the Navajo fairs throughout the Navajo
Reservation with attendance of more than 50,000 visitors, spectators and participants. This is
the most popular fair where communities around the Four Corners area come to celebrate the
year's harvest, culture and tradition.
B. SUMMARY
The NNNFB has reviewed and accepted the Special Review Report conducted by the Office
of the Auditor General. According to our records, a Memorandum of Understanding was
made and entered on September 28, 2012 between the Navajo Nation Executive Branch,
primarily through the Special Event Section of the Navajo Nation Museum, known as the
Navajo Nation Fair Office and the NNNFB. This agreement was developed to oversee and
manage all activities and events of the 2012 NNNF by the Navajo Nation Fair Office. This
agreement was finalized days prior to the 2012 fair activities causing deficiencies in the fair
operations. Nonetheless, the Navajo Nation Fair Office completed their assignment
effectively and efficiently considering the immediate adjustments made to successfully carry
out the responsibilities of the fair operations.
The NNNFB is in the process of developing a Corrective Action Plan to improve future fair
operations as recommended by the Office of the Auditor General. In addition, the Navajo
Nation Fair Office also presented a Close-Out Report after the 20 I2 NNNF events took
place. The report also provided recommendations to improve future fair activities.
Page 1
C. RESPONSE
Over the past two years, the NNNFB experienced disruptions to properly plan the 20 II and
2012 fair activities. The Plan of Operations for the NNNFB played a huge role in guiding the
board to properly plan for the fair activities. On August 21, 2012, amendments to the Plan of
Operation for the NNNFB were approved by the Resources and Development Committee of
the Navajo Nation Council to carry out the responsibilities of the fair operations with no
disruptions from the outside. Upon the final approval, the NNNFB began the initial planning
and executed the fair operations to the best of their abilities. However, the NNNFB believes
the deficiencies that were identified during the 2012 NNNF were caused from last minute
planning and lack of funds.
According to our knowledge, Mr. Manuel Wheeler, Director of the Navajo Nation Museum
has also included a written response to the findings of this review. His response is acceptable
as it further clarifies the activities that took place under his direction. Furthermore, the
NNNFB is addressing these findings to improve the upcoming 2013 fair activities by
developing a Corrective Action Plan. In addition, the NNNFB will develop and implement a
strategic plan to perform at the highest level in executing future fair events. The course of
action to develop a strategic plan will help provide direction, focus on goals and objectives,
and develop guidelines of the overall fair operations. The focus is to point to specific results
that are to be achieved and establishes a course of action for achieving them.
The NNNFB can only take these findings as a learning method to properly plan for future fair
events with honesty and integrity. Upon the review of this report, the goal is to improve the
control over revenues and expenses and effectively manage all fair events. The next course of
action for NNNFB is to develop a Corrective Action Plan which will be submitted to the
Office of the Auditor General within the next thirty (30) days.
Additionally, The NNNFB recently selected a new chairperson who has demonstrated quality
skills, commitment, goal oriented, educated and most importantly, an interest to accomplish
the overall success of future fair activities. The chairperson was nominated and selected on
February 25, 2013. Under this new leadership, the NNNFB has begun the plans and
preparations for the upcoming 2013 Northern Navajo Nation Fair event to ensure proper
planning is established. The Corrective Action Plan will also be developed under the
guidance of the new chairperson. Furthermore, a new Fair Director was appointed on March
26, 2013 to perform the essential functions of planning, organizing and executing the annual
fair activities and off-season events throughout the year. The goal for the NNNFB hopes to
accomplish a trusting relationship once again with the surrounding communities and restore
the reputation of the Northern Navajo Nation Fair in good faith, honesty and integrity.
Page 2
EXHIBIT "1M':
EXHIBIT
1-----6__
Post Office Box 2120 Shiprock, NM 87420 Website: nnnfair.com Email: hdescheenie@hotmail.com
April 30, 2013
NNNF-2013-009
The Navajo Nation
Attn: Elizabeth O. Begay, CIA, CFE
P.O. Box 708
Window Rock, AZ 86515
Dear Mrs. Begay,
According to the requirements of the Office of the Auditor General's Plan of Operation, audited
programs are required to submit a Corrective Action Plan ("CAP") within 30 days after an audit is
released. Therefore, on behalf ofthe Northern Navajo Nation Fair Board ("NNNFB"), I attached
the CAP that specifies the methods and responsibilities of the l'JNNFB to resolve these audit
deficiencies from the 2012 Special Review conducted during the 101 st Northern Navajo Nation
Fair. The NNNFB will execute these corrective actions to the best of their abilities.
In addition, the NNNFB is in the process of revising the Plan of Operation to include quorum
reduction requirements and strategies that will further enhance the implementation of the CAP to
improve future fair operations.
If you have any questions, please feel free to contact me at (505)860-2577 or via email at
sodatyler77@hotmail.com.
Sincerely,
Sophina A. Tyler, M.B.A., Chairperson
cc: Mr. Harry Descheenie, Fair Director, Northern Navajo Nation Fair
Northern Navajo Nation Fair Board Members
Post Office Box 2120 Shiprock, NM 87420 Website: nnnfair.com Email: hdescheenie@hotmail.com
Corrective Action Plan
April 30, 2013
Corrective Responsible Individual(s)/ Corrective Action Completion
Actions Supervising Individual(s) Methods Date
~ ~ $ 6 ~ b t _ ~ e _ ~ ~ _ .... __. .._. . ....._. "__ ._._.._ . ~ . _ .. ._.
a. Indian Market Office ~ Responsible Individual(s): Fair ~ Three quotes will be collected by Fair September 30, 2013
Director, Indian Market Director and Indian Market Coordinator
Coordinator following the purchasing policies of the
~ Supervising Individual(s): Navajo Nation to rent office
NNNFB will oversee and ~ Fair Director and Indian Market Coordinator
supervise Fair Director will present to NNNFB for final approval to
indirectly, but the NNNFB rent office for Indian Market
Chairperson is the responsible ~ An Indian Market Office will be opened and
individual to supervise the Fair available to the public during and throughout
Director according to the Plan the fair within the premises of the Indian
of Operation Market
~ All Event Coordinators including Indian
Market Coordinator will sign ajob
description and volunteer contract that
requires them to be available during and
throughout the.fair event
Page 1 of 10
Indian Market Coordinator will be required
to follow-up with Fair Director on a daily
basis of the operation
All major decisions require approval of the
NNNFB
b. Fair Poster Sales Responsible Individual(s): Fair The Fair Director will be responsible for September 30,2013
Director, Coordinator for marketing and collaborating with various
Publicity/Advertising, businesses/sites to sale fair posters
Accountant, Treasurer The Fair Director will develop an inventory
Supervising Individual(s): method for fair posters to effectively collect
NNNFB will oversee and revenues
supervise Fair Director The Fair Director will identify locations
indirectly, but the NNNFB within the fairgrounds and assign
Chairperson is the responsible responsibility to sell fair posters
individual to supervise the Fair The Accountant with guidance of Fair
Director according to the Plan Director will work with responsible
of Operation individual(s) to apply basic accounting
method using daily cash receipt to reconcile
cash received from sales
NNNFB
c. Guidelines for free passes Responsible Individual(s): Fair The NNNFB will schedule a work session to July 31, 2013
Director, NNNFB develop strategic planning which includes
Supervising Individual(s): development of by-laws, guidelines, policies,
NNNFB will oversee and etc. to effectively and efficiently operate
supervise Fair Director future fair events
indirectly, but the NNNFB The Fair Director will work with NNNFB to
Chairperson is the responsible establish guidelines for free passes
individual to supervise the Fair The Fair Director will be responsible for
Director according to the Plan enforcing the policies for free passes
of Operation All major decisions require approval of the
NNNFB
...
a. Tracking Method Responsible Individual(s): Fair The Fair Director will develop a professional . September 30,2013
Director tracking system/method to track all incoming
upervising Indivic:lual(s): . requests (applications, forms, vending, etc.)
Page 2 of10
b. Daily Reconciliation

a. Fair Sponsors
NNNFB will oversee
supervise Fair Director
indirectly, but the NNNFB
Chairperson is the responsible
individual to supervise the Fair
Director according to the Plan
of Operation
Responsible Individual(s): Fair
Director, Accountant,
Treasurer, Event Coordinators
Supervising Individual(s):
NNNFB will oversee and
of Operation
Director
of Operation
using Microsoft word and excel (spreadsheet)
to properly collect fees. Tracking method
should identitY unpaid fees
A confirmation letter upon payment received '
will be provided to all participants
NNNFB
The Accountant with guidance of Fair
Director will be responsible for keeping track
of cash, payables, receivables, and records to
effectively apply basic accounting methods
and update appropriately using excel
spreadsheet
Basic accounting method will be applied
daily by developing journals, daily cash
receipts, cash disbursement sheets, etc. to
alert shortage or surplus of cash transactions
All Event Coordinators will be required to
submit daily cash receipts to reconcile cash
received from sales
NNNFB
The Fair will develop a fair sponsor
package and present to the NNNFB for
approval prior to requesting sponsorship
A sponsorship letter will be developed and
signed by the NNNFB Chairperson
requesting sponsorship within the
surrounding communities ofthe Northern
Navajo Nation Agency. Only Chairperson
and Fair Director will be authorized to
request for sponsorship. A numbering system
will be establish for memos and letters to
maintain a filing system for all outgoing

September 30,2013
July 31, 2013
Page 3 of 10
A database of sponsorship developed
to properly distribute sponsorship package
>
NNNFB
b. Carnival Tickets
>
>
The Coordinator for September 30, 2013
Director, Coordinator for Publicity/Advertising/Passes with guidance
Publicity/Advertising/Passes, of Fair Director will develop an inventory
Accountant, Treasurer method for carnival tickets to effectively
>
Supervising Individual(s): collect revenues
>
supervise Fair Director Director will work with Coordinator for
indirectly, but the NNNFB Publicity/AdvertisinglPasses to apply basic
Chairperson is the responsible accounting method using daily cash receipt
individual to supervise the Fair to reconcile cash received from sales
>
of Operation NNNFB
c. Ticketing System
>
>
The Coordinator for September 30, 2013
Director, Coordinator for Publicity/Advertising/Passes with guidance
Publicity/AdvertisinglPasses, of Fair Director will obtain three quotes to
Accountant, Treasurer purchase a computerized ticketing system to
>
Supervising Individual(s): eliminate running out of entrance tickets
>
supervise Fair Director Director will work with Coordinator for
indirectly, but the NNNFB Publicity/Advertising/Passes and Finance to
Chairperson is the responsible apply basic accounting method using daily
individual to supervise the Fair cash receipt to reconcile cash received from
Director according to the Plan sales
of Operation
>
NNNFB
d. Cash Receipt Books
>
>
The Accountant with guidance of Fair September 30,2013
Director, Accountant, Director will be responsible for issuing cash
Treasurer receipt books to coordinators for proper
>
Supervising Individual(s): documentation
>
supervise Fair Director submit daily cash receipts to reconcile cash
indirectly, but the NNNFB received from sales
>
AlIlTIaj()r decisions require approval of the
Page 4 of 10
individual to supervise the Fair NNNFB
of Operation
.. . .
a. Accounting Requirements } Responsible Individual(s): Fair } The Fair Director will be responsible for
(proper documentation for Director, Accountant, developing contracts with approval of
purchasing, invoices, contracts, Treasurer NNNFB to initiate contract obligations
bank account, etc.) } Supervising Individual(s): } The Fair Director will work with Accountant
NNNFB will oversee and and Treasurer to make sure all required
supervise Fair Director documents (official quotes, invoices, etc.) are
indirectly, but the NNNFB received before signing checks
Chairperson is the responsible } The Fair Director will work with Treasurer to
individual to supervise the Fair make sure all checks have two signatures
Director according to the Plan according to Plan of Operation
of Operation } The Treasurer will ensure cash withdrawals
are prohibited
} All major decisions require approval ofthe
NNNFB
Corrective Responsible Individual(s)/ Corrective Action
Actions Supervising Individual(s) Methods
Poor
a. Indian Market Event }- Responsible Individual(s): Fair Job Descriptions for coordinators will be
Director, Indian Market developed, such as Indian Market
Coordinator Coordinator and Entertainment Coordinator
}- Supervising Individual(s): }- Volunteers for coordinators will be
NNNFB will oversee and advertised through local newspaper, website,
supervise Fair Director radio announcements, email, chapter
indirectly, but the NNNFB announcements and community collaboration
Chairperson is the responsible }- Coordinators will be interviewed using
individual to supervise the Fair interview score sheets to select experienced
Director according to the Plan coordinators
ofOperation }- Volunteer Contra(;ts willbe developedL
Page S of 10
September 30, 2013
Completion
Date
September 30, 2013
r D i ! ~ ~ ~ ~ _
a. Fair Parade
reviewed, signed and filed for all
coordinators for proper documentation
> Entertainment Coordinator will be
established and will be require to work with
Indian Market Coordinator
> Updated forms will be developed for vending
using a tracking method to ensure proper
documentations are accurate for payments,
waivers and sponsorship requirements
> All Event Coordinators will be required to
received from sales
> Members ofthe NNNFB will not participate
as coordinators due to conflict of interest to
avoid mismanagement, lack of experience
and audit deficiencies; NNNFB are welcome
to assist with any event of interest
> All major decisions require approval of the
NNNFB
> Responsible Individual(s): Fair > Job descriptions will be developed for all September 30,2013
Director, Parade Coordinator event coordinators
> Supervising Individual(s): > Volunteers for coordinators will be
NNNFB will oversee and announced through local newspaper, website,
indirectly, but the NNNFB announcements and community collaboration .
Chairperson is the responsible > Coordinators will be interviewed using
of Operation > Volunteer Contracts will be developed,
> Updated forms (parade application, judging
sheets, liability waivers, etc.) will be
developed using a tracking method to ensure
proper documentations are accurate for
payments, waivers and sponsorship
Page 6 of 10
requirements
)0 Fair Director will work closely with Parade
Coordinator to ensure all applications are
completed (fees paid, waivers signed,
application filed and parade number
assigned)
)0 Fair Director will work with Parade
Coordinator to ensure all required licenses,
applications, permits, insurance and/or
certification are obtained according to state,
tribal, county or federal regulations
)0 Fair Director will work with Parade
Coordinator to ensure prizes are ordered
within a timely matter
)0 All Event Coordinators will be required to
received from sales
)0 Members of the NNNFB will not participate
)0 All major decisions require approval ofthe
NNNFB

a. Fair Rodeo Event )0 Responsible Individual(s): Fair )0 Job descriptions will be developed for all September 30, 2013
Director, Rodeo Coordinator event coordinators
)0 Supervising Individual(s): )0 Volunteers for coordinators will be
NNNFB will oversee and announced through local newspaper, website,
indirectly, but the NNNFB announcements and community collaboration
Chairperson is the responsible )0 Coordinators will be interviewed using
of Operation )0 Volunteer Contracts will be developed,
(;oordinators for proQer documentation
Page 7of10
Updated fonns (application, liability waivers,
etc.) will be developed using a tracking
method to ensure proper documentations are
accurate for reports, payments, waivers and
collection of revenues
);> Fair Director will work closely with Rodeo
application filed and revenues collected)
);> Fair Director will work with Rodeo
);> All Event Coordinators will be required to
received from sales
);> Members of the NNNFB will not participate
);> All major decisions require approval of the
NNNFB
b. 4-H Event Responsible Individual(s): Fair );> Job descriptions will be developed for all September 30,2013
Director, Exhibit Hall event coordinators
Coordinator );> Volunteers for coordinators will be
);> Supervising Individual(s): announced through local newspaper, website,
NNNFB will oversee and radio announcements, email, chapter
supervise Fair Director announcements and community collaboration
indirectly, but the NNNFB );> Coordinators will be interviewed using
Chairperson is the responsible interview score sheets to select experienced
individual to supervise the Fair coordinators
Director according to the Plan );> Volunteer Contracts will be developed,
of Operation reviewed, signed and filed for all
);> Updated fonns (application, liability waivers,
judging sheets, etc.) will be developed using
a tracking methgQ !() {:I!sure proper
Page 8 of 10
i
a. Close-out Report Responsible Individual(s): Fair
Director, Accountant,
Treasurer
of Operation
documentations are accurate for reports,
payments, waivers, sponsorship requirements
and collection of revenues
Fair Director will work closely with Exhibit
application filed and revenues collected)
Fair Director will work closely with Exhibit
Coordinator to develop camping layout for
proper revenue collection which should be
paid to NNNFB
Fair Director will work with Exhibit
received from sales
Members of the NNNFB will not participate
NNNFB
Fair Director will provide Close-out Report October 31,2013
to NNNFB one week prior to a scheduled
call meeting via email. This will allow
members to review, develop comments and
questions before final approval
Close-out Report will include a spreadsheet
of Revenue, Expenses, and Net LosslProfit
NNNFB
.__..
Page 9 of 10
a. Proposed Memorandum of
Understanding (MOU) with any
entity
.... ... . .
.
a. IRS Requirement for
participants and workers
).> Responsible Individual(s): Fair ).> Fair Director will be responsible to ensure July 31, 2013
Director terms of any future MOU will be
).> Supervising Individual(s): implemented
NNNFB will oversee and ).> All major decisions require approval ofthe
supervise Fair Director NNNFB
..
__. _ _. __._._ __
).> Responsible Individual(s): Fair ).> A professional filing system will be . October 06, 2013
Director, Event Coordinators, developed to properly file applications,
Accountant, Treasurer resumes, contracts, interview score sheets,
).> Supervising Individuat(s): W-9 forms, etc. for paid employees,
NNNFB will oversee and volunteers, NNNFB members, coordinators,
supervise Fair Director etc.
indirectly, but the NNNFB ).> Access to files will include: Fair Director,
Chairperson is the responsible NNNFB Officers, Accountant, Auditors
individual to supervise the Fair ).> All major decisions require approval of the
Director according to the Plan NNNFB
of Operation
Page 10 of 10
i
Elizabeth O. Begay, CIA, CFE
The Navajo Nation
Auditor General
M-E-M-O-R-A-N-D-U-M
TO Mariana Kahn, Acting Chief Legal Counsel
OFFICE OF LEGISLATIVE COUNSEL
OFFICE OF LEGiSlATY:
'--------,-__J
FROM

Auditor General
OFFICE OF THE AUDITOR GENERAL
DATE May 17,2013
SUBJECT Request for Legislation -Northern Navajo Nation Fair
We request your office to prepare the legislation"An Action Relating to Finance;
Accepting the Special Review of the 2012 - 101
st
submitted by the Office of the Auditor General and approving the corrective
action plan submitted by the Northern Navajo Nation Fair Board." The
legislation sponsor will be Council Delegate Lorenzo Bates.
Attached as Exhibit "A" is Audit Report No. 13-07"A Special Review of the 2012
- 101
st
Northern Navajo Nation Fair" and Exhibit liB" is the Corrective Action
Plan submitted by the Northern Navajo Nation Fair Board.
If you have any questions, please contact our office at extension 6303. Thank you.
Attachment
xc: Lorenzo Bates, Chairperson
BUDGET AND FINANCE COMMITTEE
Chrono
P.O. Box 708/ Window Rock, AZ 86515 / Ph. (928) 871-6303,6304/ Fax (928) 871-6054 / E-mail: auditorgeneral@navajo.org
LEGISLATIVE BRANCH
HONORABLEJOHNNY NAIZE
Speaker, 22
nd
Navajo Nation Council NAVAJO NATION
May 30,2013
MEMORANDUM
TO Honorable Members
Budget and Finance Committee
FROM
SUBJECT ASSIGNMENT OF LEGISLATION
Pursuant to 2 N.N.C 164 (A)(4), this memorandum serves to inform and advise you that
I assign the following legislation to the Budget and Finance Committee.
Legislation No. 0150-13
RELATING TO BUDGET AND FINANCE; ACCEPTING THE SPECIAL
REVIEW OF THE 2012 - 101
sT
NORTHERN NAVAJO NATION FAIR
SUBMITTED BY THE OFFICE OF THE AUDITOR GENERAL AND
APPROVING THE CORRECTIVE ACTION PLAN SUBMITTED BY THE
NORTHERN NAVAJO NATION FAIR BOARD.
As the Committee assigned to consider the legislation, Legislation No. 0150-13 must be
placed on the Budget and Finance Committee's agenda at the next regular meeting for
final consideration.
ATTACHMENT: Legislation No. 0150-13
xc: Hon. Ben Shelly, President, The Navajo Nation
Harrison Tsosie, Attorney General, NNDOJ
Mark Grant, Controller
Dominic Beyal, Executive Director, OMB
Honorable LoRenzo C. Bates, Council Delegate (Prime Sponsor)
OFFICE OF THE SPEAKER INA VAJO NATION LEGISLA TIVE BRANCH I POST OFFICE BOX 3390 I WINDOW ROCK, ARIZONA 86515
TELEPHONE (928) 871-7160 FAX (928) 871-7255
. .
Office ofLegislative Counsel t5
/;
Johnny Naize
Telephone: (928) 871-7166 Speaker ofthe NtWtzjo Nation Council
Fax: (928) 871-7576

MEMORANDUM
To Honorable LoRenzo Bates
Tiistoh Sikaad, Nenahnezah, Upper Fruitland, Tse'Daa'Kaan, Newcomb, San
Juan Chapters
From LfWvl;L:nA
Mariana Kahn, Attorney
Office of Legislative Counsel
Date May 18,2013
Re PROPOSED STANDING COMMITTEE RESOLUTION, AN ACTION
RELATING TO BUDGET AND FINANCE; ACCEPTING THE SPECIAL
REVIEW OF THE 2012 - 101
sT
NORTHERN NAVAJO NATION FAIR
SUBMITTED BY THE OFFICE OF THE AUDITOR GENERAL AND
APPROVING THE CORRECTIVE ACTION PLAN SUBMITTED BY THE
NORTHERN NAVAJO NATION FAIR BOARD
As requested, I have prepared the above-referenced proposed resolution and associated
legislative summary sheet pursuant to your request for legislative drafting. Based on existing
law and review of documents submitted, the resolution drafted is legally sufficient.
However, as with all legislation, it is subject to review by the courts in the event of challenge.
You are encouraged to review the proposed resolution to ensure that it is drafted to your
satisfaction.
If you are satisfied with the proposed resolution, please sign it as "sponsor" and submit it to the
Office of Legislative Services where it will be given a tracking number and sent to the Office of
the Speaker for assignment.
If the proposed resolution is unacceptable to you, please contact me at the Office of Legislative
Counsel and advise me of the changes you would like made to the proposed resolution.
Thank you for your service to the Navajo Nation.
13-333-1
0tJiCC' ot'Legldiltiw COl/wei! The L(g/d,llil'" lImnch /I'list ()jfi, " BIIX J3')()! Hlilldozo Rocl<, AnzOilil 86515

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