Proposed Rule2022-11482
Audit Standards
Primary source
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Published
June 1, 2022
Issuing agencies
Interior DepartmentNational Indian Gaming Commission
Abstract
The National Indian Gaming Commission (NIGC) proposes to amend our Audit Standards regulations. The proposed rule will amend the regulations to eliminate the Commission waiver requirement for reviewed financial statements and allow all operations grossing less than $2 million in the previous fiscal year to submit reviewed financial statements provided that the tribe or tribal gaming regulatory authority (TGRA) permits the gaming operation to submit reviewed financials. The proposed amendment to the rule will also create a third tier of financial reporting for charitable gaming operations with annual gross revenues of $50,000 or less where, if permitted by the tribe, a charitable gaming operation may submit financial information on a monthly basis to the tribe or the TGRA and in turn, the tribe or TGRA provides an annual certification to the NIGC regarding the charitable gaming operation's compliance with the financial reporting. The proposed amendment also adds a provision clarifying that the submission of an adverse opinion does not satisfy the regulation's reporting requirements.
Full Text
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<title>Federal Register, Volume 87 Issue 105 (Wednesday, June 1, 2022)</title>
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[Federal Register Volume 87, Number 105 (Wednesday, June 1, 2022)]
[Proposed Rules]
[Pages 33091-33093]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-11482]
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DEPARTMENT OF THE INTERIOR
National Indian Gaming Commission
25 CFR Part 571
RIN 3141-AA72
Audit Standards
AGENCY: National Indian Gaming Commission, Department of the Interior.
ACTION: Proposed rule.
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SUMMARY: The National Indian Gaming Commission (NIGC) proposes to amend
our Audit Standards regulations. The proposed rule will amend the
regulations to eliminate the Commission waiver requirement for reviewed
financial statements and allow all operations grossing less than $2
million in the previous fiscal year to submit reviewed financial
statements provided that the tribe or tribal gaming regulatory
authority (TGRA) permits the gaming operation to submit reviewed
financials. The proposed amendment to the rule will also create a third
tier of financial reporting for charitable gaming operations with
annual gross revenues of $50,000 or less where, if permitted by the
tribe, a charitable gaming operation may submit financial information
on a monthly basis to the tribe or the TGRA and in turn, the tribe or
TGRA provides an annual certification to the NIGC regarding the
charitable gaming operation's compliance with the financial reporting.
The proposed amendment also adds a provision clarifying that the
submission of an adverse opinion does not satisfy the regulation's
reporting requirements.
DATES: The agency must receive comments on or before July 1, 2022.
ADDRESSES: You may send comments by any of the following methods:
<bullet> Federal eRulemaking Portal: Go to <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the instructions for submitting comments.
<bullet> Email: <a href="/cdn-cgi/l/email-protection#721b1c141d001f13061b1d1c321c1b15115c151d04"><span class="__cf_email__" data-cfemail="93fafdf5fce1fef2e7fafcfdd3fdfaf4f0bdf4fce5">[email protected]</span></a>.
<bullet> Fax: (202) 632-7066.
<bullet> Mail: National Indian Gaming Commission, 1849 C Street NW,
MS 1621, Washington, DC 20240.
<bullet> Hand Delivery: National Indian Gaming Commission, 90 K
Street NE, Suite 200, Washington, DC 20002, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
FOR FURTHER INFORMATION CONTACT: Jennifer Lawson, National Indian
Gaming Commission; Telephone: (202) 632-7003.
SUPPLEMENTARY INFORMATION:
I. Comments Invited
Interested parties are invited to participate in this proposed
rulemaking by submitting such written data, views, or arguments as they
may desire. Comments providing the factual basis behind supporting the
views and suggestions presented are particularly helpful in developing
reasoned regulatory decisions on the proposal.
II. Background
The Indian Gaming Regulatory Act (IGRA or Act), Public Law 100-497,
25 U.S.C. 2701 et seq., was signed into law on October 17, 1988. The
Act establishes the National Indian Gaming Commission (NIGC or
Commission) and sets out a comprehensive framework for the regulation
of gaming on Indian lands. On January 22, 1993, the Commission
promulgated Part 571.12 establishing audit standards for tribal gaming
facilities. On July 27, 2009, the Commission amended the regulation to
allow tribes with multiple facilities to consolidate their audit
statements into one and to allow operations earning less than $2
million in gross gaming revenue to file an abbreviated statement.
III. Development of the Proposed Rule
On June 9, 2021, the National Indian Gaming Commission sent a
Notice of Consultation announcing that the Agency intended to consult
on several topics, including proposed changes to the Audit standards.
Prior to consultation, the Commission released proposed discussion
drafts of the regulations for review. The proposed amendments to the
Audit standards are designed to reduce the financial hurdles that small
and charitable gaming operations face regarding the audit requirement.
The Commission held two virtual consultation sessions in September and
one virtual consultation in October of 2021 to receive tribal input on
any proposed changes.
The Commission reviewed all comments received through consultation
and now proposes these changes.
IV. Regulatory Matters
Regulatory Flexibility Act
The proposed rule will not have a significant impact on a
substantial number of small entities as defined under the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq. Moreover, Indian tribes are not
considered to be small entities for the purposes of the Regulatory
Flexibility Act.
Unfunded Mandate Reform Act
The Commission, as an independent regulatory agency, is exempt from
compliance with the Unfunded Mandates Reform Act, 2 U.S.C. 1502(1); 2
U.S.C. 658(1).
Takings
In accordance with Executive Order 12630, the Commission has
determined that the proposed rule does not have significant takings
implications. A takings implication assessment is not required.
Civil Justice Reform
In accordance with Executive Order 12988, the Commission has
determined that the proposed rule does not unduly burden the judicial
system and meets the requirements of section 3(a) and 3(b)(2) of the
Order.
National Environmental Policy Act
The Commission has determined that the proposed rule does not
constitute a major federal action significantly affecting the quality
of the human environment and that no detailed statement is required
pursuant to the National Environmental Policy Act of 1969, 42 U.S.C.
4321, et seq.
Paperwork Reduction Act
The information collection requirements contained in this proposed
rule were previously approved by the Office of Management and Budget
(OMB) as required by 44 U.S.C. 3501 et seq. and assigned OMB Control
Number 3141- 0003.
Tribal Consultation
The National Indian Gaming Commission is committed to fulfilling
its tribal consultation obligations--whether directed by statute or
administrative action such as Executive Order (E.O.) 13175
(Consultation and Coordination with Indian Tribal Governments)--by
adhering to the consultation framework described in its Consultation
Policy published July 15, 2013. The NIGC's consultation policy
specifies that it will consult with tribes on Commission Action with
Tribal Implications, which is defined as: Any Commission regulation,
rulemaking, policy, guidance, legislative proposal, or operational
activity that may have a substantial direct effect on an Indian tribe
on matters including, but not limited to the ability of an Indian tribe
[[Page 33092]]
to regulate its Indian gaming; an Indian tribe's formal relationship
with the Commission; or the consideration of the Commission's trust
responsibilities to Indian tribes.
Pursuant to this policy, on June 9, 2021, the National Indian
Gaming Commission sent a Notice of Consultation to the public,
announcing the Agency intended to consult on several topics, including
proposed amendments to NIGC audit standards. The Commission held two
virtual consultation sessions in September and one virtual consultation
session in October of 2021 to receive tribal input on proposed changes.
List of Subjects in 25 CFR Part 571
Gambling, Indian--lands, Indian--tribal government, reporting and
recordkeeping requirements.
Therefore, for reasons stated in the preamble, 25 CFR part 571 is
proposed to be amended as follows:
PART 571--MONITORING AND INVESTIGATIONS
0
1. The authority citation continues to read as follows:
Authority: 25 U.S.C. 2706(b), 2710(b)(2)(C), 2715, 2716.
0
2. Revise Sec. 571.12 to read as follows:
Sec. 571.12 Audit standards.
(a) Each tribe shall prepare comparative financial statements
covering all financial activities of each class II and class III gaming
operation on the tribe's Indian lands for each fiscal year.
(b) A tribe shall engage an independent certified public accountant
to conduct an annual audit of the financial statements of each class II
and class III gaming operation on the tribe's Indian lands for each
fiscal year. The audit and auditor must meet the following standards:
(1) The independent certified public accountant must be licensed by
a state board of accountancy.
(2) Financial statements prepared by the certified public
accountant shall conform to generally accepted accounting principles
and the annual audit shall conform to generally accepted auditing
standards.
(3) The independent certified public accountant expresses an
opinion on the financial statements. An adverse opinion must be
submitted, but does not satisfy this requirement unless:
(i) It is the result of the gaming operation meeting the definition
of a state or local government and the gaming operation prepared its
financial statements in accordance with generally accepted accounting
principles (GAAP) as promulgated by Financial Accounting Standards
Board (FASB), or;
(ii) the adverse opinion pertains to a consolidated audit pursuant
to paragraph (d) of this section and the operations not attributable to
the adverse opinion are clearly identified.
(c) If a gaming operation has gross gaming revenues of less than
$2,000,000 during the prior fiscal year, the annual audit requirement
of paragraph (b) of this section is satisfied if:
(1) The independent certified public accountant completes a review
of the financial statements conforming to the statements on standards
for accounting and review services of the gaming operation; and
(2) The tribe or tribal gaming regulatory authority (TGRA) permits
the gaming operation to submit a review of the financial statements
according to this paragraph and the tribe or TGRA informs the NIGC of
such permission; provided that
(3) If the Chair of the NIGC has reason to believe that the assets
of a gaming operation are not being appropriately safeguarded or the
revenues are being misused under IGRA, the Chair may, at his or her
discretion, require any gaming operation subject to this paragraph (c)
to submit additional information or comply with the annual audit
requirement of paragraph (b) of this section.
(d) If a gaming operation has multiple gaming places, facilities or
locations on the tribe's Indian lands, the annual audit requirement of
paragraph (b) of this section is satisfied if:
(1) The tribe chooses to consolidate the financial statements of
the gaming places, facilities or locations;
(2) The independent certified public accountant completes an audit
conforming to generally accepted auditing standards of the consolidated
financial statements;
(3) The consolidated financial statements include consolidating
schedules for each gaming place, facility, or location; and
(4) The independent certified public accountant expresses an
opinion on the consolidated financial statement as a whole and subjects
the accompanying financial information to the auditing procedures
applicable to the audit of consolidated financial statements.
(e) If there are multiple gaming operations on a tribe's Indian
lands and each operation has gross gaming revenues of less than
$2,000,000 during the prior fiscal year, the annual audit requirement
of paragraph (b) of this section is satisfied if:
(1) The tribe chooses to consolidate the financial statements of
the gaming operations;
(2) The consolidated financial statements include consolidating
schedules for each operation;
(3) The independent certified public accountant completes a review
of the consolidated schedules conforming to the statements on standards
for accounting and review services for each gaming facility or
location; and
(4) The independent certified public accountant expresses an
opinion on the consolidated financial statements as a whole and
subjects the accompanying financial information to the auditing
procedures applicable to the audit of consolidated financial
statements.
(f)(1) If a tribal or charitable gaming operation has gross gaming
revenues of less than $50,000 during the prior fiscal year, the annual
audit requirement of paragraph (b) of this section is satisfied if:
(i) The gaming operation creates, prepares, and maintains records
in accordance with Generally Accepted Accounting Principles;
(ii) At a minimum, the gaming operation provides the tribe or
tribal gaming regulatory authority (TGRA) with the following financial
information on a monthly basis:
(A) Each occasion when gaming was offered in a month;
(B) Gross gaming revenue for each month;
(C) Amounts paid out as, or paid for, prizes for each month;
(D) Amounts paid as operating expenses, providing each recipient's
name; the date, amount, and check number or electronic transfer
confirmation number of the payment; and a brief description of the
purpose of the operating expense;
(E) All deposits of gaming revenue;
(F) All withdrawals of gaming revenue;
(G) All expenditures of net gaming revenues, including the
recipient's name, the date, amount, and check number or electronic
transfer confirmation number of the payment; and a brief description of
the purpose of the expenditure; and
(H) The names of each employee and volunteer, and the salary or
other compensation paid to each person.
(iii) The tribe or TGRA permits the gaming operation to be subject
to this paragraph (f), and the tribe or TGRA informs the NIGC in
writing of such permission;
(iv) Within 30 days of the gaming operation's fiscal year end, the
tribe or the TGRA provides a certification to the NIGC that the tribe
or TGRA reviewed
[[Page 33093]]
the charitable gaming operation's financial information, and after such
review, the tribe or TGRA concludes that the charitable gaming
operation conducted the gaming in a manner that protected the integrity
of the games offered and safeguarded the assets used in connection with
the gaming operation, and the charitable gaming operation expended net
gaming revenues in a manner consistent with IGRA, NIGC regulations, the
tribe's gaming ordinance or resolution, and the tribe's gaming
regulations.
(2) If the tribe or TGRA does not or cannot provide the NIGC with
the certification required by paragraph (f)(1)(v) of this section
within 30 days of the gaming operation's fiscal year end, the gaming
operation must otherwise comply with the annual audit requirement of
paragraph (b) of this section.
(3) The tribe or TGRA may impose additional financial reporting
requirements on gaming operations that otherwise qualify under this
paragraph (f).
(4) If the Chair of the NIGC has reason to believe that the assets
of a charitable operation are not being appropriately safeguarded or
the revenues are being misused under IGRA, the Chair may, at his or her
discretion, require any gaming operation subject to this paragraph (f)
to submit additional information or comply with the annual audit
requirement of paragraph (b) of this section.
(5) This paragraph (f) does not affect other requirements of IGRA
and NIGC regulations, including, but not limited to, fees and quarterly
fee statements (25 U.S.C. 2717; 25 CFR part 514); requirements for
revenue allocation plans (25 U.S.C. 2710(b)(3)); requirements for
individually-owned gaming (25 U.S.C. 2710(b)(4), (d); 25 CFR 522.10);
minimum internal control standards for Class II gaming and agreed-upon
procedures reports (25 CFR part 543); background and licensing for
primary management officials and key employees of a gaming operation
(25 U.S.C. 2710(b)(2)(F); 25 CFR parts 556, 558); and facility licenses
(25 CFR part 559).
Dated: May 18, 2022.
E. Sequoyah Simermeyer,
Chairman.
Jeannie Hovland,
Vice Chair.
[FR Doc. 2022-11482 Filed 5-31-22; 8:45 am]
BILLING CODE 7565-01-P
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