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§ 1. Establishment
There is established the Office of the Auditor General under the Navajo Nation Council.
§ 2. Purpose
A. The purpose of the Office of the Auditor General shall be to provide continuing professional audit and management services to the Navajo Nation government with regard to the adequacy of management and accounting systems, procedures, practices and internal controls, including but not limited to:
1. Conducting financial audits and reviews of financial records of chapters, related Navajo Nation entities and contractors to the Navajo Nation in accordance with government auditing standards;
2. Conducting performance audits and reviews of Navajo Nation government programs, departments and divisions;
3. Providing management advisory services to the Navajo Nation;
4. Assisting the Office of the Prosecutor and Ethics and Rules Office in the investigation of possible fraud and/or misappropriation of assets of the Navajo Nation and
5. Assisting in the building of an effective, responsive, strong and accountable government.
B. The Office of Auditor General may, from time to time, perform professional services for organizations and entities not accounted for by the Department of Financial Services of the Navajo Nation and obtain revenue therefore, payable to the Navajo Nation Government.
§3. Staffing, organization and scheduling of work
A. There are established the positions of the Auditor General, other auditors, systems analysts, support staff and such other positions as may be necessary to carry out the purpose of the Office of the Auditor General.
B. The Auditor General shall be appointed by the Speaker, Navajo Nation Council, at a negotiated salary subject to confirmation by the Navajo Nation Council and shall serve at the pleasure of the Navajo Nation Council. The Auditor General shall be an actively licensed Certified Public Accountant, Certified Internal Auditor and/or other comparable certification to fulfill the purpose of the office. The Auditor General shall be bound by a professional code of ethics and standards of the accounting and auditing profession as regulated by the Board of Accountancy of the licensing state or other applicable licensing agency. The Auditor General shall be knowledgeable in performance, compliance and financial auditing, public administration, and governmental financial and fiscal policies. The Auditor General may be removed at any time by majority vote of the Navajo Nation Council.
All other personnel shall be hired and compensated pursuant to Navajo Nation policies and procedures relating to qualifications, experience, Navajo preference, salaries, etc., and subject to workload requirements and budgetary constraints.
C. The Speaker, Navajo Nation Council, may appoint an Acting Auditor General to serve during the vacancies of the Auditor General, pending formal action by the Navajo Nation Council. Such Acting Auditor General shall be subject to the same professional requirements required of the Auditor General in §3 (B), above.
D. An organizational chart of the Office of the Auditor General is provided in the office’s current Plan of Operation. This chart is subject to future changes in scope and budgetary restrictions.
E. The scheduling of the audits for any fiscal year will be done in accordance with sound professional practice, giving priority, to the extent practicable, where requested or when the interests of the Navajo Nation so require.
§4. Duties, responsibilities and authority of the Auditor General
The Auditor General is authorized and directed to:
A. Formulate, implement and maintain continuing audit programs and take such action as may be deemed necessary for the accomplishment of the purpose of the office.
B. Establish and maintain all necessary liaison and communication with the officials of the Navajo Nation government, entities, and Chapters, mineral and business lease operators and state and federal agencies for the furtherance and accomplishment of the purpose of the office.
C. Coordinate with the Division of Community Development, and the Office of the Controller in the development of accounting, financial-related and audit regulations for use by the Chapters; and work with the Office of the Prosecutor and Ethics and Rules Office, if necessary, to secure records necessary for completing Chapter audits and in the investigation of possible fraud and/or misappropriation of assets of the Navajo Nation.
D. Be responsive to the requests of management for specific information, review or audit of any aspect of Navajo Nation and Chapter operation.
E. Prepare and present to the Budget and Finance Committee of the Navajo Nation Council, and to the appropriate elements of management, clear and concise reports of the results of internal audit reviews and examinations, prepared in accordance with generally accepted auditing standards and governmental auditing standards as promulgated by the Comptroller General of the United States.
F. Serve as one of the principal advisors to the Navajo Nation Council regarding accounting, systems and procedures, program, departmental and divisional operations and financial and business matters.
G. Participate in management decisions when new fiscal procedures are being established or existing fiscal procedures modified and also in various task forces, committees and commissions.
H. Exercise supervisory control and direction of all personnel within the office and maintain the highest standards of audit quality, ethics, independency and confidentiality. Review, modify and approve audit programs, audit reports and recommendations. Schedule and prioritize audits.
I. Represent the Office of the Auditor General in executive and legislative planning.
J. Represent the Navajo Nation government within the areas of the responsibility and authority of the office and as authorized by the Office of the Speaker, Navajo Nation Council, in relations with all persons and organizations outside the Navajo Nation, and in matters relating to cooperative activities with state or federal agencies, pertaining to audit. Interface with the Navajo Nation's independent auditors.
K. Provide, to the extent necessary, training programs and library resources for the development of a well-qualified professional audit staff. Maintain a continuing education program designed to qualify staff personnel to meet the government auditing standards.
L. Conduct limited examinations of specific financial transactions and provide other administrative support services to the Navajo Nation government as and when requested and as directed by the Navajo Nation Council.
M. Enter into agreements, as deemed necessary with Navajo Nation, state or federal departments or offices for the sole purpose of accomplishing the objectives of the office, subject to review by and approval of the Intergovernmental Relations Committee.
N. Update the Plan of Operation and policy guidelines for the Office of the Auditor General as and when necessary, to implement the objectives and policies of the Navajo Nation Administration.
O. Conduct audit follow-ups and take other necessary actions to assist in the implementation of audit recommendations in accordance with requests therefore and the directions of the Navajo Nation Council.
P. While conducting audits, (financial, performance and compliance) and operations appraisals of Navajo Nation programs, divisions or Chapters, give emphasis to: effectiveness, accountability, responsiveness to the needs of the Navajo people, adherence to goals and objectives, policies and plans of operation; safeguarding of Navajo Nation assets and properties; proper use of labor, equipment, funds and properties; services to the community; compliance with applicable Navajo Nation, state and federal laws, agreements, policies or procedures; and adequacy and efficiency of personnel.
Q. Conduct, or participate in the conduct of, examinations of financial statements of Navajo Nation affiliated entities, contractors to the Navajo Nation and others, in accordance with generally accepted auditing standards.
R. Conduct operations audits of Navajo Nation programs, divisions, departments and Navajo Nation affiliated entities as requested by such entities or by the Navajo Nation Council.
S. Delegate authority to members of the staff as and when necessary.
T. Report directly to the Speaker, Navajo Nation Council on all operational issues and be responsible thereto for the accomplishment of the purposes of the office.
U. In general, do everything necessary and convenient and assume such other duties and responsibilities as may be deemed advisable, to accomplish the purpose of this office in the best interests of the Navajo Nation.
V. Serve as the sole authority within the Navajo Nation for issuance of audit reports or reports covering limited examinations of specific financial transactions.
§ 5. Disclosure of records
A. Officials and employees of all Navajo Nation programs, divisions, entities, Chapters, and enterprises shall make their books and records available to the staff of the Office of the Auditor General upon request and extend every courtesy and cooperation to such representatives while they are performing their official duties.
B. The requested information shall be made available within a reasonable period of time.
§ 6. Audit reports, actions and follow-ups
A. The Auditor General shall submit all Navajo Nation program, division, Chapter, and enterprise audit reports with findings and recommendations to the Budget and Finance Committee of the Navajo Nation Council for their review. Upon receipt of the reports, review shall begin within a reasonable period of time so as to implement the audit recommendation(s) in a timely manner.
B. The Office of the Auditor General shall conduct such post-audit follow-ups as are deemed necessary. The results of such post-audit follow-ups shall be similarly reported as specified by (A), above.
§ 7. Procedures for Addressing Audit Findings and Implementing Recommendations
A. Within 10 working days after receipt of the final draft of an audit report from the Office of the Auditor General, the audited program will submit written comments to the Auditor General that present the audited program’s overall response to the final draft of the audit report. The audited program may request an extension of up to five working days for justified reasons and approval by the Auditor General. Failure of an audited program to submit a response shall be deemed to constitute an acceptance of the final draft of the audit report by the program. The response should not exceed five pages and should generally describe how audit findings made in the final draft of the audit report will be corrected. If the audited program disputes any portion of the final draft of the audit report, the response shall state the reasons therefor.
The term “audited program” as used includes all Navajo Nation programs, divisions, chapters, enterprises, or other entities of Navajo Nation government.
B. A copy of the audited program’s response will be published as part of the audit report issued to the Budget and Finance Committee, the Standing Committee having oversight responsibility for the audited program, the Navajo Nation Council and public.
C. Within 30 calendar days after the release of the audit report, the audited program will submit a corrective action plan to the Auditor General. The corrective action plan will address each finding presented in the report in one of the following ways:
1. Audited program agrees with the audit findings and will immediately implement the recommendations within a stated time period.
2. Audited program agrees with the audit findings but considers that immediate implementation of the recommendation is not feasible. Audited program will state the reasons why implementation should be delayed and the expected time frame for implementation.
D. Upon receipt of the audited program’s corrective action plan, the Auditor General shall review the plan to determine its effectiveness. Upon approval of the plan, the Auditor General shall present the audit report, and the audited program shall present the corrective action plan to the Budget and Finance Committee for review. The Auditor General will comment and identify any potential deficiencies in the corrective action plan, if warranted. The Budget and Finance Committee will approve the audit report and the corrective action plan by resolution.
E. The standing committee or committees having oversight responsibility for the audited program shall be served with copies of the audit report and the corrective action plan. The oversight committee may request the Auditor General to brief them on the audit report.
F. Six months after the submission of the corrective action plan, the audited program will provide to the Auditor General a written report on the status of all recommendations.
1. The status report shall describe actions taken to implement the corrective action plan and the results of those actions. The report should disclose any problems that have affected the audited program’s ability to implement the corrective action plan in a timely manner and state how the audited program plans to address these problems.
2. The Auditor General will review the implementation status report and, if warranted, will conduct test work to verify actions taken and/or problems encountered. The Auditor General will provide a copy of the status report along with the Auditor General’s opinion regarding the success of the audited program’s implementation effort to the Budget and Finance Committee and the standing committee or committees having oversight responsibility for the audited program.
G. Twelve months after the release of the audit report, the Auditor General will conduct a follow-up review to document the status of the implementation. The audited program shall provide data and information, as requested by the Auditor General, to verify action taken. The Auditor General shall issue a written report on the audited program’s progress in implementing the corrective action plan. As part of the follow-up report, the Auditor General shall recommend action to be taken by the Budget and Finance Committee and present the report to the standing committee or committees having oversight responsibility for the audited program.
H. The Auditor General shall report the results of the follow-up review and the status of the corrective action plan to the Budget and Finance Committee.
I. Based on the follow-up review and any recommendations made by the standing committee having oversight responsibility for the audited program, the Budget and Finance Committee will determine what actions should be taken.
§ 8. Duties of Audited Programs
Once audit findings and a corrective action plan are approved by the Budget and Finance Committee, the Navajo Nation program, division, Chapter, enterprise or entity which is the subject of the corrective action plan shall have a duty to implement the corrective action plan according to the terms of the plan.
§ 9. Sanctions for Failure to Implement Plan
A. Whenever the Auditor General determines through the periodic review established in Section 6 or 7 that a program, division, Chapter, enterprise or entity has failed to implement the corrective action plan approved by the Budget and Finance Committee within the time table set by the corrective action plan or the Auditor General, the Auditor General shall immediately report that failure to the Controller of the Navajo Nation and to the Budget and Finance Committee.
B. As a sanction for failure to implement the corrective action plan, the Controller shall cause 10% of monies payable from any Governmental Fund of the Navajo Nation as defined at 12 N.N.C. section 810(R) to be withheld after the recommended sanction is approved by the Budget and Finance Committee and issued to the program, division, Chapter, enterprise or entity until such time as the program, division, Chapter, enterprise or entity demonstrates to the Auditor General that the corrective action plan has been implemented. Once proof of implementation of the corrective action plan has been demonstrated, the Auditor General shall immediately report this compliance to the Controller who shall then release the sanction and all withheld funds to the program, division, Chapter, enterprise or entity.
C. In addition, the director of any program, division, or entity of the Navajo Nation which fails to implement a corrective action plan, as reported by the Auditor General, may have 20% of their salary withheld by the Controller after the recommended sanction is approved by the Budget and Finance Committee until such time as the program, division, enterprise or entity which is subject to his or her direction demonstrates to the Auditor General that the corrective action plan has been implemented. Whenever the audited program is a Chapter of the Navajo Nation, 20% of any payment prospectively due the chapter officials shall be withheld by the Controller and the Chapter government. Once proof of implementation of the corrective action plan has been demonstrated, the Auditor General shall immediately report this compliance to the Controller and, where applicable, the chapter government, who shall then release the withheld salary to the director of the program, division, enterprise, or entity or to the chapter official.
D. Any director or Chapter official whose salary or other payments are withheld pursuant to section 9(C) shall have the right to have the withholding reviewed by the Navajo Nation Office of Hearings and Appeals. Review shall be limited to a determination of whether the audit recommendation or corrective action plan bears a rational relationship to the audit report, was approved by the Budget and Finance Committee, whether the corrective action plan was implemented within established time tables and whether the time tables for implementation were reasonable. The withholding of salary shall be upheld if there is a preponderance of evidence in support of these factors. The decision of the Office of Hearings and Appeals shall be final and no appeal shall lie to the courts of the Navajo Nation.
§10. Amendment of the Plan of Operation
This Plan of Operation may be amended from time to time by the Navajo Nation Council upon the recommendation of the Intergovernmental Relations Committee of the Navajo Nation Council. The request for amendment shall be originated by the Auditor General.
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