§ 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 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. If the independent certified public accountant issues an adverse opinion, it still 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 (c); 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 the Indian Gaming Regulatory Act (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 tribe has multiple gaming facilities or operations on the tribe's Indian lands, the tribe may choose to satisfy the annual audit requirement of paragraph (b) of this section with a consolidated audit if the following requirements are satisfied: ( 1 ) The tribe is the owner of all the facilities;
( 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; and
( 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 the gaming operation's financial information, and after such review, the tribe or TGRA concludes that the 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 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 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 (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).
[87 FR 57597, Sept. 21, 2022]