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National Indian Gaming Commission

NOTICE OF VIOLATION

NOV 05-11

Charles W. Murphy, Chairman (Agent for Service of Process)
Standing Rock Sioux Tribe

P.O. Box D

Fort Yates, ND 58538

FAX: (701) 854-8595

Tribal Council (Agent for Service of Process)
Standing Rock Sioux Tribe

P.O. Box D

Fort Yates, ND 58538

Eric Antoine, Attorney
Standing Rock Sioux Tribe
P.O. Box D

Fort Yates, ND 58538
FAX: (701) 854-3488

- Notification of Violation

The Chairman of the National Indian Gaming Commission (NIGC) hereby gives notice that
the Standing Rock Sioux Tribe (Respondent), located in Fort Yates, North Dakota, is in
violation of the Indian Gaming Regulatory Act (IGRA), NIGC regulations, and its Gaming

Ordinance for failure to submit a timely annual audit.

. Authority

Under regulations of the National Indian Gaming Commission, the Chairman of the NIGC
(Chairman) may issue a Notice of Violation (NOV) to any person for violation of any
provision of the Indian Gaming Regulatory Act, NIGC regulations, or any provision of

a tribal gaming ordinance or resolution approved by the Chairman. 25 C.F.R. § 573.3.

. Applicable Federal and Tribal Laws



A. IGRA requires an annual audit of each gaming operation and requires that a copy
of the results of the annual audit be submitted to the NIGC. 25 U.S.C.

2710(b)(2)(C).

B. NIGC regulations require that a tribe cause to be conducted annual independent
audits of the financial statements of each gaming operation on Indian lands and
submit a copy of the audit report(s) setting forth the results of the annual
audit(s) to the NIGC within 120 days after the end of each fiscal year. 25 C.F.R.
§§ 571.12 and 571.13

Cc. Section 23-404 of the Standing Rock Sioux Tribe’s Ordinance No. 198 — the
approved gaming ordinance — requires the Tribe to obtain outside annual audits
for all of its gaming operations and to submit the results of those audits to the
NIGC.

Role of Independent Audit Report

Submission of the annual independent audit report by a firm of certified public accountants
is critical to the NIGC’s mission to protect the integrity of Indian gaming. A firm’s ability to
conduct an audit in accordance with generally accepted auditing standards and render an
opinion on the financial statements prepared in conformity with generally accepted
accounting principals provides a certain level of assurance as to the security of tribal gaming
revenues. The audit report prepared and submitted on a timely basis is evidence of, among
other things, the integrity of the gaming operation and, mote specifically, of the adequacy of
the books and records, the functioning of the internal financial controls, and the disclosure
of information having a bearing on the financial statements.

Circumstances of the Violation

A. Respondent is a federally recognized Indian Tribe with tribal headquarters in
Fort Yates, North Dakota.

B. Respondent operated its gaming facility, Bear Soldier Jackpot Bingo, during all or
part of the following years: 2004.

Cc. The NIGC received an untimely audit report for the fiscal year ending December
31, 2004. The audit report was due to the NIGC on May 2, 2005, 120 days after
the end of the Tribe’s fiscal year. The audit was received by the NIGC on May

31, 2005.
6. Measures Required to Correct this Violation

There is no way to rectify the late submission of the 2004 audit. The statute requires that the
audit be received within 120 days of the end of the fiscal year.


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7.

Appeal

Within 30 (thirty) days after service of this Notice of Violation, Respondent may appeal to
the full Commission under 25 C.F.R. Part 577 by submitting a notice of appeal and, if
desired, request for hearing to the National Indian Gaming Commission, 1441 L Street, NW,
Ninth Floor, Washington, DC 20005. Respondent has a right to assistance of counsel in
such an appeal. A notice of appeal must reference this Notice of Violation.

Within ten (10) days after filing a notice of appeal, Respondent must file with the
Commission a supplemental statement that states with particularity the relief desired and the
grounds therefore and that includes, when available, supporting evidence in the form of
affidavits. If Respondent wishes to present otal testimony or witnesses at the hearing,
Respondent must include a request to do so with the supplemental statement. The request
to present oral testimony or witnesses must specify the names of proposed witnesses and the
general nature of their expected testimony, whether a closed hearing is requested and why.
Respondent may waive its right to an oral hearing and instead elect to have the matter
determined by the Commission solely on the basis of written submissions.

Fine--Submission of Information

The violation cited above may result in the assessment of a civil fine against Respondent in
an amount not to exceed $25,000 per violation per day. Under 25 C.F.R. § 575.5(a),
Respondent may submit written information about the violation to the Chairman within 15
days after this notice of violation (or such longer period as the Chairman of the
ant for good cause). The Chairman shall consider any information

National Indian Gaming Commission

Andia Lord

Staff Attorney