The Chukchansi Tribe has conducted Class II and III gaming in its gaming
facility, the Chukchansi Gold Resort and Casino, from June 2003 to the
present. In prior financial statements and audits submitted to the NIGC,
the fiscal year for the Casino ran from January 1 to December 31. In
particular, in the Casino's 2013 fiscal year, the Chukchansi Tribe
maintained that same 12-month period as its fiscal year i.e., beginning
January 1, 2013, and ending December 31, 2013.

IGRA requires that tribes submit annual audits of each gaming facility. 25
USS.C. § 2710(b)(2)(C). NIGC regulations require that a tribe engage an
independent certified public accountant to provide annual independent
audits of the financial statements of each gaming operation located on
Indian lands for each fiscal year. The NIGC regulations further require a
tribe submit a copy of the financial statements and audits, with any
management letter(s) and other documents/reports setting forth the results
of the annual audit(s) to the NIGC within 120 days after the end of each
gaming operation's fiscal year. Further, the Chukchansi Tribe’s ordinance
requires the Tribal gaming enterprise provide an annual independent audit
to the National Indian Gaming Commission.

Therefore, the Chukchansi Tribe’s 2013 fiscal year financial statement and
audit were due to the NIGC on April 30, 2014.

The Chukchansi Tribe did not submit the 2013 fiscal year financial
statement and audit to the NIGC on April 30, 2014, and have yet to submit
the documents.

On the May 6, 2014, the attorney for the Chukchansi Tribe’s gaming
commission sent a letter to the NIGC Sacramento Region Director
acknowledging the overdue audit and financial statements for the 2013
fiscal year.

IGRA provides that the NIGC shall monitor Class II gaming conducted on
Indian lands on a continuing basis and may demand access to and inspect
all papers, books, and records necessary to carry out its duties. 25 U.S.C. §
2706(b)(1) and (6). NIGC regulations require that a tribe engage a
certified public accountant to perform an assessment to verify whether the
gaming operation is in compliance with MICS and/or the TICS for each
fiscal year and submit the AUP report to the NIGC within 120 days of the
end of each gaming operation's fiscal year, in conjunction with the
submission of the annual financial audit report. Additionally, the
Chukchansi Tribe’s gaming ordinance requires an independent certified
public accountant to annually perform an AUP assessment in the manner
outlined in the NIGC regulations.


shall be engaged annually to perform “Agreed-Upon
Procedures” in the manner provided for in 25 C.F.R.
542.3(f).

e. Section 9.5; Audit Requirements,

9.5.1 Annual Enterprise Audit. The Tribal Gaming
Commission and the General Manager of the Enterprise
shall obtain an annual independent audit of such
Enterprise by a certified public accountant using the
accounting standards for audits of casinos of the
American Institute of Certified Public Accountants.

9.5.3. Acopy of such audits shall be provided to the Tribal
Gaming Commission, the Tribal Council, State Gaming
Agency and the NIGC.

Role of Independent Audit Report and Agreed-Upon Procedure Report

Submission of the annual independent audit report and agreed-upon procedure
(AUP) report by a certified public accountant is critical to the NIGC’s mission to
protect the integrity of Indian gaming. An independent certified public
accountant'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 principles provides a certain level
of assurance as to the security of tribal gaming revenues. The AUP report is an
evaluation of the gaming operations system of internal controls by measuring
compliance with the TICS that were adopted by the tribal gaming regulatory
authority. Both the audit report and the AUP report prepared and submitted on a
timely basis is evidence of, among other things, the integrity of the gaming
operation and, more 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. The failure to submit the audit report
or the AUP report deprives the Chairman of his ability to exercise the regulatory
tole provided in IGRA.

Circumstances of the Violation

1. The Chukchansi Tribe is a federally recognized Indian nation with Tribal
headquarters in Coarsegold, California.


8. Therefore, the Chukchansi Tribe’s 2013 fiscal year AUP report was due to
the NIGC on April 30, 2014.

0. The Chukchansi Tribe did not submit the 2013 fiscal year AUP report to
the NIGC on April 30, 2014, and have yet to submit the documents.

10. In violation of IGRA, NIGC regulations, and the Chukchansi Tribe’s
gaming ordinance, the Chukchansi Tribe has failed to submit to the NIGC
an annual independent audit and financial statements for the 2013 fiscal
year.

ll. In violation of IGRA, NIGC regulations, and the Chukchansi Tribe’s

gaming ordinance, the Chukchansi Tribe has failed to submit to the NIGC
an annual AUP report for the 2013 fiscal year.

Measures Required to Correct the Violation.

Financial statements, audits, and AUP reports must be received within 120 days
of the end of a gaming operation's fiscal year. 25 C.F.R. §§ 542.3(f), 543.23(d),
and 571.13(a). No remedial action can cure the failure to submit the documents.
Nevertheless the Chukchansi Tribe should submit to the NIGC within ten
calendar days of service of this NOV the 2013 fiscal year audit, financial
statement, and AUP report.

Appeal

Within 30 days after service of this NOV, any party served with this NOV may
appeal, under 25 C.F.R. part 584, by submitting a notice of appeal to the National
Indian Gaming Commission, 90 K Street N.E., Suite 200, Mailstop #1621,
Washington, DC 20240. The appealing party, the appellant, has a right to
assistance of counsel in such an appeal. A notice of appeal must reference this
NOV.

Within ten days after filing a notice of appeal, the appellant must file with the
Commission a brief that states with particularity the relief desired and the grounds
in support and may include, when available, supporting evidence in the form of
affidavits. If the appellant wishes for a closed hearing, it must include, with the
brief, a request to do so and why. If the appellant wishes to present oral testimony
or witnesses at the hearing, it must include a request to do so with the brief. The
request to present oral testimony or witnesses must specify the names of proposed
witnesses and the general nature of their expected testimony. The appellant 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, under 25 C.F.R.
part 585.


NATIONAL INDIAN GAMING COMMISSION

NOTICE OF VIOLATION

TO:

NOV-14-02

Chairman (Agent for Service)

Picayune Rancheria of the Chukchansi Indians

Picayune Rancheria of the Chukchansi Indians Tribal Gaming Commission
46575-B Road 417

Coarsegold, CA 93614

Picayune Rancheria of the Chukchansi Indians Tribal Gaming Commission
Khammy Chhom, Executive Director

46575-B Road 417

Coarsegold, CA 93614

Notification of Violation

The Chairman of the National Indian Gaming Commission (NIGC) gives notice
that the Picayune Rancheria of the Chukchansi Indians (Chukchansi Tribe),
located in Coarsegold, California, and operating the Chukchansi Gold Resort and
Casino (Casino) located at 711 Lucky Lane, in Coarsegold, California, off State
Route 41, has violated the Indian Gaming Regulatory Act (IGRA), the NIGC
regulations, and the Chukchansi Tribe’s gaming ordinance by failing to submit a
timely annual audit, financial statement, and agreed-upon procedure report.

Authority

Under the IGRA and NIGC regulations, the Chairman may issue a Notice of
Violation (NOV) to any person for a violation of any provision of IGRA, NIGC
regulations, or a tribal gaming ordinance or resolution approved by the NIGC
Chairman. 25 U.S.C, § 2713(a); 25 C.F.R. § 573.3(a).

Applicable Federal and Tribal Laws

1. 25 U.S.C. § 2710(b)(2)(C). 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.


H. Fine; Order of Temporary Closure; Submission of Information

The violation cited above may result in the assessment of a civil fine against the
Chukchansi Tribe in an amount not to exceed $25,000 per violation per day. The
violation is of an on-going nature because the Chukchansi Tribe has not yet
submitted its fiscal year 2013 financial statements, audits, and AUP reports. The
violation cited above may also result in the issuance of an order of temporary
closure if the violation is not corrected. Under 25 C.F.R. § 575.5(a), the
Chukchansi Tribe may submit written information about the violation to the
Chairman within 15 days after service of this NOV (or such longer period as the
Chairman may grant for good cause). The Chairman shall consider any
information submitted in determining the facts surrounding the violation and the
amount of the civil fine, if any.

Dated this v of September, 2014

CADML

onddev O. CKaudhtti, Chairman (Acting)



25 C.F.R. §§ 571.12 and 571.13. NIGC regulations require that a tribe
engage an independent certified public accountant to provide annual
independent audits of the financial statements of each gaming operation on
Indian lands for each fiscal year and submit a copy of the financial
statements and audits, with any management letter(s) and other
documents/reports setting forth the results of the annual audit(s) to the
NIGC within 120 days after the end of each gaming operation's fiscal year.

25 C.F.R. §§ 542.3(f) and 543.23(d). NIGC regulations require that a
tribe engage a certified public accountant to perform an assessment to
verify whether the gaming operation is in compliance with NIGC
Minimum Internal Control Standards (MICS) and/or the Tribal Internal
Control Standards (TICS) for each fiscal year and submit the agreed-upon
procedures report to the NIGC within 120 days of the end of each gaming
operation's fiscal year in conjunction with the submission of the annual
financial audit report.

The Tribal Gaming Ordinance of the Picayune Rancheria of the
Chukchansi Indians approved by the NIGC Chairman on April 16, 2010,
has the following requirements:

a. Section 1.3; Policy.

* eK

1.3.6 Tribal Class II Internal Control Standards: The Tribe
voluntarily, through this Tribal Gaming Ordinance, shall
maintain minimum internal control standards (“MICS”)
that equal or exceed those set forth in 25 C.F.R. 542 (as
in effect on October 1, 2006). The Tribe will work with
NIGC to ensure compliance with MICS regulations.

b. Section 4.18; Powers of the Board of Commissioners:
In furtherance, but not in limitation, of the Tribal Gaming
Commission’s purposes and responsibilities, and subject to any
restrictions contained in this Ordinance or other applicable law, the
Board of Commissioners shall have, and is authorized to exercise
by majority vote, the following powers in addition to all power
already conferred by this Ordinance:

4.18.1 To enforce this Ordinance, the IGRA, the Tribal MICS,
the Compact, and the regulations of the Tribal Gaming
Commission over all Gaming within the jurisdiction of
the Tribe, provided that none of the Board of
Commissioners, any individual Commissioner nor any
employee of the Tribal Gaming Commission shall make


ae

4.18.20

management decisions as to the day-to-day operations of
the Gaming Enterprise.

To require the filing of any records, forms, and reports
and all other information desired by the Tribal Council or
required by this Ordinance.

Section 6.3; Audit Requirements.

6.3.1

The Enterprise shall provide a copy of an annual
independent audit to the Tribal Gaming Commission, the
Tribal Council, the State Gaming Agency, and National
Indian Gaming Commission.

Each contract between the Tribe and another Person for
supplies, services (other than legal and accounting
services) or concession of a contract amount in excess of
Twenty-five Thousand Dollars ($25,000) annually shall
be subject to an independent audit. Such audit shall be
solely limited to monthly printout from the accounts
payable of the Gaming Operations of the checks
rendered. A copy of such audit will be provided to the
Tribal Gaming Commission, the Tribal Council, State
Gaming Agency and the National Indian Gaming
Commission.

Section 8.2; Minimum Internal Control Standards.

8.2.1

eed

S22.

Applicable Standards. The Tribal Gaming Commission
shall comply with 25 C.F.R. part 542 by formally
adopting and making applicable to the Tribe’s Gaming
operation(s) internal control standards that: (1) provide a
level of regulatory control that equals or exceeds that set
forth in 25 C.F.R. part 542, as published or as revised by
mutual agreement between the National Indian Gaming
Commission and the Picayune Rancheria of the
Chukchansi Indians;

Annual CPA Testing of Compliance. In order to verify
that the Gaming operation is in compliance with the
internal control standards adopted pursuant to Section
8.2.1, an independent certified public accountant (CPA)