NATIONAL INDIAN GAMING COMMISSION 

NOTICE OF VIOLATION 

NOV-14-01 

TO: Chairman (Agent for Service) 

Picayune Rancheria of the Chukchansi Indians 

Picayune Rancheria of the Chukchansi Indians Tribal Gaming Commission 

46575-B Road 417 

Coarse gold, CA 93 614 

Picayune Rancheria of the Chukchansi Indians Tribal Gaming Commission 

Khammy Chhom, Executive Director 

46575-B Road 417 

Coarsegold, CA 93614 

A. 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. 

B. Authority 

Under 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). 

C. 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. 
2. 25 C.F.R. §§ 571.12 and 571.13. NIGC regulations require that a tribe 

engage an independent ce1iified 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. 

3. 25 C.F.R. §§ 542.3(f) and 543.23(d). NIGC regulations require that a 

tribe engage a certified public accountant to perfonn 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. 

4. 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. 

* * * 

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: 

4.1 8.1 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 

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* * * 

management decisions as to the day-to-day operations of 

the Gaming Enterprise. 

4.18.20 To require the filing of any records, fonns, and reports 

and all other infonnation desired by the Tribal Council or 

required by this Ordinance. 

c. 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. 

6.3 .2 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. 

d. Section 8.2; Minimum Internal Control Standards. 

8.2.1 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; 

* * * 

8.2.2 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) 

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shall be engaged amrnally to perfonn "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 Amrnal 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 A copy of such audits shall be provided to the Tribal 

Gaming Commission, the Tribal Council, State Gaming 

Agency and the NIGC. 

D. Role of Independent Audit Report and Agreed-Upon Procedure Report 

Submission of the annual independent audit report and agreed-upon procedures 

(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 infonnation 

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 

role provided in IGRA. 

E. Circumstances of the Violation 

1. The Chukchansi Tribe is a federally recognized Indian nation with Tribal 

headquarters in Coarsegold, California. 

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2. 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 2012 fiscal year, the Chukchansi Tribe 

maintained that same 12-month period as its fiscal year i.e., beginning 

January 1, 2012, and ending December 31 , 2012. 

3. IGRA requires that tribes submit annual audits of each gaming facility. 25 

U.S.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. 

4. Therefore, the Chukchansi Tribe's 2012 fiscal year financial statement and 

audit were due to the NIGC on April 30, 2013. 

5. The Chukchansi Tribe did not submit the 2012 fiscal year financial 

statement and audit to the NIGC on April 30, 2013, and have yet to submit 

the documents. 

6. On July 8, 2013, the NIGC Sacramento Region Director sent a letter to the 

Chukchansi Tribe informing it of the missed compliance date for the 

submission of the annual independent audit report and financial statements 

and requested the Chukchansi Tribe identify steps to address the matter. 

Then again, on April 1, 2014, the NIGC Sacramento Region Director sent 

another letter to the Chukchansi Tribe about the missing and overdue audit 

and financial statements for the 2012 fiscal year. 

7. On July 16, 2013, 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 2012 

fiscal year. Then again, 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 2012 fiscal year. 

8. 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. § 

5 
2706(b)(l) and (6). NIGC regulations require that a tribe engage a 

certified public accountant to perfonn 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 mam1er 

outlined in the NIGC regulations. 

9. Therefore, the Chukchansi Tribe's 2012 fiscal year AUP report was due to 

the NIGC on April 30, 2013. 

10. The Chukchansi Tribe did not submit the 2012 fiscal year AUP report to 

the NIGC on April 30, 2013, and have yet to submit the documents. 

11. In violation ofIGRA, 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 2012 fiscal 

year. 

12. In violation ofIGRA, 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 2012 fiscal year. 

F. Measures Required to Correct the Violation. 

Financial statements, audits, and AUP reports must be received within 120 days 

of the end ofa 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 2012 fiscal year audit, financial 

statement and AUP report. 

G. 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. 

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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 suppoti and may include, when available, supporting evidence in the fonn 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. 

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

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 2012 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 Chainnan shall consider any 

information submitted in detennining the facts surrounding the violation and the 

amount of the civil fine, if any. 

Dated this !J_ of September, 2014 

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