Date: August 24,2005 

Subject: Minimum Internal Control Standards Revisions 

to 25 C.F.R. Part 542 

The purpose of this Bulletin is to address the final rule published on August 12, 2005, 70 Fed. 

Reg. 47097 that includes revisions to the National Indian Gaming Commission (Commission or 

NIGC) Minimum Internal Control Standards (MICS) at 25 C.F.R. Part 542. The NlGC has worked 

cooperatively for over a year with a standing committee consisting of Tribal and NlGC 

representatives to develop the final revisions. Additional revisions are anticipated as the NlGC 

seeks to refine its regulations to keep pace with changes in the gaming industry, particularly 

those concerning technological advances. 

In response to the inherent risks of gaming enterprises and the resulting need for effective 

internal controls in Tribal gaming operations, the NlGC first developed MlCS for Indian gaming in 

1999, and then later performed a comprehensive revision of them in 2002. The Commission 

recognized from the outset that periodic technical adjustments and revisions would be necessary 

in order to keep the MlCS effective in protecting Tribal gaming assets and the interests of Tribal 

stakeholders and the gaming public. To that end, on May 4, 2005, initial technical revisions to the 

MlCS were enacted. The NlGC has now issued a final rule containing further revisions to the 

Commission's existing MICS. These revisions are necessary to correct erroneous citations or 

references in the MlCS and to clarify, improve, and update other existing MlCS provisions. The 

purpose of these final MlCS revisions is to address apparent shortcomings in the MlCS and 

various changes in Tribal gaming technology and methods. Public comment to these final MlCS 

revisions was received by the Commission for a period of 48 days after the date of their 

publication in the Federal Register as a proposed rule on March 10, 2005. After consideration of 

all received comments, the Commission has made whatever changes to the proposed revisions 

that it deemed appropriate and has now published its final revisions to the Commission's MlCS 

Rule. 25 C.F.R. Part 542. 

The current revisions include changes to the following sections which you will want to review to 

determine if your Tribe's internal control standards need to be amended: 

Section 542.3(f) Revisions to clarify the type of report being requested and more 

accurately define the scope and function of the process deemed 

necessary to ensure consistency and reliability of the reports produced. 

Section 542.7(d) Revisions to clarify that unverified transfers of bingo cash or cash 

equivalents accountability are prohibited. 
Section 542.8(f) Revisions to clarify that unverified transfers of pull-tab cash or cash 

equivalents accountability are prohibited. 

Section 542.1 0(f) Revisions to clarify that unverified transfers of keno cash or cash 

equivalents accountability are prohibited. 

Section 542.1 1 (e) Revisions to clarify that unverified transfers of pari-mutuel cash or cash 

equivalents accountability are prohibited. 

Section 542.13(f) Revisions to clarify that unverified transfers of gaming machine cash or 

cash equivalents accountability are prohibited. 

Section 542.14(d) Revisions to clarify that unverified transfers of cage and vault cash or 

cash equivalents accountability are prohibited. 

Section 542.14(d)(4) Revision to delete the standard because it is misplaced within the MICS; 

it applies to the general ledger not the cagelvault accountability. 

Section 542.17 Revisions to require that individual comp transactions equal to or 

exceeding $100 be included in the comp report. 

Section 542.21(f)(4)(ii) Revision to delete the standard requiring a second count of the gaming 

machine bill acceptor drop because the meter data provides an 

acceptable independent verification. 

Section 542.21 (f)(12) Revision to delete the standard because it represents a duplicate control 

to an identical requirement at Section 542.21 (e)(4). 

Section 542.22(g) Revision to add a standard that represents notification to internal 

auditors and internal audit departments that the Commission will provide 

recommended guidelines to aid in satisfaction of the testing requirements 

contained within the internal audit section. 

Section 542,23(n)(3) Revision to lower the threshold in which a heightened level of 

surveillance coverage is required over wide area progressive gaming 

machines. Accordingly, the coverage is now applicable to wide area 

progressive machines possessing a base amount of $1 million or more. 

Section 542.31 (f)(4)(ii) Revision to delete the standard requiring a second count of the gaming 

machine bill acceptor drop because the meter data provides an 

acceptable independent verification. 

Section 542.31 (f)(12) Revision to delete the standard because it represents a duplicate control 

to an identical requirement at Section 542.31 (e)(5). 

Section 542.32(g) Revision to add a standard that represents notification to internal 

auditors and internal audit departments that the Commission will provide 

recommended guidelines to aid in satisfaction of the testing requirements 

contained within the internal audit section. 

Section 542.33(q)(3) Revision to lower the threshold in which a heightened level of 

surveillance coverage is required over wide area progressive gaming 
machines. Accordingly, the coverage is now applicable to wide area 

progressive machines possessing a base amount of $1 million or more. 

Section 542.41 (f)(4)(ii) Revision to delete the standard requiring a second count of the gaming 

machine bill acceptor drop because the meter data provides an 

acceptable independent verification. 

Section 542.41 (f)(12) Revision to delete the standard because it represents a duplicate control 

to an identical requirement at Section 542.41 (e)(5). 

Section 542.42(g) Revision to add a standard that represents notification to internal 

auditors and internal audit departments that the Commission will provide 

recommended guidelines to aid in satisfaction of the testing requirements 

contained within the internal audit section. 

Section 542.43(r)(3) Revision to lower the threshold in which a heightened level of 

surveillance coverage is required over wide area progressive gaming 

machines. Accordingly, the coverage is now applicable to wide area 

progressive machines possessing a base amount of $1 million or more. 

Compliance 

In accordance with the published rule, except for the final revisions to subsection 542.3(f), on or 

before October 11, 2005, the Tribal gaming regulatory authority should have: (1) in accordance 

with the Tribal gaming ordinance, established and implemented Tribal internal control standards 

that shall provide a level of control that equals or exceeds the revised standards set forth herein; 

and (2) established a deadline no later than December 12, 2005, by which a gaming operation 

must come into compliance with the Tribal internal control standards. However, the Tribal gaming 

regulatory authority may extend the deadline by an additional 60 days if written notice is provided 

to the Commission no later than December 12, 2005. Such notification must cite the specific 

revisions to which the extension pertains. 

With regard to the final revisions to subsection 542.3(f), on or before October 11, 2005, the Tribal 

gaming regulatory authority should have: (1) in accordance with the Tribal gaming ordinance, 

established and implemented Tribal internal control standards that shall provide a level of control 

that equals or exceeds the revised standards set forth in subsection 542.3(f); and (2) established 

a deadline no later than August 14, 2006, by which a gaming operation must come into 

compliance with the Tribal internal control standards. To further clarify the referenced deadline, 

the final revisions to subsection 542.3(f) are applicable to fiscal years of the gaming operation 

ending after August 14, 2006. No extension of the compliance period is allowed for the final 

revisions to subsection 542.3(f). 

These revisions will appear in the Code of Federal Regulations (CFR) when Title 25 is published 

by the Government Printing Office in April 2006. However, the CFR website, 

http://www.qpoaccess.qov/ecfr/, incorporates the new revisions and is updated frequently. 

Should you have any question, please call the Division of Audits at (503) 326-7050 or submit 

inquiries to our website at www.nigc.gov.