§ 543. 19 What are the minimum internal control standards for audit 

and accounting? 

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In 2010, the NIGC posted on its web-site draft Class II MICS, Section 543.19, What are the 

minimum internal control standards for accounting? This document will compare the 2010 Draft 

Regulation to the TGWG’s proposed § 543.19(e). The words in blue (underlined) are the 

additions made by the TGWG. 

July 2010 Draft MICS TGWG Version 

§ 543.19 What are the minimum internal 

control standards for accounting? 

(a) Each gaming operation shall prepare 

accurate, complete, legible, and permanent 

records of all transactions pertaining to revenue 

and gaming activities. 

(b) Each gaming operation shall prepare 

general accounting records according to 

Generally Accepted Accounting Principles 

using a double-entry system of accounting, and 

shall maintain detailed, supporting, subsidiary 

records, including, but not limited to: 

(1) Detailed records identifying revenues, 

expenses, assets, liabilities, and equity for each 

gaming operation; 

(2) Detailed records of all markers, IOU's, 

returned checks, held checks, or other similar 

credit instruments; 

(3) Card game statistical game records 

reflecting drop by each table by shift, by day, 

cumulative month-to-date, and year-to-date. 

(4) Other records required by this part and by 

the Tribal internal control standards; 

(5) Journal entries prepared by the gaming

operation and by its independent accountants; 

and 

(6) Any other records specifically required to 

be maintained. 

(c) Each gaming operation shall establish 

administrative and accounting procedures for 

the purpose of determining effective control 

over a gaming operation's fiscal affairs. The 

procedures shall be designed to reasonably 

ensure that: 

(1) Assets are safeguarded; 

(2) Financial records are accurate and reliable; 

(3) Transactions are performed only in 

accordance with management's general and 

specific authorization; 

§ 543.19 What are the minimum internal 

control standards for Audit and 

Accounting?

(e) Accounting. Controls must be established to 

ensure each gaming operation

(1) Prepares accurate, complete, 

legible, and permanent records of all 

transactions pertaining to gaming 

revenue 2) Prepares general accounting 

records on a double-entry system of 

accounting, maintaining detailed, 

supporting, subsidiary records, and 

perform the following: 

(i) Record gaming activity 

transactions in an accounting 

system to identify and track all

revenues, expenses, assets, and 

liabilities; 

(ii) Produce income and 

balance sheet statements;

(iii) Produce appropriate 

subsidiary ledgers to support 

the balance sheet;

(iv) Inventory and safeguard 

assets;

(v) Prepare, review, and 

maintain accurate financial 

statements;

(vi) Prepare minimum bankroll 

calculations; and

(vii) Maintain and preserve all 

financial books, records, and 

relevant supporting 

documentation. 

TGWG Guidance

(h)Accounting. 

(1)Controlled Inventories. For any 

inventories that accounting maintains for 
§ 543. 19 What are the minimum internal control standards for audit 

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(c) Each gaming operation shall establish 

administrative and accounting procedures for 

the purpose of determining effective control 

over a gaming operation's fiscal affairs. The 

procedures shall be designed to reasonably 

ensure that: 

(1) Assets are safeguarded; 

(2) Financial records are accurate and reliable; 

(3) Transactions are performed only in 

accordance with management's general and 

specific authorization; 

(4) Transactions are recorded adequately to 

permit proper reporting of gaming revenue, and 

to maintain accountability of assets; 

(5) Recorded accountability for assets is 

compared with actual assets at reasonable 

intervals, and appropriate action is taken with 

respect to any discrepancies; and 

(6) Functions, duties, and responsibilities are 

appropriately segregated in accordance with 

sound business practices. 

(d) Gross gaming revenue computations. (1) 

For player interfaces, gross revenue equals 

drop, less fills, prize payouts and personal 

property awarded to patrons as gambling 

winnings. 

cash paid out during the month to patrons as 

winning wagers (“modified accrual basis''). 

(3) For each card game, gross revenue equals 

all cash received by the operation as 

compensation for conducting the game. 

(i) A gaming operation shall not include either 

shill win or loss in gross revenue computations. 

(ii) [Reserved] 

(4) In computing gross revenue for bingo and 

pull tabs, the actual cost to the gaming 

operation of any personal property (other than 

costs of travel, lodging, services, food, and 

beverages) awarded as a payout to patrons may 

be deducted if the gaming operation maintains 

detailed documents supporting the deduction. 

(e) Each gaming operation shall establish 

internal control systems sufficient to ensure 

that currency (other than tips or gratuities) 

received from a patron in the gaming area is 

promptly placed in a locked box in the table, 

or, in the case of a cashier, in the appropriate 

proper segregation, controls should be 

developed to account for the following: 

(i)Receipt of Inventory. When 

inventory is received it should be counted 

and recorded on a log. 

(ii)Storage of Inventory. Storage of 

inventory should be secured and recorded 

on the appropriate log. 

(iii)Issuance of Inventory. Issuance of 

inventory should be performed by an 

accounting agent, and should be recorded on 

the appropriate log. 

(iv)Use of Inventory. Accounting 

should perform a reconciliation between 

inventory used and inventory issued. 

Variances should be investigated and 

documented, with results forwarded to 

management. 

(v)Return of Inventory. Return of 

inventory should be performed by an 

accounting agent, and should be recorded on 

the appropriate log. 

(vi)Audit of Accounting Managed 

Inventory. Controls should require an agent 

independent of accounting to audit any 

inventories managed by accounting. 

(2)Preparation of Records. 

(i)The gaming operation must conform to 

generally accepted accounting principles 

(GAAP) when preparing financial 

statements, including subsidiary ledgers. 

(ii)Best practice suggests the gaming 

operation should record all transactions 

pertaining to gaming revenue in an 

automated or computerized accounting 

system. This will help ensure preparation 

of accurate, complete, legible, and 

permanent records of those transactions. 

(iii)The accounting system should be 

designed to prepare general accounting 

records on a double-entry system of 

accounting. 

(iv)The accounting system should have 

the capability to record gaming activity 

transactions to identify and track all 
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place in the cashier's cage, or on those games 

which do not have a locked drop box, or on 

card game tables, in an appropriate place on the 

table, in the cash register or in another 

approved repository. 

(f) If the gaming operation provides periodic 

payments to satisfy a prize payout resulting 

from a wager, the initial installment payment, 

when paid, and the actual cost of a payment 

plan, which is funded by the gaming operation, 

may be deducted from winnings. The gaming

operation is required to obtain the approval of 

all payment plans from the Tribal gaming 

regulatory authority. For any funding method 

which merely guarantees the gaming

operation's performance, and under which the 

gaming operation makes payments out of cash 

flow (e.g. irrevocable letters of credits, surety 

bonds, or other similar methods), the gaming

operation may only deduct such payments 

when paid to the patron. 

(g) Vouchers issued at a player interface shall 

be deducted from gross revenue as prize 

payouts in the month the vouchers are issued 

by the player interface. Vouchers deducted 

from gross revenue that are not redeemed 

within a period, not to exceed 180 days of 

issuance, shall be included in gross revenue. 

An unredeemed voucher previously included in 

gross revenue may be deducted from gross 

revenue in the month redeemed. 

(h) A gaming operation may not deduct from 

gross revenues the unpaid balance of a credit 

instrument extended for purposes other than 

gaming. 

(i) A gaming operation may deduct from gross 

revenue the unpaid balance of a credit 

instrument if the gaming operation documents, 

or otherwise keeps detailed records of, 

compliance with the following requirements. 

Such records confirming compliance shall be 

made available to the Tribal gaming regulatory 

authority or the Commission upon request: 

(1) The gaming operation can document that 

the credit extended was for gaming purposes; 

(2) The gaming operation has established 

procedures and relevant criteria to evaluate a 

revenues, expenses, assets, and liabilities in 

order to produce income and balance sheet 

statements. 

(v)Appropriate subsidiary ledgers should 

be prepared and maintained to support 

balance sheet items. Subsidiary ledgers 

should be reviewed on a monthly basis for 

completeness and accuracy to affirm 

inventory, asset valuation, and liabilities. 

Subsidiary ledgers should also be verified to 

the general ledger balances monthly and 

all variances investigated and 

documented. 

(vi)The accounting system should have the 

capability to prepare and maintain accurate 

financial statements. These financial 

statements must be reviewed after 

preparation. Best practice suggests that 

management agents independent of 

accounting perform the review. 

(3)Minimum Bankroll Calculation. The 

gaming operation should coordinate with 

the TGRA to determine the frequency for 

preparation of a minimum bankroll 

calculation. The gaming operation should 

further coordinate with the TGRA to 

determine, based on the needs of the 

operation, what minimum bankroll 

calculation to perform to ensure the gaming 

operation maintains cash (on hand and in 

bank) in an amount sufficient to satisfy 

obligations to patrons as they are incurred. 

(4)Maintenance and Preservation of Books, 

Records, and Documentation. The gaming 

operation must develop controls to 

ensure that all financial books, records, 

and relevant supporting documentation, are 

maintained and preserved as required. 
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patron’s credit reputation or financial resources 

and to then determine that there is a reasonable 

basis for extending credit in the amount or sum 

placed at the patron’s disposal; 

(3) In the case of personal checks, the gaming

operation has established procedures to 

examine documentation, which would normally 

be acceptable as a type of identification when 

cashing checks, and has recorded the patron’s 

bank check guarantee card number or credit 

card number, or has satisfied paragraph (i) (2) 

of this section, as management may deem 

appropriate for the check-cashing authorization 

granted; 

(4) In the case of third-party checks for which 

cash, chips, or tokens have been issued to the 

patron, or which were accepted in payment of 

another credit instrument, the gaming operation 

has established procedures to examine 

documentation, normally accepted as a means 

of identification when cashing checks, and has, 

for the check's maker or drawer, satisfied 

paragraph (i) (2) of this section, as 

management may deem appropriate for the 

check-cashing authorization granted; 

(5) In the case of guaranteed drafts, procedures 

should be established to ensure compliance 

with the issuance and acceptance procedures 

prescribed by the issuer; 

(6) The gaming operation has established 

procedures to ensure that the credit extended is 

appropriately documented, not least of which 

would be the patron’s identification and 

signature attesting to the authenticity of the 

individual credit transactions. The authorizing 

signature shall be obtained at the time credit is 

extended. 

(7) The gaming operation has established 

procedures to effectively document its attempt 

to collect the full amount of the debt. Such 

documentation includes, but is not limited to, 

letters sent to the patron, logs of personal or 

telephone conversations, proof of presentation 

of the credit instrument to the patron’s bank for 

collection, settlement agreements, or other 

documents which demonstrate that the gaming

operation has made a good faith attempt to 
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collect the full amount of the debt. Such 

records documenting collection efforts shall be 

made available to the Tribal gaming regulatory 

authority or the Commission upon request. 

(j) Allowable and non-allowable deductions 

from gross revenue. (1) Any prizes, premiums, 

drawings, benefits or tickets that are 

redeemable for cash or merchandise or other 

promotional allowance, except cash or tokens 

paid at face value or the cost of personal 

property awarded directly to a patron as the 

result of a specific wager, must not be 

deducted. 

(2) Cash paid to fund periodic payments may 

be deducted. 

(3) For bingo and pull tabs, the actual cost of 

any personal property distributed to a patron as 

the result of a specific legitimate wager may be 

deducted, but not travel expenses, food, 

refreshments, lodging, or services. 

(4) A gaming operation that provides a patron 

with additional play at bingo as the result of an 

initial wager may deduct all cash or tokens paid 

directly to that patron as a result of such 

additional play. 

(5) A gaming operation may deduct its pro-rata 

share of a payout from a game played in a wide 

area linked system except for a payout made in 

conjunction with a card game. The amount of 

the deduction must be determined based upon 

the written agreement among the gaming 

establishments participating in the wide area 

linked system and the operator of the system. 

All cash prizes and the value of noncash prizes 

awarded during a contest or tournament 

conducted in conjunction with a wide area 

linked system are also deductible on a pro-rata 

basis to the extent of the compensation 

received for the right to participate in that 

contest or tournament. 

(6) Deductibility of free play and promotional 

items: 

(i) Card Games

(A) Buy-in coupons (e.g., $25 in chips for 

$20 buy-in) 

(B) Tournaments played with negotiable 

chips and rake is taken 
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(C) Tournaments played with nonnegotiable chips, contests and drawings 

(D) Prizes (e.g., $100 prize for high hand of 

the week) 

(E) Promotional progressive pot and/or pool 

payouts 

(F) Shill wins and losses 

(ii) Bingo 

(A) Match play/discount wagering 

(B) Free play wagering (negotiable and 

non-negotiable) 

(C) Non-cash prizes 

(D) Promotional activity reimbursement by 

external party 

(E) Appeasement payouts (payments made 

on non-winning cards in response to patron 

complaints)

(iii) Pull Tabs 

(A) Match play/discount wagering 

(B) Free play wagering (negotiable and 

non-negotiable) 

(C) Non-cash prizes 

(D) Promotional activity reimbursement by 

external party 

(E) Appeasement payouts (payments made 

on non-winning pull tabs in response to 

patron complaints)

(7) Credit instruments written off as 

uncollectible are deductible unless any of the 

following applies: 

(i) The instrument was not signed by the 

patron; 

(ii) The gaming operation did not have an 

address for the patron at the time of accepting 

the instrument; 

(iii) The gaming operation does not maintain 

evidence that it has made a reasonable effort to 

collect the debt; 

(iv) The gaming operation does not maintain 

evidence that it checked the credit history of 

the patron before extending the credit; 

(v) The signature of the patron on the 

instrument was forged and the gaming 

operation has not made a written report of the 

forgery to the appropriate law enforcement 

agency; or 
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(vi) The gaming operation is unable to produce 

the credit instrument within a reasonable time 

after a request by the Commission. (Note: 

However, this shall not pertain to 

circumstances beyond the control of the 

gaming operation e.g., custody of court, stolen, 

etc.) 

(k) Maintenance and preservation of books, 

records, and documents. (1) All original books, 

records, and documents pertaining to the 

conduct of wagering activities shall be retained 

by a gaming operation in accordance with the 

following schedule. A record that summarizes 

gaming transactions is sufficient, provided that 

all documents containing an original 

signature(s) attesting to the accuracy of a 

gaming related transaction are independently 

preserved. Original books, records, or 

documents shall not include copies of originals, 

except for copies that contain original 

comments or notations on parts of multi-part 

forms. The following original books, records, 

and documents shall be retained by a gaming

operation for a minimum of five (5) years: 

(i) Casino cage documents; 

(ii) Documentation supporting the calculation 

of bingo win; 

(iii) Documentation supporting the calculation 

of revenue received from card games, and all 

other gaming activities offered by the gaming

operation; 

(iv) Bingo statistical reports; 

(v) Pull tab statistical reports; 

(vi) Internal audit documentation and reports; 

(vii) Documentation supporting the write-off of 

gaming credit instruments and named credit 

instruments; 

(viii) All other books, records, and documents 

pertaining to the conduct of wagering activities 

that contain original signature(s) attesting to 

the accuracy of the gaming related transaction. 

(2) Unless otherwise specified in this part, all 

other books, records, and documents shall be 

retained until such time as the accounting 

records have been audited by the gaming

operation's independent certified public 

accountants. 
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(3) The above standards shall apply without 

regard to the medium by which the book, 

record or document is generated or maintained 

(paper, computer-generated, magnetic media, 

etc.). 

NIGC Comments to TGWG Proposed Regulation 

OVERALL COMMENT: The intent of the Draft Regulation § 543.19 is to provide basic 

standards relative to the following: 

1. Basic preparation and recording criteria for Tribal gaming operation accounting 

records, including examples of various records, reports and subsidiary ledgers that 

should be maintained. 

 

2. Direction for the computation of Gross Gaming Revenue for the various gaming 

revenue centers. Examples of specific transactions and whether to include them in 

gross gaming revenue were provided in the standards. 

3. Maintenance and record retention direction is provided for gaming operation books, 

records and documents. 

Section 543.19 was not a part of the original NIGC MICS but was developed by a subsequent 

MICS advisory committee because of the frequent indications in Tribal gaming operation audited 

financial statements and associated management letters that several gaming operations’ 

accounting departments did not have the accounting experience and gaming expertise necessary 

to maintain accurate records of gaming transactions and the assets, liabilities and equity balances. 

However, the proposed TGWG 543.19, which contains the addition of “audit” in the section title, 

appears to expand the section to include standards for departments/functions other than 

accounting departments. 

(a) & (b) Accounting Records

Effect of 2010 Draft Regulation: Draft regulations are intended to define the basic accounting 

requirements for a gaming operation. 

Effect of TGWG Proposal: The proposal deletes the requirement that accounting records be 

prepared “according to generally accepted accounting principles.” Instead, it has incorporated 

into 543.19(c) the following wording; “When establishing SICS the gaming operation should 
§ 543. 19 What are the minimum internal control standards for audit 

and accounting? 

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review and consider incorporation of other external standards such as GAAP....” The failure to 

require that the accounting records be prepared in accordance with a specific set of authoritative 

standards could lead to the adoption of unconventional accounting principles and misleading or 

confusing financial statements. 

(c) Control over Fiscal Affairs

Effect of 2010 Draft Regulation: The draft regulation outlines the goals of the accounting 

policies and procedures to ensure control over the operation’s fiscal affairs. 

Effect of TGWG Proposal: The TGWG version has incorporated language similar to items (1), (2) 

and perhaps (4) in 543.19(e)(2) but does not address items (3), (5) or (6), which are significant 

goals in the development of casino accounting controls.

Various Provisions Deleted from 543.19(d)-(i) 

Effect of 2010 Draft Regulation: The draft regulations address the following accounting issues: 

 Computation of gross gaming revenue 

 Currency control 

 Accounting treatment of periodic payments of payouts 

 Accounting treatment of vouchers issued 

 Deductibility of unpaid credit instruments 

Effect of TGWG Proposal: The amendment fails to address any of the above issues. The opinion 

of the reviewer is that this omission is a material oversight of the TGWG as the calculation of 

gross gaming revenues is an issue that many gaming operations of all Tier levels struggle with. 

This is reflected in the results of the numerous NIGC annual fees audits performed by NIGC audit 

staff. Failure to provide any guidance for gaming operation accounting departments should be 

addressed. 

(j) Deductibility from Gross Gaming Revenue

Effect of 2010 Draft Regulation: The draft regulation addresses the deductibility and nondeductibility of specific items from gross gaming revenue, a question that is frequently posed to 

the Audit Division. 

Effect of TGWG Proposal: The TGWT proposal deletes the entire sub-part, leaving the gaming 

operations with no guidance as to what can and cannot be deducted from gross gaming revenue. 

Although this information could be provided in another form, e.g. a bulletin, incorporating it into 

the regulations provides the greatest assurance that it will be readily available to those who are 

seeking it. 

Write-offs of Uncollectable Credit

Effect of 2010 Draft Regulation: The draft regulation describes the circumstances where a credit 

instrument that has been written off as uncollectible can be deducted.

Effect of TGWG Proposal: The amendment does not contain this information.
§ 543. 19 What are the minimum internal control standards for audit 

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Minimum Bankroll Formula

Effect of 2010 Draft Regulation: Standards for the establishment of and compliance with a 

minimum bankroll formula are provided in the NIGC’s proposed cage standards 543.14 (e) Cage 

and vault accountability standards. (4) 

Effect of TGWG Proposal: The combination of the TGWG’s proposed 543.19(e)(2)(vi) standard 

and the related guidance essentially mirror the NIGC’s proposed standard. 

(k) Maintenance and preservation of books, records and documents

Effect of 2010 Draft Regulation: The draft regulation details which specific records are required 

to be retained for five years, records that should be maintained until audited by the external CPA 

firm and direction regarding media for maintaining records. 

Effect of TGWG Proposal: The amendment deletes the bulk of (k) and the following remains: 

“(2)(vii) Maintain and preserve all financial books, records, and relevant supporting 

documentation.” Maintenance of records and documents has been the subject of frequent 

inquiries to the NIGC and support the information provided in the NIGC’s proposed 543.19(k).
§ 543. 42 What are the minimum internal control standards for internal 

audit for Tier C gaming operations? 

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In 2010, the NIGC posted on its web-site draft Class II MICS, § 543.42, What are the minimum 

internal control standards for internal audit for Tier C gaming operations? The NIGC also 

posted draft sections 543.22 and 543.32, which provide internal control standards for Tier A and 

B gaming operations respectively. 

This document will provide comments comparing the 2010 Draft Regulations to the TGWG’s 

proposed subsection 543.19(f), Internal Audit. The words in blue (underlined) are the additions 

made by the TGWG. 

July 2010 Draft MICS TGWG Version 

§543.42 What are the minimum internal 

control standards for internal audit for Tier 

C gaming operations? 

(a) Internal audit personnel. (1) For Tier C 

gaming operations, a separate internal audit 

department shall be maintained whose 

primary function is performing internal audit 

work and that is independent with respect to 

the departments subject to audit. 

(2) The internal audit personnel shall report 

directly to the Tribe, Tribal gaming 

regulatory authority, audit committee, or 

other entity designated by the Tribe in 

accordance with the definition of internal 

audit in §543.2. 

(b) Audits. Internal audit personnel shall 

perform audits of the gaming operation. 

(1) The following areas shall be audited at 

least annually: 

(i) Pull tabs, including but not limited to, 

computer applications, pull tab inventory, 

access, transfers, winning pull tabs, 

accountability form, statistical reports, and 

electronic equipment; 

(ii) Card games, including but not limited to, 

computer applications, supervision, playing 

cards, shills, reconciliation of card room 

bank, promotional progressive pots and 

pools, card room contests and tournaments, 

computerized player tracking systems and 

accounting/audit standards; 

(iii) Cage procedures, including but not 

limited to, computer applications, personal 

checks, cashier's checks, traveler’s checks, 

§ 543. 19 What are the minimum internal 

control standards for Audit and 

Accounting?

(f) Internal audit. Controls shall be 

established to ensure:

(1) Internal auditor(s) perform audits of 

each department of a gaming 

operation, at least annually, to review 

compliance with TICS, SICS, and 

these MICS.

(2) Internal auditor(s) are independent 

of the gaming operations with respect 

to the departments subject to audit 

(auditors internal to the operation, 

officers of the TGRA, or outside CPA 

firm may perform this function).

(3) Internal auditors report directly to 

the Tribe, TGRA, audit committee, or 

other entity designated by the Tribe.

(4) Documentation (e.g., checklists, 

programs, reports, etc.) is prepared to 

evidence all internal audit work and 

follow-up performed as it relates to

compliance with TICS, SICS and these 

MICS.

(5) Reports documenting audits 

performed are maintained and made 

available to the Commission upon 

request.

 

TGWG Guidance

(i) Internal Audit.

(1) Internal Auditors. Best 
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payroll checks, and counter checks, patron 

deposited funds, safe deposit boxes, 

cage/vault accountability, chip and token 

standards, promotional payments, drawings, 

and giveaway programs, accounting/auditing 

standards and extraneous items; 

(iv) Credit procedures, including but not 

limited to, computer applications, credit 

standards, payment standards, access to 

credit documentation, maintenance of credit 

documentation, write off and settlement, 

collection agencies, and accounting/auditing 

standards; 

(v) Information technology, including but 

not limited to, Physical access and 

maintenance controls, system parameters, 

user accounts, generic user accounts, 

service and default accounts, administrative 

access, backups, recordkeeping, electronic 

storage of documentation, network 

security, changes to production 

environment, remote access, information 

technology department, in-house developed 

systems, and purchased software programs. 

 (vi) Complimentary services or items, 

including but not limited to, procedures 

whereby complimentary service items are 

issued, authorized, redeemed and reported; 

(vii) Accounting standards, including but not 

limited to, accounting records, GAAP 

requirements, administrative and accounting 

procedures, gross gaming revenue 

computations, currency controls, periodic 

payment plans, voucher deductibility, unpaid 

credit instrument deductibility, allowable and 

non-allowable deductions from gross 

revenue, and maintenance and preservation 

of books, records and documents; 

(viii) Drop and count standards, including but 

not limited to, computer applications, card 

game drop, soft count room personnel, card 

game soft count, player interface financial 

instrument storage component drop, player 

interface financial instrument storage 

component count, player interface coin drop, 

practice suggests the internal 

audit function be performed in 

accordance with the Professional 

Practices Framework established 

by the Institute of Internal 

Auditors. This function can be 

performed by auditors internal to 

the operation, officers of the 

TGRA, or an outside services 

firm (i.e., CPA firm). 

(2) Scope and Frequency of 

Audits. 

(i) Internal audits must be 

performed for each 

gaming department of the 

operation at least annually. 

(ii) The internal auditor(s) 

should coordinate with 

the TGRA and gaming 

operation to determine 

the frequency of these 

and additional audits, as 

well as the departments to 

be audited outside of the 

scope of each gaming 

department. 

(iii)Audits must be 

performed to review for 

compliance with the 

MICS, TICS, and SICS. 

Additionally, the internal 

auditor should coordinate 

with the TGRA and the 

gaming operation to 

determine if a review of 

compliance to additional 

policies is suggested. 

(3) Independence. There 
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hard count room personnel, player interface 

coin count and wrap, count room inventory 

security, transfers of currency and coin 

during the count, key controls-general, player 

interface drop key controls, card game drop 

box key controls, card game drop box release 

keys, player interface financial instrument 

storage component release keys, card game 

drop box storage rack keys, player interface 

financial instrument storage component 

storage rack keys, card game drop box 

contents keys, player interface financial 

instrument storage component contents keys, 

player interface computerized key security 

systems, card game computerized key 

security systems, emergency drop procedures 

and player interface count equipment; and 

(ix) Any other internal audits as required by 

the Tribe, Tribal gaming regulatory authority, 

audit committee, or other entity designated 

by the Tribe. 

(2) In addition to the observation and 

examinations performed under paragraph 

(b)(1) of this section, follow-up observations 

and examinations shall be performed to 

verify that corrective action has been taken 

regarding all instances of noncompliance 

cited by internal audit, the independent 

accountant, and/or the Commission. The 

verification shall be performed within six (6) 

months following the date of notification. 

(3) The following area shall be audited at 

least semi-annually:

(i) Bingo, including but not limited to, bingo 

cards, bingo draw, manual payouts and short 

pays, operational controls, gaming 

equipment, voucher systems, patron accounts 

and cashless systems, promotions, and 

accounting/auditing standards. 

(ii) [Reserved] 

(4) Whenever possible, internal audit 

observations shall be performed on an 

unannounced basis (i.e., without personnel 

being forewarned that their activities will be 

observed). Additionally, if the independent 

should be independence between 

the agent(s) performing the 

internal audit and the 

department(s) subject to the 

audit(s). Controls should be in 

place specifying to whom internal 

auditors report. 

(4) Reports. Reports 

documenting audits performed 

are maintained and made 

available to the Commission 

pursuant to 25 USC §2706(b)(1)-

(4). 

 (5) Material Exceptions. 

(i) The internal auditor 

should coordinate with 

management and the 

TGRA to determine a 

definition of material 

exception for each gaming 

area. 
§ 543. 42 What are the minimum internal control standards for internal 

audit for Tier C gaming operations? 

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accountant also performs the internal audit 

function, the accountant shall perform 

separate observations of the player interface 

drops and counts to satisfy the internal audit 

observation requirements and independent 

accountant tests of controls as required by the 

American Institute of Certified Public 

Accountants guide. 

(c) Documentation. (1) Documentation 

(e.g., checklists, programs, reports, etc.) shall 

be prepared to evidence all internal audit 

work performed as it relates to the 

requirements in this section, including all 

instances of noncompliance. 

(2) The internal audit department shall 

operate with audit programs, which, at a 

minimum, address the MICS. Additionally, 

the department shall properly document the 

work performed, the conclusions reached, 

and the resolution of all exceptions. Institute 

of Internal Auditors standards are 

recommended but not required. 

(d) Reports. (1) Reports documenting audits 

performed shall be maintained and made 

available to the Commission upon request. 

(2) Such audit reports shall include the 

following information: 

(i) Audit objectives; 

(ii) Audit procedures and scope; 

(iii) Findings and conclusions; 

(iv) Recommendations, if applicable; and 

(v) Management's response. 

(e) Material exceptions. All material 

exceptions resulting from internal audit work 

shall be investigated and resolved with the 

results of such being documented and 

retained for five years. 

(f) Role of management. (1) Internal audit 

findings shall be reported to management. 

(2) Management shall be required to respond 

to internal audit findings stating corrective 

measures to be taken to avoid recurrence of 

the audit exception. 

(3) Such management responses shall be 

included in the internal audit report that will 
§ 543. 42 What are the minimum internal control standards for internal 

audit for Tier C gaming operations? 

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be delivered to management, the Tribe, 

Tribal gaming regulatory authority, audit 

committee, or other entity designated by the 

Tribe. 

(g) Internal Audit Guidelines. In connection 

with the internal audit testing pursuant to 

paragraph (b) (1) and (b) (3) of this section, 

the Commission shall develop recommended 

Internal Audit Guidelines, which shall be 

available upon request. 

NIGC Comments to TGWG Proposed Regulation 

OVERALL COMMENT: When the TGWG developed its proposed “543.19 What are the 

minimum internal control standards for Audit and Accounting?” it decided to include a subsection of Internal Audit standards instead of providing separate sections covering internal audit 

standards by gaming operation Tier level. The intent of the NIGC’s 543.19 is to provide basic 

standards relative to the accounting and financial statement presentation functions and includes 

the following: 

1. Basic preparation and recording criteria for Tribal gaming operation accounting 

records, including examples of various records, reports and subsidiary ledgers that 

should be maintained. 

 

2. Direction for the computation of Gross Gaming Revenue for the various gaming 

revenue centers. Examples of specific transactions and whether to include them in 

gross gaming revenue were provided in the standards. 

3. Maintenance and record retention direction is provided for gaming operation books, 

records and documents. 

Section 543.19 was not a part of the original NIGC MICS but was developed by a subsequent 

MICS advisory committee because of the frequent notifications provided in Tribal gaming 

operation audited financial statements and associated management letters that some gaming 

operations’ accounting departments did not have the accounting and gaming expertise necessary 

to maintain accurate records of gaming transactions and the assets, liabilities and equity balances. 

However, the proposed TGWG 543.19 expands the MICS §543.19 to include standards for 

departments/functions not typically considered general accounting department functions. 

TGWG Sub-section (f), Internal Audits, contains standards adapted from the 2010 Draft 

Regulation §§ 543.22, 543.32 and 543.42, which provide standards for internal audits based on 

Tier level. The internal audits of gaming operations should generally not be performed by 

members of the gaming operation’s accounting department and should be conducted by 

individuals independent of the gaming operation. These individuals generally report to the Tribal 

Gaming Regulatory Authority, the Tribal Council, the Tribal Treasurer, an Audit Committee, or 
§ 543. 42 What are the minimum internal control standards for internal 

audit for Tier C gaming operations? 

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other independent entities. In some cases internal audits of Tribal gaming operations are 

performed under contract by outside CPA firms. 

Internal Audits Required

Effect of 2010 Draft Regulation: Draft regulation requires that internal audits be performed at 

least annually for all gaming areas except for surveillance and for bingo, which is required to be 

audited at least semi-annually. Direction as to the most common areas of each department is 

provided, however, included in the standard is the notification that this direction is not intended to 

limit the audits only to those areas or specific transactions. 

Effect of TGWG Proposal: TGWG proposal requires at least annual audits of each gaming 

department but does not provide any further direction, such as that noted in the above paragraph. 

It also does not provide for semi-annual audits of bingo, which is almost always the gaming 

revenue center with the most significant exposures to theft and abuse, especially those operations 

that offer electronic bingo. 

Internal Audit Personnel

Effect of 2010 Draft Regulation: Draft regulations require that a separate internal audit 

department be maintained for Tier C gaming operations (The draft regulations provide an 

alternative for Tier A and B gaming operations by allowing individual who are independent with 

respect to the departments subject to audit perform the internal audits). However, it is 

recommended by this writer that these alternatives be revisited in combination with any changes 

in the gross gaming revenue parameters for determining a Tier A gaming operation versus a 

Small Gaming operation, as defined in §543.6, or in the range for Tier B designation . 

Effect of TGWG Proposal: TGWG version eliminates the requirement for a separate internal 

audit department for Tier C gaming operations but retains a requirement of independence for 

those individuals performing internal audits. However, it is difficult to understand how “auditors 

internal to the operation” would maintain independence. Provided the level of exposure that exists 

even at the low end of the Tier B GGR range, it is advisable that the same criteria for selection of 

the internal auditor for a Tier B operation be that of the Tier C facilities. 

Documentation

Effect of 2010 Draft Regulation: Standard requires that documentation be prepared to evidence 

all audit work performed and provides examples thereof.

Effect of TGWG Proposal: TGWG version is consistent in requiring documentation of all audit 

work performed. However, it eliminates the requirement for inclusion of all instances of noncompliance with the MICS in the documentation. Furthermore, it eliminates the requirement to 

use audit programs which, at a minimum, address the MICS and the requirement to document the 

work performed, the conclusions reached, and the resolution of all exceptions. Also, the reference 

to “these” MICS, TICS and SICS is ambiguous and the addition of the wording “TICS and SICS” 

before “these MICS, TICS and SICS” does not provide any clarification. 
§ 543. 42 What are the minimum internal control standards for internal 

audit for Tier C gaming operations? 

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Internal Audit Reporting

Effect of 2010 Draft Regulation: Draft regulation delineates possible reporting relationships for 

the internal auditors. 

Effect of TGWG Proposal: Amendment appears consistent with draft regulation.

Reports 

Effect of 2010 Draft Regulation: The draft regulation specifies the minimum content of the 

reports documenting audits performed and requires that the reports be made available to the 

Commission upon request.

Effect of TGWG Proposal: The amendment deletes the minimum content requirements for the 

reports, thereby eliminating guidance to those performing the audits and increasing the risk that 

the reports will be less consistent, less uniform and less meaningful to the users. 

Material Exceptions

Effect of 2010 Draft Regulation: Draft regulation requires that material exceptions be 

investigated and resolved and the results of the investigation be documented and retained for five 

years.

NIGC Comment to TGWG Guidance: TGWG version deletes the requirement that the 

documented results of the investigation be retained for five years, but otherwise appears 

consistent with the draft regulation. 

Role of Management

Effect of 2010 Draft Regulation: The draft regulation requires that internal audit findings be 

reported to management, that management respond to internal audit findings stating how the 

findings will be corrected and that management responses be included in the internal audit report 

and communicated to the appropriate entity. 

NIGC Comment to TGWG Guidance: Amendment appears consistent with draft regulation.
§ 543.19 What are the minimum internal control standards for audit 

and accounting? 

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In October, 2008, the NIGC published PART 543 – MINIMUM INTERNAL CONTROL 

STANDARDS in the Federal Register. This document will provide comments comparing the 

NIGC’s published standards 543.3(f), CPA testing, to the TGWG proposed § 543.19(g) Annual 

Audits. The words in blue (underlined) are the additions made by the TGWG. 

 MICS TGWG Version 

§ 543.3 How do tribal governments comply 

with this part? 

(f) CPA testing. (1) An independent certified 

public accountant (CPA) must be engaged to 

perform “Agreed-Upon Procedures” to verify 

that the gaming operation is in compliance with 

the minimum internal control standards (MICS) 

set forth in this part or a tribally approved 

variance thereto that has received Commission 

concurrence. The CPA must report each event 

and procedure discovered by or brought to the 

CPA's attention that the CPA believes does not 

satisfy the minimum standards or tribally 

approved variance that has received 

Commission concurrence. The “Agreed-Upon 

Procedures” may be performed in conjunction 

with the annual audit. The tribe must submit 

two copies of the report to the Commission 

within 120 days of the gaming operation's 

fiscal year end. In performing the compliance 

audit, the CPA must use the Statements on 

Standards for Attestation Engagements No. 10 

at Sections 101 (“Attest Engagements”) and 

201 (“Agreed-Upon Procedures Engagements”) 

(collectively “SSAE's”), July 12, 2007, 

American Institute of Certified Public 

Accountants Inc, (AICPA). SSAE No. 10 at 

Sections 101 and 201 are incorporated by 

reference into this section with the approval of 

the Director of the Federal Register under 5 

U.S.C. 552(a) and 1 CFR part 51. To enforce 

any edition other than that specified in this 

section, the Commission must publish notice of 

change in the Federal Register and the material 

must be available to the public. You may 

obtain a copy from the American Institute of 

Certified Public Accountants, 220 Leigh Farm 

Rd., Durham, NC 27707, 1–888–777–7077, at 

§ 543. 19 What are the minimum internal 

control standards for Audit and 

Accounting?

(g) Annual Audits.

(1) Agreed upon procedures. A CPA must be 

engaged to perform, in accordance with agreed 

upon procedures and the most recent versions 

of the Statements on Standards for Attestation 

Engagements and Agreed-Upon Procedures 

Engagements (collectively „„SSAEs), issued 

by the American Institute of Certified Public 

Accountants Inc., an assessment of whether the 

gaming operation is in compliance with these 

MICS, the TICS, and/or the SICS.

(2) The tribe must submit two copies of the 

agreed-upon procedures report to the 

Commission within 120 days of the gaming 

operation’s fiscal year end in conjunction with 

the submission of the annual financial audit 

report required under 25 CFR Part 571.

(3) Require management to have sufficient 

knowledge and understanding of the purpose, 

nature, and scope of the agreed upon 

procedures to provide adequate oversight and 

participation in the process to ensure a 

meaningful and useful outcome.

(4) Reliance on Internal Audit.

(i) Agreed upon procedures are to be performed 

by the CPA to determine that the internal audit 

procedures performed during the fiscal year 

have been properly completed.

(ii) The CPA may rely on the work of internal 

audit for the completion of the MICS checklists 

as they relate to the standards covered by this 

Part.

 (5) Report Format. The Statements on 

Standards for Attestation Engagements and 

Agreed-Upon Procedure Engagements 

(SSAEs) are applicable to agreed-upon 
§ 543.19 What are the minimum internal control standards for audit 

and accounting? 

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http://www.aicpa.org . You may inspect a copy 

at the National Indian Gaming Commission, 

1441 L Street, NW., Suite 9100, Washington, 

DC 20005, 202–632–7003. All approved 

material is available for inspection at the 

National Archives and Records Administration 

(NARA). For information on the availability of 

this material at NARA, call 202–741–6030 or 

go to 

http://www.archives.gov/federal_register/code

_of_federal_regulations/ibr_locations.html . 

The CPA must perform the “Agreed-Upon 

Procedures” in accordance with the following: 

(i) As a prerequisite to the evaluation of the 

gaming operation's internal control systems, it 

is recommended that the CPA obtain and 

review an organization chart depicting 

segregation of functions and responsibilities, a 

description of the duties and responsibilities of 

each position shown on the organization chart, 

and an accurate, detailed narrative description 

of the gaming operation's procedures in effect 

that demonstrate compliance. 

(ii) Complete the CPA NIGC MICS 

Compliance checklists or other comparable 

testing procedures. The checklists should 

measure compliance on a sampling basis by 

performing inspections, observations and 

substantive testing. The CPA must complete 

separate checklists for bingo and information 

technology. All questions on each applicable 

checklist should be completed. Work-paper 

references are suggested for all “no” responses 

for the results obtained during testing (unless a 

note in the “W/P Ref” can explain the 

exception). 

(iii) The CPA must perform, at a minimum, the 

following procedures in conjunction with the 

completion of the checklists: 

(A) At least one unannounced observation of 

each of the following: financial instrument 

acceptor drop and count. For purposes of these 

procedures, “unannounced” means that no 

officers, directors, or employees are given 

advance information regarding the dates or 

times of such observations. The independent 

accountant should make arrangements with the 

procedures engagements required in this Part. 

All noted instances of noncompliance must be 

documented in the report with a narrative 

description, the number of exceptions and 

sample size tested.

TGWG Guidance

(j) Annual Audits. 

(1) Agreed Upon Procedures. 

(i) A CPA must be engaged to 

perform an assessment of whether the 

gaming operation is in compliance with the 

MICS, the TICS, and/or the SICS. Such 

assessment should be made in substantial 

accordance with agreed upon procedures 

and the most recent versions of the 

Statements on Standards for Attestation 

Engagements and Agreed-Upon 

Procedures Engagements (collectively 

„„SSAE‟s‟‟) issued by the American Institute 

of Certified Public Accountants, Inc. 

(ii) Best practice suggests that 

management should have a basic 

understanding of the procedures the CPA 

should be performing in the engagement. 

The items or areas that should be addressed 

include: 

(A) An organizational chart

 depicting segregation of duties 

or independence of department functions or 

responsibilities; 

(B) A description of 

the duties, responsibilities and

(C) A copy of the SICS and other 

operating policy and procedure manuals, as 

needed; 

(D) A discussion of known fraud at the 

gaming operation; 

(E) Completion of the MICS 

compliance checklist for at least one 

unannounced observation of drop and count; 

(F) Interviews with

 gaming operation agents and

(G) Compliance testing of various 

documents related to the audit functions; 
§ 543.19 What are the minimum internal control standards for audit 

and accounting? 

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gaming operation and tribal gaming regulatory 

authority to ensure proper identification of the 

CPA's personnel and to provide for their 

prompt access to the count rooms. The 

checklists should provide for drop and count 

observations. The count room should not be 

entered until the count is in process and the 

CPA should not leave the room until the 

monies have been counted and verified to the 

count sheet by the CPA and accepted into 

accountability. 

(B) Observations of the gaming operation's 

agents as they perform their duties. 

(C) Interviews with the gaming operation's 

agents who perform the relevant procedures. 

(D) Compliance testing of various documents 

relevant to the procedures. The scope of such 

testing should be indicated on the checklist 

where applicable. 

(E) For new gaming operations that have been 

in operation for three months or less at the end 

of their business year, performance of this 

regulation, this section, is not required for the 

partial period. 

(2) Alternatively, at the discretion of the tribe, 

the tribe may engage an independent CPA to 

perform the testing, observations and 

procedures reflected in paragraphs (f)(1)(i), (ii), 

and (iii) of this section utilizing the tribal 

internal control standards adopted by the tribal 

gaming regulatory authority or tribally 

approved variance that has received 

Commission concurrence. Accordingly, the 

CPA will verify compliance by the gaming 

operation with the tribal internal control 

standards. Should the tribe elect this 

alternative, as a prerequisite, the CPA will 

perform the following: 

(i) The CPA must compare the tribal internal 

control standards to the MICS to ascertain 

whether the criteria set forth in the MICS or 

Commission approved variances are adequately 

addressed. 

(ii) The CPA may utilize personnel of the tribal 

gaming regulatory authority to cross-reference 

the tribal internal control standards to the 

MICS, provided the CPA performs a review of 

(H) Discussion of changes in 

management, including revisions in 

policies and procedures affected by the 

management change; 

(I) Discussion of risks and 

opportunities; 

(J) Understanding of ongoing issues of 

concern; and 

(K) A review of randomly selected 

contracts. 

(2) Submissions of Agreed-Upon 

Procedures Report to the Commission. The 

tribe must submit two copies of the agreedupon procedures report to the Commission 

within 120 days of the gaming operation‟s 

fiscal year end in conjunction with the 

submission of the annual financial audit 

report required under 25 CFR Part 571. 

(3) Reliance on Internal Audit. 

(i) Agreed-upon procedures are to be 

performed by the CPA to determine that the 

internal audit procedures performed during 

the fiscal year have been properly 

completed. This can be performed by the 

CPA looking at the audit reports generated 

by the internal audit department to ensure an 

audit was completed during the fiscal year 

for all gaming areas. 

(ii) The CPA may rely on the work of 

internal audit for the completion of the 

MICS checklists as they relate to the 

standards covered by Part 543. Best practice 

suggests, based on the CPA review of audit 

reports and MICS checklists completed by 

internal audit, testing may be expanded 

where material exceptions were not 

corrected. 
§ 543.19 What are the minimum internal control standards for audit 

and accounting? 

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the tribal gaming regulatory authority 

personnel's work and assumes complete 

responsibility for the proper completion of the 

work product. 

(iii) The CPA must report each procedure 

discovered by or brought to the CPA's attention 

that the CPA believes does not satisfy 

paragraph (f)(2)(i) of this section. 

(3) Reliance on Internal Auditors. (i) The CPA 

may rely on the work of an internal auditor, to 

the extent allowed by the professional 

standards, for the performance of the 

recommended procedures specified in 

paragraphs (f)(1)(iii)(B), (C), and (D) of this 

section, and for the completion of the 

checklists as they relate to the procedures 

covered therein. 

(ii) Agreed-upon procedures are to be 

performed by the CPA to determine that the 

internal audit procedures performed for a past 

12-month period (includes two six month 

periods) encompassing a portion or all of the 

most recent business year has been properly 

completed. The CPA will apply the following 

agreed-upon procedures to the gaming 

operation's written assertion: 

(A) Obtain internal audit department workpapers completed for a 12-month period 

(includes two six month periods) encompassing 

a portion or all of the most recent business year 

and determine whether the CPA NIGC MICS 

Compliance Checklists or other comparable 

testing procedures were included in the internal 

audit work-papers and all steps described in the 

checklists were initialed or signed by an 

internal audit representative. 

(B) For the internal audit work-papers obtained 

in paragraph (f)(3)(ii)(A) of this section, on a 

sample basis, re-perform the procedures 

included in CPA NIGC MICS Compliance 

Checklists or other comparable testing 

procedures prepared by internal audit and 

determine if all instances of noncompliance 

noted in the sample were documented as such 

by internal audit. The CPA NIGC MICS 

Compliance Checklists or other comparable 

testing procedures for the applicable Drop and 
§ 543.19 What are the minimum internal control standards for audit 

and accounting? 

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Count procedures are not included in the 

sample re-performance of procedures because 

the CPA is required to perform the drop and 

count observations as required under paragraph 

(f)(1)(iii)(A) of this section of the agreed-upon 

procedures. The CPA's sample should comprise 

a minimum of three percent of the procedures 

required in each CPA NIGC MICS Compliance 

Checklist or other comparable testing 

procedures for the bingo department and five 

percent for the other departments completed by 

internal audit in compliance with the internal 

audit MICS. The re-performance of procedures 

is performed as follows: 

( 1 ) For inquiries, the CPA should either speak 

with the same individual or an individual of the 

same job position as the internal auditor did for 

the procedure indicated in the CPA checklist. 

( 2 ) For observations, the CPA should observe 

the same process as the internal auditor did for 

the procedure as indicated in their checklist. 

( 3 ) For document testing, the CPA should 

look at the same original document as tested by 

the internal auditor for the procedure as 

indicated in their checklist. The CPA need only 

retest the minimum sample size required in the 

checklist. 

(C) The CPA is to investigate and document 

any differences between their re-performance 

results and the internal audit results. 

(D) Documentation must be maintained for five 

years by the CPA indicating the procedures reperformed along with the results. 

(E) When performing the procedures for 

paragraph (f)(3)(ii)(B) of this section in 

subsequent years, the CPA must select a 

different sample so that the CPA will reperform substantially all of the procedures after 

several years. 

(F) Additional procedures performed at the 

request of the Commission, the tribal gaming 

regulatory authority or management should be 

included in the Agreed-Upon Procedures report 

transmitted to the Commission. 

(4) Report Format. The NIGC has concluded 

that the performance of these procedures is an 

attestation engagement in which the CPA 
§ 543.19 What are the minimum internal control standards for audit 

and accounting? 

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applies such Agreed-Upon Procedures to the 

gaming operation's assertion that it is in 

compliance with the MICS and, if applicable 

under paragraph (f)(2) of this section, the tribal 

internal control standards and approved 

variances, provide a level of control that equals 

or exceeds that of the MICS. Accordingly, the 

Statements on Standards for Attestation 

Engagements (SSAE's), specifically SSAE 10, 

at Sections 101 and 201 are applicable. SSAE 

10 provides current, pertinent guidance 

regarding agreed-upon procedure engagements, 

and the sample report formats included within 

those standards should be used, as appropriate, 

in the preparation of the CPA's agreed-upon 

procedures report. If future revisions are made 

to this standard or new SSAE's are adopted that 

are applicable to this type of engagement, the 

CPA is to comply with any revised professional 

standards in issuing their agreed upon 

procedures report. The Commission will 

provide an example report and letter formats 

upon request that may be used and contain all 

of the information discussed below. The report 

must describe all instances of procedural 

noncompliance (regardless of materiality) with 

the MICS or approved variations, and all 

instances where the tribal gaming regulatory 

authority's regulations do not comply with the 

MICS. When describing the agreed-upon 

procedures performed, the CPA should also 

indicate whether procedures performed by 

other individuals were utilized to substitute for 

the procedures required to be performed by the 

CPA. For each instance of noncompliance 

noted in the CPA's agreed-upon procedures 

report, the following information must be 

included: The citation of the applicable MICS 

for which the instance of noncompliance was 

noted; a narrative description of the 

noncompliance, including the number of 

exceptions and sample size tested. 

(5) Report Submission Requirements. (i) The 

CPA must prepare a report of the findings for 

the tribe and management. The tribe must 

submit two copies of the report to the 

Commission no later than 120 days after the 
§ 543.19 What are the minimum internal control standards for audit 

and accounting? 

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gaming operation's business year end. This 

report should be provided in addition to any 

other reports required to be submitted to the 

Commission. 

(ii) The CPA should maintain the work-papers 

supporting the report for a minimum of five 

years. Digital storage is acceptable. The 

Commission may request access to these workpapers, through the tribe. 

(6) CPA NIGC MICS Compliance Checklists. 

In connection with the CPA testing pursuant to 

this section and as referenced therein, the 

Commission will provide CPA MICS 

Compliance Checklists upon request. 

(g) Enforcement of Commission Minimum 

Internal Control Standards. 

(1) Each tribal gaming regulatory authority is 

required to establish and implement internal 

control standards pursuant to paragraph (c) of 

this section. Each gaming operation is then 

required, pursuant to paragraph (d) of this 

section, to develop and implement an internal 

control system that complies with the tribal 

internal control standards. Failure to do so may 

subject the tribal operator of the gaming 

operation, or the management contractor, to 

penalties under 25 U.S.C. 2713. 

(2) Recognizing that tribes are the primary 

regulator of their gaming operation(s), 

enforcement action by the Commission will not 

be initiated under this part without first 

informing the tribe and tribal gaming 

regulatory authority of deficiencies in the 

internal controls of its gaming operation and 

allowing a reasonable period of time to address 

such deficiencies. Such prior notice and 

opportunity for corrective action is not required 

where the threat to the integrity of the gaming 

operation is immediate and severe. 

[73 FR 60498, Oct. 10, 2008, as amended at 74 

FR 52139, Oct. 9, 2009] 
§ 543.19 What are the minimum internal control standards for audit 

and accounting? 

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NIGC Comments to TGWG Proposed Regulation 

OVERALL COMMENT: When the TGWG developed its proposed § 543.19, a sub-section (g) 

was created that resembles the 543.3(f) CPA testing standards published in October 2008 by the 

NIGC. 

The intent of the NIGC’s proposed 543.19 is to provide basic standards relative to the accounting 

and financial statement presentation functions, and includes the following: 

1. Basic preparation and recording criteria for Tribal gaming operation accounting 

records, including examples of various records, reports and subsidiary ledgers that 

should be maintained. 

 

2. Direction for the computation of Gross Gaming Revenue for the various gaming 

revenue centers. Examples of specific transactions and whether to include them in 

gross gaming revenue were provided in the standards. 

3. Maintenance and record retention direction is provided for gaming operation books, 

records and documents. 

Section 543.19 was not a part of the original NIGC MICS. It was developed by a subsequent 

MICS advisory committee because of the frequent notifications that some gaming operations’ 

accounting departments did not have the expertise necessary to maintain accurate records of 

gaming transactions and the assets, liabilities, and equity balances. 

However, the proposed TGWG 543.19 expands the MICS § 543.19 to include standards for 

departments/functions not typically considered general accounting department functions. 

As noted previously, the TGWG Sub-section (g), Annual Audits, contains standards adapted from 

the NIGC final rule 543.3(f), CPA testing, which provide standards the performance of the 

“Agreed-Upon Procedures” (AUP) engagement required to be conducted by an independent 

Certified Public Accountant. Section 543.3 focuses on the requirements for development of, and 

compliance with, internal control standards for the Tribal gaming operation(s). This part describes 

Tribal government and the Tribal Gaming Regulatory Authority (TGRA) responsibilities 

associated with these standards. Incorporating the AUP standards into a section designed for 

accounting departments does not appear logical to the reviewer. 

Evident from the comparison columns above is the significant deletion of 543.3(f) standards in 

the development of the TGWG’s 543.19(g) Annual Audits. It is also evident that the guidance 

provided by the TGWG is not significantly different from that provided in the TGWG standards, 

except for those in “(ii) Best practice” which provides suggestions for management understanding 

of the AUP procedures. Since the AUP procedures relate to the internal control systems of the 

gaming operation it is surprising to the reviewer why management should not already have a 

basic understanding of internal control testing procedures as part of their position responsibilities. 

Annual Audits
§ 543.19 What are the minimum internal control standards for audit 

and accounting? 

Comparison of July TGWG Submission to MICS 543.3(f), CPA Testing

Page 9 of 10 12/29/2011 

 NIGC Version 

Effect of 2008 Regulation: The current subtitle indicates that the testing must be done by a CPA. 

Effect of TGWG Proposal: The proposed subtitle is inaccurate in that the required Agreed-Upon 

Procedures do not constitute an audit as the general definition of an audit performed by a CPA 

includes the expression of an opinion. The Statement on Standards for Attestation Engagements 

expressly states that the practitioner does not provide an opinion or negative assurance. Instead 

the practitioner is engaged to issue a report of findings on specific procedures performed on 

subject matter. 

Agreed-Upon Procedures

Effect of 2008 Regulation: The comparable standard is 543.3(f)(1), which requires that the 

Agreed Upon Procedures engagement be performed in accordance with the AICPA’s SSAE’s and 

details the procedures that are required to be performed during the engagement.

Effect of TGWG Proposal: The TGWG amendment also requires that the Agreed Upon 

Procedures engagement be performed in accordance with the AICPA’s SSAE’s. However, the 

amendment eliminates any description of the procedures to be performed and does not require 

that the CPA report each event and procedure discovered by or brought to the CPA's attention 

that the CPA believes does not satisfy the minimum standards or tribally approved variance that 

has received Commission concurrence. Furthermore, the amendment requires that the CPA 

“perform an assessment” of whether the gaming operation is in compliance with the MICS, TICS 

and/or SICS. Although the revision no longer requires that the CPA “render an opinion”, the use 

of the word “assessment” could be misinterpreted to mean an opinion, which is beyond the scope 

of the Agreed-Upon Procedures. The reviewer cannot recall ever having seen American Institute 

of Certified Public Accountants followed by the abbreviation “Inc.”

Submission of Reports

Effect of 2008 Regulation: The comparable standard is 543.3(f)(5), which requires the submission 

of two copies of the report within 120 days of the gaming operation’s fiscal year end in addition 

to any other reports required to be submitted.

Effect of TGWG Proposal: The amendment appears consistent with the draft regulation.

Management Knowledge

Effect of 2010 Draft Regulation: There is no draft regulation comparable to the amendment.

Effect of TGWG Proposal: It is certainly desirable that management have sufficient knowledge 

and understanding of the purpose, nature, and scope of the agreed upon procedures to provide 

adequate oversight and participation in the process to ensure a meaningful and useful outcome. 

For a standard to be effective, it must be enforceable. Ascertaining whether management was 

compliant would not only be difficult to determine but there would be no way to enforce the 

standard.
§ 543.19 What are the minimum internal control standards for audit 

and accounting? 

Comparison of July TGWG Submission to MICS 543.3(f), CPA Testing

Page 10 of 10 12/29/2011 

 NIGC Version 

Reliance on Internal Audit

Effect of 2008 Regulation: The comparable standard is 543.3(f)(3) which allows the CPA, if he or 

she so chooses, to rely on the work of the internal auditors for the purposes of the AUP testing, to 

the extent allowed by professional standards, after having completed an assessment of the internal 

auditors work.

Effect of TGWG Proposal: The amendment (ii) states that the CPA may rely on the work of 

internal audit without specifying any assessment of said work be performed and without any 

reference to professional standards. The amendment (i) appears to be a rewording of the 

requirement to review the internal auditor workpapers in preparation for a determination of 

whether reliance can be placed on the internal auditor’s work. However, the rewording is not 

clear and something else may have been intended.

Report Format

Effect of 2008 Regulation: The comparable standard is 543.3(f)(4), which describes the required 

format and content of the AUP report.

Effect of TGWG Proposal: The amendment eliminates much of the detail regarding the 

requirements of the report. A particularly significant omission is that the amendment does not 

require the citation of the applicable MICS for which the instance of non-compliance was noted.
§ 543. 50 What are the minimum internal control standards for 

Revenue Audit? 

Comparison of July TGWG Submission to July 2010 Draft MICS 

Page 1 of 6 12/29/2011 

 NIGC Version 

In 2010, the NIGC posted on its web-site draft Class II MICS, 543.50. This document will 

provide comments comparing the proposed draft 543.50 to the TGWG’s proposed subsection 

543.19(d), Operational Audits (formerly “Revenue Audit”). The words in blue (underlined) are 

the additions made by the TGWG. 

July 2010 Draft MICS TGWG Version 

§543.50 What are the minimum internal 

control standards for Revenue Audit? 

Due to the length of the NIGC Draft Regulation, it 

is attached to this comparison document. 

SEE ATTACHMENT 

§ 543. 19 What are the minimum internal 

control standards for Audit and 

Accounting?

(d) Operational Audits (formerly “Revenue 

Audit”). Controls shall be established to 

ensure:

(1) All audits are designed in a manner to 

detect unauthorized access, misappropriation, 

forgery, theft or fraud.

(2) All audits are performed within seven (7) 

days of the audited activity’s occurrence as 

follows, unless otherwise specified:

(i) Gaming revenue and payouts;

(ii) Increases and decreases to inventory;

(iii) Cash equivalent inventory count;

(iv) Exceptions, overrides, and voids;

(v) Complimentary services and items records 

(Weekly);

(vi) Manual increases and decreases to/from 

player accounts (Weekly);

(vii) Promotions, contests, and tournaments 

(Weekly); and

(viii) Key control records (Quarterly).

(3) Minimum bankroll calculations are audited 

periodically to ensure that the gaming 

operation maintains cash in an amount 

sufficient to satisfy the gaming operation’s 

obligations. 

(4) At least bi-annually, an inventory of all 

drop, count, override, and panel keys are 

performed and increases and decreases in key 

inventory are reconciled.

(5) Audit results are summarized and recorded. 

(6) Audit controlled inventories for recording 

the receipt, issuance, and use of controlled 

inventories (including but not limited to bingo 

cards, pull tabs, playing cards, keys, prenumbered and/or multi-part forms, etc.).

(7) Adjustments to original data are controlled 
§ 543. 50 What are the minimum internal control standards for 

Revenue Audit? 

Comparison of July TGWG Submission to July 2010 Draft MICS 

Page 2 of 6 12/29/2011 

 NIGC Version 

to ensure all adjustments are properly 

completed and documented. 

(8) Exceptions are reviewed for suspect and/or 

unusual transactions.

(9) Documentation must be generated and 

maintained evidencing the performance of 

audit procedures. 

(10) If the audit is not performed by accounting 

agents, the agent(s) performing the audit are 

independent of the agents who performed the 

transactions being reviewed.

TGWG GUIDANCE

Due to the length of the TGWG guidance document 

(g), Operational Audits, please consult the TGWG 

proposal, Tab L.

NIGC Comments to TGWG Proposed Regulation 

OVERALL COMMENT: In 2009 Tribal Advisory Committee meetings were held to develop 

proposed revisions to the NIGC MICS. The Committee proposed creating a new MICS Section 

titled [w]hat are the minimum internal control standards for Revenue Audit? by extracting the 

accounting/auditing standards subsection from each applicable MICS section. 

The TGWG does not propose revisions to 543.50, Revenue Audit, but instead proposes to 

incorporate a brief sub-section titled Operational Audits into its proposed § 543.19, What are the 

minimum internal control standards for Audit and Accounting?”. 

The intent of the creation of the Draft Proposal 543.19 was to provide basic standards relative 

to the accounting and financial statement presentation functions and not to contain specific 

standards relative to revenue auditing, which can better be addressed in a separate section. 

The Draft Proposal, § 543.19, includes the following:

1. Basic preparation and recording criteria for Tribal gaming operation accounting 

records, including examples of various records, reports and subsidiary ledgers that 

should be maintained. 

 

2. Direction for the computation of Gross Gaming Revenue for the various gaming 

revenue centers. Examples of specific transactions and whether to include them in 

gross gaming revenue were provided in the standards. 

3. Maintenance and record retention direction is provided for gaming operation books, 

records and documents. 
§ 543. 50 What are the minimum internal control standards for 

Revenue Audit? 

Comparison of July TGWG Submission to July 2010 Draft MICS 

Page 3 of 6 12/29/2011 

 NIGC Version 

Section 543.19 was not a part of the original NIGC MICS, but was developed by a subsequent 

MICS advisory committee. This was done because the NIGC was frequently notified that some 

gaming operations’ accounting departments did not have the accounting and gaming expertise 

necessary to maintain accurate records of gaming transactions and the assets, liabilities, and 

equity balances. 

However, the proposed TGWG 543.19 expands the MICS § 543.19 to include standards for 

departments/functions not typically considered general accounting department functions. 

Subsection (d), Operational Audits, is one of these. The ten standards appear to be a haphazard 

sample of some of the audit procedures conducted by casino revenue auditors and should not be 

considered a comprehensive listing. It is also significantly different from the proposed § 543.50, 

which provides standards by revenue or support center. The TGWG’s proposal appears to 

combine revenue audits of all revenue centers into a category based on proposed frequency of 

performance. 

Design of Audits to detect theft & fraud

Effect of 2010 Draft Regulation: Regulation includes requirement that audit procedures to be in 

place to review variances related to bingo accounting data. 

Effect of TGWG Proposal: The purpose of revenue audits, referred to as operational audits in the 

TGWG version, is to ensure that control procedures designed to reduce the opportunity for fraud, 

forgery, theft and/or misappropriation are followed and that revenue is accurately calculated and 

reflected in the accounting records. Although fraud and theft detection can always be considered 

a goal of the revenue audit department, the detection of misappropriation, theft, forgery or fraud, 

may require specially designed audits performed by seasoned professionals with specific 

experience and training in this area of auditing. Many casino revenue auditors do not have the 

requisite experience to design or perform such specialized audits. Furthermore, “operational 

audit” is a term not often associated with the financial or compliance auditing, but with audits 

designed to develop methods to improve efficiency of operations. 

Timing of Audits

Effect of 2010 Draft Regulation: Section 543.50 contains a requirement that audit procedures 

must be performed within seven days of the transaction occurrence date. 

Effect of TGWG Proposal: A 7-day period similar to the NIGC requirement is provided. 

However, since both proposals allow for seven days to lapse between the “generation” of gaming 

revenue and the auditing thereof this reviewer finds the time period excessive. It may be more 

appropriate for a Tier A facility with limited revenue audit staff but would be inconceivable for a 

Tier B or larger facility. It is also possible that surveillance video would be overwritten by the 

time a significant variance investigation could be instigated. 

Increases and Decreases to Inventory

Effect of 2010 Draft Regulation: Section 543.50 contains standards for independent monthly 

verification of physical inventory amounts and reconciliation to control documents. 
§ 543. 50 What are the minimum internal control standards for 

Revenue Audit? 

Comparison of July TGWG Submission to July 2010 Draft MICS 

Page 4 of 6 12/29/2011 

 NIGC Version 

Effect of TGWG Proposal: Standard is vague. The reviewer is unable to determine with any 

degree of certainty what “inventory count” references, what procedures comprise an audit, or how 

frequently the “audit” is to be performed (due to inability to determine when “inventory count” is 

to take place or who is authorized to perform it).

Cash Equivalent Inventory Count

Effect of 2010 Draft Regulation: Section 543.50 contains in (d)(3) requirements for semi-annual 

counts of all funds in gaming areas, including direction as to the scope of the count, who may 

count or observe the count and the maintenance of count documentation. 

Effect of TGWG Proposal: Standard is vague. The reviewer is unable to determine with any 

degree of certainty what “cash equivalent inventory count is being referenced”, what procedures 

comprise audit, how frequently the “audit” is to be performed, or who is authorized to perform it.

Exceptions, overrides, and voids

Effect of 2010 Draft Regulation: Section 543.50 contains standards in the various gaming revenue 

areas for review of exception reports, reconciliation of variances. Proper treatment of voided 

documents or transactions is generally provided in the applicable gaming revenue section. 

Effect of TGWG Proposal: Standard is overly brief. 

Complimentary services and items records (Weekly)

Effect of 2010 Draft Regulation: 543.17(c) requires the preparation of a monthly report by an 

independent individual that contains specified information for complimentary services and items 

valued at over a specified dollar amount. 543.50(f) requires at least monthly review of the report 

by specified employees. The purpose of the preparation of the report and its review are to ensure 

compliance with the complimentary policy. 

Effect of TGWG Proposal: Standard is vague. The reviewer is unable to determine with any 

degree of certainty what procedures comprise audit or who is authorized to perform it.

Manual increases and decreases to/from player accounts

Effect of 2010 Draft Regulation: Section 543.50 contains standards for reconciliation of players’ 

patron deposit accounts. Standards for effective controls over player tracking accounts were not 

recommended however the reviewer believes that this was an oversight of the committee and that 

effective controls for revenue audit review of player tracking systems should be developed. 

Effect of TGWG Proposal: It is unclear from the brief description whether this refers to patron 

deposit accounts, player tracking accounts or both. 

Promotions, contests, and tournaments (Weekly)
§ 543. 50 What are the minimum internal control standards for 

Revenue Audit? 

Comparison of July TGWG Submission to July 2010 Draft MICS 

Page 5 of 6 12/29/2011 

 NIGC Version 

Effect of 2010 Draft Regulation: Section 543.50contains requirements to ensure that promotions 

programs are conducted in accordance with the rules provided to the patrons. Section 543.14(g)

contains minimum standards for promotional payments disbursed by the cage or other 

departments. 

Effect of TGWG Proposal: Standard is overly brief. 

Key control records (Quarterly)

Effect of 2010 Draft Regulation: Section 543.50 contains requirements in (g) for effective 

oversight of manual and computerized key security systems. 

Effect of TGWG Proposal: Standard is vague. The reviewer is unable to determine with any 

degree of certainty what is mean by “key control records,” what procedures comprise audit and, 

who is authorized to perform it.

Minimum bankroll calculations

Effect of 2010 Draft Regulation: Section 543.50(e) contains requirement for establishment of a 

minimum bankroll formula designed to calculate an amount necessary to meet a gaming 

operation’s obligations to patrons and offers to provide a formula to do so. 

Effect of TGWG Proposal: Standard is similar to that above in 543.14(e). 

Key Inventory

Effect of 2010 Draft Regulation: Section 543.50 contains requirements in (g) for effective 

oversight of manual and computerized key security systems. 

Effect of TGWG Proposal: Standard fails to state to what increases or decreases in key inventory 

are reconciled and fails to require that investigations for all keys unaccounted for be conducted 

and documented. Furthermore, “bi-annually” is a term subject to frequent misinterpretation and 

its use should be avoided. It appears that the audit is to be conducted twice a year, which is a 

decrease from the current requirement of four times per year.

Audit Result Summaries

Effect of 2010 Draft Regulation: Section 543.50 contains requirements for the documentation of 

all accounting/audit procedures including examples of documentation and direction for 

maintaining such documents for inspection by the TGRA. 

Effect of TGWG Proposal: TGWG standard requires only that audit results be summarized and 

recorded. A meaningful audit report requires much more than a summary of the results, e.g. scope 

of the audit, details of the procedures performed, details and corrections of any errors discovered, 

etc.

Audit Controlled Inventories
§ 543. 50 What are the minimum internal control standards for 

Revenue Audit? 

Comparison of July TGWG Submission to July 2010 Draft MICS 

Page 6 of 6 12/29/2011 

 NIGC Version 

Effect of 2010 Draft Regulation: Section 543.50 proposes standards relevant to the securing and 

maintenance of various inventories within the relevant gaming and support sections of the MICS.

Effect of TGWG Proposal: The TGWG proposal is unclear as it appears to apply to only “Audit 

controlled inventories” although the examples cited are generally not “controlled” by revenue 

audit or even generally by Casino accounting departments. 

Adjustments to Original Data are controlled

Effect of 2010 Draft Regulation: The TGWG standard is ambiguous, but appears to apply to 

controls for access to data which are provided for in appropriate sections of the MICS. 

Effect of TGWG Proposal: Standard is ambiguous as it does not define what constitutes an 

adjustment, what is being adjusted, and what constitutes proper completion and/or documentation 

of adjustments. 

Review of Exceptions

Effect of 2010 Draft Regulation: Section 543.50 contains specific direction for revenue audits of 

the Class II gaming revenue and support centers, e.g. resolution of certain “discrepancies” is 

required before generation of statistical reports. 

Effect of TGWG Proposal: Standard is ambiguous as it does not define what “exceptions” are to 

be reviewed, what constitutes a “review,” whether further action is required following the review 

or who is to review them. 

Documentation of Audit Procedures

Effect of 2010 Draft Regulation: Section 543.50 requires that all accounting/audit procedures 

must be documented and maintained for inspection and provided to the TGRA upon request.

Effect of TGWG Proposal: The TGWG proposal is similar to the NIGC proposal but does not 

require the gaming operation to provide the documentation to the TGRA upon request. 

Audit Agent Independence

Effect of 2010 Draft Regulation: Section 543.50 states that accounting/audit procedures must be 

performed by agents who are independent of the persons who performed the transactions being 

reviewed. 

Effect of TGWG Proposal: The standard is overly broad. It appears that any agent who did not 

participate in the performance of the transactions being audited may perform an audit, e.g. a cage 

cashier who was not working on a given day could perform the Cage audit for that day. 

This criticism also applies to the NIGC’s proposed 543.50 standards and a revision to it is 

recommended. 
§543. 50 What are the minimum internal control standards for Revenue Audit? 

(a) Bingo. (1) Accounting/audit standards. (i) Accounting/auditing procedures must be 

performed by agents who are independent of the persons who performed the transactions 

being reviewed. 

(ii) All accounting/audit procedures and actions must be documented (e.g., log, 

checklist, investigations and notation on reports), maintained for inspection and provided 

to the tribal gaming regulatory authority upon request. 

(iii) Accounting/audit procedures must be performed reviewing transactions for relevant 

accounting periods, including a 24-hour accounting period and reconciled in total for 

those time periods. 

(iv) Accounting/audit procedures must be performed within seven days of the 

transaction's occurrence date being reviewed. 

(v) Accounting/audit procedures must be in place to review variances related to bingo 

accounting data, which must include at a minimum any variance noted by the Class II 

gaming system for cashless transactions in and out, electronic funds transfer in and out, 

external bonus payouts, vouchers out and coupon promotion out. 

(vi) At least monthly, an accounting/audit agent must confirm that the appropriate 

investigation has been completed for the review of variances. 

(2) Audit tasks to be performed for each day's business. 

(i) Records of bingo card sales must be reviewed for proper authorization, completion 

and accurate calculations. 

(ii) Manual payout summary report, if applicable, must be reviewed for proper 

authorizations, completion, accurate calculations, and authorization confirming manual 

payout summary report totals. 

(iii) A random sampling of records of manual payouts must be reviewed for proper 

authorizations and completion for manual payouts less than $1,200. 

(iv) Records of all manual prize payouts of $1,200 or more must be reviewed for proper 

authorizations and completion. 

(v) Where manual payout information is available per player interface, records of manual 

payouts must be reviewed against the recorded manual payout amounts per player 

interface. 

(vi) Manual payout forms must be reconciled to each cashier's accountability documents 

and in total for each relevant period (e.g., session, shift, day, etc.). 

(vii) Records of voided manual payouts must be reviewed for proper authorization and 

completion. 

(viii) Records of voided bingo cards must be reviewed for proper authorization and 

completion. 

(ix) Use of controlled forms must be reviewed to ensure each form is accounted for. 

(x) Where bingo sales are available per player interface, bingo sales must be reviewed for 

reasonableness. 

(xi) Amount of financial instruments accepted per financial instrument type and per 

financial instrument acceptor must be reviewed for reasonableness, to include but not 

limited to zero amounts. 

(xii) Where total prize payouts are available per player interface, total prize payouts must 

be reviewed for reasonableness. 

7-8-10 Version 

Page 1 of 9 
(xiii) Amount of financial instruments dispensed per financial instrument type and per 

financial instrument dispenser must be reviewed for reasonableness, to include but not 

limited to zero amounts. 

(xiv) For a random sampling, foot the vouchers redeemed and trace the totals to the totals 

recorded in the voucher system and to the amount recorded in the applicable cashier's 

accountability document. 

(xv) Daily exception information provided by systems used in the operation of bingo 

must be reviewed for propriety of transactions and unusual occurrences. 

(xvi) Ensure promotional coupons which are not financial instruments are properly 

cancelled to prevent improper recirculation. 

(xvii) Reconcile all parts of the form used to document transfers that increase/decrease 

the inventory of an accountability (includes booths and any other accountability areas). 

(xviii) Reconcile voucher liability (e.g., issued-voided-redeemed-expired = unpaid) to the 

voucher system records. 

(xix) The total of all patron deposit accounts must be reconciled, as follows: 

(A) A report must be generated that details each day's beginning and ending balance of 

patron deposit accounts, adjustments to patron deposit accounts, and all patron deposit 

account transactions. 

(B) Reconcile the beginning and ending balances to the summary of manual 

deposit/withdrawal and account adjustment documentation to the patron deposit account 

report. 

(xx) Reconcile each day's patron deposit account liability (e.g., deposits ± 

adjustments−withdrawals = total account balance) to the system records. 

(xxi) Reconcile electronic funds transfers to the cashless system records, the records of 

the outside entity which processed the transactions and the operations dedicated cashless 

account bank records. 

(xxii) Accounting data used in performance analysis may only be altered to correct 

amounts that were determined to be in error. When correcting accounting data, the 

correct amount must be indicated in any Class II gaming system exception reports 

generated. 

(xxiii) Accounting/auditing agents must reconcile the audited bingo totals report to the 

audited bingo accounting data for each day. 

(xxiv) Accounting/auditing agents must ensure each day's bingo accounting data used in 

performance reports has been audited and reconciled. 

(xxv) If the Class II gaming system produces exception reports they must be reviewed on 

a daily basis for propriety of transactions and unusual occurrences. 

(3) Audit tasks to be performed at relevant periods: 

(i) Financial instrument acceptor data must be recorded immediately prior to or 

subsequent to a financial instrument acceptor drop. The financial instrument acceptor 

amount-in data must be recorded at least weekly. The time between recordings may 

extend beyond one week in order for a recording to coincide with the end of an 

accounting period only if such extension is for no longer than six additional days. 

(ii) When a player interface is removed from the floor, the financial instrument acceptor 

contents must be protected to prevent the misappropriation of stored funds. 

(iii) When a player interface is permanently removed from the floor, the financial 

instrument acceptor contents must be counted and recorded. 

7-8-10 Version 

Page 2 of 9 
(iv) For currency interface systems, accounting/auditing agents must make appropriate 

comparisons of system generated count as recorded in the statistical report at least one 

drop period per month. Discrepancies must be resolved prior to generation/distribution of 

reports. 

(v) For each drop period, accounting/auditing agents must compare the amount-in per 

financial instrument accepted by the financial instrument acceptors to the drop amount 

counted for the period. Discrepancies must be resolved before the generation/distribution 

of statistical reports. 

(vi) Investigation must be performed for any one player interface having an unresolved 

drop variance in excess of an amount that is both more than $25 and at least three percent 

(3%) of the actual drop. The investigation performed and results of the investigation must 

be documented, maintained for inspection, and provided to the tribal gaming regulatory 

authority upon request. 

(vii) The results of a variance investigation, including the date and personnel involved in 

any investigation, will be documented in the appropriate report and retained. The results 

will also include any corrective action taken (e.g., accounting data storage component 

replaced, interface component repaired, software debugged, etc.). The investigation will 

be completed and the results documented within seven days of the day the variance was 

noted, unless otherwise justified. 

(viii) Procedures must be established and implemented to perform the following on a 

regular basis, at a minimum of monthly, and using predetermined thresholds: 

(A) Where the Class II gaming system is capable of providing information per player 

interface, identify and investigate player interfaces with total prize payouts exceeding 

bingo sales; 

(B) Where bingo sales is available per player interface, investigate any percentage of 

increase/decrease exceeding a predetermined threshold, not to exceed 20%, in total bingo 

sales as compared to a similar period of time that represents consistency in prior 

performance. 

(C) Investigate any exception noted in paragraphs (i) (3) (viii) (A) and (B) of this section 

and document the findings. The investigation may include procedures to review one or 

more of the following: 

(1) Verify days on floor are comparable. 

(2) Non-prize payouts for authenticity and propriety. 

(3) Player interface out of service periods. 

(4) Unusual fluctuations in manual payouts. 

(D) If the investigation does not identify an explanation for exceptions then a physical 

check procedure must be performed, as required by paragraph (i)(3)(viii)(E) of this 

section. 

(E) Document any investigation of unresolved exceptions using a predefined player 

interface physical check procedure and checklist, to include a minimum of the following 

as applicable: 

(1) Verify game software; 

(2) Verify player interface configurations; 

(3) Test amount in accounting data for accuracy upon insertion of financial instruments 

into the financial instrument acceptor; 

7-8-10 Version 

Page 3 of 9 
(4) Test amount out accounting data for accuracy upon dispensing of financial 

instruments from the financial instrument dispenser; 

( 5 ) Record findings and repairs or modifications made to resolve malfunctions, 

including date and time, player interface identifier and signature of the agent performing 

the player interface physical check, and additional signatures as required; and 

(6) Maintain player interface physical check records, either in physical or electronic form, 

for the period prescribed by the procedure. 

(ix) For Class II gaming systems, procedures must be performed at least monthly to 

verify that the system accounting data is accurate. 

(x) For Tier C, at least weekly: 

(A) Financial instruments accepted at a kiosk must be removed and counted by at least 

two agents; and 

(B) Kiosk transactions must be reconciled to the beginning and ending balances for each 

kiosk. 

(xi) At the conclusion of a promotion, accounting/audit agents must perform procedures 

(e.g., interviews, review of payout documentation, etc.) to ensure that promotional prize 

payouts, drawings, and giveaway programs are conducted in accordance with the rules 

provided to the patrons. 

(4) Inter-tribal prize pools. Procedures must be established and implemented to govern 

the participation in inter-tribal prize pools, which at a minimum must include the review, 

verification and maintenance of the following records, which must be made available, 

within a reasonable time of the request, to the tribal gaming regulatory authority upon 

request: 

(i) Summary of contributions in total made to an inter-tribal prize pool; 

(ii) Summary of disbursements in total from an inter-tribal prize pool; and 

(iii) Summary of inter-tribal prize pool funds availability. 

(5) Performance Analysis. (i) Bingo performance data must be recorded at the end of the 

gaming operations specified 24-hour accounting period. Such data must include: 

(A) Amount-in and amount-out for each Class II gaming system. 

(B) The total value of all financial instruments accepted by the Class II gaming system by 

each financial instrument acceptor and by each financial instrument type. 

(C) The total value of all financial instruments dispensed by the Class II gaming system 

and by each financial instrument type. 

(D) The total value of all manual payouts by each Class II gaming system. 

(E) The total value of bingo purchases for each Class II gaming system. 

(F) The total value of prizes paid for each Class II gaming system. 

(ii) Procedures must be established and implemented that ensure the reliability of the 

performance data. 

(iii) Upon receipt of the summary of the data, the accounting department must review it 

for reasonableness using pre-established parameters defined by the gaming operation. 

(iv) An agent must record and maintain all required data before and after any 

maintenance or modifications that involves the clearing of the data (e.g., system software 

upgrades, data storage media replacement, etc.). The information recorded must be used 

when reviewing performance reports to ensure that the maintenance or modifications did 

not improperly affect the data in the reports. 

7-8-10 Version 

Page 4 of 9 
(6) Statistical reporting. (i) The bingo sales, prize payouts, bingo win, and actual bingo 

win percentages must be recorded for: 

(A) Each shift or session; 

(B) Each day; 

(C) Month-to-date; and 

(D) Year-to-date or fiscal year-to-date. 

(ii) A monthly comparison for reasonableness must be made of the amount of bingo 

paper sold from the bingo paper control log to the amount of bingo paper sales revenue 

recognized. 

(iii) Management employees independent of the bingo department must review bingo 

statistical information on at least a monthly basis. 

(iv) Agents independent of the bingo department must investigate any large or unusual 

statistical fluctuations, as defined by the gaming operation. 

(v) Such investigations must be documented, maintained for inspection, and provided to 

the tribal gaming regulatory authority upon request. 

(vi) The actual bingo win percentages used in the statistical reports should not include 

operating expenses (e.g., a percentage payment to administrators of inter-tribal prize 

pools), promotional prize payouts or bonus payouts not included in the prize schedule. 

(7) Progressive prize pools. (i) A display that shows the amount of the progressive prize 

must be conspicuously displayed at or near the player interface(s) to which the prize 

applies. 

(ii) At least once each day, each gaming operation must record the total amount of each 

progressive prize pool offered at the gaming operation on the progressive log. 

(iii) When a manual payment for a progressive prize is made from a progressive prize 

pool, the amount must be recorded on the progressive log. 

(iv) Each gaming operation must record, on the progressive log, the base reset amount of 

each progressive prize the gaming operation offers. 

(v) Procedures must be established and implemented specific to the transfer of 

progressive amounts in excess of the base reset amount to other awards or prizes. Such 

procedures may also include other methods of distribution that accrue to the benefit of the 

gaming public. 

(b) Pull tabs. (1) At the end of each month, a person or persons independent of pull tab 

sales and inventory control shall verify the accuracy of the ending balance in the pull tab 

control by reconciling the pull tabs on hand. 

(2) At least monthly, a comparison for reasonableness shall be made of the amount of 

pull tabs sold from the pull tab control log to the amount of revenue recognized. 

(3) Personnel independent of pull tab operations shall verify the amount of winning pull 

tabs redeemed each day. 

(4) If the gaming operation utilizes electronic equipment in connection with the play of 

pull tabs, then the following standards shall also apply. 

(i) If the electronic equipment contains a financial instrument acceptor, then §543.21(e) 

and (f), §543.31(e) and (f), or §543.41(e) and (f) (as applicable) shall apply. 

(ii) If the electronic equipment uses a bar code or microchip reader, the reader shall be 

tested periodically to determine that it is correctly reading the bar code or microchip. 

(iii) If the electronic equipment returns a voucher to the player, then §543.7(f) (as 

applicable) shall apply. 

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(iv) If the electronic equipment utilizes patron account access cards for activation of play, 

then §543.7(g) (as applicable) shall apply. 

(c) Card Games (1) The card games audit shall be conducted by personnel independent of 

the card games department. 

(2) On a daily basis, audit/accounting personnel shall reconcile the amount indicated on 

the progressive sign/meter to the cash counted or received by the cage and the payouts 

made for each promotional progressive pot and pool. This reconciliation must be 

sufficiently documented (including substantiation of differences, adjustments, etc.). 

(3) The following procedures shall be performed by accounting/audit personnel using the 

appropriate document prepared by the count team members for each day: 

(i) Reconcile the dollar amount of drop proceeds to the dollar amount recorded in the 

applicable accountability document using, if applicable, the transfer forms indicating all 

transfers in/out of the count room, both during and at the end of the count. Investigate 

and document any variance noted. 

(ii) Recalculate card game proceeds (all funds received by the gaming operation as 

compensation for conducting the game) in total and by shift. For computerized master 

games sheets that total the count proceeds from each box, accounting personnel are to 

recalculate rake in total and by shift for one day each month. 

(iii) Verify that the correct total of card game proceeds is recorded in the accounting 

records. 

(4) At least monthly, accounting/audit personnel shall review all payouts for the 

promotional progressive pots, pools, or other promotions to determine proper accounting 

treatment. 

(5) At least monthly, accounting/audit personnel shall perform procedures to ensure that 

payouts for the promotional progressive pots, pools, or other promotions are conducted in 

accordance with conditions provided to the patrons. 

(6) Daily, accounting/audit personnel shall reconcile all contest/tournament entry and 

payout forms to the dollar amounts recorded in the appropriate accountability document. 

(7) Documentation (e.g., log, checklist, notation on reports, and tapes attached to original 

documents) evidencing the performance of card games audit procedures, the exceptions 

noted, and the follow-up of all card games audit exceptions shall be maintained, 

(d) Cage. (1) The cage accountability shall be reconciled to the general ledger at least 

monthly. 

(2) For at least one day each month, accounting/audit personnel shall trace the amount of 

cage deposits to the amounts indicated in the bank statements. 

(3) For at least two days each year, a count shall be performed of all funds in all gaming 

areas (i.e. cages, vaults and booths (including reserve areas), kiosks, cash-out ticket 

redemption machines, and change machines. Do not include player interface hopper 

funds. Count all chips and tokens by denomination and type. Count individual straps, 

bags, and imprest banks on a sample basis. Trace all amounts counted to the amounts 

recorded on the corresponding accountability forms to ensure the proper amounts are 

recorded. Maintain documentation evidencing the amount counted for each area and the 

subsequent comparison to the corresponding accountability form. The count shall be 

completed within the same gaming day for all areas. 

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(i) Counts shall be observed by an individual independent of the department being 

counted. It is permissible for the individual responsible for the funds to perform the 

actual count while being observed. 

(ii) Internal audit may perform and/or observe the two counts. 

(4) At least annually, select a sample of invoices for chips and tokens purchased and trace 

the dollar amount from the purchase invoice to the accountability document that indicates 

the increase to the chip or token inventory to ensure the proper dollar amount has been 

recorded. 

(5) For each business year end, create and maintain documentation evidencing the 

amount of the chip/token liability, the change in the liability from the previous year, and 

explanations for adjustments to the liability account including any adjustments for 

chip/token float. 

(6) For at least one day each month, accounting/audit personnel shall review a sample of 

returned checks to determine that the required information was recorded by cage 

personnel when the check was cashed. 

(7) Accounting/audit personnel shall review exception reports for all computerized cage 

systems (e.g., fill/credit systems) at least monthly for propriety of transactions and 

unusual occurrences. The review shall include, but is not limited to, voided 

authorizations. All noted improper transactions or unusual occurrences identified shall be 

investigated with the results documented. 

(8) At least monthly, accounting/audit personnel shall review all promotional payments, 

drawings, and giveaway programs to verify proper accounting treatment and proper 

win/loss computation. 

(9) For all promotional payments, drawings, and giveaway programs the following 

documentation shall be maintained: 

(i) Copies of the information provided to the patrons describing the promotional 

payments, drawings, and giveaway programs (e.g., brochures, flyers); 

(ii) Effective dates; and 

(iii) Accounting treatment, including general ledger accounts, if applicable. 

(10) At least monthly, accounting/audit personnel shall perform procedures to ensure that 

promotional payments, drawings, and giveaway programs are conducted in accordance 

with information provided to the patrons. 

(11) Daily, accounting/audit personnel shall reconcile all parts of forms used to document 

increases/decreases to the total cage inventory, investigate any variances noted, and 

document the results of such investigations. 

(12) All cage auditing procedures and any follow-up performed shall be documented, 

maintained for inspection, and provided to the Tribal gaming regulatory authority upon 

request. 

(e) Credit. (1) A person independent of the cage, credit, and collection functions shall 

perform all of the following at least three (3) times per year: 

(i) Select a sample of credit accounts; 

(ii) Ascertain compliance with credit limits and other established credit issuance 

procedures; 

(iii) Reconcile outstanding balances of both active and inactive (includes write-offs and 

settlements) accounts on the accounts receivable listing to individual credit records and 

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physical instruments. This procedure need only be performed once per year for inactive 

accounts; and 

(iv) Examine credit records to determine that appropriate collection efforts are being 

made and payments are being properly recorded. 

(2) For a minimum of five (5) days per month, a person independent of the cage, credit, 

and collection functions shall subsequently reconcile partial payment receipts to the total 

payments recorded by the cage for the day and account for the receipts sequentially. 

(3) A trial balance of gaming operation accounts receivable, including the name of the 

patron and current balance, shall be prepared at least monthly for active, inactive, settled 

or written-off accounts. (4) The 

trial balance of gaming operation accounts receivable shall be reconciled to the general 

ledger each month. The reconciliation and any follow-up performed shall be documented, 

maintained for inspection, and provided to the Tribal gaming regulatory authority upon 

request. (5) On 

a monthly basis an evaluation of the collection percentage of credit issued to identify 

unusual trends shall be performed. 

(f) Complimentary services or items. The internal audit or accounting departments shall 

review the reports required in paragraph §543.17 (c) at least monthly. These reports shall 

be made available to the Tribe, Tribal gaming regulatory authority, audit committee, 

other entity designated by the Tribe, and the Commission upon request. 

(g) Drop and Count. (Tiers A, B and C) (1) Unannounced currency counter and currency 

counter interface (if applicable) tests shall be performed by personnel independent of the 

cage, vault, count team, player interface, and card games departments on at least a 

quarterly basis with the test results documented and maintained. All denominations of 

currency and vouchers counted by the currency counter must be tested. This test may be 

performed by internal audit or the Tribal gaming regulatory authority. The result of these 

tests shall be documented and signed by the person or persons performing the test. 

(2) Unannounced weigh scale and weigh scale interface (if applicable) tests shall be 

performed by a person or persons independent of the cage, vault, and player interface 

departments and count team at least quarterly with the test results being documented and 

maintained. This test may be performed by internal audit or the Tribal gaming regulatory 

authority. The result of these tests shall be documented and signed by the person or 

persons performing the test. 

(3) For computerized key security systems controlling access to card games drop and 

count keys, accounting/audit personnel, independent of the system administrator, shall 

perform the following procedures: 

(i) Daily, review the report generated by the computerized key security system indicating 

the transactions performed by the individual(s) that adds, deletes, and changes user's 

access within the system (i.e., system administrator). Determine whether the transactions 

completed by the system administrator provide an adequate control over the access to the 

card games drop and count keys. Also, determine whether any card games drop and count 

key(s) removed or returned to the key cabinet by the system administrator was properly 

authorized. 

(ii) For at least one day each month, review the report generated by the computerized key 

security system indicating all transactions performed to determine whether any unusual 

card games drop and count key removals or key returns occurred. 

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(iii) At least quarterly, review a sample of users that are assigned access to the card 

games drop and count keys to determine that their access to the assigned keys is adequate 

relative to their job position. 

(iv)All noted improper transactions or unusual occurrences are investigated with the 

results documented. 

(4) At least quarterly, an inventory of all count room, card game drop box release, storage 

rack, contents, override and panel keys shall be performed, and reconciled to records of 

keys made, issued, and destroyed. Investigations shall be performed for all keys 

unaccounted for, with the investigations being documented. 

(5) For computerized key security systems controlling access to player interface drop and 

count keys, accounting/audit personnel, independent of the system administrator, shall 

perform the following procedures: 

(i) Daily, review the report generated by the computerized key security system indicating 

the transactions performed by the individual(s) that adds, deletes, and changes user's 

access within the system (i.e., system administrator). Determine whether the transactions 

completed by the system administrator provide an adequate control over the access to the 

player interface drop and count keys. Also, determine whether any player interface drop 

and count key(s) removed or returned to the key cabinet by the system administrator was 

properly authorized. 

(ii) For at least one day each month, review the report generated by the computerized key 

security system indicating all transactions performed to determine whether any unusual 

player interface drop and count key removals or key returns occurred. 

(iii) At least quarterly, review a sample of users that are assigned access to the player 

interface drop and count keys to determine that their access to the assigned keys is 

adequate relative to their job position. 

(iv) All noted improper transactions or unusual occurrences are investigated with the 

results documented. 

(6) At least quarterly, an inventory of all count room, player interface door, player 

interface fill cabinet, storage rack, contents, override and panel keys shall be performed, 

and reconciled to records of keys made, issued, and destroyed. Investigations shall be 

performed for all keys unaccounted for, with the investigation being documented. 

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