# GOVERNMENTAL DEPARTMENT OF THE (2021) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/tribal%3Apyramid_lake%3A43efe574f895c71c ## Record - **Collection:** Tribal code - **Document type:** Tribal code ## Text GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE Financial Statements and Independent Auditor's Reports on Financial Statements, Compliance, and Internal Control Under the Single Audit Act December 31, 2021 BlueBird GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE DECEMBER 31, 2021 TABLE OF CONTENTS PAGE INDEPENDENT AUDITOR'S REPORT 1-3 FINANCIAL STATEMENTS Department-Wide Financial Statements: Statement of Net Position Statement of Activities Governmental Fund Financial Statements: Balance Sheet 4 5 6 Statement of Revenues, Expenditures, and Changes in Fund Balances 7 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 8 Notes to Financial Statements 9-22 SUPPLEMENTARY INFORMATION Combining Balance Sheet- Non major Governmental Funds 23 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances- Non major Governmental Funds 24 Combining Schedule of Classified Expenditures 25-26 Schedule of Expenditures of Federal Awards 27-30 Notes to Schedule of Expenditures of Federal Awards 31 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE DECEMBER 31, 2021 TABLE OF CONTENTS (CONTINUED) PAGE COMPLIANCE SECTION Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 32-33 Independent Auditor's Report on Compliance for Each Major Federal Program and on Internal Control over Compliance Required by the Uniform Guidance 34-37 Schedule of Findings and Questioned Costs 38-43 Summary Schedule of Prior Year Audit Findings 44-45 Corrective Action Plans 46-48 INDEPENDENT AUDITOR'S REPORT To the Members of the Tribal Council of the Pyramid Lake Paiute Tribe: Report on the Audit of Financial Statements Opinions We have audited the financial statements of the governmental activities, each major fund, and aggregate remaining fund information of the Governmental Department (the "Governmental Department") of the Pyramid Lake Paiute Tribe (the "Tribe"), as of and for the year ended December 31, 2021, and the related notes to the financial statements, which collectively comprise the Governmental Department's financial statements as listed in the table of contents. In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and aggregate remaining fund information of the Governmental Department as of December 31, 2021, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Tribe and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of Matter As discussed in Note 1, the financial statements of the Governmental Department are intended to present the financial position and changes in financial position of only that portion of the governmental activities, each major fund, and aggregate remaining fund information of the Tribe that is attributable to the transactions of the Governmental Department. They do not purport to, and do not, present fairly the financial position of the Tribe, as of December 31, 2021, or the changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinions are not modified with respect to this matter. Page I 1 Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we: • • • • Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Governmental Department's internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Required Supplementary Information Management has omitted the management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the financial statements. Such missing information, although not a part of the financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic, or historical context. Our opinions on the financial statements are not affected by this missing information. Page I 2 Supplementary Information Our audit was conducted for the purpose of forming opm1ons on the financial statements that collectively comprise the Governmental Department's financial statements. The combining financial statements are presented for purposes of additional analysis and are not a required part of the financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining financial statements and schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 7, 2023, on our consideration of the Governmental Department's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Governmental Department's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Governmental Department's internal control over financial reporting and compliance. Reno, Nevada June 7, 2023 Page I 3 FINANCIAL STATEMENTS GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE STATEMENT OF NET POSITION DECEMBER 31, 2021 Governmental Activities ASSETS Cash and cash equivalents $ Investments 54,657,460 165,689 81,413,724 Restricted investments Accounts receivables, net 791,352 Grants receivable Depreciable capital assets, net 1,183,489 553,386 23,102,675 Nondepreciable capital assets 60,098,002 Prepaid items 221,965,777 Tot a I assets LIABILITIES Accounts payable 859,648 857,747 Accrued liabilities Due to proprietary funds 4,159 35,282,997 268,160 Unearned revenues Compensated absences Long-term debt: Due within one year 55,064 Due in more than one year 167,836 37,495,611 Total liabilities NET POSITION 82,925,712 Net investment in capital assets Restricted: Clinic 12,409,106 Investment trust fund 81,163,075 Grant 500 7,971,773 Unrestricted $ Total net position The accompanying notes are an integral part of the financial statements. 184,470,166 Page 4 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31,2021 Net (Expenses) Revenues and Changes in Net Program Revenues Functions/Programs Expenses Charges for Operating Grants and Services Contributions Position Capital Grants Governmental Activities and Contributions Governmental activities: General government $ Education $ 697,861 2,111,949 Natural resources Public safety Socia I services 2,185,818 161,798 245,971 Judicial services Culture and recreation Roads and transportation $ 1,098,720 14,046 29,022,738 5,171,049 $ 5,867,348 $ $ 331,140 7,889,735 3,228,782 Health and welfare services Interest on long-term debt Total governmental activities 11,388,058 54,757 3,522,033 2,018,092 8,241,952 406,354 46,296 29,562 1,701,838 2,404,888 70,694 5,325 96,698 1,105 $ 9,327,854 (366,721) 100,995 22,133,974 61,895 3,874,250 (1,120,590) 265,366 (61,542) 1,492,697 $ (349,661) $ 71,088 (143,948) 466,170 172,083 (14,046) 2,611,173 General revenues: Interest and investment loss (404,963) Sales taxes 867,451 1,142,265 1,604,753 Other Total general revenues 4,215,926 Change in net position 180,254,240 Net position, beginning of year Net position, end of year The accompanying notes are an integral part of the financial statements. $ 184,470,166 Page 5 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE BALANCE SHEET- GOVERNMENTAL FUNDS DECEMBER 31, 2021 Department of Investment Trust Fund General Fund ASSETS Cash and cash equivalents Investments Restricted investments Accounts receivable, net Due from other funds Grants receivable Prepaid items Total assets LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable Accrued liabilities Due to other funds Due to proprietary funds Unearned revenues $ $ Department of Department of Department of Nonmajor Total the Interior Transportation the Treasury Governmental Fund Fund Fund Fund Funds Governmental Funds 1,087,058 $ $ 81,413,724 261,817 171,340 7,628,075 26,675,946 $ 6,564,666 $ 4,737,206 $ 15,000,630 $ 358,195 301,370 271,693 182,270 428,156 553,386 $ 9,110,444 $ $ 357,394 561,023 $ 81,675,541 $ 27,335,511 $ 6,836,359 $ 4,919,476 $ 15,000,630 $ 1,515,214 $ 293,345 14,624 3,433,234 $ 143,792 1,500 1,814,215 $ 12,723 $ $ 48,646 487,275 3,748 280,600 14,643 512,466 922,576 FUND BALANCES: Nonspendable Restricted- Clinic Restricted Investment trust fund Restricted - grant Unassigned 512,466 4,419,478 14,701,139 100,326 14,926,405 6,836,359 4,919,476 15,000,130 1,515,214 44,632,626 553,386 12,409,106 81,163,075 500 7,634,482 81,163,075 500 7,634,482 $ 9,110,444 $ $ 4,876,852 12,409,106 8,187,868 $ 146,393,175 11,185,202 1,366,242 553,386 Total fund balances 54,657,460 165,689 81,413,724 791,352 7,628,075 1,183,489 553,386 859,648 857,747 7,628,075 4,159 35,282,997 4,159 Total liabilities Total liabilities and fund balances 591,954 165,689 Health and Human Services 81,163,075 ____g_409, 106 81,675,541 $ 27,335,511 500 $ 6,836,359 $ 4,919,476 $ 15,000,630 101,760,549 $ 1,515,214 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in the fund financial statements. 83,200,677 Noncurrent liabilities, including long-term debt and compensated absences, are not due and payable in the current period and, therefore, are not reported in the fund financial statements. (491,060) Net position of governmental activities The accompanying notes are an integral part of the financial statements. $ 184,470,166 Page I 6 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES- GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2021 Department of General Fund Health and Department of Department of Department of Non major Total Investment Human Services the Interior Transportation the Treasury Governmental Governmental Trust Fund Fund Fund Fund Fund Funds Funds REVENUES: Intergovernmental revenues Charges for services Permits and fees Rent and lease Sales taxes Interest and investment income (loss) Indirect cost recoveries Other $ $ 2,087,105 3,334,871 583,660 867,451 8,215 3,435,505 927,516 11,244,323 Total revenues $ 8,888,874 3,254,306 $ 3,821,700 39,446 $ 1,409,075 1,105 $ 5,772,994 $ 2,413,414 27,361 (413,178) 41,485 1,451,665 250 3,861,396 12,143,180 (413,178) 500 5,773,494 172,514 2,613,289 5,615,610 1,100 336,169 731,985 206,924 60,254 877,096 $ 22,306,057 5,409,323 3,334,871 583,660 867,451 (404,963) 3,435,505 1,142,265 36,674,169 EXPENDITURES: Current: General government Education Natural resources Health and welfare services Public safety Social services Judicial services Culture and recreation Roads and transportation Indirect costs Capital outlay Debt service: Principal Interest 4,850,579 39,952 198,615 568,297 1,648,354 132,482 91,413 182,339 84,719 116,085 1,139,871 ___ 2,613,289 62,183 14,046 32,511,738 6,566,817 1,306,323 410,866 64,051 751,118 14,132 1,022,302 159,001 124,215 593,266 22,000 1,313,523 1,211,373 62,183 14,046 8,969,563 Total expenditures 341,558 44,071 10,552,008 492,206 2,070,471 7,342,038 3,014,931 2,171,562 155,464 196,471 827,568 3,435,505 2,177,285 9,842,831 703,353 163,057 585,255 3,861,396 1,799 155,585 1,451,665 5,772,994 EXCESS (DEFICIENCY) OF REVENUES 2,274,760 (413,178) 37,283 293,775 331,058 (293,775) (293,775) NET CHANGE IN FUND BALANCES 2,605,818 (706,953) 2,300,349 FUND BALANCES, BEGINNING OF YEAR 5,582,050 81,870,028 10,108,757 OVER (UNDER) EXPENDITURES 2,300,349 500 4,162,431 OTHER FINANCING SOURCES (USES): Proceeds from issuance of debt Transfers from (to) other funds Total other financing sources (uses) FUND BALANCES, END OF YEAR $ 8,187,868 37,283 $ 81,163,075 37,283 $ 12,409,106 4,199,714 500 97,560,835 $ $ The accompanying notes are an integral part of the financial statements. $ 500 $ $ 101,760,549 Page I 7 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2021 Net change in fund balances- governmental funds $ 4,199,714 Amounts reported for governmental activities in the statement of activities are different because: Capital outlays are reported in governmental funds as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. Capital outlay 2,177,285 Depreciation expense (2,202,753) Accrued compensated absences do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. 16,780 Change in accrued compensated absences The issuance of debt is treated as other financing sources and debt service payments are treated as expenditures in the fund financial statements but are reported as increases and decreases in outstanding debt obligations within the statement of net position. Issuance of debt (37,283) Current year payment on long-term debt 62,183 Change in net position of governmental activities The accompanying notes are an integral part of the financial statements. $ 4,215,926 Page 8 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 Note 1: Reporting Entity and Operations The Pyramid Lake Paiute Lake (the 11 Tribe") is a federally recognized Tribe located in the State of Nevada. The Tribe is governed by an elected ten-member council. The Tribe has jurisdiction over activities occurring on the reservation, and has rights to economic and other benefits from the use of its property and resources. The Tribe administers federal and other government grant awards to provide government services to its community. The accompanying financial statements include the Governmental Department of the Pyramid Lake Paiute Tribe (the 11 Governmental Department") and do not include the financial activity of any of the Tribe's other departments, enterprises, component units, or other activities. Accordingly, these financial statements do not purport to, and do not, present fairly the financial position or changes in financial position of the Tribe in accordance with accounting principles generally accepted in the United States of America (GAAP). Note 2: Summary of Significant Accounting Policies The financial statements of the Governmental Department have been prepared in accordance with GAAP as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. GASB statements and interpretations constitute GAAP for governments, including tribal governments. During 2021, the Governmental Department implemented GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period, the objectives of which are (1) to enhance the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period and (2) to simplify accounting for interest cost incurred before the end of a construction period. Implementation of this statement did not have a significant impact on the Governmental Department's financial statements. In May 2020, GASB issued Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance, effective immediately. The objective of this statement is to provide temporary relief to governments and other stakeholders in light of the COVID-19 pandemic by extending the effective dates of certain accounting and financial reporting provisions in Statements and Implementation Guides that were first effective for reporting periods beginning after June 15, 2018 and later. Implementation of this statement extended the effective dates of GASB Statements No. 87, No. 91, No. 92, and No. 93. In June 2017, GASB issued Statement No. 87, Leases. The objective of this statement is to better meet the information needs of financial statement users by improving accounting and financial reporting comparability for leases by governments. GASB Statement No. 87 becomes effective for the Governmental Department for the 2022 reporting period. In May 2019, GASB issued Statement No. 91, Conduit Debt Obligations. The objective of this statement is to better meet the information needs of financial statement users by enhancing the comparability and consistency of conduit debt obligation reporting and reporting of related transactions and other events. GASB Statement No. 91 becomes effective for the Governmental Department for the 2022 reporting period. In January 2020, GASB issued Statement 92, Omnibus 2020. The objective of this statement is to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB statements. GASB Statement No. 92 becomes effective for the Governmental Department for the 2022 reporting period. Page I 9 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 Note 2: Summary of Significant Accounting Policies (Continued) In March 2020, GASB issued Statement No. 93, Replacement of Interbank Offered Rates. The objective of this statement is to establish accounting and financial reporting requirements related to the replacement of an interbank offered rate in hedging derivative instruments and leases. GASB Statement No. 93 becomes effective for the Governmental Department for the 2022 reporting period. In March 2020, GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The objective of this statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements. This statement also provides guidance for accounting and financial reporting for availability payment arrangements. GASB Statement No. 94 becomes effective for the Governmental Department for the 2023 reporting period. In May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements. The objective of this statement is to provide guidance on the accounting and financial reporting for subscriptionbased information technology arrangements for government end users. GASB Statement No. 96 becomes effective for the Governmental Department for the 2023 reporting period. In October 2021, GASB issued Statement No. 98, The Annual Comprehensive Financial Report. The objective of this statement is to address references in authoritative literature to the term comprehensive annual financial report. GASB Statement No. 98 becomes effective for the Governmental Department for the 2022 reporting period. The effect of the future adoption of GASB Statements No. 87, No. 91, No. 92, No. 93, No. 94, No. 96, and No. 98 on the Governmental Department's financial statements has not been evaluated as of the date of this report. Basis of Accounting The department-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded when liabilities are incurred, regardless of when the related cash flow takes place. Nonexchange transactions, in which the Governmental Department gives (or receives) value without directly receiving (or giving) equal value in exchange, include grants, entitlements, and donations. Revenues from grants, entitlements, and donations are recognized in the fiscal year in which eligibility requirements have been satisfied. Governmental fund financial statements are reported using the flow of current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The Governmental Department considers all revenues reported in the governmental funds to be available if the revenues are collected within one year (the Governmental Department does not assess nor collect ad valorem property taxes). Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, compensated absences, and claims and judgments, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds from long-term debt and acquisitions under capital leases are reported as other financing sources. Page I 10 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 Note 2: Summary of Significant Accounting Policies (Continued) Financial Statements The financial statements of the Governmental Department include the department-wide and fund financial statements. The financial statement emphasis is on the department-wide financial statements while reporting additional detailed information about the Governmental Department's major governmental activities is in the fund financial statements. Department-Wide Financial Statements The statement of net position and statement of activities display information about the Governmental Department as a whole. The statements report governmental activities of the Governmental Department, which are generally financed through intergovernmental revenues, charges for services, permits and fees, and sales taxes. The Governmental Department does not include any proprietary funds that would be required to be reported as business-type activities. The Governmental Department's statement of activities reflects the cost of programs and functions reduced by directly associated revenue to arrive at the net revenue or expense for each program and function. Net program revenues or expenses for governmental activities are then adjusted for general revenues to determine the change in net position for the year. Indirect expenses such as support services and administration incurred by the general government and other functions/activities have been eliminated from these financial statements. Fund Financial Statements The fund financial statements provide information about the Governmental Department's funds. The emphasis of fund financial reporting is on major governmental funds, each displayed in a separate column. The Governmental Department reports the following major governmental funds: General Fund: The general fund is the primary operating fund of the Governmental Department and is always classified as a major fund. The general fund is used to account for activities of the general government not accounted for in another fund. Investment Trust Fund: The investment trust fund is a government fund consisting primarily of funds established under section 208 of Public Law 101-618, titled the "Truckee-Carson-Pyramid Lake Water Settlement", to promote tribal economic development from which investment income is available to expend. The investment income can only be expended on Tribal projects and governmental services, in accordance with a plan approved by the Secretary of the United States Department of Interior, with the objectives to develop long-term, profit-making opportunities for the Tribe using the unique natural and cultural resources of the reservation. The fund also receives unrestricted sand and gravel revenues, which are eligible to be paid to the general fund. Department of Health and Human Services Fund: The Department of Health and Human Services fund accounts for resources received by the Governmental Department from the U.S. Department of Health and Human Services mostly relating to the operation of the Governmental Department's self-determination contract. Department of the Interior Fund: The Department of the Interior fund accounts for the revenues and expenditures related to the Governmental Department's federal awards from the Bureau of Indian Affairs. The fund is used to fund education, natural resources, and other various activities. Page I 11 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 Note 2: Summary of Significant Accounting Policies (Continued) Department of Transportation Fund: The Department of Transportation fund accounts for resources received by the Governmental Department from the U.S. Department of Transportation mostly relating to road maintenance and improvements. Department of the Treasury Fund: The Department of the Treasury fund accounts for the revenues and expenditures related to the Governmental Department's federal awards from the Department of the Treasury. The fund is used to fund general government activities related to COVID-19 pandemic mitigation. Budgets The Governmental Department uses budgets as an operational tool in certain funds, but does not adopt a legally appropriated budget as defined by GASB. Therefore, budgetary comparisons are not reported as supplementary information in these financial statements. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, cash in demand deposits, and all highly liquid investments purchased with an original maturity of three months or less. Investments Investments are recorded at fair value, regardless of time remaining to maturity. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Restricted Investments Investments reported in the investment trust fund are restricted for purposes described in previous page under the Truckee-Carson-Pyramid Lake Water Settlement. Accounts Receivable Accounts receivable consist of clinic receivables, interest receivable, water and solid waste fees, and other receivables. Allowances for uncollectible accounts receivable are based upon historical trends and the periodic aging of accounts receivable. lnterfund Transactions lnterfund transactions are reflected as loans, services provided, reimbursements, or transfers. Loans are reported as receivables and payables as appropriate, are subject to elimination upon consolidation, and are referred to as either "due from/to other." Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures/expenses. Reimbursements occur when one fund incurs a cost, charges the appropriate benefiting fund and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Page I 12 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 Note 2: Summary of Significant Accounting Policies (Continued) Grants Receivable Grants receivable consist of amounts due for reimbursement of approved expenditures on grants entered into with various state and federal governmental agencies, and are considered fully collectible. Prepaid Items Prepaid items consist of amounts paid by the Governmental Department that will benefit future periods. Prepaid items are recorded at cost and are amortized over the related period. Capital Assets Capital assets are defined by the Governmental Department as assets with an initial, individual cost of more than $5,000 and an estimated useful life of more than one year. Capital assets are recorded in the department-wide financial statements at historical cost or estimated historical cost if actual cost is not available. Additions, improvements, and other capital outlays that significantly extend the useful life of an asset are capitalized. Donated capital assets are recorded at estimated fair market value at the date of donation. Costs incurred for repairs and maintenance are expensed as incurred. Depreciation is computed using the straight-line method based on the estimated useful lives of the related assets as follows: Land improvements 20-50 years Infrastructure 20-50 years Buildings 15-50 years Machinery and equipment 3- 15 years Intangible Assets As the Governmental Department does not place a limitation on the life of the water rights and does not expect to cease utilizing the water rights in the foreseeable future, the water rights are considered to have an indefinite useful life. Long-Lived Assets Management reviews the recoverability of its long-lived assets in accordance with the provisions of GASB Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries. GASB Statement No. 42 requires recognition of impairment of long-lived assets in the event the asset's service utility has declined significantly and unexpectedly. Accordingly, management evaluates assets' utility annually or when an event occurs that may impair recoverability of the asset. Unearned Revenues The Governmental Department reports unearned revenue on its balance sheet and statement of net position. Unearned revenue arises when potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period. Unearned revenue also arises when the Governmental Department receives resources before it has a legal claim to them, for example, when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met or when the Governmental Department has a legal claim to the resources, the liability for unearned revenue is reduced and revenue is recognized. Compensated Absences The Governmental Department accrues the cost of unpaid vacation leave earned in the statement of net position. No liability is recorded for nonvested accumulated rights to receive sick pay benefits. Page I 13 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 Note 2: Summary of Significant Accounting Policies (Continued) Net Position/Fund Balances Department-Wide Financial Statements Net position is displayed in the following components: 1. Net investment in capital assets -Capital assets, net of accumulated depreciation and outstanding principal balances attributable to the acquisition, construction, or improvement of those assets. 2. Restricted- Restricted assets reduced by liabilities related to those assets. 3. Unrestricted - Net amount of the assets and liabilities that are not included in the determination of net investment in capital assets or restricted components of net position. Fund Financial Statements The following classifications describe the relative strength of the spending constraints: 1. Nonspendable fund balance - amounts that are not in spendable form (such as inventories and prepaid items) or are required to be maintained intact. 2. Restricted fund balance - amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation. 3. Committed fund balance - amounts that can be used only for specific purposes determined by a formal action by Tribal Council ordinance or resolution. 4. Assigned fund balance - amounts the Governmental Department intends to use for a specific purpose. Intent can be expressed by the Tribal Council or by an official or body to which the Tribal Council delegates the authority. 5. Unassigned fund balance - amounts that are available for any purpose. reported only in the general fund. Positive amounts are The Governmental Department's policy is to spend restricted amounts first when an expenditure is incurred for purposes for which both restricted and unrestricted fund balances are available. When an expenditure is incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used, the assumed order of spending is first committed, assigned, and then unassigned. Intergovernmental Revenues The Governmental Department recognizes intergovernmental revenues at the time that such revenues become available and measurable, which is generally at the time such revenues are currently receivable. Receipts in advance on cost reimbursable type contracts are considered unearned and are recognized as revenues when allowable expenditures are incurred. Page I 14 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 Note 2: Summary of Significant Accounting Policies (Continued) Indirect Costs Indirect cost recoveries are accounted for in the general fund. Indirect cost expenditures are allocated to various grants and contracts at the Governmental Department's current indirect cost rate approved by the Interior Business Center, U.S. Department of the Interior. This rate is applied to all expenditures of the direct cost base excluding contractual expenditures, capital outlay, and any pass-through funds. During the year ended December 31, 2021, the Governmental Department's approved indirect cost rate was 24.55 percent. Reimbursements received from grants and contracts are included in the general fund's indirect cost pool as "indirect cost recoveries" in the accompanying statement of revenues, expenditures, and changes in fund balances. The indirect cost recoveries and expenditures are eliminated in the statement of activities. Income Taxes Pursuant to an Act of Congress, the Tribe is treated as a sovereign nation and its commercial operations are exempt from all income taxation imposed by the federal government, any state, or any political subdivision thereof. Accordingly, there are no provisions for federal or state income taxes in the accompanying financial statements. Note 3: Cash and Cash Equivalents and Restricted Cash At December 31, 2021, cash and cash equivalents and restricted cash consisted of the following: Cash on hand Carrying amount of cash in bank Total cash and cash equivalents and restricted cash Financial institution balances Amounts insured by the FDIC or collateralized Uncollateralized and uninsured balances $ $ $ $ 300 54,657,160 54,657,460 55,050,058 (45,660,841) 9,389,217 The difference between financial institution balances and the carrying amounts are due to deposits in transit and outstanding checks at year end that had not cleared the financial institution. Custodial credit risk for demand deposits is the risk that in the event of bank failure, the Governmental Department's demand deposits may not be returned to it. The Governmental Department does not have a policy for deposit custodial credit risk. Balances held in financial institutions are insured by the Federal Deposit Insurance Corporation (FDIC} up to $250,000 per financial institution, per depositor, per deposit category. Note 4: Investments At December 31, 2021, the Governmental Department reported the following investments: Investments U.S. Treasury Overnight Funds U.S. Government Sponsored Entity Bonds Certificates of Deposit Total investments and restricted investments <1 year $ 4,034,988 165,689 $ 4,200,677 6-10 years 1-5 years $ $ >10 years $ 13,155,370 7,635,410 47,005,373 $ 13,155,370 $ 7,635,410 $ 47,005,373 N/A $ 9,582,583 $ 9,582,583 $ 9,582,583 71,831,141 165,689 $ 81,579,413 Totals Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates. The Governmental Department does not have an investment policy for interest rate risk. Page I 15 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 Note 4: Investments (Continued) Concentration of Credit Risk Concentration of credit risk on investments is the risk of loss due to the concentration of an investment in a single issuer. The Governmental Department has adopted an investment policy to address concentration of credit risk. At December 31, 2021, no single issuer exceeded more than 5% of the Governmental Department's investments. Credit Risk Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. At December 31, 2021, $81,413,724 was invested in U.S. Government backed securities held by the U.S. Department of the Interior, BIA or certificates of deposit which are fully insured by the FDIC. Note 5: Fair Value Measurements GASB Statement No. 72, Fair Value Measurements and Disclosures, provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under GASB Statement No. 72 are described as follows: Level 1 inputs consist of unadjusted quoted prices in active markets for identical assets and have the highest priority; Level 2 inputs consist of other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date; and Level 3 inputs are unobservable and have the lowest priority. The Governmental Department uses appropriate valuation techniques based on the available inputs to measure the fair value of its investments. When available, the Governmental Department measures fair value using Level 1 inputs because they generally provide the most reliable evidence of fair value. At December 31, 2021, the fair value of the Governmental Department's investments measured on a recurring basis consisted of the following: Quoted Prices in Active Markets Significant Other for Identical Observable Fair Value U.S. Treasury Overnight Funds U.S. Government Sponsored Entity Bonds Certificates of Deposit $ 9,582,583 71,831,141 Assets Inputs (Levell) (Levell) $ $ 9,582,583 71,831,141 $ 81,413,724 165,689 165,689 Total investments and restricted investments, at fair value $ 81,579,413 $ 165,689 The Level 2 instruments listed in the fair value hierarchy table above use the following valuation techniques and inputs: U.S. Treasury Overnight Funds and U.S. Government Sponsored Entity Bonds: The fair value of investments in U.S. Treasury Overnight Funds and U.S. Government Sponsored Entity Bonds classified as Level 2 are primarily determined using consensus pricing methods of observable market-based data. Significant observable inputs include quotes, spreads, and data points for yield curves. Page I 16 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 Note 6: Accounts Receivable At December 31, 2021, accounts receivable consisted of the following: $ Clinic receivable 996,301 Interest receivable 261,817 Other 290,402 1,548,520 Total accounts receivable (757,168) 791,352 Less allowance for doubtful accounts $ Accounts receivables, net Note 7: Grants Receivable/Unearned Revenues At December 31, 2021, grants receivable and unearned revenues consisted of the following: Grants Unearned Receivable Revenues U.S. Government: Department of Health and Human Services $ 301,370 $ 11,185,202 Department of the Interior 271,693 4,876,852 Department of Transportation 182,270 4,419,478 Department of the Treasury 14,701,139 Department of Agriculture 15,690 16,768 Environmental Protection Agency 100,979 4,415 Institute of Museum and Library Services 9,812 Department of Justice 115,280 Department of Homeland Security 131,635 Nonfederal Totals 14,408 64,735 54,760 $ 1,183,489 $ 35,282,997 Page I 17 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 Note 8: Capital Assets A summary of changes in the Governmental Department's capital assets during the year ended December 31, 2021, is as follows: January 1, December 31, Additions 2021 Deletions 2021 Depreciable capital assets: Land improvements Infrastructure Buildings Machinery and equipment $ 9,489,906 18,389,953 19,284,094 11,787,434 58,951,387 Total depreciable capital assets $ $ 16,240 32,350 604,767 653,357 $ (246,091) (246,091) 9,506,146 18,422,303 19,284,094 12,146,110 59,358,653 246,091 246,091 (6,657,971) (10,961,683) (10,444,787) (8,191,537) (36,255,978) Accumulated depreciation: Land improvements Infrastructure Buildings Machinery and equipment (277,669) (429,681) (375,890) (1,119,513) (2,202,753) Total accumulated depreciation (6,380,302) (10,532,002) (10,068,897) (7,318,115) (34,299,316) Total depreciable capital assets, net 24,652,071 23,102,675 17,828,115 86,700 33,735,055 6,924,204 58,574,074 17,828,115 86,700 33,735,055 8,448,132 60,098,002 Nondepreciable capital assets: Land Museum artifacts Intangible assets Construction in progress Total nondepreciable capital assets $ Total capital assets, net 1,523,928 1,523,928 $ 83,226,145 83,200,677 Depreciation expense was charged to functions as follows: General government $ Education 852,830 205,655 Natural resources 41,478 Health and welfare services 547,697 Public safety 213,851 Social services 14,256 Judicial services 6,334 Culture and recreation 49,500 Roads and transportation 271,152 Total depreciation expense $ 2,202,753 Page I 18 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 Note 9: Long-Term Debt Long-term debt activity for the year ended December 31, 2021, was as follows: January 1, Additions 2021 $ Capital leases payable Note payable- USDA Loan $ Totals 218,393 29,407 247,800 December 31, Amounts Due 2021 within One Year Payments $ 37,283 $ $ 37,283 $ (57,287) (4,896) (62,183) $ 198,389 24,511 222,900 $ $ 50,070 4,994 55,064 $ Estimated future payments relating to the long-term debt are as follows: Years Ending December 31, Principal 2022 2023 2024 2025 2026 $ Totals $ 55,064 58,163 51,399 54,346 3,928 222,900 Totals Interest $ $ 11,119 8,020 4,739 1,792 80 25,750 $ $ 66,183 66,183 56,138 56,138 4,008 248,650 Capital Leases Payables The Governmental Department entered into a capital lease agreement during December 2017, for the purchase of a front loader mounted on a truck. The agreement requires monthly payments of $4,221 including interest at 5.99%. The agreement is scheduled to mature on December 15, 2025 and is secured by the related asset. The Governmental Department entered into another capital lease agreement during 2021, for the purchase of a vehicle. The agreement requires annual payments of $10,045 including interest at 5.23%. The agreement is scheduled to mature on March 31, 2023 and is secured by the related asset. The carrying values of the machinery and equipment purchased with capital leases as of December 31, 2021, were as follows: Machinery and equipment Less accumulated depreciation Carrying value $ $ 358,611 (264,519) 94,092 Note Payable- USDA Loan On June 14, 2012, the Governmental Department entered into a loan agreement with the United States Department of Agriculture (USDA) in the amount of $150,000 to provide funds for the building of the Sutcliffe water treatment facility ("Water System"). Annual payments of $5,484 include interest at 2.00%. The Governmental Department is required to set aside $598 per year to a reserve account until the sum of $5,976 has been accumulated. The reserve balance was $5,976 at December 31, 2021. The Governmental Department is also required to set aside a short-lived asset reserve in the amount of $9,538 per year to be used as needed to replace Water System assets. The note matures on June 14, 2026. Page I 19 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 Note 9: Long-Term Debt (Continued) The table below summarizes the Governmental Department's Water System activities for the year ended December 31, 2021. Fund 118 Water System Revenues Septic pumping $ Water Garbage Other Total revenues 3,654 84,408 126,526 86 214,674 Expenditures Salaries Fringes 78,885 15,928 Supplies Lease Contracted services Utilities Maintenance Vehicle Other Indirect cost Debt service: Principal Interest Total expenditures 10,717 724 29,370 4,374 13,136 21,282 2,439 48,539 Revenues under expenditures 38,621 12,033 276,048 $ (61,374) Page I 20 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 Note 10: Due From/ (To) Other Funds lnterfund balances primarily represent routine cash flow assistance between funds. At December 31, 2021, the Governmental Department had interfund receivables and payables with related funds in the following amounts: Due To Purpose Pooled cash General Fund Investment Trust Fund Department of Health and Human Services Fund General Fund Department of the Interior Fund General Fund Department of Transportation Fund General Fund Department of the Treasury Fund General Fund 1-80 Smoke Shop* Due From General Fund Amount $ 512,466 Pooled cash $ 3,433,234 Pooled cash 1,814,215 Pooled cash $ $ Pooled cash Pooled cash $ Nonmajor Governmental Funds $ 14,643 1,366,242 General Fund Goods sold $ 4,159 487,275 * Excluded from these financial statements. Note 11: lnterfund Transfers The General fund makes transfers to supplement the operations of the other funds. For the year ended December 31, 2021, the Governmental Department had transfers from and to with related funds in the following amounts: Transfers From General Fund Transfers To Purpose Investment Trust Fund Operational support Amount $ 293,775 Note 12: Retirement Plan The Governmental Department participates in the Pyramid Lake Paiute Tribe Retirement Plan (the "Plan"), which is a single employer defined contribution plan established by the Tribe to provide retirement benefits for qualified employees. The Plan is administered by the Tribal Council, which is responsible for establishing plan benefits, contributions, and other provisions, and for approving all Plan amendments. Benefit terms, including contribution requirements, for the Plan are established and may be amended by the Tribal Council. Annually, the Governmental Department provides a matching contribution up to a limit of three percent of the employee's annual compensation or may elect to contribute a non-elective contribution of two percent of the annual compensation for each eligible employee. Employees who have worked a year or more and a minimum of one thousand hours may defer a portion of their salary up to applicable Internal Revenue Code established limits. Employees' contributions are fully vested at all times and the employer's contributions are vested after an employee completes four plan years of service. The employer and employee contributions to the Plan totaled $81,225 and $205,929, respectively, during the year ended December 31, 2021. Page I 21 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 Note 13: Risk Management The Governmental Department is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Governmental Department maintains insurance coverage to protect against losses related to real and personal property, general liabilities, crime, automobile liability, workers' compensation and catastrophes. Note 14: Legal Matters The Governmental Department has been involved in disputes arising in the normal course of business. In the opinion of management, the ultimate outcome of these disputes will not have a materially adverse effect on the Governmental Department's financial position as of December 31, 2021. Page I 22 SUPPLEMENTARY INFORMATION GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS DECEMBER 31, 2021 Environmental Institute of Museum and Department of Protection Agency library Services ~riculture Fund Fund Fund Department of Department of Justice Fund Homeland Security Other Grants and Fund Contracts Fund Totals ASSETS 16,768 15,690 $ $ 32,458 $ Unearned revenues 3,929 11,761 16,768 Total liabilities 32,458 Cash and cash equivalents $ Grants receivable Total assets 335,258 100,979 $ $ 436,237 $ 27,626 404,196 4,415 489,891 115,280 $ $ 605,171 $ 11,381 579,382 14,408 23,999 9,812 $ $ 33,811 $ 250 33,561 155,682 131,635 $ $ 287,317 $ $ 2,610 284,707 $ $ 1,087,058 428,156 120,220 $ 1,515,214 2,850 52,635 64,735 $ 48,646 1,366,242 100,326 65,460 54,760 - LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable Due to other funds 436,237 605,171 33,811 1,515,214 120,220 287,317 FUND BALANCES: Restricted Total fund balances Total liabilities and fund balances $ 32,458 $ 436,237 $ 33,811 $ 605,171 $ 287,317 $ 120,220 $ 1,515,214 Page I 23 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCESNON MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2021 Institute of Environmental Museum and Department of Protection Agency Library Services Department of Homeland Security Department of Other Grants and ~riculture Fund Fund Fund Justice Fund Fund Contracts Fund Totals REVENUES: Intergovernmental revenues $ 96,281 $ Charges for services 844,954 15,311 $ 89,905 $ 96,281 860,265 $ 7,441 1,049,207 Other Total revenues 1,041,766 89,905 297,894 12,050 150,937 460,881 $ 42,614 $ 14,136 56,750 2,413,414 27,361 172,514 2,613,289 EXPENDITURES: Current: 1,100 1,100 336,169 195,505 13,146 11,419 731,985 206,924 60,254 877,096 14,132 341,558 44,071 2,613,289 General government 263,986 72,183 Education 718,839 Natural resources Health and welfare services 60,254 824,984 Public safety 141,426 17,722 163,969 1,390 7,832 14,132 9,121 860,265 89,905 1,049,207 460,881 56,750 44,280 Social services Culture and recreation 7,930 44,071 96,281 Indirect costs Capital outlay Total expenditures EXCESS OF REVENUES OVER EXPENDITURES NET CHANGE IN FUND BALANCES FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR $ $ $ $ $ $ $ Page I 24 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE COMBINING SCHEDULE OF CLASSIFIED EXPENDITURES FOR THE YEAR ENDED DECEMBER 31,2021 General Fund Department of Health Direct Indirect and Human Services Department of the Department of Department of the Fund Interior Fund Transportation Fund Treasury Fund Total General Fund EXPENDITURES: Salaries $ Fringes 1,697,447 $ 371,389 1,122,371 $ 2,819,818 263,896 635,285 $ 3,127,433 $ 747,664 1,609,184 $ 383,291 381,090 Sponsorship S0,622 Travel and training 31,145 1,767 32,912 24,787 9,388 961 Supplies 138,517 65,414 203,931 274,510 178,311 25,964 Telephone 34,625 53,046 87,671 15,892 30,850 4,917 1,536 58,000 58,000 Legal Fees 358,811 358,811 476 163,729 Community services 13,617 13,617 59,339 67,367 Stipends 62,250 31,150 93,400 14,250 2,000 Lease 20,168 33,007 53,175 80,732 12,566 4,562 Contracted services 563,870 197,252 761,122 1,767,604 328,808 104,648 Direct assistance 107,839 107,839 265,198 148,319 Utilities (1,598) 50,622 Consultant Dues and fees 7,933 $ 115,774 2,717 1,580 4,297 11,769 500 150,058 88,864 238,922 69,540 8,832 762,623 762,623 Insurance 16,222 4,860 8,413 5,575,492 3,749 Maintenance 236,328 33,404 269,732 261,625 111,354 22,513 74 Vehicle 193,297 27,416 220,713 13,472 18,008 41,388 465 109,271 548,688 94,329 58,772 61,196 Burial 92,029 Other 439,417 Taxes 212,874 Noncapital expenditures 22,874 32,527 35,989 Cost of goods sold 47,820 47,820 435,641 Employee related costs 5,603 5,603 17,685 92,029 7,091 212,874 9,653 7,118 In-kind 39,446 Indirect cost 1,022,302 1,022,302 1,313,523 593,266 163,057 1,799 Capital outlay 159,001 159,001 1,211,373 22,000 585,255 155,585 Debt service principal 62,183 62,183 Debt service interest 14,046 6,168,849 14,046 8,969,563 Total expenditures $ $ 2,800,714 $ $ 9,842,831 $ 3,861,396 $ 1,451,665 $ 5,772,994 Page I 25 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE COMBINING SCHEDULE OF CLASSIFIED EXPENDITURES FOR THE YEAR ENDED DECEMBER 31, 2021 Environmental Institute of Museum Department of Protection Agency and library Services Department of Justice Homeland Security Other Grants and Agriculture Fund Fund Fund Fund Fund Contracts Fund Department of Totals EXPENDITURES: Salaries s Fringes 13,422 s 2,018 367,195 s 30,253 s 514,358 s 183,528 s 64,376 17,661 s 9,071,875 109,315 5,873 133,550 3,520 375 648 12,793 20,236 32,832 35,162 3,102 803,063 229 2,720 12,439 341 155,059 9,432 2,204,980 Sponsorship 50,622 Travel and training Supplies Telephone 72,591 Consultant 58,000 Legal Fees 50 529,462 Community services 623 140,946 Stipends 109,650 Lease Contracted services 327 2,924 11,978 132,340 2,301 882 10,888 2,850 Direct assistance 157,469 172,795 3,301,446 146,145 2,202 6,245,195 940 342,452 Dues and fees 16,566 Utilities 3,203 2,806 14,460 6 3,976 6,657 304 3,806 6,450 681 305,287 45,527 1,507 10,108 758,931 Insurance 762,623 Maintenance Vehicle 675,937 Burial 99,120 Other 212,874 Taxes Noncapital expenditures 26,742 9,163 2,280 167,897 Cost of goods sold 483,461 Employee related costs 30,406 In-kind Indirect cost 7,930 Capital outlay 44,071 66,807 12,050 15,311 141,426 17,722 163,969 1,390 9,121 3,435,505 2,177,285 Debt service principal 62,183 Debt service interest Total expenditures s 96,281 s 860,265 s 89,905 s 1,049,207 s 460,881 s 56,750 s 14,046 32,511,738 Page I 26 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED DECEMBER 31, 2021 Federal Agency/Pass~ Through Agency/ Program and Cluster Title U.S. Department of Agriculture: Food Distribution Program on Indian Reservation CFDA Pass-Through Entity Number Project/Grant Number Expenditures 10.567 96,281 Total U.S. Department of Agriculture 96,281 U.S. Department of the Interior: Aid to Tribal Governments- Enrollment Services Aid to Tribal Governments- Enrollment Services COVID-19 Aid to Tribal Governments COVID-19 Aid to Tribal Governments- Enrollment Services Services to Indian Children, Elderly and Families Tribal Courts Tribal Courts Indian law Enforcement COVID-19 Indian law Enforcement Indian Law Enforcement 15.020 15.020 15.020 15.020 Subtotall5.020 4,848 4,923 46,879 3,079 59,729 15.025 203,245 15.029 15.029 5ubtotal15.029 10,629 60,065 70,694 15.030 15.030 15.030 Subtotal15.030 599,872 65,301 865,178 1,530,351 15.031 15.031 Indian Community Fire Protection Indian Community Fire Protection Subtotal 15.031 617 2,459 3,076 Roads Maintenance_lndian Roads 15.033 154,710 Forestry on Indian Lands Forestry on Indian Lands 15.035 15.035 58,061 57,537 115,598 Subtotal15.035 15.037 15.037 15.037 Water Resources on Indian lands Water Resources on Indian Lands Water Resources on Indian Lands Subtotal15.037 100,995 401,237 97,149 599,381 Minerals and Mining on Indian Lands 15.038 34,187 Environmental Management_lndian Programs~ Aerial Geothermal Geophysics Environmental Management_!ndian Programs- Noxious Weeds Environmental Management_lndian Programs~ Invasive Species Environmental Management_lndian Programs~ Range Vegetation Inventory Environmental Management_lndian Programs~ Range Improvement Projects 15.041 15.041 15.041 15.041 15.041 15,977 80,007 13,314 68,731 1,643 179,672 Subtotal15.041 15.113 15.113 15.113 Indian Social Services_Welfare Assistance COVID-191ndian Social Services_Welfare Assistance Indian Social Services_Welfare Assistance Subtotal15.113 7,379 (645) 149,252 155,986 Indian Education_Higher Education Grant Program Indian Education_Higher Education Grant Program 15.114 15.114 5ubtotal15.114 62,535 65,651 128,186 Indian Education_Assistance to Schools Indian Education_Assistance to Schools 15.130 15.130 5ubtotal15.130 21,798 11,727 33,525 15.508 15.517 15.608 92,204 85,534 12,958 15.639 15.639 15.639 15.639 5ubtotal15.639 86,818 6,062 69,150 55,021 217,051 White-nose Syndrome National Response Implementation 15.684 49,730 Historic Preservation Fund Grants~!n-Aid Historic Preservation Fund Grants~ln~Aid Historic Preservation Fund Grants-In-Aid 15.904 15.904 15.904 32,107 48,263 15,513 95,883 Providing Water to At~Risk Natural Desert Terminal Lakes Fish and Wildlife Coordination Act Fish and Wildlife Management Assistance Tribal Wildlife Grants Program~ Aquatic Invasive Species Tribal Wildlife Grants Program~ AIS Prevention & Management Tribal Wildlife Grants Program~ Reintroduction of Big Horn Sheep Tribal Wildlife Grants Program- Reintroduction of Big Horn Sheep Subtotal15.904 3,821,700 Total U.S. Department of the Interior The accompanying notes are an integral part of the schedule of expenditures of federal awards. Page 27 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED DECEMBER 31, 2021 Federal Agency/Pass-Through Agency/ Program and Cluster Title CFDA Pass-Through Entity Number Project/Grant Number Expenditures U.S. Department of Justice: 16.021 16.024 Justice Systems Response to Families Tribal Sexual Assault Services Program Pass-Through the State of Nevada: Crime Victim Assistance 76,356 51,622 16.575 Crime Victim Assistance/Discretionary Grants Crime Victim Assistance/Discretionary Grants COVID-19 Crime Victim Assistance/Discretionary Grants Crime Victim Assistance/Discretionary Grants Violence Against Women Discretionary Grants for Indian Tribal Governments Rural Domestic Violence, Dating Violence, Sexual Assault, and Stalking Assistance Program Tribal Court Assistance Program-eTAS Drug Court Grant Public Safety Partnership and Community Policing Grants 2018.V2·GX·0078 27,334 16.582 16.582 16.582 16.582 Subtotal16.582 128,920 1,184 44,067 8,395 182,566 16.587 16.589 16.608 16.710 273,788 156,641 10,888 52,813 16.736 16.841 27,461 182,297 Transitional Housing Assistance for Victims of Domestic Violence, Dating Violence, Stalking, or Sexual Assault VOCA Tribal Victim Services Set¥Aside Program 1,041,766 Total U.S. Department of Justice U.S. Department of Transportation: Pass~ Through the Bureau of Indian Affairs: Highway Planning and Construction~ Transportation Planning H61883 Highway Planning and Construction~ PLPTTransit Program Highway Planning and Construction- WCC Parking Lot Phase II Highway Planning and Construction- Tahoe Pyramid Bike Path Highway Planning and Construction¥ PlPT Admin Parking Highway Planning and Construction- Tribal Transit Facility Highway Planning and Construction- WADS 447 Complete Street COVID~19 Formula Grants for Rural Areas and Tribal Transit Program- Tribal Transit Formula Grants for Rural Areas and Tribal Transit Program- Admin Facility Design Formula Grants for Rural Areas and Tribal Transit Program- Admin Facility Design Formula Grants for Rural Areas and Tribal Transit Program- FTA Formula Funds 20.205 20.205 20.205 20.205 20.205 20.205 20.205 Subtotal 20.205 292,361 45,039 39,443 147,312 51,946 137,666 939 714,706 20.509 20.509 20.509 20.509 71,088 207,754 12,080 28,161 A16AP00042 A16AP00042 A16AP00042 A16AP00042 A16AP00042 A16AP00042 A16AP00042 Pass- Through the State of Nevada: Formula Grants for Rural Areas and Tribal Transit Program Formula Grants for Rural Areas and Tribal Transit Program 20.509 20.509 296,281 79,005 694,369 NV-2020-008-00 NV-2021-004/031/034 Subtotal 20.509 1,409,075 Total U.S. Department of Transportation U.S. Department of the Treasury: COVID-19 Coronavirus Relief Fund COVID-19 Coronavirus Relief Fund COVID-19 Coronavirus State and local Fiscal Recovery Funds COVID-19 Coronavirus State and Local Fiscal Recovery Funds COVID-19 Coronavirus State and local Fiscal Recovery Funds COVID-19 Coronavirus State and Local Fiscal Recovery Funds 21.019 21.019 Subtotal21.019 243,080 52,176 295,256 21.027 21.027 21.027 21.027 522 8,603 5,463,000 5,613 5,477,738 Subtotal 21.027 5,772,994 Total U.S. Department of the Treasury U.S. Institute of Museum and Library Services: Native American/Native Hawaiian Museum Services Program 45.308 36,355 Native American and Native Hawaiian library Services 45.311 45.311 45.311 1,825 51,676 49 53,550 Native American and Native Hawaiian Library SefVices Native American and Native Hawaiian library SefVices Subtotal 45.311 89,905 Total U.S. Institute of Museum and library Services The accompanying notes are an integral part of the schedule of expenditures of federal awards. Page 28 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED DECEMBER 31, 2021 Federal Agency/PassMThrough Agency/ Program and Cluster Title CFDA Pass-Through Entity Number Project/Grant Number Expenditures U.S. Environmental Protection Agency: Training, Investigations, and Special Purpose Activities of Federally-Recognized Indian Tribes Consistent With the Clean Air Act (CAA), Tribal Sovereignty and the Protection and Management of Air Quality Training, Investigations, and Special Purpose Activities of Federally-Recognized Indian Tribes Consistent With the Clean Air Act (CAA), Tribal Sovereignty and the Protection and Management of Air Quality Performance Partnership Grants- Water Quality Monitoring Performance Partnership Grants- Non Point Source Performance Partnership Grants- Wetland Program Development Performance Partnership Grants- Non Point Source Competitive Performance Partnership Grants- PPG CWA Multi-Purpose Funding State and Tribal Response Program Grants Indian Environmental General Assistance Program (GAP} Indian Environmental General Assistance Program {GAP) 66.038 63,838 66.038 5ubtotal66.038 23,989 87,827 66.605 66.605 66.605 66.605 66.605 5ubtotal66.605 244,778 38,779 109,583 12,151 11,319 416,610 66.817 70,086 66.926 66.926 5ubtotal66.926 148,052 122,379 270,431 844,954 Total U.S. Environmental Protection Agency U.S. Department of Health and Human Services: Indian Health Service: Pass-Through the State of Nevada: Special Programs for the Aging_Title Ill, Part C_Nutrition Services 93.045 2001NVHDC2-00 2,708 COVID-19 Special Programs for the Aging_Title VI, Part A, Grants to Indian Tribes_Part B, Grants to Native Hawaiians- Title VI Cares Act Nutrition COVID-19 Special Programs for the Aging_Title VI, Part A, Grants to Indian Tribes_Part B, 93.047 21,413 Grants to Native Hawaiians- Title VI Families First Special Programs for the Aging_Title VI, Part A, Grants to Indian Tribes_Part 8, Grants to 93.047 2,794 Native Hawaiians- Title VI Families First- CAA 21 Title VI Supplemental COVID-19 Special Programs for the Aging_Title VI, Part A, Grants to Indian Tribes_Part B, 93.047 11,844 Grants to Native Hawaiians- Title VI Families First- TITLE VI PART A/B Special Programs for the Aging_Title VI, Part A, Grants to Indian Tribes_Part 8, Grants to 93.047 14,061 93.047 5ubtotal93.047 87,567 137,679 93.053 10,259 93.054 8,858 93.054 5ubtotal93.054 39,945 48,803 93.071 93.071 93.071 Native Hawaiians- Numaga Title VI Part A 2020-2023 Nutrition Services Incentive Program National Family Caregiver Support, Title VI, Part C, Grants to Indian Tribes and Native Hawaiians- Numaga Caregiver Program 2017-2021 National Family Caregiver Support, Title VI, Part C, Grants to Indian Tribes and Native Hawaiians- Numaga Caregiver Part C Subtotal93.071 2,268 1,102 115 3,485 Special Diabetes Program for lndians_Diabetes Prevention and Treatment Projects Substance Abuse and Mental Health Services Projects of Regional and National Significance 93.237 93.243 140,640 47,139 Injury Prevention Program for American Indians and Alaskan Natives_Cooperative Agreements- Elder Fall Prevention Program 93.284 17,281 Medicare Enrollment Assistance Program Medicare Enrollment Assistance Program Medicare Enrollment Assistance Program COVID-19 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department 93.391 60,403 93.391 Subtotal 93.391 52,287 112,690 93.441 93.441 93.441 5ubtotal93.441 194 6,768,646 278,758 7,047,598 Indian Health Service Sanitation Facilities Construction Program-PUD: IHS Special Projects 93.445 552,072 Good Health and Wellness in Indian Country {A) 93.479 50,308 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution 93.498 575,065 Response to Public Health or Healthcare Crises COVID-19 Activities to Support State, Tribal, Local and Territorial {STLT) Health Department Response to Public Health or Healthcare Crises Indian Self-Determination- Health Service Project COVID-191ndian Self-Determination Indian Self-Determination The accompanying notes are an integral part of the schedule of expenditures of federal awards. Page 29 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED DECEMBER 31, 2021 Federal Agency/PassMThrough Agency/ Program and Cluster Title Child Care and Development Block Grant COVID-19 Child Care and Development Block Grant COVID-19 Child Care and Development Block Grant Child Care Mandatory and Matching Funds of the Child Care and Development Fund Child Care Mandatory and Matching Funds of the Child Care and Development Fund COVID-19 Child Care and Development Block Grant Child Care and Development Block Grant Child Care and Development Block Grant Promote the Survival and Continuing Vitality of Native American Languages CFDA Pass-Through Entity Number Project/Grant Number Expenditures Subtotal CCDF Cluster 87,740 7,323 12,821 301,064 31,803 59,046 116,677 232 616,706 93.587 2,656 93.575 93.575 93.575 93.596 93.596 93.575 93.575 93.575 Pass-Through the State of Nevada: Family Violence Prevention and Services/Domestic Violence Shelter and Supportive Services 93.671 13,950 2001NVFVP5 COVID-19 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement Demonstration Projects for Indian Health 93.912 35,415 93.933 49,485 9,463,939 Total U.S. Department of Health and Human Services Department of Homeland Security: Pass-Through the State of Nevada: Emergency Management Performance Grants-FY 2020 97.042 Assistance to Firefighters Grant 97.044 97.047 97.083 Pre-Disaster Mitigation Staffing for Adequate Fire and Emergency Response {SAFER} EMF·2020·EP·00017·501 12,050 26,742 172,795 86,307 297,894 Total Department of Homeland Security 22,838,508 Total Expenditures of Federal Awards The accompanying notes are an integral part of the schedule of expenditures of federal awards. Page 30 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED DECEMBER 31, 2021 Note 1: Basis of Presentation The accompanying schedule of expenditures of federal awards (the "Schedule") includes the grant activity of the Governmental Department of the Pyramid Lake Paiute Tribe (the "Governmental Department") under programs of the federal government for the year ended December 31, 2021. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Governmental Department, it is not intended to and does not present the financial position or changes in net position of the Governmental Department. Note 2: Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Note 3: Indirect Cost Rate The Governmental Department has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Instead, the Governmental Department has negotiated approved indirect cost rates. Note 4: Subrecipients Of the federal expenditures presented in the Schedule, the Governmental Department provided no federal awards to subrecipients. Note 5: Reconciliation of Federal Awards During the year ended December 31, 2020, the Governmental Department incurred expenditures under Provider Relief Fund (PRF) in the amount of $575,065. As required by the OMB Compliance Supplement Addendum, those expenditures are reported in the Schedule in 2021. The following is a reconciliation of the expenditures reported on the Schedule to intergovernmental revenues reported in the financial statements: Expenditures of federal awards $ Expenditures under PRF for 2020 Expenditures of non-federal awards Intergovernmental revenues $ 22,838,508 (575,065) 42,614 22,306,057 Note 6: Water Treatment Facility Loan During 2012, the Governmental Department entered into a loan agreement (See Note 9 to the financial statements) for the building of the Sutcliffe water treatment facility with USDA. The loan was issued for $150,000. At December 31, 2021, the loan's principal balance was $24,511. The loan contains no significant continuing compliance requirements other than maintenance of debt service payments. Page 31 COMPLIANCE SECTION INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Members of the Tribal Council of the Pyramid Lake Paiute Tribe: We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Governmental Department of the Pyramid Lake Paiute Tribe (the "Governmental Department") as of and for the year ended December 31, 2021, and the related notes to the financial statements, which collectively comprise the Governmental Department's financial statements, and have issued our report thereon dated June 7, 2023. Report on Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Governmental Department's internal control over financial reporting (internal control) as a basis for designs audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Governmental Department's internal control. Accordingly, we do not express an opinion on the effectiveness of the Governmental Department's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the Governmental Department's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We identified certain deficiencies in internal control, described in the accompanying schedule of findings and questioned costs as items 2021-001 and 2021-002, that we consider to be significant deficiencies. Page 32 Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the Governmental Department's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. The Governmental Department's Response to Findings Government Auditing Standards requires the auditor to perform limited procedures on the Governmental Department's response to the findings identified in our audit and described in the accompanying corrective action plans. The Governmental Department's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Governmental Department's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Governmental Department's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Reno, Nevada June 7, 2023 Page 33 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE To the Members of the Tribal Council of the Pyramid Lake Paiute Tribe: Report on Compliance for Each Major Federal Program Qualified Opinions We have audited the Governmental Department of the Pyramid Lake Paiute Tribe's (the "Governmental Department") compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the Governmental Department's major federal programs for the year ended December 31, 2021. The Governmental Department's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Qualified Opinions on Indian Law Enforcement, Coronavirus Relief Fund, and Coronavirus State and Local Fiscal Recovery Funds In our opinion, except for the noncompliance described in the Basis for Qualified Opinions section of our report, the Governmental Department complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on Indian Law Enforcement, Coronavirus Relief Fund, and Coronavirus State and Local Fiscal Recovery Funds for the year ended December 31, 2021. Basis for Qualified Opinions on Indian Law Enforcement, Coronavirus Relief Fund, and Coronavirus State and Local Fiscal Recovery Funds We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor's Responsibilities for the Audit of Compliance section of our report. We are required to be independent of the Pyramid Lake Paiute Tribe and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the Governmental Department's compliance with the compliance requirements referred to above. Page 34 Matter Giving Rise to Qualified Opinions on Indian Law Enforcement, Coronavirus Relief Fund, and Coronavirus State and Local Fiscal Recovery Funds As described in the accompanying schedule of findings and questioned costs, the Governmental Department did not comply with requirements regarding CFDA 15.030 Indian Law Enforcement, CFDA 21.019 Coronavirus Relief Fund, and CFDA 21.027 Coronavirus State and Local Fiscal Recovery Funds as described in finding number 2021004 for Reporting. Compliance with such requirements is necessary, in our opinion, for the Governmental Department to comply with the requirements applicable to those programs. Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to Governmental Department's federal programs. Auditor's Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the Governmental Department's compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the Governmental Department's compliance with the requirements of each major federal program as a whole. In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we: • • • Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the Governmental Department's compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. Obtain an understanding of Governmental Department's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the Governmental Department's internal control over compliance. Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. Page 35 Other Matters The results of our auditing procedures disclosed an instance of noncompliance which is required to be reported in accordance with the Uniform Guidance and which is described in the accompanying schedule of findings and questioned costs as items 2021-003. Our opinion on each major federal program is not modified with respect to item this matter. Government Auditing Standards requires the auditor to perform limited procedures on the Governmental Department's response to the noncompliance findings identified in our audit described in the accompanying schedule of findings and questioned costs. The Governmental Department's response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. Report on Internal Control over Compliance Our consideration of internal control over compliance was for the limited purpose described in the Auditor's Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance and, therefore, material weaknesses or significant deficiencies may exist that have not been identified. However, as discussed below, we did identify deficiencies in internal control over compliance that we consider to be a material weakness and a significant deficiency. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. We consider the deficiency in internal control over compliance described in the accompanying schedule of findings and questioned costs as item 2021-004 to be a material weakness. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. We consider the deficiency in internal control over compliance described in the accompanying schedule of findings and questioned costs as item 2021-003 to be a significant deficiency. Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. Government Auditing Standards requires the auditor to perform limited procedures on the Governmental Department's response to the internal control over compliance findings identified in our audit described in the accompanying schedule of findings and questioned costs. The Governmental Department's response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. Page 36 The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Reno, Nevada June 7, 2023 Page 37 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED DECEMBER 31,2021 Section I - Summary of Independent Auditor's Results Financial Statements Unmodified Type of auditor's report issued: Internal control over financial reporting: • Material weakness(es) identified? Yes • Significant deficiency(ies) identified? X Noncompliance material to financial statements noted? X None noted Yes Yes No X No Federal Awards Internal control over major federal programs: Yes • Material weakness(es) identified? X • Significant deficiency(ies) identified? X Yes No None noted Type of auditor's report issued on compliance for major federal programs: Type of Opinion on Federal Agency and Name of Major Program U.S. Department of the Interior- Indian Law Enforcement U.S. Department of the Treasury- Coronavirus Relief Fund Major Program Qualified Qualified U.S. Department of the Treasury- Coronavirus State and Local Fiscal Qualified Recovery Funds Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? X Yes No Identification of Major Federal Programs CFDA Numbers Name of Federal Programs 15.030 Indian Law Enforcement 21.019 Coronavirus Relief Fund 21.027 Coronavirus State and Local Fiscal Recovery Funds $ Dollar threshold used to distinguish between type A and type B programs: Auditee qualified as low-risk auditee? X Yes 750,000 No Page 38 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED DECEMBER 31, 2021 Section II - Financial Statement Findings Finding 2021-001: Third Party Revenues and Accounts Receivable Reconciliation -Significant Deficiency Type of Finding: Internal Control over Financial Reporting Criteria: The Governmental Department is required to establish and maintain internal controls that operate effectively and provide reasonable assurance regarding the reliability of the Governmental Department's financial statements. The Governmental Department is encouraged to earn income to improve cash flow and financial position. Condition/Context: The Governmental Department's clinic third party revenues and accounts receivable were not fully reconciled with supporting documentation and available for review upon commencement of audit fieldwork. Cause: The Governmental Department's accounting department had turnover in a key position. Effect: The audit process and financial statement preparation time are delayed when the accounts are not fully reconciled to the supporting documentation. In addition, Tribal Council cannot adequately oversee operations without sufficient financial reporting to ensure that the departments are within budget, and that financial reporting is performed in a timely manner. Repeat Finding from the Prior Audit: Yes. Recommendation: We recommend that the finance department reviews clinic third party receivable and revenues and compares it to the supporting documentation to ensure that the accounts have been completely reconciled on a monthly basis. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges this finding and will address remediation in the accompanying corrective action plans. Page 39 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED DECEMBER 31, 2021 Section II- Financial Statement Findings (Continued) Finding 2021-002: Payroll Controls- Significant Deficiency Type of Finding: Internal Control over Financial Reporting Criteria: Sound internal controls require that the Governmental Department ensures all timecards and pay rates are properly reviewed and approved by management and related supporting documentation is properly retained. Condition/Context: During payroll testing, we noted the following: • There were 4 out of 42 employees selected whose hours worked on the timecards could not be matched to the payroll register. • There were 2 out of 42 employees selected whose pay rates were increased but these 2 employees were paid at the old pay rates. Cause: There has been turnover in key positions, making it difficult for all controls in the payroll process to function properly. Effect: Without verifying timecards and pay rates, the Governmental Department could be incorrectly paying employees. Repeat Finding from the Prior Audit: No. Recommendation: We recommend that a review and approval process be implemented to provide for better control over the payroll process. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges this finding and will address remediation in the accompanying corrective action plans. Page 40 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED DECEMBER 31, 2021 Section Ill - Federal Award Findings and Questioned Costs Finding 2021-003: Allowable Costs/Cost Principles- Payroll Controls- Significant Deficiency Type of Finding: Internal Control over Compliance and Compliance Applicable to: CFDA Number 15.030 21.019 Federal Agency and Program Name U.S. Department of the InteriorIndian Law Enforcement U.S. Department of the TreasuryCoronavirus Relief Fund Federal Award Identification Number and Year Questioned Costs A16AV00556- 2021 A21AV00187- 2021 None N/A- 2020 None Criteria: 2 CFR §200.430(i)(1)(vii) states: "Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and nonFederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity." 2 CFR §200.403(g) states: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under federal awards: (g) be adequately documented." 2 CFR §200.302(b)(3) states: "Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation." Condition/Context: We noted that employees' personnel files did not contain current pay rate documentation. We also noted that there is no established procedure for the review and approval of timecards prior to payment. Our audit testing also disclosed the following instances: Indian Law Enforcement • • There were 3 out of 20 employees selected whose hours worked on the timecards could not be matched to the payroll register. There was 1 out of 20 employees selected whose pay rate was increased but this employee was paid at the old pay rate. Coronavirus Relief Fund • There was 1 out of 1 employee selected whose hours worked on the timecard could not be matched to the payroll register. Indirect Cost Pool Fund • There was 1 out of 11 employees selected whose pay rate was increased but this employee was paid at the old pay rate. Page 41 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED DECEMBER 31, 2021 Section Ill- Federal Award Findings and Questioned Costs (Continued) Finding 2021-003: Allowable Costs/Cost Principles- Payroll Control- Significant Deficiency (Continued) Cause: There has been turnover in key positions. Effect: Without verifying pay rate authorization forms and timecards, the Governmental Department could be incorrectly paying employees. Repeat Finding from the Prior Audit: No. Recommendation: We recommend that a review and approval process be implemented to provide for better control over the payroll process. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges this finding and will address remediation in the accompanying corrective action plans. Finding 2021-004: Reporting- Material Weakness Type of Finding: Internal Control over Compliance and Compliance Applicable To: CFDA Number 15.030 21.019 21.027 Federal Agency and Program Name U.S. Department of the InteriorIndian Law Enforcement U.S. Department of the TreasuryCoronavirus Relief Fund U.S. Department of the TreasuryCoronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year Questioned Costs A16AV00556- 2021 A21AV00187- 2021 None N/A- 2020 None N/A- 2021 None Criteria: 1. 2 CFR Section §200.512{a)(1) states: "The audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day." 2. Indian Law Enforcement - The Governmental Department is required to submit quarterly financial progress reports within a certain period after each quarter. 3. Coronavirus Relief Fund - The Governmental Department is required to submit quarterly financial progress reports within a certain period after each quarter and appropriately maintain accounting records for compiling and reporting accurate, compliant financial data in accordance with appropriate accounting standards and principles. Page 42 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED DECEMBER 31, 2021 Section Ill- Federal Award Findings and Questioned Costs (Continued) Finding 2021-004: Reporting- Material Weakness (Continued) Condition/Context: 1. The Governmental Department did not submit its single audit report in a timely manner. 2. Indian Law Enforcement - 1 out 8 quarterly financial progress reports was not submitted, 6 out 8 quarterly financial progress reports were submitted late. 3. Coronavirus Relief Fund- 1 out 4 quarterly financial progress reports was not submitted, 1 out 4 quarterly financial progress reports was submitted late. 4. Coronavirus Relief Fund -We noted that the amount reported in the financial progress reports did not reconcile to the general ledger. Cause: 1. 2. The Governmental Department did not have sufficient staffing to undertake financial statement and compliance reporting preparation tasks. In addition, there has been turnover in key positions. Coronavirus Relief Fund- There has been turnover in key positions. Effect: Without proper reporting, the Governmental Department was unable to comply with the applicable federal requirements and their federal funding could be at risk of termination. Without timely and accurate reports, the Governmental Department was unable to ensure that the goals and purposes of the grants had been achieved and accounted for properly. Repeat Finding from the Prior Audit: Yes. Recommendation: We strongly recommend that the Governmental Department institute policies and procedures that stipulate that the required reports must be filed by their respective due dates and maintain the proof of the submission. It is critically important that timely and accurate reports be produced to ensure that the goals and purposes of the grant have been achieved and accounted for properly. We further suggest that a careful review of these reports take place before they are filed. Amounts reported in these reports should always agree with the general ledger. Management's Response/Planned Corrective Action: Management acknowledges this finding and will address remediation in the accompanying corrective action plans. Page 43 Pyranlid Lake Paiute Tribe l'ost qf.Yice Box 256 Nixon, Nevada 89424 Telephone: (775) 574-1000 Fax (775) 574-1008 GOVERNMENTAl DEPARTMENT OF THE PYRAMID lAKE PAIUTE TRIBE SUMMARY SCHEDUlE OF PRIOR YEAR AUDIT FINDINGS FROM THE YEAR ENDED DECEMBER 31, 2020 Finding 2020-001: Third Party Revenues and Accounts Receivable Reconciliation Condition/Context: During the testing of third-party insurance billings, we noted that several claims were submitted to the third-party payors after the allowed time period, which can result in the claims being denied for payment. In addition, several claims were not submitted due to insufficient documentation and paperwork by the front office personnel before the patients were provided services. Third-party insurance accounts receivable and associated allowance for doubtful accounts were not fully reconciled with supporting documentation and available for review upon commencement of audit fieldwork. Status: Unresolved. See current year finding 2021-001. Finding 2020·002: Capital Asset listing Condition/Context: During our audit, we noted that a significant amount of new acquisitions were not included in the capital assets listing. Status: Resolved. Finding 2020-003: Reporting Applicable To: ·-cl=oft.___ r Number ---·---~~·---··-~----·--·-----··-· Federal Agency and Program Name Federal Awa rd Identification Numbe rand Year U.S. Department of the Interior15.020 Aid to Tribal Governments- Enrollment A16AVO 0685-2020 Services .. -----·U.S. Department of the Treasury21.019 N/A . 2020 Coronavirus Relief Fund ------····--------·---~-----··--·--·-·---·-·----'. Questioned Costs -- None -·~~--~~"~--~-~-··--····-········-·~···-··-·--··-·---····-----------···~ _____ None Condition/Context: Aid to Tribal Governments - Enrollment Services -We were not able to verify submission of the annual narrative report. Coronavirus Relief Fund• 1 out of 3 quarterly financial progress report was submitted late; • 2 out of 3 quarterly financial progress reports were not submitted. Status: Status: Unresolved. See current year finding 2021-004 for Coronavirus Relief Fund. Page 44 Pyrarnid Lake Paiute Tribe Post q[fice !Jox 256 Nixon, Nevada 89424 1ldephone: (775) 574-1000 Fax (775) 574-1008 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE SUMMARY SCHEDULE OF PRIOR YEAR AUDIT FINDINGS FROM THE YEAR ENDED DECEMBER 31, 2020 Finding 2020-003: Reporting (Continued) Reason for Audit Finding Recurrence -Aid to Tribal Governments- Enrollment Services: The 2021 annual narrative report was not sent to the agency. This was due to the department director not keeping adequate records and not adhering to Annual Funding Agreement report deadlines. Corrective Action Plan: The annual narrative report for 2021 was submitted June 1, 2023 to the agency via email. The department will keep records of reports submitted via email, attaching a copy of verification to the actual document in the Enrollment files and Finance will keep a copy of the narrative in the contract file and electronic file. Contact Person: Joanne Shaw, Enrollment Coordinator Date of Completion: June 1, 2023 Page 45 Pyratnid Lake Paiute Tribe l'ost (~/.fice Box 256 ll/ixon, Nevada 89424 Telephone: (775) 574-1000 Fax (775) 574-1008 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE CORRECTIVE ACTION PLANS FROM THE YEAR ENDED DECEMBER 31, 2021 Finding 2021-001 Third Party Revenues and Accounts Receivable Reconciliation Action: The Interim Comptroller and the General Ledger Accountant will meet monthly with the Health Director to verify the Third Party revenues and accounts receivable are fully reconciled with supporting documentation. Discrepancies and errors will be resolved and corrected by the Health Director with the assistance of the Finance Department and a report will be sent to the Tribal Chairman monthly. The Tribe will be performing a Financial Management Assessment in 2023, of all aspects and levels of the governmental accounting and financial systems and responsibilities. The assessment will review, recommend as required updates and or expansion of the Financial Policies, Internal Controls, Staffing and Structure. The purpose of this assessment is to establish continuity of practices throughout the organization, with the intent and goal of enforcing compliance of accounting standards, compliance with reporting and regulatory, limiting risk and deterring fraud. The Health Clinic will be in this assessment. An RFP is scheduled to be announced and sent to qualified Certified Public Accounting firms by June 30, 2023, and will be completed by December 31, 2023. Responsible Official: Dawna Brown, Pyramid Lake Health Director Date of Completion: December 31, 2023 Page 46 Pyra1nid Lake Paiute Tribe Post qffice Box 256 Nixon, Nel'ada 89424 'Ide plume: (775) 574-1000 Fax (775) 574-1008 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE CORRECTIVE ACTION PLANS FROM THE YEAR ENDED DECEMBER 31, 2021 Findings 2021-002 Payroll Controls and 2021-003 Allowable Costs/Cost Principles- Payroll Controls Action: The Accounting Supervisor, or in the absence of the Accounting Supervisor, the Comptroller receives the Employee Action Notice (EAN) and verification for accuracy is done. In the event of an incorrect EAN, the form is returned to the HR department for correction. Upon receipt of the corrected EAN, the information is further verified by the Accounting Supervisor, or the Comptroller then entered in to the accounting system by the Payroll Manager. Transition fully to the Employee Web Services (EWS) payroll system and eliminate the manual timecard due to discrepancies between the physical timecards, EWS timesheets and the Daily Work Record. The Department Director or Supervisor verifies hours worked and submits payroll information to the Employee Web Services payroll system for upload. The Director or Supervisor submits hard copies of the EWS timecard and that document becomes the official record. The Tribe will be performing a Financial Management Assessment in 2023, of all aspects and levels of the governmental accounting and financial systems and responsibilities. The assessment will review, recommend as required updates and or expansion of the Financial Policies, Internal Controls, Staffing and Structure. The purpose of this assessment is to establish continuity of practices throughout the organization, with the intent and goal of enforcing compliance of accounting standards, compliance with reporting and regulatory, limiting risk and deterring fraud. An RFP is scheduled to be announced and sent to qualified Certified Public Accounting firms by June 30, 2023, and will be completed by December 31, 2023. Responsible Official: Pamela Wright, Interim Comptroller Date of Completion: 12/31/2023 Page 47 Pyramid Lake Paiute Tribe Post (~f.fice Box 256 Nixon, Nel'ada 89424 Telepltonc: (775) 574-1000 Fax (775) 574-1008 GOVERNMENTAL DEPARTMENT OF THE PYRAMID LAKE PAIUTE TRIBE CORRECTIVE ACTION PLANS FROM THE YEAR ENDED DECEMBER 31, 2021 Finding 2021-004 Reporting Action: 1. The FY2021 Single Audit- The FY 2021 audit was late due to financial statements of the Tribe submitted to the auditor without proper reconciliation. Upon discovery, consultants were immediately hired to assist in preparing the financial statements, revising SEFA and the audit moved forward. 2. Indian Law Enforcement- A21AV00187- The Grants Accounting Specialist prepares the general ledgers and SF425 report for Comptroller review and approval. The approved report goes to the Tribal Chairman for signature. Upon return of signed report, the Grants Accounting Specialist submits the report. The policy for grant reporting is in the Financial Management Policy of the Pyramid Lake Paiute Tribe. 3. Coronavirus Relief Fund - review of the Online Data Collection system shows reports currently uploaded. Reports are notated as Past Due and in a Saved status. These reports will be retrieved and resubmitted. Assistance from the Online Data Collection/Grant Solutions will be requested. 4. Coronavirus Relief Fund -The reports in the Online Data Collection system notated as Past Due and Saved status will be retrieved and corrected to reconcile to the general ledger. Assistance from the Online Data Collection/Grant Solutions will be requested. The Comptroller has created a contract file and an electronic file containing copies of submitted Coronavirus documents and record of submission status. The Financial Assessment will address the Grants Management section of the Financial Management Policy as well as staffing. Responsible Official: Pamela Wright, Interim Comptroller Date of Completion: 09/30/2023 Page 48 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/tribal%3Apyramid_lake%3A43efe574f895c71c. Public record. Not legal advice.