Guidance on Tribal Government FASB-Based Financial Statements

Financial Management

A landmark tribal government-working group was announced this summer at the Financial Accounting Foundation (FAF) board of trustee meeting. The decision to form a working group, directed by the Governmental Accounting Standards Board (GASB) Chairman David Vaudt, comes after a historic educational session between representatives from NAFOA, the Southern Ute Indian Tribe, the FAF, the GASB, and the Financial Accounting Standards Board (FASB).            

Tribal governments’ reliance on economic development to fund essential services to their citizens has negatively impacted audits – even for tribes with strong financial (AAA) ratings. Negative audits, in the form of dual audit opinions, can impact federal funding, bank loans, the ability to raise capital, and the potential loss of economic opportunities.

The educational session led by NAFOA centered on how federal Indian policy has shaped today’s tribal governments and resulted in a complex government framework that does not allow tribes to fit neatly into the existing accounting standards for local governments. The Tribal Government Accounting Working Group (TGAWG) includes accounting standard-setting bodies, representatives from tribal governments, federal agencies, state and local governments, and other professionals that work in Indian Country.

NAFOA is working with the TGAWG to gather information that will help educate members about the status of financial reporting by tribal entities. The group will focus on finding a financial solution reporting solution that accommodates the tribal governance model and allows a clean audit opinion on a for-profit or FASB financial statements for enterprises. NAFOA will continue to promote Indian Country’s involvement in all GASB projects and expand knowledge of tribal operations to accounting standard setters.

The TGAWG next meeting will convene on Wednesday, April 17, 2019, after NAFOA’s 37th Annual Conference in Portland, OR. If you would like to attend this public meeting, please email Jennifer@nafoa.org