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Confederated Tribes of the Colville Reservation Annual General Membership Meeting Financial Update

October 4, 2014. Confederated Tribes of the Colville Reservation Annual General Membership Meeting Financial Update October 12, 2013. Agenda. FY12 Audit Investments FY14 Budget. FY12 Audit. Tribes audited financial statements can be found on internet The Federal Audit Clearinghouse

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Confederated Tribes of the Colville Reservation Annual General Membership Meeting Financial Update

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  1. October 4, 2014 Confederated Tribes of the Colville Reservation Annual General Membership Meeting Financial Update October 12, 2013

  2. Agenda • FY12 Audit • Investments • FY14 Budget

  3. FY12 Audit • Tribes audited financial statements can be found on internet • The Federal Audit Clearinghouse • http://census.gov • What is an qualified and unqualified opinion? • Tribes financial statements are qualified • Why? CBC choses not to included gaming, which is proprietary information

  4. Total Assets vs. Liabilities

  5. Governmental Activities Net Assets

  6. Enterprise Assets vs. Liabilities

  7. Enterprise Net Assets

  8. General Fund Assets vs. Liabilities

  9. General Fund Net Assets

  10. General Fund Revenues vs Expenditures before Transfers

  11. Enterprise Revenues vs. Expenditures

  12. Special Revenue Expenditures

  13. Distributions to Tribal Members

  14. Finding 12-1 Condition: Accounts payable needed to be adjusted for several unrecorded invoices related to 2012. Additionally, several capital items were not included on the Tribe’s depreciation schedule. It should be noted that while correcting entries were required, substantial progress has been made by the Tribes compared to the past years. Recommendation: General ledger accounts should be reconciled to subsidiary ledgers and supporting documentation each month. All accounting transactions should be entered into the system timely and reviewed by an appropriate level of management. This review process would ensure completeness and accuracy and thereby enhance the control system in the accounting department. Financial Statement Findings

  15. Finding 12-2 Condition: Per inquiry and review of controls and procedures relating to credit card purchases we noted numerous instances where payments were made prior to the submission of receipts and other supporting documentation. Recommendation: We recommend that the established policies and procedures regarding credit card purchases be strictly followed. Any unsupported charges should be considered personal in nature by the individual incurring the expense and immediately reimbursed. Financial Statement Findings

  16. Finding 12-3 Condition: Per inquiry and review of controls and procedures relating to fuel/gas card purchases we noted numerous instances where it appears abuse may have occurred, supporting documentation for all fuel purchases was not readily available to determine proprietary and/or need or charge for fuel. Recommendation: We recommend that the established policies and procedures regarding fuel/gas card purchases be strictly followed. Any unsupported charges should be considered personal in nature by the individual incurring the expense and immediately reimbursed. Financial Statement Findings

  17. Finding 12-4 Condition: Davis-Bacon requires federally-funded contractors to pay their employees prevailing wages as established by the DOL. The Tribe is required to monitor this requirement by reviewing certified payroll records from the contractor. Several contractors tested were found to have not been reviewed. Recommendation: We recommend that the Tribes identify those contractors working under federal contracts and develop procedures to ensure that payroll records are requested and reviewed. Federal Award Findings

  18. Questions?

  19. Investments General fund • $13.3M Qwam Qwmpt’ • Settlement $193M • Payments to Members $96.5M (50%) • Initial investment $96.5M • Balance at 09/30/2013 is $89.6M • Difference is $6.9M • $6.9M transferred to QQ commitments • $6.6M land purchase • $250k Salish College, Hearts Gather School, & Inchelium Language & Culture Assoc.

  20. Markets and Portfolio Summary Q3-2013 Markets • Uncertainty • Even though the stock market is up, the U.S. economy hasn’t quite followed suit • Europe’s sovereign debt crisis highlights just how overextended governments and central banks are • Chinese GDP growth has been revised downward in the 7-8% range • Government shut down • Federal government's debt ceiling • Unemployment rate was 7.3% in August, down from 8.1 percent a year ago. • Employment and consumer spending have been resilient • Home construction, government spending, and consumer spending have rebounded at the slowest rates of any recovery period

  21. Markets and Portfolio Summary Q3-2013 Markets • Global stocks rose sharply, led by a strong rebound in International Developed markets. Emerging Markets rallied from a recent low. • Investors allocated to equities after the Federal Reserve affirmed their support of low interest rates, for the time being. Eventually, rates will trend upward. • US smaller company stocks hit an all time high this quarter. • Treasury Bond prices strengthened, and the 10-Year Treasury yield declined back to 2.6% after the Fed Chairman’s comments calmed the bond market. • Returns to bonds remain low, but are not expected to be a continual performance drag on portfolio returns. Portfolio Changes • Took gains in small company stocks and reallocated to international positions. • Reduced maturities in bonds to position for risk of rising interest rates. • Transferred cash and securities to establish Generations Fund, Sustainable Fund and Language Endowment fund. Outlook • Positive outlook for US Equities and selected International regions • Neutral on Fixed Income, yet values to be found • Positive on Emerging Markets

  22. Colville Tribes: Settlement Accounts

  23. Colville Tribes: Other Accounts

  24. Qwam Qwmpt" Funds Balance at 9/30/2013 $89,623,295

  25. Colville Tribes: Performance Current Blended Benchmark: 20% Equities, 80% Fixed Income. Allocation: 10% S&P500. 3% Russell Mid-Cap,2% Russell 2000, 3% MSCI International Developed EAFE, 2% MSCI Emerging Markets EEM, 75% Barclay’s Aggregate Bond Index, 5% Citigroup 3-Month T-Bill.

  26. Colville Tribes: Main Account Performance Current Blended Benchmark: 20% Equities, 80% Fixed Income. Allocation: 10% S&P500. 3% Russell Mid-Cap,2% Russell 2000, 3% MSCI International Developed EAFE, 2% MSCI Emerging Markets EEM, 75% Barclay’s Aggregate Bond Index, 5% Citigroup 3-Month T-Bill.

  27. relationship summary COLVILLE TRIBES M/AG 40-10-424-1865020

  28. fixed income portfolio analysis COLVILLE TRIBES M/AG 40-10-424-1865020

  29. Goals and Accomplishments Summary Goals • Establish long-term investment accounts to support future needs of the Tribes • Implement Investment program, review and monitor activity ($726k in FY14 budget) Accomplishments • Created Investment Policy Statements for long-term funds • Invested according to Policy to earn returns on settlement dollars • Established Investment Committee and met multiple times • Earned positive total return within first year Long-term investing is like walking up a hill while playing with a yo-yo. We keep our eyes on where we are going, mindful of the ups and downs, but focused on climbing upward to achieve our goal of getting where we want to be. From Investment Committee discussion, August, 2013

  30. Questions?

  31. FY14 Budget Organizational Priorities • Health, Education, Language, Employment • Public safety • Preservation of Tribal lands (restoration) • Financial – compliance, diversity and stability • People - Positive working environment, Planning, Leadership, Recognition & Training • Elders – Wells Dam payment to elders • Infrastructure – IT • Government Center

  32. Initiatives • Jobs skills banks – growing jobs • Government Center • Third classroom to the Head Start Program • College internships • Increase scholarships • Funding law enforcement and emergency services where federal funds were cut • Comprehensive TERO training program • Contribution to the generation’s (endowment) fund

  33. Financial Highlights ($ millions)

  34. Consolidated 2014 Budget 2014 Budget Source of Funds 2014 Budget Use of Funds

  35. Federal & State Grants 2014 Budget 2014 Budget Source of Funds 2014 Budget Use of Funds $82,291,680

  36. General Fund FY14 Budget 2014 Budget $47,831,159 Source of Funds

  37. General Fund FY14 Budget 2014 Budget $47,831,159 Use of Funds

  38. 2014 Action Plan • Complete Serenic implementation • Improve financial reporting • Increase annual revenues • Department of Commerce • Grants • Stumpage • Control costs while sustaining quality • Purchase cards • Group purchasing agreements • Convalescence Center (business & marketing plan) • Headstart

  39. Fiscal Responsibility Measures • Cost Control • Create on site training programs • Develop staff training plans • Establish purchasing groups to lower expenses • Develop in house travel agency • Update accounting policy & procedures • Purchase cards • Implement vehicle fleet program • Continue to obtain grants • Spend federal $ first

  40. Questions?

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