An Osage Nation Congressional audit report of the Pawhuska Indian Village Five-Man Board is raising inquiries of how the board operates and spends revenue the village receives from the Pawhuska Osage Casino monthly lease. In wake of the audit, board Chairman Joe Don Mashunkashey resigned his seat after the Sept. 7 report noted more than $800,000 of the village money is unaccounted for.
The ON Office of Fiscal Performance and Review issued a written compliance and operational audit of the Five-Man Board amid failed efforts to obtain the financial records from the board and bank where the village money is kept. In April, Mashunkashey issued a letter from the Five-Man Board declining to participate in the OFPR audit stating the board believes it is not part of the Osage Nation since it follows law approved by the federal government.
According to the OFPR report, the village received a total of $857,025.93 from Osage Casino and its predecessor Osage Million Dollar Elm Casino for the Pawhuska casino lease from October 2008 to July 2012. The casino sits on the southeast corner of the village property held in trust by the federal government.
In a single-paragraph letter dated April 5, the Pawhuska Five-Man Board responded to the OFPR’s audit by writing: “Please be advised that the members of the Pawhuska 5-Man Board wishes to not be audited at this time due to we have our own Federal ID Number and are not part of the Osage Nation but follow our own by-laws set up by the Bureau of Indian Affairs and (Code of Federal Regulations).”
The OFPR hit another roadblock when Pawhuska’s First National Bank denied auditors access to the village’s banking records. An Osage Nation Congressional subpoena was issued for the banking records, but the bank would not honor it, according to the report.
On the Federal ID number issue, OFPR said: “The Federal Identification Number that the Pawhuska Indian Village Committee is using at (First National Bank) proved to be a non-current number per the Internal Revenue Service with no record on file. In searching the most recent list of recognized Native American Indian Tribes, only the ‘Osage Nation’ was listed with no mention of any of the villages.”
The OFPR sought utility payment records kept by the City of Pawhuska and reported that over $50,700 of the village money was spent on utility bills for both residents and village entities. The report states Mashunkashey paid his utility bills with village money more than 40 times totaling $12,244.85, as well as other Osage residents’ bills.
In a breakdown of the utility bill payments, the OFPR reported bills for other Osages, including immediate Mashunkashey relatives, were paid one to three times since 2009.
“These expenditures totaled $50,732.37 for the period between November 2008 and July 2012,” according to the report. “This left a balance of $806,293.56 that could not be accounted for with the records that we had available.”
Those utility bill payments were made with the village’s two-party signature checks, “but the notation that two signatures are required is crossed out and only a single signature is on the check,” according to OFPR.
In conclusion, the OFPR issued a “disclaimer of opinion” on the finances and operations of the Pawhuska Indian Village Five-Man Board. OFPR Senior Internal Auditor Kelly Corbin said his office issued the disclaimer of opinion because: “there are significant scope limitations, whether intentional or not, which hinder the auditor’s work in obtaining evidence and performing procedures (and) there are significant uncertainties with the auditee.”
According to businessdictionary.com, a disclaimer of opinion is a “statement by auditors that they do not express an opinion on the financial position of a firm because (1) they have not completed an examination of its accounts, or (2) the examination is not broad enough in scope to enable them to form an opinion.”
The OFPR recommends: “The Osage Nation Attorney General Office or an appropriate Federal Entity take control of the current assets and future revenues of the Pawhuska Indian Village 5-Man Board on behalf of the inhabitants of the Pawhuska Indian Village and place it into trust with the Treasurer of the Osage Nation. The Osage Nation Treasurer would then maintain the accounting records of the Pawhuska Village and issue payments upon request, that they are supported by board minutes and signatures of a quorum of board members.”
ON Attorney General Jeff Jones said his office received the OFPR report but his office has yet to receive the village board finance records as of Sept. 12. Jones said his office received inquires from the U.S. Attorney’s Office that same day requesting information about the village finances and bank account for a potential federal subpoena.
“It would appear they’re interested in the audit too,” Jones said of the federal authorities. “It’s something I would prosecute under tribal law,” he said if an AG investigation finds wrongdoing. The seven Osage Casinos and trust lands, including the three Indian villages, fall under the ON Attorney General’s office jurisdiction.
Jones said First National Bank is not obligated to comply with ON Congressional subpoenas because they are not under the Nation’s jurisdiction and were not issued by a court judge, however, the bank must honor any federal or state court subpoenas served to the institution.
In a Sept. 10 statement on the audit, Principal Chief John Red Eagle said: “The Osage Nation Attorney General’s office and the Office of the Principal Chief are reviewing the actions of the Pawhuska Village Five-Man Board. Any notable findings will be made public when they are complete. I ask that everyone reserve any premature judgments until after the review is complete.”
Village money spending
Mashunkashey acknowledged he used village money to pay his utility bills and added that he paid the $12,000-plus back to the bank on Sept. 10, the same day he resigned. Mashunkashey also said he used the village money to pay utility bills for village residents falling on hard financial times.
“Yes, I was paying my electric bill (out of village money), it was wrong to do that, I feel bad,” Mashunkashey said. “I paid it back, now I just need to work on getting everybody’s trust back from the people. I love this village.” Mashunkashey declined to say where he received the $12,000-plus to pay back the utility bill costs.
Mashunkashey said he used the village money to pay bills for fellow residents struggling financially. Some of the money went toward electric bills, gift certificates for school clothes, groceries and “help with whatever they need.”
“It’s all about what they couldn’t get on the hill,” Mashunkashey said referring to ON government assistance programs. “My mom always said if you have the ability to help anybody, then do it.”
The village money is also spent during holiday festivities such as the annual Fourth of July fireworks with food served during the show and turkey giveaways at Thanksgiving and Christmas, Mashunkashey said.
The OFPR report also raised issue with regular Five-Man Board meetings, stating: “It appears that there are no regularly scheduled meetings and reportedly the Chairman is the only board member that has access to the bank records and checks,” according to the report.
Mashunkashey said he’s lived in the village for over 30 years and served on the village board for four or five years. He is married to Mary Mashunkashey, administrator of the Osage Tax Commission, who is the niece of Chief Red Eagle, also a village resident.
Five-Man Board member resigns in July
Jennifer Tiger, who sat on the Five-Man Board as an interim member for about four months this year, resigned her seat on July 25. Tiger said she was appointed to the board in April after former board member KC Bills stepped down. She also said the board hosted one public meeting after she joined the board and none have been held since then.
The May 23 meeting was held to announce Tiger’s appointment to the board and she wanted to discuss the village budget at the meeting. “At that point, (Mashunkashey) said there is no budget, there was only a checkbook,” Tiger said referring to the village’s bank checking account. “I just left it at that, I don’t know how long the board’s been operating with just a checkbook,” she said.
Tiger said she resigned due to personal time constraints and said she was unaware that Mashunkashey was using village money to pay his own utility bills.
News of the audit report comes one month shy of the next election for the Five-Man Board. Remaining board members are Asa Cunningham (secretary/ treasurer), Ted Brunt and Frank Red Corn. According to the Village Constitution adopted in 1963, the Five-Man Board election is to be held on the first Monday in October of the election year, making next month’s election date Oct.3.
It’s unclear how the audit report and any developments will impact the election next month.
The OFPR took issue with the village finances and operations with regard to the secretary/ treasurer because the officeholder must have a minimum $1,000 fiduciary bond; maintain the board meeting minutes; and account for the board’s income and expenditures, according to the Village Constitution.
The report states: “It appears that the secretary/ treasurer, per the person in that position’s statement, does not have bonding as required per the adopted constitution. The elected secretary/ treasurer does not receive or have knowledge of the revenues, account balances, or expenditures of the (Five-Man Board). These are in control of the (Chairman).”
Absent accounting duties, Cunningham handled the calendar for Wakon Iron community building (for special occasions, funerals, parties, etc.) and took notes for board meetings.
Cunningham said she received a Sept. 9 phone call from Mashunkashey informing her of his intentions to resign. With Mashunkashey’s resignation occurring, Cunningham said the next planned step is for her and the remaining board members to meet with Red Eagle and Treasurer Callie Catcher so the Executive Branch may handle the banking and accounting of the village money. A meeting date has yet to be set, she said.
Regarding Mashunkashey’s utility bills, Cunningham said: “I was in the dark about everything.” Cunningham said no further spending should occur of the village money until the Executive Branch handles the account since no one else had signature authority.
Tiger said the audit and issues surrounding it may open doors for revisiting laws and regulations regarding the Indian villages, noting the 1963 Village Constitution took up three pages in the OFPR report which is about 40 pages.
Tribal legislation on village revenue from gaming introduced
In wake of the audit, Congressional Speaker Raymond Red Corn filed a bill seeking to amend the Nation’s gaming law regarding Indian village payments from gaming revenues. According to the bill (ONCA 12-109), the gaming law would be amended to require payments made to the Indian villages to be remitted to the Treasurer’s office for distribution.
Red Corn introduced ONCA 12-109 to the entire Congress during the Sept. 10 session of the ongoing Tzi-Zho Session. The Congressional Committee on Commerce and Economic Development will initially consider the bill before a final vote by the entire Congress.
Grayhorse and Hominy Indian Village Five-Man Boards receive their revenues through ON Congressional appropriations of tribal funds unlike Pawhuska’s, which receives casino revenue, now called into question.
In a separate report, OFPR audited the Grayhorse Five-Man Board for the 2009, 2010 and 2011 fiscal years. Spending for those three years was under budgeted amounts with other findings noted and recommendations issued for each item.
According to OFPR findings, the Grayhorse board did not post regular scheduled meetings, and a former board treasurer (no longer on board) wrote 24 checks out to his/herself. The board responded to the findings stating they are being addressed; a board member is in process of creating a Grayhorse Village Facebook page for community notifications; and checks will no longer be made out to the same person signing them.
On Sept. 12, the Congressional Culture Committee considered the budgets for the Hominy and Grayhorse Five-Man Boards, which requested $50,000 each to maintain their respective villages. Both bills unanimously passed and face a floor vote of the Congress as it considers the Nation’s 2013 fiscal year budgets.
To view the OFPR audit of the Pawhuska Indian Village Five-Man Board, click the following link to see the reports on the ON Congressional Web site: www.osagetribe.com/congress/info_sub_page.aspx?subpage_id=275