Cherokee Nation Final CRF Desk Review Memo 06.27.23

Summary

A June 27, 2023 memorandum for Jessica Milano, Acting Chief Recovery Officer, from Deborah L. Harker, Assistant Inspector General for Audit, with the subject Desk Review of The Cherokee Nation, Oklahoma's Use of Coronavirus Relief Fund Proceeds (OIG-CA-23-020). It attaches a desk review by Wayne Ference of Castro & Company, LLC, which states that Treasury issued a Coronavirus Relief Fund payment to the Cherokee Nation of $410,906,000.99 and that a sample of 42 transactions amounted to $255,828,638 of the $409,737,639 in cumulative expenditures. Castro determined that the expenditures comply with the CARES Act and Treasury Guidance, that the risk of unallowable use of funds was low, and that it is not recommending an audit. The memorandum also states that Treasury OIG is not questioning a property acquisition for $4,392,815.30.

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DEPARTM ENT OF THE TREASURY
WASHINGTON, D.C.  20220
OFFICE OF
June 27, 2023
INSPECTOR GENERAL
MEMORANDUM FOR JESSICA MILANO, ACTING CHIEF RECOVERY OFFICER,
DEPARTMENT OF THE TREASURY
FROM:
Deborah L. Harker /s/
Assistant Inspector General for Audit
SUBJECT:
Desk Review of The Cherokee Nation, Oklahoma’s Use of
Coronavirus Relief Fund Proceeds
(OIG-CA-23-020)
Please find the attached desk review memorandum1 on The Cherokee Nation,
Oklahoma’s (Cherokee Nation) use of Coronavirus Relief Fund (CRF) proceeds.
The CRF is authorized under Title VI of the Social Security Act, as amended by
Title V, Division A of the Coronavirus Aid, Relief, and Economic Security Act
(CARES Act). Under a contract monitored by our office, Castro & Company, LLC
(Castro), a certified independent public accounting firm, performed the desk
review. Castro performed the desk review in accordance with the Council of the
Inspectors General on Integrity and Efficiency, Quality Standards for Federal
Offices of Inspector General standards of independence, due professional care,
and quality assurance.
In its desk review, Castro found that Cherokee Nation personnel did not complete
the required quarterly Financial Progress Reports (FPR) for Cycles 12 and 2.3
However, Castro noted Cherokee Nation requested a 30-day extension to submit
the Cycle 1 and 2 reports by October 21, 2020. Treasury OIG granted one-month
extensions for both Cycle 1 and 2 reporting submissions. Due to a
misunderstanding between Cherokee Nation and Treasury OIG, Treasury OIG
ultimately granted Cherokee Nation an extension to submit the Cycle 1 and 2
submission data with Cycle 3.4 As a result, Cherokee Nation is compliant with the
reporting timelines as required under Treasury’s guidance. In addition, Castro
personnel reviewed documentation for a sample of 42 transactions, which
amounted to $255,828,638 of the $409,737,639 in cumulative expenditures
1 The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) assigned the Department of
the Treasury Office of Inspector General with responsibility for compliance monitoring and
oversight of the receipt, disbursement, and use of Coronavirus Relief Fund (CRF) payments. The
purpose of the desk review is to perform monitoring procedures of the prime recipient’s receipt,
disbursement, and use of CRF proceeds as reported in the grants portal on a quarterly basis.
2 Calendar quarter ending June 30, 2020
3 Calendar quarter ending September 30, 2020
4 Calendar quarter ending December 31, 2020

Page 2
reported as of the Cycle 85 quarterly submission period. Castro personnel found
that all transactions selected for testing were supported by documentation and
were necessary expenditures due to the COVID-19 public health emergency, were
not accounted for in the budget most recently approved as of March 27, 2020, and
were incurred during the covered period.
Based on the results of its desk review, Castro determined that the expenditures
related to all obligation types reviewed comply with the CARES Act and Treasury
Guidance. Additionally, Castro determined that the risk of unallowable use of
funds was low. As such, Castro is not recommending Treasury Office of Inspector
General perform an audit of the Cherokee Nation.
Treasury OIG received a complaint associated with the Cherokee Nation regarding
the acquisition of a property for $4,392,815.30. Castro also selected this
transaction for testing during its desk review and concluded that this was an
eligible use of CRF proceeds based on the supporting documentation. Treasury
OIG notified the Department of the Treasury Office of Recovery Programs (ORP) of
its concerns surrounding the reasonableness of the transaction. Specifically, we
were concerned (1) whether the purchase was truly necessary in response to the
COVID-19 public health emergency and (2) whether the valuation of the property
was reasonable due to the fact that the Cherokee Nation did not obtain an
independent appraisal prior to the purchase.
Treasury ORP responded that this acquisition of real property with CRF award
funds seems reasonable because it meets all the requirements of section 601(d) of
the Social Security Act as added by the CARES Act in that: (1) the purchase of the
real property was a necessary expenditure incurred due to the COVID-19
pandemic to decrease food insecurity among the Tribal members, allow for self-
isolation of Tribal members that tested positive for COVID-19, and provide a
respite for Tribal members to improve their mental health, which declined due to
the effects of the COVID-19 pandemic; (2) it appears that the costs for the
acquisition of the real property was not accounted for in the Tribe’s approved
budget as of March 27, 2020; and (3) the property was acquired on December 23,
2020 prior to the end of the period for which recipients could incur allowable costs
under their CRF awards. Treasury ORP also opined that although obtaining an
appraisal is a best practice, it is not required under Treasury’s CRF guidance.
Therefore it would be unreasonable for Treasury to find the Tribe’s property
acquisition questionable due to the lack of an appraisal. Based on Castro’s review
of the documentation for the purchase and our follow-up with Treasury
management we are not questioning this purchase of land.
5 Calendar quarter ending March 31, 2022

Page 3
In connection with the contract, we reviewed Castro’s desk review memorandum
and related documentation and inquired of its representatives. Our review, as
differentiated from an audit performed in accordance with generally accepted
government auditing standards, was not intended to enable us to express an
opinion on Cherokee Nation’s use of the CRF proceeds. Castro is responsible for
the attached desk review memorandum and the conclusions expressed therein.
Our review found no instances in which Castro did not comply in all material
respects, with the Quality Standards for Federal Offices of Inspector General.
We appreciate the courtesies and cooperation provided to Castro and our staff
during the desk review. If you have any questions or require further information,
please contact me at (202) 486-1420, or a member of your staff may contact Lisa
DeAngelis, Deputy Assistant Inspector General for Audit, at (202) 487-8371.
Attachment
cc:
Michelle. A. Dickerman, Deputy Assistant General Counsel, Department of
the Treasury
Victoria Collin, Chief Compliance & Finance Officer, Office of Recovery
Programs, Department of the Treasury
Janees Taylor, Treasurer, The Cherokee Nation
Wayne Ference, Partner, Castro & Company, LLC

Castro Company
Auditors
✓ Advisors
1635 King Street
Alexandria, VA 22314
Phone: 703.229.4440
Fax: 703.859.7603
www.castroco.com
Desk Review of the Cherokee Nation
June 27, 2023
OIG-CA-23-020
MEMORANDUM FOR DEBORAH L. HARKER,
ASSISTANT INSPECTOR GENERAL FOR AUDIT
FROM:
Wayne Ference
Partner, Castro & Company, LLC
SUBJECT:
Desk Review of the Cherokee Nation, Oklahoma
On June 13, 2022, we initiated a desk review of the Cherokee Nation’s use of the
Coronavirus Relief Fund (CRF) authorized under Title VI of the Social Security Act,
as amended by Title V Division A of the Coronavirus Aid, Relief, and Economic
Security Act (CARES Act).1 The objective of our desk review was to evaluate the
Cherokee Nation’s documentation supporting its uses of CRF proceeds as
reported in the GrantSolutions2 portal and to assess the risk of unallowable use of
funds. The scope of our desk review was limited to obligation and expenditure
data for the period of March 1, 2020 through March 31, 2022 as reported in Cycles
13 through 84 in the GrantSolutions portal.
As part of our desk review, we performed the following:
1) reviewed the Cherokee Nation’s quarterly Financial Progress Reports
(FPRs) submitted in the GrantSolutions portal through March 31, 2022;
2) reviewed the Department of the Treasury’s (Treasury) Coronavirus Relief
Fund Guidance as published in the Federal Register on January 15, 2021;5
1 P.L. 116-136 (March 27, 2020).
2 GrantSolutions, a grant and program management Federal shared service provider under the
U.S. Department of Health and Human Services, developed a customized and user-friendly
reporting solution to capture the use of CRF payments from recipients.
3 Calendar quarter ending June 30, 2020.
4 Calendar quarter ending March 31, 2022.
5 Coronavirus Relief Fund Guidance as published in the Federal Register (January 15, 2021)
https://home.treasury.gov/system/files/136/CRF-Guidance-Federal-Register_2021-00827.pdf
1

Desk Review of the Cherokee Nation
3) reviewed Treasury’s Office of Inspector General (OIG) Coronavirus Relief
Fund Frequently Asked Questions Related to Reporting and
Recordkeeping;6
4) reviewed Treasury OIG’s monitoring checklists7 of the Cherokee Nation’s
quarterly FPR submissions for reporting deficiencies;
5) reviewed other audit reports issued, such as Single Audit reports, and
those issued by the Government Accountability Office and other applicable
Federal agency OIGs for internal control or other deficiencies that may
pose risk or impact the Cherokee Nation’s uses of CRF proceeds;
6) reviewed Treasury OIG Office of Investigations (OI), the Council of the
Inspectors General on Integrity and Efficiency Pandemic Response
Accountability Committee (PRAC),8 and Treasury OIG Office of Counsel
input on issues that may pose risk or impact the Cherokee Nation’s uses of
CRF proceeds;
7) interviewed key personnel responsible for preparing and certifying the
Cherokee Nation’s GrantSolutions portal quarterly FPR submissions, as
well as officials responsible for obligating and expending CRF proceeds;
8) made a non-statistical selection of Contracts, Grants, Transfers,9 Direct
Payments, Aggregate Reporting,10 and Aggregate Payments to Individuals11
data identified through GrantSolutions reporting; and
9) evaluated documentation and records used to support the Cherokee
Nation’s quarterly FPRs.
6 Department of the Treasury Office of Inspector General Coronavirus Relief Fund Frequently Asked
Questions Related to Reporting and Recordkeeping OIG-20-028R; March 2, 2021.
7 The checklists are used by Treasury OIG to monitor the progress of prime recipient reporting in
the GrantSolutions portal. GrantSolutions quarterly submission reviews are designed to identify
material omissions and significant errors, and where necessary, include procedures for notifying
prime recipients of misreported data for timely correction. Treasury OIG follows the CRF Prime
Recipient Quarterly GrantSolutions Submissions Monitoring and Review Procedures Guide, OIG­
CA-20-029R to monitor the prime recipients quarterly.
8 Section 15010 of P.L. 116-136 established the Pandemic Response Accountability Committee
within the Council of the Inspectors General on Integrity and Efficiency to promote transparency
and conduct and support oversight of covered funds (see Footnote 18 for a definition of covered
funds) and the coronavirus response to (1) prevent and detect fraud, waste, abuse, and
mismanagement; and (2) mitigate major risks that cut across program and agency boundaries.
9 A transfer to another government entity is a disbursement or payment to a government entity
that is legally distinct from the prime recipient.
10 Recipients are required to report CRF transactions greater than or equal to $50,000 in detail in
the GrantSolutions portal. Transactions less than $50,000 can be reported as an aggregate lump-
sum amount by type (contracts, grants, loans, direct payments, and transfers to other government
entities).
11 Obligations and expenditures for payments made to individuals, regardless of amount, are
required to be reported in the aggregate in the GrantSolutions portal to prevent inappropriate
disclosure of personally identifiable information.
2

Desk Review of the Cherokee Nation
Based on the results of our desk review, the Cherokee Nation’s documentation
supporting the uses of CRF proceeds comply with the CARES Act and Treasury’s
Guidance. Additionally, we determined the Cherokee Nation’s risk of unallowable
use of funds to be low. As such, Castro is not recommending Treasury OIG
perform an audit of the Cherokee Nation.
Non-Statistical Transaction Selection Methodology
Treasury issued a CRF Payment to the Cherokee Nation of $410,906,000.99. As of
Cycle 8,12 the Cherokee Nation’s cumulative obligations and expenditures were
$410,906,000.99 and $409,737,639.02, respectively. The Cherokee Nation’s
cumulative obligations and expenditures by obligation type as reported in
GrantSolutions through Cycle 812 are summarized below:
Payment Type
Cumulative
Cumulative
Obligations
Expenditures
Contracts >= $50,000
$
95,790,724.51
$
94,987,249.10
Grants >= $50,000
$
140,242,200.34
$
140,242,200.34
Loans >= $50,000
$
-
$
-
Transfers >= $50,000
$
4,053,107.62
$
4,053,107.62
Direct Payments >= $50,000
$
21,199,679.01
$
21,054,945.64
Aggregate Reporting < $50,000
$
19,049,792.69
$
18,829,639.50
Aggregate Payments to Individuals (in
any amount)
$
130,570,496.82
$
130,570,496.82
Totals
$
410,906.000.99
$
409,737,639.02
Castro made a non-statistical selection of Contracts greater than or equal to
$50,000, Grants greater than or equal to $50,000, Transfers greater than or equal
to $50,000, Direct Payments greater than or equal to $50,000, Aggregate Reporting
less than $50,000, and Aggregate Payments to Individuals. Selections were made
using auditor judgment based on information and risks identified in reviewing
audit reports, the GrantSolutions portal reporting anomalies13 identified by the
Treasury OIG CRF monitoring team, and review of the Cherokee Nation’s FPR
submissions. Castro noted the Cherokee Nation did not obligate or expend CRF
proceeds for Loans greater than or equal to $50,000, therefore, we did not make a
selection of transactions from this category.
The number of transactions (35) we selected to test were based on the Cherokee
Nation’s total CRF award amount and our overall risk assessment of the Cherokee
Nation. To allocate the number of transactions (35) by obligation type
12 Calendar quarter ending March 31, 2022.
13 Treasury OIG has a pre-defined list of risk indicators that are triggered based on data submitted
by recipients in the FPR submissions that meet certain criteria. Castro reviewed these results
provided by Treasury OIG for the Cherokee Nation.
3

Desk Review of the Cherokee Nation
(Contracts greater than or equal to $50,000, Grants greater than or equal to
$50,000, Direct Payments greater than or equal to $50,000, Aggregate Reporting
less than $50,000, and Aggregate Payments to Individuals), we compared the
obligation type dollar amounts as a percentage of cumulative obligations for
Cycle 8.14 Additionally, Treasury OIG identified seven anomaly transactions, for a
total of 42 transactions tested. Six of the anomalies were potential duplicate
payments and one of the anomalies was an outlier.15 We included four potential
duplicate payments from the Contracts greater than or equal to $50,000 obligation
type, two potential duplicate payments from the Direct Payments greater than or
equal to $50,000 obligation type, and the one outlier payment from the
Grants greater than or equal to $50,000 obligation type.
Background
The CARES Act appropriated $150 billion to establish the CRF. Under the CRF,
Treasury made payments for specified uses to States and certain local
governments; the District of Columbia and U.S. Territories, including the
Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American
Samoa, and the Commonwealth of the Northern Mariana Islands; and Tribal
governments. Treasury issued a CRF payment to the Cherokee Nation for
$410,906,000.99. The CARES Act stipulates that a recipient may only use the funds
to cover costs that—
(1) are necessary expenditures incurred due to the public health emergency
with respect to the coronavirus disease 2019 (COVID-19);
(2) were not accounted for in the budget most recently approved as of
March 27, 2020; and
(3) were incurred between March 1, 2020 and December 31, 2022.16
14 Calendar quarter ending March 31, 2022.
15 The anomaly for the Grants greater than or equal to $50,000 obligation type related to funds
used as economic support to Cherokee Nation’s tribally-owned business entities with economic
losses caused by required business closures due to the COVID-19 public health emergency,
including necessary expenditures made in response to or mitigation of COVID-19. This was
identified by the Treasury OIG CRF monitoring team s an outlier because the transaction was
identified as having a high dollar amount relative to transactions at similar points in time, with
similar award descriptions, and that were disbursed by the same prime recipient.
16 P.L. 116-260 (December 27, 2020). The period of performance end date of the CRF was extended
through December 31, 2021 by the Consolidated Appropriations Act, 2021. The period of
performance end date for tribal entities was further extended to December 31, 2022 by the State,
Local, Tribal, and Territorial Fiscal Recovery, Infrastructure, and Disaster Relief Flexibility Act,
Division LL of the Consolidated Appropriations Act, 2023, P.L. 117-328, December 29, 2022, 136
Stat. 4459.
4

Desk Review of the Cherokee Nation
Section 15011 of the CARES Act, requires each covered recipient17 to submit to
Treasury and the PRAC, no later than 10 days after the end of each calendar
quarter, a report that contains (1) the total amount of large covered funds 18, 19
received from Treasury; (2) the amount of large covered funds received that were
expended or obligated for each project or activity; (3) a detailed list of all projects
or activities for which large covered funds were expended or obligated; and (4)
detailed information on any level of subcontracts or subgrants awarded by the
covered recipient or its sub-contractees or sub-grantees.
The CARES Act assigned Treasury OIG the responsibility for compliance
monitoring and oversight of the receipt, disbursement, and use of CRF proceeds.
Treasury OIG also has authority to recoup funds in the event that it is determined
a recipient failed to comply with requirements of subsection 601(d) of the Social
Security Act, as amended, (42 U.S.C. 801(d)).
Desk Review Results
Financial Progress Reports
Our review of the Cherokee Nation’s quarterly FPR submissions through
March 31, 2022 identified reporting issues as detailed below.
According to the CARES Act, quarterly FPRs are to be submitted by the 10th day of
the month following quarter end unless it falls on a holiday. Based on our initial
review of the quarterly FPRs, the Cherokee Nation was not compliant with the
reporting timeline as required under Department of the Treasury’s Guidance OIG­
CA-20-021 (issued July 2, 2020), Coronavirus Relief Fund Reporting and Record
Retention Requirements20 for two of the eight quarterly reporting cycles tested.
We determined that the Cherokee Nation did not submit their FPRs for Cycles 121
and 222 and began reporting in Cycle 323 based on discussions with Treasury OIG.
Castro followed-up with the Cherokee Nation for an explanation of the Cycles 121
17 Section 15011 of P.L. 116-136 defines a covered recipient as any entity that receives large
covered funds and includes any State, the District of Columbia, and any territory or possession of
the United States.
18 Section 15010 of P.L. 116-136 defines covered funds as any funds, including loans, that are made
available in any form to any non-Federal entity, not including an individual, under Public Laws 116­
123, 127, and 136, as well as any other law which primarily makes appropriations for Coronavirus
response and related activities.
19 Section 15011 of P.L. 116-136 defines large covered funds as covered funds that amount to more
than $150,000.
20 Department of the Treasury Office of Inspector General Coronavirus Relief Fund Reporting and
Record Retention Requirements OIG-CA-20-021; July 2, 2020.
21 Calendar quarter ending June 30, 2020.
22 Calendar quarter ending September 30, 2020.
23 Calendar quarter ending December 31, 2020.
5

Desk Review of the Cherokee Nation
and 222 non-submission and found that the Cherokee Nation’s management
requested a 30-day extension for submission of Cycles 121 and 222 reports on
September 17, 2020 with the intention to submit both reports by October 21, 2020.
Treasury OIG granted one-month extensions for both Cycle 1 and 2 reporting
submissions. Due to a misunderstanding between the Cherokee Nation and
Treasury OIG, Treasury OIG ultimately granted the Cherokee Nation an extension
to submit the Cycles 124 and 225 data with Cycle 326 reporting. As a result of
Treasury OIG’s approved extension, the Cherokee Nation was compliant with the
reporting timelines as required under Treasury’s Guidance.
Summary of Testing Results
Castro found that all of the 42 transactions selected for testing were supported by
documentation and were necessary expenditures due to the COVID-19 public
health emergency, were not accounted for in the budget most recently approved
as of March 27, 2020, and were incurred during the covered period. The
transactions selected for testing were not selected statistically, and therefore
results cannot be extrapolated to the total universe of transactions.
The following table includes the total cumulative expenditure population amount
and the cumulative expenditure amount tested. Additionally, this table includes a
summary of Castro’s testing results over cumulative expenditure transaction
balances. Within the “Exception Noted: IPA [Independent Public Accountant]
Recommended for Treasury OIG Follow-up” section of this table, we have
included a summary of unsupported and ineligible exception balances identified
as questioned costs as a result of our desk review. The Cherokee Nation did not
have any questioned costs. Additionally, in the far-right column, we have
identified the cumulative expenditures that Castro tested without exceptions
noted.
24 Calendar quarter ending June 30, 2020.
25 Calendar quarter ending September 30, 2020.
26 Calendar quarter ending December 31, 2020.
6

–
-
-
-
Desk Review of the Cherokee Nation
Summary of Expenditures Testing and Recommended Results As of Cycle 8 27
Payment Type
Cumulative
Expenditure
Population
Amount
Cumulative
Expenditure
Tested Amount
Exception Noted: IPA
Recommended for Treasury
OIG Follow up
Castro Reviewed
Value Without
Exception (per
Support)
Unsupported
Ineligible
Contracts >=
$50,000
$
94,987,249.10
$ 29,060,999.98
$
-
$
-
$
29,060,999.98
Grants >= $50,000
$
140,242,200.34
$ 137,620,082.05
$
-
$
-
$
137,620,082.05
Loans >= $50,000
$
-
$
-
$
-
$
-
$
-
Transfers to Other
Government
Agencies >=
$50,000
$
4,053,107.62
$
180,000.00
$
-
$
-
$
180,000.00
Direct Payments
>= $50,000
$
21,054,945.64
$
4,556,815.30
$
-
$
-
$
4,556,815.30
Aggregate
Reporting <
$50,000
$
18,829,639.50
$
41,125.00
$
-
$
-
$
41,125.00
Aggregate
Payments to
Individuals (in any
amount)
$
130,570,496.82
$ 84,369,615.61
$
-
$
-
$
84,369,615.61
Totals
$
409,737,639.02
$ 255,828,637.94
$
$
$
255,828,637.94
Conclusion
Based on our review of the Cherokee Nation’s documentation supporting the uses
of CRF proceeds as reported in the GrantSolutions portal, we determined that the
expenditures comply with the CARES Act and Treasury’s Guidance. Additionally,
we determined the Cherokee Nation’s risk of unallowable use of funds to be low.
As such, Castro is not recommending Treasury OIG perform an audit of the
Cherokee Nation.
27 Calendar quarter ending March 31, 2022.
7

Desk Review of the Cherokee Nation
*****
All work completed with this letter complies with the Council of the Inspectors
General on Integrity and Efficiency’s Quality Standards for Federal Offices of
Inspectors General, which requires that the work adheres to the professional
standards of independence, due professional care, and quality assurance to
ensure the accuracy of the information presented.28 We appreciate the courtesies
and cooperation provided to our staff during the desk review.
Sincerely,
Wayne Ference
Partner, Castro & Company, LLC
28 https://www.ignet.gov/sites/default/files/files/Silver%20Book%20Revision%20-%208-20-12r.pdf
8

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