Top Issues for CFOs and Tribal Leaders in 2021

From operations to accounting, the ongoing COVID-19 pandemic has affected everything. Now, with the continuing rollout of new funding regulations and standards, the challenge is to keep up with the myriad issues arising from the economic fallout.

As you look ahead to managing through 2021 and beyond, REDW wants you to be aware of the important considerations discussed in our in-depth understanding of key finance, accounting and business issues. Our well-honed perspective is the result of serving for more than 30 years as skilled advisors to tribes and their entities.

Below, our experts share what they consider to be the most important issues for tribal CFOs, CIOs, HR Directors, Investment Committees and other professionals in leadership positions.

Top Issues for CFOs & Tribal Leaders in 2021:

GASB revised effective dates

GASB 83, Certain Asset Retirement Obligations, fiscal year beginning after 6/15/2019
Recognition of a liability and deferred outflow when there is a legally enforceable liability for the retirement of a tangible capital asset.

GASB 84, Fiduciary Activities, fiscal year beginning after 12/15/2019
Review 1) pension/retirement governance potential component unit criteria; and 2) per capita or minors trust fiduciary funds for a change in fund accounting and reporting entity requirements.

GASB 88, Certain Disclosures related to Debt, including Direct Borrowing and Direct Placements, fiscal year beginning after 6/15/2019
Review any defeasances of debt when assets used from only existed resources (not resources of refunded debt) are placed in an irrevocable trust to extinguish, for change in accounting and disclosures.

GASB 89, Accounting for Interest Cost Incurred before the End of a Construction Period, fiscal year beginning after 12/15/2020
For incurred interest on construction projects, an accounting change that the interest may no longer be capitalized, and will be incurred as an expenditure (governmental funds/current resource measured funds) or expense (business-type/economic resource measured funds).

Statement 90, Majority Equity Interest, fiscal year beginning after 12/15/2019
When a government has a majority equity interest in a separate legal entity, and such equity interest meets the GASB definition of an investment, the investment shall be accounted for on an equity basis, with the exception of a special-purpose government engaged only in fiduciary activities, a fiduciary fund, or endowment fund – which would continue to be fair-market valued. If the entity does not meet the definition of investment, it should be accounted for as a component unit.

Statement 91, Conduit Debt Obligations, fiscal year beginning after 12/15/2019
For conduit debt with 3 separate parties involved, dated accounting and disclosure guidance are required.

Statement 93, Replacement of Interbank Offered Rates:
-All requirements except paragraph 11b, 13 and 14, fiscal years beginning after 6/15/2020 -Paragraph 11b, fiscal years beginning after12/31/2021 -Paragraphs 13 and 14, fiscal years beginning after 6/15/2021 The Interbank Offered Rates, notably LIBOR rates, are under global reform with LIBOR expected to cease. The Standard covers debt and related derivatives/hedges and related accounting LIBOR requirement debt instruments are changed or replaced.

Accurate Audit Preparation/CARES Act

Accurate audit preparation and attention to the CARES Act are even more critically important this year. The Government Auditing Standards and Single Audit requirements put the burden on the auditees to accurately prepare and understand their financial statements, the Schedule of Expenditures of Federal Awards (SEFA) and footnote disclosures.

Further, 2020 provided tribes with a variety of federal COVID-19 funds, with specific SEFA requirements, compliance and accounting requirements. Tribal Healthcare entities that received Provider Relief funds will have atypical audit preparation requirements.

Tribes with Single Audits due between 10/1/2020 and 6/30/2021 that received federal COVID-19 funding have a three-month extension to submit their Single Audit. Plan to attend one of our upcoming webinars this year to review COVID-19-related federal compliance requirements and/or freshen up your knowledge on other federal awards with our Grants Management training.

Contact Wes Benally, Senior Manager, WBenally@REDW.com, 602.730.3632.
Accounting Software Many tribes have moved – or are considering moving – to cloud-based and/or remotely accessed accounting applications, as well as procurement/payables and payroll/human resource processes that are approved electronically. These changes require implementing new controls in your accounting processes, software design and related policies. REDW provides training and support for Abila/MIP/Microix and Intacct accounting software to help with your design and control procedures. The REDW Software team also offers assistance with selecting new software. REDW Software has developed a new Abila SEFA tool, called SEFA Pro™, which can help you to automate your SEFA preparation and track grants information.

Business Data Intelligence and Process Automation Many tribes face difficulties with producing meaningful, real-time data in an easy-to-understand format directly from their system(s). The REDW team provides interactive dashboards for various data analytics including budget, forecasting and KPIs. We can combine data from various systems in real time and provide in a single data report or dashboard to your decision makers in charts/graphs/Excel format. These reports/dashboards are accessible from any device, no matter where it is located.

Contact Mustafa Kamal, Principal and Software Practice Leader, MKamal@REDW.com, 505.998.3423
Tribal Tax Enforcement and Collection. Many tribal governments have laws in place that govern taxation revenues, but the tribes sometimes have difficulty enforcing these laws and collecting the taxes due. Tribal governments should focus on educating the community, taxpayers doing business on tribal land, and even tribal government members about the tax laws. A strong understanding of the tax laws will help the tax administration team to enforce and collect taxes – and thus increase tax revenues.

Taxation of Online Sales. The United States Supreme Court recently overturned a 1992 precedent that barred states from requiring an out-of-state seller with no physical presence to collect sales tax on sales to a resident of the state. Now that physical presence is no longer required for states to impose a sales tax on sellers, states can collect sales taxes from remote sellers. Tribes should consider whether to adopt laws similar to state economic nexus laws, which require remote sellers to collect and remit sales tax if they had aggregate sales of tangible personal property or services within tribal territory that exceeded stated thresholds. An economic nexus law can enable a tribe to increase tax revenues by collecting sales tax on sales delivered onto trust lands from remote sellers.

Economic Development. To promote economic development on trust land, thereby increasing tax revenues, tribes can offer incentives to businesses who locate there. This is similar to many states that offer credits and incentives. One example: Oklahoma’s Investment/New Job Tax Credit package provides a growing number of manufacturers a significant tax credit. It is based on either an investment in depreciable property or on the addition of full-time-equivalent employees engaged in manufacturing, processing, or aircraft maintenance.

Protecting Tribal Sovereignty. When it comes to trust versus fee lands, state taxation can be complicated. The U.S. Supreme Court has stated that a fundamental attribute of sovereignty is the power to tax transactions occurring on trust lands and which significantly involve a tribe or its members. Tribes need to be aware of what a state can and cannot tax on both trust and fee lands.

Indian Employment Credit. The federal government has extended, through 2020, the tax credit available to employers who hire American Indians or their spouses living on or near a reservation and work for an employer on that reservation. In order to encourage employers to hire American Indians, employers receive tax credit on a portion of the qualified wages and employee health insurance costs paid to an enrolled member of a Native American Tribe or the enrolled member’s spouse. Despite national efforts to make this permanent, it hasn’t happened yet; stay tuned for updates from the new Congress.

Payroll Tax Credits from Coronavirus Relief Act.Employers who adopted paid emergency sick leave policies during the COVID-19 pandemic under the federal Families First Coronavirus Relief Act (FFCRA) may voluntarily continue those leave policies after December 31, 2020. As part of the December 2020 Coronavirus Relief Fund Extension legislation, the payroll tax credits related to the wages of employees who take that leave have been extended through the quarter ending March 31, 2021.

 Contact James Ortiz, Principal, State and Local Tax, JOrtiz@REDW.com, 505.998.3468.
The Future of Gaming Management: Historically, the gaming industry has relied on “next-day” reporting of wins and losses and monthly reporting of financial data. But with the arrival of business intelligence and data analytics, gaming management has changed for those facilities that have taken steps to streamline their business processes. Now, with data analytics connected via a cloud infrastructure to casino systems and software, management has immediate access to critical information; this includes live cash floats, live patron interaction and financial data, and instantaneous reporting for stakeholders. Connecting accounting systems to cloud-environment reporting allows for instant business process automation of daily revenue and expense transactions, and activity. All this represents a new beginning in accounting and reporting for the gaming industry. Those facilities implementing these practices will be at the forefront of their competitors.

Economic Diversification: Although gaming has unquestionably been an economic engine for tribes in recent decades, the COVID-19 pandemic revealed a significant vulnerability, with repercussions that will likely require years to overcome. Complicating a recovery will be the market saturation that exists in some areas, along with continued expansion of gaming into new jurisdictions. In addition, the potential impact of online gaming is another risk that is difficult to predict or measure. The combination of these unknowns will encourage tribal leaders to evaluate their strengths and opportunities to seek out new sources of economic growth. Diversifying investments will be the future mindset as the leveraging of past gaming successes enables new ventures; this should now allow the risk to be spread across a broader investment portfolio than done in the past.

BSA/AML Due Diligence: Bank Secrecy Act (BSA)/Anti-Money Laundering (AML) due diligence has been a well-recognized FinCEN requirement, although much diversity has existed within the gaming industry in operators’ responses. This has been due partly to the subjective analysis of risks posed by the scope of gaming conducted and financial services offered. However, the federal agency is soon expected to provide detailed guidance on what is necessary to achieve compliance. For example, casinos will soon need to re-evaluate their design and implementation procedures so that high-risk patrons can be separated from lower-risk, casual gamblers. Compliance Officers will need to ensure documented procedures are in place that delineate the identification process, the frequency of review, the method of identifying source of funds and the process of reporting the results to key personnel.

Outsourcing: Outsourcing of accounting and internal auditing functions is, out of necessity, going to be considered by more gaming entities in the future. For the third consecutive year, in 2020 accounting and finance positions were among the top 10 hardest jobs to fill. In high growth markets, it can be hard to find qualified staff; and after they are found, hired, and trained, are even more difficult to retain. In response, gaming entities will increasingly turn to outside sources to provide these professional accounting and financial services. Gaming entities must be willing to give up the benefit of a daily presence in return for the assurance of a qualified person on whom they can depend. The additional advantage of outsourcing will be the knowledge and experience provided by accounting professionals who are well-seasoned in a specific industry.

PPP Loans: After first being unable to receive Paycheck Protection Program (PPP) loans, many gaming entities eventually were able to take advantage of them. The loans were designed to provide small businesses (which ultimately included tribal casinos) with funds to pay up to 24 weeks of payroll costs, including certain benefits, interest on mortgages, rents/leases, and utilities. The loans are fully forgiven if the entity demonstrates that the funds were used on these qualifying costs, including at least 60% on payroll costs. Now in the forgiveness application phase of this cycle, gaming operations are asking about the accounting ramifications. In short, PPP loans must be reported as a long-term debt liability on the balance sheet until the gaming operation receives a legal release from the loan; at that point, a loan forgiveness revenue can be recognized. This recognition of long-term debt could potentially cause issues for gaming operations with other existing long-term debt and related covenants if the legal release from the PPP loan is not granted by the fiscal year-end date. The larger, long-term debt balance could jeopardize the gaming operation’s compliance with fixed-charge coverage ratios, leverage ratios, or other financial ratios. It’s important to maintain proactive communication with the debt holders – before any gaming operation potentially falls out of compliance. Additionally, the recognition of a “gain on forgiveness of debt” in fiscal year 2021 may impact the tribe’s revenue allocation plan with the casino(s). It will be vital for tribes to acknowledge the differences between net income and available cash available for distributions.

Contact our Gaming leaders, Anthony Gerlach, Principal, AGerlach@REDW.com, 602.730.3612 or Adam Smith, Principal, Adam.Smith@REDW.com, 505.998.3219.
From time to time, all qualified retirement plans must be updated to reflect recent legislative and/or regulatory changes. Some of these updates are made through plan amendments, but others require plan documents to be completely rewritten (a process known as "restating" the plan).

The deadlines for adopting these updates usually depend on the type of plan and plan document. For example, a defined contribution plan, (e.g., a 401(k) plan or profit-sharing plan using a prototype document,) must generally be restated every six years. Alternatively, a defined contribution plan using an individually designed plan must generally be restated every five years. Amendments may still be required in between these mandatory restatements.

The following lists the various deadlines for defined contribution plans using either prototype or volume submitter documents. Different deadlines apply to governmental plans as well as defined contribution plans using individually designed documents.

Cycle 3 Restatement
  • Description: Full plan restatement for legislation and regulations since 2008

  • Effective Date: Various

  • Required For: All qualified plans

  • Earliest Due Date: July 31, 2022


  • CARES Act Amendment
  • Description: Good-faith amendment covering the provisions from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, including expansion of participant loans and distributions, postponement of participant loan payments and waiver of required minimum distributions for 2020.

  • Effective Date: Various dates in 2020

  • Required For: All qualified plans

  • Earliest Due Date: Last day of 2022 plan year (December 31, 2022 for calendar-year plans)


  • SECURE Act Amendment
  • Description: Good-faith amendment covering the provisions from the Setting Every Community Up for Retirement Enhancement (SECURE) Act, including increase in the required minimum distribution beginning age, penalty-free distributions for birth and adoption, pooled employer plans, portability of lifetime income options, testing relief for frozen defined benefit pension plans and more.

  • Effective Date: Various

  • Required For: All qualified plans

  • Earliest Due Date: Last day of 2022 plan year (December 31, 2022 for calendar-year plans)


  • Hardship Distribution Amendment
  • Description: Good-faith amendment covering the provisions from the Bipartisan Budget Act of 2018 and related regulations, including elimination of the deferral suspension, removal of the requirement to first take a loan, and making available safe harbor contributions as well as earnings on elective deferrals.

  • Effective Date: Various

  • Required For: All qualified plans that permit hardship distributions

  • Earliest Due Date: December 31, 2021


  • Contact Dennis Davis, Principal, ABG Southwest*, DDavis@ABGSW.com, 505.998.3294
    A culture of security awareness is vital to protecting your tribe’s information and ensuring it is safe from hackers and data ransoms. In addition, the COVID-19 pandemic has produced a new threat vector: fake emails regarding PPP loans, stimulus payments, WHO and CDC data. This is in addition to such everyday phishing and social engineering attempts as phony video conference meetings, wire transfers, gift cards and invoices.

    A continuous security awareness education program should include:

  • A Security Awareness Education Policy

  • Interactive training modules assigned to employees bi-monthly – at least every second month

  • Phishing your team monthly, with remedial training assignments for those who get “hooked”

  • Assessments and quizzes

  • Providing educational materials such as current cybersecurity events, posters, and videos

  • Many employees have switched to a work-from-home environment, so ensure that remote workers are connecting to the business network with a secure virtual private network (VPN) connection or a virtual desktop interface (VDI) connection.

    Implement Multi-Factor Authentication (MFA) as an added layer of security to prevent hackers from gaining access to your organization with compromised credentials. MFA helps to protect network, email, financial accounts, social media accounts and mobile devices, and is a great feature to include with a VPN connection.

    Revisit logical access controls and ensure users have access to only the data and applications they need to perform their jobs. Make sure to review user network accounts and disable accounts that are no longer being used.

    As IT practices have pivoted during the pandemic, remember to create, review and/or update IT Security Policies and Procedures and ensure they are current with industry best practices. Be sure to share updates with all employees, and have them acknowledge these policies and procedures annually.

    Data backup and restoration procedures must be kept up-to-date and tested regularly. This will help to ensure that if your data becomes encrypted with ransomware, you’ll avoid paying cyber criminals – and avoid the possibility of being targeted again. Having data backup copies in multiple locations, i.e., a copy on-site and one copy replicated to cloud storage, will help ensure data isn’t lost if you fall victim to a ransomware attack.

    Implement a Mobile Device Management solution and policy to assist with security controls, such as remotely wiping laptops, smart phones, and tablets, if a device is lost or stolen. With the new work-from-home environment, data security is top of mind.

    Perform annual penetration tests and run routine vulnerability scans to identify and secure hidden network vulnerabilities that cybercriminals are searching for to gain access into your network.

    Now is a great time to review the Disaster Recovery (DR) and Cybersecurity Incident Response Plans (CSIRP) to update any outdated information. These plans should also be tested regularly with their respective teams. Schedule testing time in advance for the entire year so testing doesn’t fall through the cracks.

    Confirm IT best practices are in place. Perform an annual IT Risk Assessment to evaluate overall technology and architecture.

    Implement a robust vendor management process for third-party providers. Ask what security practices are in place to protect your network and data, and review their SOC reports. Also, ensure a confidentiality agreement is in place.

    Evaluate your current cyber-liability insurance policy or speak with a reputable broker if your organization does not have this insurance.

    Contact Jennifer Moreno, CISA, IT & Cybersecurity Consultant, Jennifer.Moreno@REDW.com, 505.998.3239.
    COVID-19 and federal funding to help alleviate the crisis were the largest concerns for tribes and tribal enterprises during 2020, and will continue to be so in 2021. Policies addressing hazard pay, administrative pay, FFCRA (Families First Coronavirus Response ACT), EFMLEA (Emergency Family Medical Leave and Expansion Act), CARES (Coronavirus Aid, Relief and Economic Security) Act, remote work, and returning to work became essential in protecting tribes from potential claw backs due to lack of documentation. With the temporary extension of the FFCRA leave provisions, tribes can continue to take advantage of payroll tax credits through March 31 by offering leave under the same framework; however the payroll tax credits are not available where wages are paid with CARES Act funding (no “double-dipping” is allowed). Tribes must also begin designing a vaccination program by determining whether they will proceed with a mandatory, hybrid, or voluntary approach to vaccinating employees. The law supports a mandatory program – but exemptions for sincerely held religious beliefs, as well as high-risk health conditions, should be built into the program.

    Minimum Wage Increases have taken effect in 29 states and the District of Columbia, although the federal minimum wage has been $7.25/hour since 2009. Employers should also check local wage rates, as they may be higher than the state rates. In some instances, the minimum wage rate may vary based on more than just the geographic location, and could be based on employer size and industry.

    Pay Compression may be an unintended consequence for employers who increased employee salaries to meet the new minimum salary requirements under the FLSA in 2020 to keep these employees classified as exempt from overtime. Likewise, pay compression can become an issue when employers apply the increases to minimum wage rates in their organization. Pay compression occurs when the pay of one or more employees is very close to the pay for more experienced or longer-tenured employees in the same position, or when employees in entry-level type jobs are paid almost as much as colleagues in higher-level jobs, including supervisory or managerial positions. Employers should consider an adjustment to all related salary scales to avoid pay compression and ensure continued internal equity.

    Construction and Trades Positions are steadily recovering after a net loss of over two million jobs in the last decade. In most states, construction is enjoying solid growth – but there’s a shortage of qualified employees for more complex projects. The new generation of workers is not embracing the industry as an option with a viable career path, and turnover in construction is already about twice the national average.

  • Employers need to find how to retain their construction and trades employees, as well as identify how to resonate with the millennial mindset. This means designing attractive compensation and competitive benefits to hire and retain highly skilled employees.


  • Compensation and benefits must be part of a viable Human Resources program that allows employers to retain top talent. Conducting a compensation study to determine whether your organization is competitive in the market in which you’re competing for talent is a good practice. It can ensure your organization is offering a competitive base wage, while also minimizing turnover and enhancing employee engagement. Intangible rewards also count! Talented, skilled employees recognize the value of organizational cultures that include mentoring, feedback, career paths, and technology. Other appreciated aspects include flexible work schedules, retirement plans, fitness benefits, and work/life balance.

    Workplace harassment claims require annual and robust sexual harassment training for employees. Training can be especially important for managers, who may benefit from additional training about what constitutes inappropriate conduct with a subordinate, as well as how to identify sexually abusive behavior in those they supervise. Employers should also adopt clear sexual harassment policies, identify inappropriate behaviors, and give employees the tools and training they need to report instances of sexual harassment in the workplace. In California, employers are now mandated to provide sexual harassment training.

    Employer Drug Testing and your organization’s drug policies must be thoughtful and intentional, and should address current state laws as well as the organization’s position. With more states legalizing marijuana for medical or recreational use, some states are also passing laws prohibiting discrimination against employees who use marijuana. Will you accommodate marijuana use? If not, what accommodations are required by your state, if any? Are there certain job positions where no accommodation can be made due to safety sensitivities that may be governed by federal safety regulations? A reasonable-suspicion program is essential, as well as providing training for staff and management about how to react when someone is impaired on the job.

    Contact Cristin Heyns-Bousliman, Esq., Principal and HR Consulting Practice Leader, Cristin.Bousliman@REDW.com, 505.998.3452.
    Federal Government Funding is expected to ramp up again with another stimulus package on the horizon. President Biden’s initial plan calls for $350 billion in emergency funding for state, local, and tribal governments. Similar to the first round of stimulus funding from the CARES Act, we’d expect tribes to get some useful funds to help aid them in this crisis. Although most of the funds are used up quickly, remember that interest-bearing accounts may yield a little return on those funds before they’re needed.

    Inflation is a concern for many, as it should be with more government stimulus funding. Not only is the Federal Reserve pumping large amounts of money into the economy by buying all sorts of corporate and government debt, but the federal government is also racking up record high debt during this pandemic. With an increase in money supply by the Federal Reserve and higher national debt, inflation will rise at some point. It’s important to keep this in mind throughout the year and plan accordingly.

    The Accredited Investor Definition now includes tribes. In August of last year, the Securities and Exchange Commission (SEC) updated the definition to formally include tribes and their entities that own investments exceeding $5 million. The update also allows tribes with $100 million or more to participate in the commercial paper markets. Although some tribes previously obtained qualification as an accredited investor through state law, all tribes are now eligible under tribal law.

    Valuations on equities and fixed income securities are on the high end of historical averages. The U.S. stock market forward P/E ratio is at a level we haven’t seen since the Tech Bubble in the late 1990s. Similarly, U.S. fixed income market spreads (interest rate differential when compared to Treasuries) are on the low end of the range when compared to the last 15 years. With U.S. equity and fixed income valuations near historical highs, it’s important to review your portfolios regularly and make appropriate adjustments.

    Rebalancing helps to keep the portfolio’s risk and return in line to meet long-term objectives. With valuations on the high end and portfolios performing well in 2020, it is a great time to rebalance portfolios. To maintain your intended risk/return profile on your portfolio, rebalancing is key.

    Investment Policy Statements (IPS) are like a roadmap to your investment strategy. The IPS helps to outline purpose, objectives, and constraints for the portfolios. It also helps with setting clear expectations for all parties involved by outlining roles and responsibilities for staff, committees, tribal councils, investment advisors, and others. Best practices call for annual reviews for any updates, and 2021 could be the year for some changes.

    Contact Paul Madrid, Principal, REDW Wealth** Practice Leader, PMadrid@REDW.com, 505.998.3249.

    The REDW tribal experts are here to assist you in any of these areas, and many others not covered in this article. To learn more about how any of these issues may apply to your tribe or tribal entities more specifically, please contact Wes Benally at WBenally@REDW.com, 602.730.3632, or Corrine Wilson at CWilson@REDW.com, 602.730.3609.

    Additionally, REDW will conduct a series of seminars and webinars throughout 2021, so please visit our events page periodically for more information and to register: www.REDW.com/events .


    *ABGSW is subsidiary of REDW LLC providing retirement plan design, administration and recordkeeping services.

    **REDW Wealth is an SEC-registered subsidiary of REDW LLC providing financial planning and wealth management services.