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Navajo Nation Oil and Gas Co. will conduct audit [The Daily Times, Farmington, N.M. :: ](Daily Times (Farmington, NM) Via Acquire Media NewsEdge) Aug. 18--FARMINGTON -- The Navajo Nation Oil and Gas Co. has hired an accounting firm to conduct a forensic audit of the last four years of the company's finances. McGladrey LLP, an international tax and consulting firm with offices in Denver and Phoenix, was selected last week. The selection of the firm was approved by the Navajo Nation auditor general, according to a press release sent to The Daily Times on Tuesday. "NNOGC is solely owned by the Navajo Nation. The company's money is the Navajo people's money," said Lennard Eltsosie, NNOGC board chairman, in the release. "The Navajo people have a right to know how their money has been managed and spent. We will work hard to recover any money that was spent illegally or against our company's bylaws." One focus of McGladrey's audit will be the transfer of $17 million in company funds into a non-interest-bearing, non-rated account without board authorization. Eltsosie, who was recently reinstated to the company's board, has also said almost $1 million was spent on lawyers and lobbyists to unseat a majority of the board members, including himself. Repeated efforts to reach Eltsosie last week were unsuccessful. Established as a corporation under a Section 17 federal charter with the U.S. government, the company has one sole shareholder, the people of the Navajo Nation. The company, which is worth $458 million, operates under the guidance of a board of directors. In April, the Navajo Nation Council approved amended changes to language in the company's federal charter. The changes increased the required qualifications of board members. They state members must have direct experience in business and the oil and gas industry, with an emphasis on knowledge of corporate financial statements and financial planning. Sharon Pinto, the regional director for the Bureau of Indian Affairs, received the amendments in May and approved them on Aug. 11. "We have reviewed the proposed amendments to the Charter (and) find them not contrary to federal law," Pinto wrote in a letter approving the amendments. "To the extent that there are internal disagreements regarding the amendments, I anticipate that these disagreements will be resolved through the appropriate tribal institutions." After five days for public review and comment, the legislation becomes eligible for committee action on Tuesday. It was assigned to the Naa'bik'íyáti' Committee and the Navajo Nation Council, where final authority rests. Last week, shareholder representatives issued a press release of their own urging the Navajo Nation Council to ratify the amendments. "If we want to do business with the outside world, then we must have the proper business structure, and we will achieve this through a strong Section 17 corporation," said Charles Damon, a shareholder representative, in the release issued on Tuesday. "Part of being a strong company is having competent and well-qualified board members to oversee the organization; that is why the effort to update the corporate charter started years ago." But feuding between Eltsosie's board majority and shareholder representatives continues. A Navajo Nation Supreme Court ruling in June reinstated five board members -- Diandra Benally, Jennifer Hatathlie, Mae-Gilene Begay, Nelson Toledo and Eltsosie -- who were either suspended or removed by shareholder representatives at a Dec. 21 meeting. The five reinstated members then fired company CEO Robert Joe and Chief Financial Officer Reuben Mike. Perry Shirley, who was chairman before Eltsosie, said he welcomes the amendments' final ratification. He and Frances Totsoni, both board appointees, are at odds with the other five board members, including a dispute over the hiring of McGladrey to conduct the audit. "The last (board) meeting held in Albuquerque on Aug. 9, (the five majority members) gave an update on the so-called forensic audit and that they'd appointed themselves to the subcommittee to handle it," Perry said by phone on Thursday. "It sounds like they have preconceived areas they want to look at, but we're the minority and totally excluded from any of this process of the selection of the audit firm. This is certainly not legitimate or independent audit. It's not independent review." Perry claims that Totsoni's and his exclusion from the board's business is payback for the two men's allegiance to the shareholder representatives' action in the Dec. 21 meeting. James Fenton covers Aztec and Bloomfield for The Daily Times. He can be reached at 505-564-4631 and [email protected]. Follow him @fentondt on Twitter. ___ (c)2014 The Daily Times (Farmington, N.M.) Visit The Daily Times (Farmington, N.M.) at www.daily-times.com Distributed by MCT Information Services |