The games may be the same, but there's at least one important difference between tribal casinos and the regular kind: They're government-run.

The governments in question are tribal governments, of course, and serving them and their casinos is a niche that Great Falls, Mont.-based firm Joseph Eve excels at.

The firm tapped into the market almost 30 years ago when partner Todd Timboe saw that some of the self-governing nations were being ignored by the accounting profession. "One thing we noticed, around 1986, is that Indian country wasn't being properly serviced," said Timboe. "It was almost like tribal governments were second-class clients. CPA firms would provide service to one tribe, and usually only after tax season."

The window of opportunity opened in 1988, when the Reagan administration passed the Indian Gaming Regulatory Act, which partner Grant Eve recalls as the beginning of tribal gaming. "The Nevada Gaming Control Board already had established internal controls," noted Eve. "If you go back to those original internal controls where the National Gaming Commission came from, they are very similar to the Nevada Gaming Control Board."

Joseph Eve started to make its move into Indian country by training and actively soliciting for work in the late 1980s. "This business is very unique," said Timboe. "We came out of a recession during the early 1980s when there was a lot of fee pressure for local government audit and tax work." He realized that tribal work was fractionalized all over the country, and this gave the firm the upper hand when it came to out-of-state work. "When a tribe went out for bid on an audit, there would usually be one or two firms we would compete against. If you had a decent resume and tribal references, it was fairly easy to get work throughout the U.S."



Eve has worked with both tribal and commercial casinos, and said that the two are very similar. "You're dealing with gaming machines, table games and casino operations. But some of the difference is in the reporting structure," said Eve. "For commercial gaming in Nevada, you will report to management, the audit committee, the Nevada Gaming Control Board, and the shareholders. In regulating and auditing tribal casinos, you might report to the tribal gaming commission, tribal council, management, or you may be reporting to all three of those in separate meetings. We have presented audit and financial reports to general council, where you present in front of thousands of tribal members."

Another factor to take into consideration is the location of the tribal communities, which have experienced rapid growth since 1988 within the states that have a compact with the tribes. A compact is the agreement between the state and tribe on the type of gaming that is going to take place on the reservation. "You really need to have the expertise of the different internal controls regulations and understand who you are reporting to," said Eve.

Joseph Eve currently works with a number of tribes throughout 28 states, and staying abreast of what's fresh and new for each of its clients may come as a challenge. However, Clayton Johnson, a manager at the firm, said that the firm's senior staff is well-versed on how the financial statements are reported for tribal casinos. "It works out where our people have an excellent knowledge base of what the overall expectations are, no matter what state they are [working] in. I think the majority of regulations cross over from state to state, and where they don't, our experienced team knows what regulations apply to each state. We also rigorously maintain our internal CPE, at least semi-annually."

Tribal casinos are exempt from federal taxes under Protection 7871 of the Internal Revenue Code; however, Eve said that other taxes vary from tribe to tribe. There might be a casino that is exempt from federal tax but have a tribal tax administered by the tribe. "They are their own sovereign nation and establish their own governments -- they have their own constitutions, and some of those include taxes. When we are doing those audits, we have to learn the tax for the tribe and make sure it's accounted for correctly on the casino and retail side."

Phil Collins, a Joseph Eve audit manager who generally works with tribal government clients, occasionally gets asked about the taxation of certain transactions. "Specifically, the money that they distribute to tribal members is usually taxable," said Collins. "There are some exceptions with tribal members where the income may not be taxable."



Joseph Eve conducts a large number of tribal casino audits and adheres to procedures required by the National Gaming Commission, which are different from the typical financial statement.

The firm also provides forensic accounting services and has at least 10 certified fraud examiners who handle consulting agreements, policies and procedures. Casinos are a sweet spot for money laundering, and Eve noted that Title 31, or the Bank Secrecy Act, has been getting a great deal of attention lately, especially on the commercial side.

For example, casino operator Las Vegas Sands Corp. got hit with a fine of approximately $47 million by the Department of Justice in the summer of 2013 after failing to report its gains from a gambler who happened to be linked to money laundering through drug trafficking. There's a lot of scrutiny when dealing with money laundering, and Eve said that those who oversee Title 31 have definitely put the spotlight on casinos. "We've seen that area increase in the past several months, and we anticipate a lot of Title 31 audits for 2014 for both the tribal and commercial side."

The firm also outsources internal audits for casinos that don't want to have their own internal audit departments. "We come in and act as their internal auditors where we go in annually, semi-annually or quarterly," said Eve.

Collins added that the firm also handles indirect cost agreements and internal audit work for tribal government clients. "We also go through the reservation to see what fixed assets they own, especially now that GASB No. 34 requires capitalization of fixed assets."

A-133 audits are also on Joseph Eve's list of services for its tribal government clients, which could include housing authorities and schools. "All require an A-133 audit if they receive more than $500,000 a year in federal funding," said Timboe. "That's a large part of our tribal government work."



Given the amount of travel the staff does and the distance between the firm and many of its clients, Joseph Eve is at the forefront of technology, according to Collins: "Over the past few years, we have worked on improving our audit niche and clients can now upload their files [to the cloud] and keep track of how the audit is progressing."

The firm has formed a partnership with cloud-based accounting software developer Intacct. "We've developed and installed a cloud-based module in several casinos that helps with inefficiencies from legacy accounting systems. We have tried to utilize technology to facilitate a lot of these activities as well," Eve noted.

A majority of the firm's clients have made the technology shift with the firm, and only a handful aren't quite ready yet. "Our firm moved paperless in the early 2000s," said Eve, who noted that the firm is cloud-based for internal financial statements. "Our managing partner, Joseph Eve, has always been an advocate to move very quickly and invest as far as technology is concerned." The technology group, which is based out of the Kalispell, Mont., office, has received monetary backing and invested the time into its partnership with Intacct on a financial accounting platform. "It's exciting to see all the different things you can do with accounting systems in casinos, and we are moving forward and putting it in the tribal government arena too."

The travel aspect of working in the tribal casino world can be seen as a pro or a con. "One benefit is that you get to see the country and meet different people," said Eve. "We work with tribes and casinos all the way on the East Coast to organizations in Washington, D.C., as well as San Diego all the way up to the Washington State area. We are currently working in 28 different states and there is a lot of travel no matter where you are based out of. Some employees look at it as a con and some of the employees we have love the travel."

Timboe said that it's been very rewarding to work in Indian country, because of the different cultures he has learned about over the past 30 years: "There are so many people I would never have met if I didn't work in this area. Great people, great cultures, and the history is fascinating."



Firm Joseph Eve

Headquarters Great Falls, Mont.

Managing partner Joseph Eve

No. of partners/staff 65/4

Year founded 1983

Services Attestation, accounting services, accounting software, cloud computing solutions, forensic investigations, anti-money laundering/ Title 31 consulting, tax

Industry specialties Government, gaming, tax

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