TORRES MARTINEZ DESERT CAHUILLA INDIANS Audited Financial Statements For the year ended September 30, 2007TORRES MARTINEZ DESERT CAHUILLA INDIANS. TABLE OF CONTENTS FINANCIAL SECTION Independent Auditors’ Report Basic Finsacial Statements ‘Tribe-Wide Financial Statements Statement of Net Assets Statement of Activities Governmental Fund Financial Statements Balance Sheet - Governmental Funds 7 ce Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds Reconciliation of Statement of Revenues, Expenditures, and Changes in Fund Balances- Governmental Funds to Statement of Activities, Notes to the Financial Statements SINGLE AUDIT SECTION Schedule of Federal Awards Independent Auditors report on compliance and on internal control over financial reporting based on an audit of financial statements performed in accordance with Governmental Auditing Standards Independent Auditors’ report on compliance requirements applicable to each major program and internal control over, compliance in accordance with OMB Cireular A-133 Schedule of Findiugs and Questioned Costs Corrective Action Plan Page 36 39 4 0INDEPENDENT AUDITORS' REPORTMidwest Professionals, P.L.L.C. Cerifed Public Accountanes ‘989-782-1156 Fax 999-731-2541 INDEPENDENT AUDITORS’ REPORT Tribal Council ‘Torres Martinez. Desert Cahuilla Indians P.O. Box 1160 ‘Thermal, California 92274 We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information and the Tribal Housing Authority discretely presented component unit of the Torres Martinez Desert Cahuilla Indians (“the Tribe”), as of and for the year ended September 30, 2007, which collectively comprise the basic financial statements of the Torres Martinez Desert Cahuilla Indians’ primary government as listed in the table of contents. These financial statements are the responsibility of Torres Martinez Desert Cahuilla Indians’ management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Selnek-is Tem-Al Corporation, a discretely presented component unit of the Tribe and is presently separately as a part of the Tribe's basic financial statements. These component unit financial statements were audited by other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Torres Martinez, Desert Cahuilla Indians, is based on the report of the other auditors. ‘We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the provisions of Office of Management and Budget Circular A-133, "Audits of States, Local Governments and Non-Profit Organizations". Those slandands require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. ‘An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overal financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information and the discretely presented component units for the primary government of the Torres Martinez Desert Cahuilla Indians for the year then ended September 30, 2007, and the respective changes in financial position and cash flows, where Member of American Institute of Certified Public Accountants Member of Native American Finance Officers AssociationMidwest Professionals, P.L.L.C. Certified Pubic Accountants TIS South Cour Avenue, Gaylord. MITIS 989-733-1156 Fax 989-731-2541 Page 2 applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America In accordance with Government Auditing Standards, we have also issued our report dated, June 26, 2009 on our consideration of the Torres Martinez Desert Cahuilla Indians’ intemal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of the audit. ‘The Torres Martinez Desert Cabuilla Indians has not presented the management's discussion and analysis and budgetary comparison. information that accounting principles generally accepted in the United States of America has determined is necessary 10 supplement, although not required to be part of, the basic financial statements. As discussed in Note 15 to the financial statements, the Torres Martinez Desert Cahuilla Indians, has expended certain grant funds in a manner that may have violated certain restrictive provisions of the related grants. The possible outcome of these matters is uncertain at this time. ‘Accordingly, no provision for any liability has been made in the financial statements for possible federal and state claims for refunds of those grant monies, Cur audit was performed for the purpose of forming an opinion on the financial statements taken as.a whole, ‘The accompanying schedule of expenditures of federal and state awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the financial statements of Torres Martinez Desert Cahuilla Indians. Such information in that schedule has been subject to the auditing procedures applied in the audit of the financial statements and, in our opinion, i fairly tated, in all material respects, in relation to the financial statements taken as a whole. P40. Midwest Professionals, PLL-L.C July 09, 2009 Gaylord, Michigan Member of American Institute of Certified Public Accountants ‘Member of Native American Finance Officers AssociationBASIC FINANCIAL STATEMENTS,PRIMARY GOVERNMENT FINANCIAL STATEMENTS‘THE TORRES MARTINEZ DESERT CAHUILLA INDIAN TRIBE Statement of Net Assets Assets Curentassets Cash and cash equivalents Investments Due from other governments, Receivables, net Prepaid expenses Inventory Receivable from related parties Total current assets Noncurrent assets Restricted cash Capital assets: Capital assets not being depreciated Capital assets, depreciable Net capital assets Other assets, net Total assets Labilities Current liabilities ‘Accounts payable MEPA liability ‘Accrued liabilities Line of credit Retainage payable Deferred revenue ‘Current portion of capital lease obligations. ‘Current portion of notes payable Payble to related party Due to other governments Total current liabilities Non-current liabilities ‘Compensated absences Capital ease net of current partion Notes payable, net of current portion Total non-current liabilities Total liabilities Net assets Invested in capital assets Resticted Unrestricted Total net assets ‘September 30, 2007 Component Units Governmental —Seinek is Tribal Housing Activities _ __Tem-A!_ __Authority —_ $ 700686 $ 106.938 $981,314 2,541,558 17,322,286 324,967 ‘55601 67,744 46,278 43,529 21,807 242801 474531 Zits 191 ~__408690 TERS 681,999 929,026 A 4 4,581,498 16,305,062 25,719,689 _ 17,305,751 1,336,429 $ 349,491 § 933,890 180,625 225,624 86,806 1851,144 691,562 462,557 424,202 39,237 400,000 1,328,414 200,000 474531 16854570 ___ 19,944,268 3.703.220 555.156 146,720 41,010 1.137.880 _14.613,361 11325610 _14613.361 21,269,878 _ 18,316,590 655.1568 4,501,251 (51,440) (920,830) 681.273, $__4449.811 $__(920,839) $___681,273 ‘See Accompanying Notes tthe Financial Statements