Overview:
The 25th Navajo Nation Council voted 16-0 to accept a report detailing payroll delays, financial management system challenges, outstanding payments and audit concerns while calling for greater accountability and improved financial oversight.
The 25th Navajo Nation Council is demanding greater accountability and improved financial oversight following payroll delays, payment discrepancies and implementation challenges involving the Nation’s new financial management system.
On Monday, the Council received a detailed report from Navajo Nation Controller Sean McCabe on the transition from the Financial Management Information System (FMIS) to the new Enterprise Resource Planning (ERP) system, outstanding payments and updates on financial audits.
“Our Navajo Nation employees, chapters, veterans and programs depend on financial systems that are accurate, reliable and accountable,” Speaker Crystalyne Curley said. “We recognize the importance of modernizing our government’s financial operations, but that transition must not come at the expense of employees receiving their paychecks or communities receiving essential services.”
McCabe explained that the ERP system replaces the Nation’s aging FMIS platform with four applications covering budgeting, payroll, vital records and financial management. The Office of the Controller oversees financial and supply chain management, while the Department of Human Services oversees Dayforce, which manages payroll and personnel records.
The new system is expected to cost approximately $31 million over five years, including $14 million to $15 million in implementation expenses. McCabe said the previous FMIS platform had become increasingly difficult to update and integrate with other financial applications.
Payroll problems prompt calls for accountability
Council Delegate Brenda Jesus questioned whether the substantial investment was delivering the promised improvements, particularly after employees experienced delayed direct deposits, incorrect deductions, short payments and discrepancies in leave balances.
McCabe acknowledged significant complications during the first payroll processing cycle. An initial payroll file contained approximately $2 million in overstated payments resulting from timesheet errors, requiring corrections before the file could be released.
He said the payroll file was transmitted in time for most employees who bank with Wells Fargo to receive their deposits Saturday morning. Several hundred employees who use other financial institutions experienced additional delays, with deposits arriving Wednesday.
To reduce the likelihood of future disruptions, McCabe said payroll files would be released one to two days earlier. The additional time would allow officials to verify payroll information, address errors and complete processing before employees expect their deposits.
Council Delegate Dr. Andy Nez emphasized the need for accessible training and timely technical assistance to help employees navigate the new system.
McCabe committed to coordinating additional ERP training, including one-on-one assistance for personnel with the Navajo Nation Veterans Administration.
New purchasing process and financial oversight
McCabe also outlined a five-step purchasing and payment process designed to strengthen documentation, improve accountability and reduce paperwork.
Under the process, programs submit electronic requisitions, obtain procurement approval, confirm receipt of goods or services, verify invoices and complete financial compliance reviews.
Council delegates also requested updated fiscal year 2026 financial balances, explanations for negative federal fund balances, and information about outstanding purchase orders and potential overcommitments in capital outlay accounts.
The questions underscored concerns about the Nation’s ability to maintain accurate financial records and ensure that funds are properly tracked as the new system is implemented.
Audits and ARPA assistance for Navajo elders
McCabe reported that the Nation’s 2025 financial audit was complete and would be submitted to the Council. The federal single audit was expected soon, with preliminary concerns involving procurement compliance and whether spending under the American Rescue Plan Act (ARPA) met federal requirements.
The report also addressed the ARPA hardship assistance program for Navajo elders.
As of May 31, 2026, approximately 30,000 Navajo elders ages 75 and older had been identified as eligible for assistance, but only about 6,000 had applied, McCabe reported.
Council members called for expanded outreach through senior centers and the Nation’s five agencies to help more eligible elders learn about the program and submit applications.
The Council emphasized that continued oversight will be necessary to ensure payroll corrections, outstanding payments, audit findings and financial reporting concerns are resolved.
The 25th Navajo Nation Council voted 16-0 to accept the Controller’s report.
