State Watchdogs: New Mexico's Martinez clamps down on unaudited bureaucrats

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News,Watchdog,New Mexico

Santa Fe, N.M. - Government entities be warned: Fail to submit an audit to New Mexico and say goodbye to some of that state money you want.

Earlier this month, Gov. Susana Martinez issued an executive order barring any governmental entity that isn't up to date on its audits from receiving any capital outlay goodies from the state, effective immediately.

"When you receive millions of dollars of taxpayer money, it's the responsibility of the state to establish basic financial controls and require audits that demonstrate an entity's ability to be a good steward of that money," Martinez said in a statement.

"It's a very important step that the governor ordered an executive order to say, 'I'm no longer going to allow the Department of Finance and Administration to just openly reward with capital outlay entities that haven't submitted their audit,' " State Auditor Hector Balderas told New Mexico Watchdog.

Balderas may be a Democrat and Martinez may be a Republican but they're both on the same page when it comes to getting entities to adhere to the state's 1978 Audit Act to help make sure money isn't getting wasted or stolen.

"I think it sends a message to people who are in charge of these operations that they need to take more responsibility or else they aren't going to be rewarded," Balderas said.

New Mexico Watchdog has obtained a list from the DFA, which has cross-referenced the capital outlay projects approved in this past legislative session with entities that haven't turned in their required audits. The result?

Some 35 organizations that will not receive money the legislature and the governor's office initially OK'd for them until they get their finances straightened out.

Included on the list:

• $400,000 for Espa?ola ($300,000 to remodel city hall and the jail and $100,000 in improvements to the Veteran's Memorial Wall)

• $300,000 for streets and drainage improvements in Sunland Park

• $220,000 for gas pipelines to the general hospital in Roosevelt County

• $200,000 in improvements to the water system in the town of Cuba

• $155,000 for activity buses for the Las Vegas, New Mexico, city public school district

• More than $145,000 to help seniors in Gallup

• $40,000 for an ambulance for the town of Santa Rosa

The State Auditor's Office has been battling late audits for years with a staff of 30 and a budget of $3 million to enforce what Balderas calls "a culture of a lack of accountability."

There may be 59 entities out of compliance now but Balderas says the number has been as high as 90 in recent years, with an estimated $1 billion not properly accounted for.

Without timely audits, the possibility of embezzlement or financial mischief can follow.

Recent scandals in Sunland Park, the New Mexico Finance Authority and the Jemez Mountain Schools each were accompanied by overdue audits.

"I'm like the truancy officer telling the parents about the bad grades and missed days," Balderas said. "But the juvenile delinquent is still missing school and the fact that the kid is not in school probably indicates there are other problems that haven't even been discovered yet."

Now that the executive order has been issued, DFA — the agency that ultimately cuts the checks to entities receiving capital outlay — hopes the scofflaws will get back in compliance.

"This is going to give them more incentives to get those [audits] done," said Ryan Gleason, the department's Local Government Division director, adding that overdue audits will be looked at carefully once they come in.

"Just because they've got their audit done, we want to make sure they've got good financial controls in place as well," Gleason said. "Yes, we take this executive order very seriously. ... We have high hopes that this will help a number of communities to get into compliance."

Balderas said many entities have leaders who are making an effort to get their financial houses in order but added that "even when they're not trying to play fast and loose and they're just trying to do the right thing, I think they're very at risk for some employee to steal them blind."

Rob Nikolewski is a reporter for New Mexico Watchdog.org, which is affiliated with the Franklin Center for Government and Public Integrity.

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