Belen receives unqualified audit
For the second year in a row, auditors gave the city of Belen's annual financial report the best opinion they could've received — unqualified.
Through an evaluation of the city's basic financial statements for 2011-12, independent auditors from Accounting and Consulting Group, LLP added four findings to the city's existing list of the five repeated findings.
"The opinion we rendered was an unqualified opinion," said Certified Public Accountant Robert M. Cordova with Accounting and Consulting Group, LLP at a recent city council meeting. "That's the best opinion you can get."
The city's budget was approved by the New Mexico Office of the State Auditor in late November, according to their website.
Independent auditors completed an examination of the city's financial position for a certain time frame and to check if the city was in accordance with the national generally accepted accounting principles.
The audit states, "In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole."
The issues highlighted through the audit were described extensively with city officials, including City Manager Mary Lucy Baca and City Councilors David Carter and Wayne Gallegos, during an exit interview in November 2012 with auditors, said Cordova, the firm's manager.
One finding, repeated since 2010, contained more than 16 deficiencies. The design deficiencies in internal control over financial reporting was labeled as a material weakness, or a deficiency or combination of deficiencies in internal control that could lead to a misstatement that wouldn't be prevented, detected or corrected in a timely manner, Cordova said.
"This finding is a catch all for those things that can affect financial reporting," Cordova said.
The deficiencies centered around a number of financial and court related activities completed or managed by one employee without an independent review, along with a lack of a data backup system.
"The city does not maintain proper oversight or monitoring in regards to the city's accounting activities and has not taken the proper measures to monitor and mitigate the risk for fraud, misappropriation of assets or misstatement of financial statements," the audit states.
City officials are developing a procedural plan, which will establish an internal control system containing division of duties, approval requirements for adjustments and segregation of duties, on top of purchasing data storage for backups and updating the capital asset inventory, detailing all city property, annually.
Budget hearings, where department heads deliver a wish list of equipment or personnel needed to city officials, and available funds will determine if more personnel are hired in the finance and court departments, Baca said.
"Everyone is asking for someone," Baca said. "I would like to (hire more personnel), but we'll have to see what we can do in the end."
Other material weaknesses found were a lack of preparation of financial statements due to a lack of time and training and not updating an engineering study for the landfill post closure liability.
Significant deficiencies, or a deficiency or combination of deficiencies in internal control that are less severe than material weaknesses but require attention, found include contribution remittance reports filed with the Public Employees Retirement Association of New Mexico not properly completed to show the total wages subject to PERA, incorrect accruement of vacation time per pay period and physical and virtual access controls not canceled promptly after an employee's termination due to communication problems.
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