VC projects in danger due to audit

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During last week’s Valencia County commission meeting, County Manager Bruce Swingle warned that if the county audit doesn’t shape up quickly, the county could lose more than $1 million in capital outlay.

During last week’s Valencia County commission meeting, County Manager Bruce Swingle warned that if the county audit doesn’t shape up quickly, the county could lose more than $1 million in capital outlay.

According to a written statement from the New Mexico Department of Finance and Administration, capital outlay appropriations for 2013 have been suspended until the county has corrected its audit findings.

Swingle said the potential loss stems from an executive order issued by Gov. Susana Martinez in May, nearly two months after the Legislature passed the 2013 capital outlay bill and Martinez signed it.

“So far we have not received any information from anyone,” Swingle told the commissioners. His information came from two senators who represent Valencia County — Michael Sanchez (D-29, Belen) and. Clemente Sanchez (D-30, Grants).

Via email, the two senators warned the county that due to the findings in its most recent financial audit, the capital outlay might not be forthcoming.

“We actually just started our entrance interviews with the auditors today (July 3) and we feel in really good shape,” Swingle said.

He said the county is making “great strides” in resolving the 22 findings in the county’s 2011-12 fiscal year audit.

“We have an extremely capable finance director and we have added an accountant and two assistants to that department,” the manager said. “We are making a very strong effort to address the audit findings.”

But outside of media inquiries about the possible loss of funding for improvements to the county’s animal shelter, Swingle said there has been no official communication from the New Mexico Department of Finance and Administration.

He asked the commissioners how they wanted him to approach the situation, saying he could send a letter to the governor’s office now or wait until the county received formal notification.

“Do it now,” Commissioner Mary Andersen said.

Commissioner Alicia Aguilar said she wanted the county to be a little more aggressive.

“Can we schedule a meeting with the governor? Invite her to come down here? Many of these projects are in my district,” Aguilar said. “I would like to show her El Cerro Mission. I would like to see her here. She’s our governor and we need her.”

The commissioner said if Martinez wouldn’t come to the county, she was more than willing to go to Santa Fe.

“We can’t sit here and do nothing, so do it all,” Andersen said. “We can’t just sit back and not comment. We have taken care of many of the findings and made great progress. It’s time we told people about that.”

Commission Chairman Charles Eaton said he wanted to find out if Valencia County was being targeted.

“If it is previous issues, our history, we need to show what we have done now,” Eaton said. “We need to find out exactly what is going on and not engage in mudslinging. I understand these projects were not in the bond sale in June. If we can satisfy the issues, we need to target the December bond sale.”

State Sen. Clemente Sanchez said he became aware of the unfunded projects in his district when the legislative finance committee released a list of projects that were held back from the bond sales.

“Valencia County is not the only one,” Clemente Sanchez said. “There were projects in Cibola and McKinley counties that were held back because of audit issues and the executive order. There were projects for Democrats and Republicans; it’s not just one party. Republican districts have the same issues.”

All total, there were $13 million in projects held back from the June bond sale, he said.

The senator said it was his understanding after conversations with department of finance and administration that, if Valencia County fixed the audit findings, the projects would be in the next bond sale at the end of this year.

State Sen. Michael Sanchez posted a list of the unfunded Valencia County projects on his Facebook page on July 3.

“I, for one, am tired of this administration’s excuses for continuing to hurt the people of our state,” Sen. Michael Sanchez wrote in the post.

Calls to Sen. Michael Sanchez were not returned by News-Bulletin press time.

The executive order tasks DFA with establishing uniform funding criteria for local government bodies requesting state appropriations.

The order says if an audit documents material weaknesses or significant deficiencies, then the requestor must remedy the issues to the satisfaction of the state agency making the grant. When local governments make capital outlay requests, depending on the nature of the project, the funds come from different state agencies.

For example, the $100,000 for an educational agriculture farm at Willie Chavez Park for Belen Consolidated Schools comes out of the public education department and the $15,000 for water system improvements and fire suppression well in Bartola Canyon comes from the environmental department.

Both those projects, as well as funds for additional vehicles for the sheriff’s department, improvements to the county animal shelter, various paving projects and emergency generators for the Meadow Lake and Manzano Vista fire stations were not funded during the bond sale in June.

According to a written statement from DFA’s Public Information Officer Tim Korte, counties and municipalities will have capital appropriations suspended if they have any serious audit findings and/or they are not current on audits.

“The 2013 capital outlay appropriation to Valencia County has not been eliminated,” Korte’s statement read. “Rather, like all communities around the state, Valencia County will need to develop plans to address the serious issues raised by their audit. If and when the issues are resolved, the funds will be provided as early as the next bond sale in December.”

Specifically regarding Valencia County, the county receive a qualified audit, Korte wrote, which indicates internal control problems, including several repeat findings that date back to the 2007 fiscal year audit.

Valencia County Finance Director Nick Tellez said Tuesday the county has not received any word from the state as to how to proceed and said he wishes the state had given the county some warning in regards to the executive order.

“Maybe they could have asked us to get the commission to sanction a corrective action plan for the audit findings,” Tellez said. “As it is, we have already started our fiscal year and revenues are already slim pickings.”

Capital outlay funds cannot be used for recurring expenses, such as payroll or operational costs, Tellez said, but with revenues low across the board, local governments become dependent on the funds to complete “brick and mortar” projects such as paving roads, construction and replacing vehicles.

“We’ve made lot of progress with the audit findings. The manger and commissioners have allocated the resources to making some corrections and I do feel we will have significant amount of improvement,” he said.

The poor showing on the most recent audit was most likely because of the lack of a county finance director, Tellez said.

“There was a void and I think a lot of things that should have been handled, weren’t,” he said. “The problem is, these audits lag a year. So all the things that happened last year, all the change-over and frankly, turmoil, will be reflected in this coming audit.”

Tellez noted that, even though the county didn’t turn in its last audit until early January — nearly two months after the Nov. 15 deadline — it still wasn’t included in the state auditor’s “naughty list” of at-risk governmental agencies.


-- Email the author at jdendinger@news-bulletin.com.