Report shows state was double-counting permanent fund money for years

An annual audit of the state’s finances found that officials had double-counted over $750 million dollars. And that’s not the first time something like this has happened. That’s the most striking finding from an audit of the state’s Comprehensive Annual Financial Report, which gives a detailed picture of the state’s fiscal situation, for the fiscal […]

An annual audit of the state’s finances found that officials had double-counted over $750 million dollars. And that’s not the first time something like this has happened.

That’s the most striking finding from an audit of the state’s Comprehensive Annual Financial Report, which gives a detailed picture of the state’s fiscal situation, for the fiscal year that ended in mid-2016.

Auditors gave the report a “disclaimer of opinion,” which means there are significant enough problems that they cannot give a valid opinion on the report.[perfectpullquote align=”right” cite=”” link=”” color=”” class=”” size=””]The state’s best environmental coverage.




[/perfectpullquote]This is the fourth consecutive year that auditors gave the CAFR a disclaimer of opinion.

The report, which was due Feb. 15 but not submitted until mid-June, showed state agencies were reporting money they received from the Land Grant Permanent Fund in their financial statements—which, in addition with the accounting of the fund itself amounting to double-counting hundreds of millions of dollars.

“While many of the accounting conventions used by agencies appear rational at a parochial level, they may not be aligned with the appropriate way of reporting the activity from a statewide perspective,” Department of Finance and Administration Secretary Duffy Rodriguez wrote in a letter attached to the CAFR.

This was changed, according to State Auditor Tim Keller, in late June 2017 when State Controller Ronald C. Spilman decided to account for the Land Grant Permanent Fund “as an asset within a governmental fund in the department level financial statements of the State Investment Council.” At the same time, the controller ordered other agencies to stop reporting the permanent fund as an asset.

“The audit highlights a number of areas in which our state continues to be unable to provide an aggregate financial snapshot to policymakers and the public,” Keller said in a statement. “Specifically, with regard to the double counting of over $750 million by higher education funds and the Land Grant Permanent Fund, our office called on the state to resolve the issue,” he added. “We are encouraged that a plan is in place to properly account for the billions in the Fund moving forward. We will continue to push the state towards achieving a timely and accurate snapshot of finances.”

Story continues below



The audit found three other significant issues, each of which were problems in the previous year’s CAFR, too.

These were weaknesses in accounting for interfund, internal and intraentity balances and transactions, a lack of “a process to ensure the reporting of all receivables and payables between the primary government and component units are accurately reflected in the State’s financials as required” and that internal controls over financial reports “ were not adequate to ensure preparation of financial statements for the State in accordance with generally accepted accounting principles.”

The report also looked at the recent decline in taxes, and largely blamed the drop in energy prices for the lost revenue. Still, natural gas production “remained steady” according to the report, while oil production “surged 3.9 percent.”

Other drops included a 7 percent decline in gross receipts taxes, which make up one-third of the state’s general fund revenue each year. Corporate income taxes also plummeted by 53 percent, contributing to the 9.3 percent drop in income tax revenues. Personal income taxes, which the report calls “a more significant and relatively stable revenue source for the state” when compared to corporate income taxes “were marginally lower” than the previous fiscal year.

Personal income taxes make up about one-fifth of the state’s general fund revenue.

One segment of the state’s tax collection actually increased in revenue—selective sales taxes. These grew because of an increase in insurance coverage and premiums from the Affordable Care Act, including Medicaid expansion. An increase in sales of motor vehicle, which are subject to an excise tax, also increased, which was attributed to low gas prices and low interest rates.

We're ad free

That means that we rely on support from readers like you. Help us keep reporting on the most important New Mexico Stories by donating today.

Related

Lujan Grisham pocket vetoes two bills

Lujan Grisham pocket vetoes two bills

Gov. Michelle Lujan Grisham pocket vetoed two bills the legislature passed this legislative session: one changing the Cybersecurity Act and the other concerning law…
Gov signs bills with some vetoes 

Gov signs bills with some vetoes 

Gov. Michelle Lujan Grisham signed 69 bills that the legislature passed during the 2024 legislative session. These included the General Appropriations Act which contains…
Guv signs state budget

Guv signs state budget

Gov. Michelle Lujan Grisham signed the budget bill for Fiscal Year 2025 and the Capital Outlay spending bill. The FY25 state budget bill passed…
State fines oil company more than $2 million after spill

State fines oil company more than $2 million after spill

The Energy, Minerals and Natural Resources Department fined an oil and gas company operating in the Permian Basin more than $2 million over produced…
PRC denies request to build LNG storage facility

PRC denies request to build LNG storage facility

The New Mexico Public Regulation Commission unanimously rejected a request by the New Mexico Gas Co. to build, own and operate a liquified natural…
NM Supreme Court upholds Community Solar Rule

NM Supreme Court upholds Community Solar Rule

Hours after the New Mexico Supreme Court heard arguments in the investor-owned utilities’ appeal of the community solar rule, the justices upheld the regulations…
Amid new graduation requirements, what do high schoolers want to learn?

Amid new graduation requirements, what do high schoolers want to learn?

By Margaret O’Hara, The Santa Fe New Mexican The main things that bring Brayan Chavez to school every day: Seeing, talking to and engaging with…
Special ed teachers hope lawmakers OK pay raises, admin changes

Special ed teachers hope lawmakers OK pay raises, admin changes

By Margaret O’Hara, The Santa Fe New Mexican Brittany Behenna Griffith has a laundry list of adjectives to describe the ideal special education teacher:…
Lawmakers must find consensus on competing education spending plans

Lawmakers must find consensus on competing education spending plans

By Margaret O’Hara, The Santa Fe New Mexican A challenging task awaits New Mexico lawmakers in the next 30 days: Reconciling three very different…
Lujan Grisham, Biden admin announce $10 million in federal funds for tribes, pueblos

Lujan Grisham, Biden admin announce $10 million in federal funds for tribes, pueblos

Gov. Michelle Lujan Grisham announced Friday $10 million in funding from the federal American Rescue Plan Act was awarded to six tribal nations and…
Proposal to curb executive powers moves to House Judiciary

Proposal to curb executive powers moves to House Judiciary

The House Government, Elections and Indian Affairs Committee discussed a potential constitutional amendment that seeks to limit the governor’s executive powers. The committee approved…
Supreme Court censures attorney over conduct in anti-COVID policy suits

Supreme Court censures attorney over conduct in anti-COVID policy suits

The New Mexico State Supreme Court censured a New Mexico attorney because of her “misconduct” in two unsuccessful cases pushing back on COVID-19 regulations…
Supreme Court to hear two abortion cases this spring

Supreme Court to hear two abortion cases this spring

Later this month, the U.S. Supreme Court will hear oral arguments on the case against the abortion medication mifepristone. It will hear a second…
How Biden, others highlighted reproductive rights at the State of the Union

How Biden, others highlighted reproductive rights at the State of the Union

President Joe Biden highlighted reproductive rights issues as part of his State of the Union speech Thursday. Biden delivered his 2024 State of the…
Stansbury invites OB-GYN doctor as her state of the union guest 

Stansbury invites OB-GYN doctor as her state of the union guest 

U.S. House of Rep. Melanie Stansbury has invited an OB-GYN doctor from Roswell as her guest for President Joe Biden’s State of the Union…
Supreme Court to hear two abortion cases this spring

Supreme Court to hear two abortion cases this spring

Later this month, the U.S. Supreme Court will hear oral arguments on the case against the abortion medication mifepristone. It will hear a second…
How Biden, others highlighted reproductive rights at the State of the Union

How Biden, others highlighted reproductive rights at the State of the Union

President Joe Biden highlighted reproductive rights issues as part of his State of the Union speech Thursday. Biden delivered his 2024 State of the…
Stansbury invites OB-GYN doctor as her state of the union guest 

Stansbury invites OB-GYN doctor as her state of the union guest 

U.S. House of Rep. Melanie Stansbury has invited an OB-GYN doctor from Roswell as her guest for President Joe Biden’s State of the Union…
See who’s going to be on your primary ballot in June

See who’s going to be on your primary ballot in June

Tuesday marked the official beginning of the 2024 New Mexico primary season for the legislature, with candidates officially filing for candidacy. This is the…

Bill to require disclosure of use of AI in campaign materials goes to governor

The Senate approved a bill aiming to require the disclosure of the use of artificial intelligence or other changes made by computers to campaign…
House amends, passes bill banning firearms near polling places

House amends, passes bill banning firearms near polling places

The House narrowly approved a bill that would ban firearms near polling places. The House voted 35-34 to pass the bill following an extensive…
U.S. Supreme Court lets ban on Couy Griffin from holding office stand

U.S. Supreme Court lets ban on Couy Griffin from holding office stand

The U.S. Supreme Court declined to hear an appeal of a Republican official who was barred from holding office after being convicted for a…
Politics Newsletter: legislative leaders not running for reelection

Politics Newsletter: legislative leaders not running for reelection

Hello fellow political junkies! Candidate filing day has come and gone, and members of House and Senate leadership opted to either not seek reelection…
Lujan Grisham, Biden admin announce $10 million in federal funds for tribes, pueblos

Lujan Grisham, Biden admin announce $10 million in federal funds for tribes, pueblos

Gov. Michelle Lujan Grisham announced Friday $10 million in funding from the federal American Rescue Plan Act was awarded to six tribal nations and…

GET INVOLVED

© 2023 New Mexico Political Report