Once again, New Mexico’s financials are too poor to merit a comment from an independent auditor.
For the second year in a row, the state received a “disclaimer of opinion” on its most recent Comprehensive Annual Financial Report (CAFR), which is supposed to give the most accurate picture of New Mexico’s financial condition.
That’s because the state can’t account for at least $100 million of its own money, though the State Auditor’s Office says that the estimate of unaccounted-for money may be “substantially higher.”
New Mexico is overestimating money held in its savings account, or reserves. Reserves are different than the money used for the state’s annual budgets and act as a backup fund during bad economic times.
For nearly a decade, New Mexico hasn’t been able to properly perform this act of balancing its own checkbook. The problem dates back to 2006, when state government overhauled its entire accounting system to an online program called SHARE.
The Santa Fe Reporter covered the issue earlier this year (in a story written by yours truly):
Because all the state agencies have been using the accounting software for nearly eight years, Keller says none of them can be effectively blamed as a scapegoat for the bigger issue.
“These are millions and millions of entries,” he says. “That’s why the problem is so complicated.”
The state also has problems releasing its CAFR.
“Timeliness has been an issue,” Justine Freeman, spokeswoman for the State Auditor, said in a brief interview.
New Mexico is one of just six states that doesn’t have 2014 financial data listed on the website of the watchdog group Truth in Accounting, presumably because it was just released publicly today. The state’s last CAFR, which came out in February of this year, ranked last in the nation in terms of being released in a timely manner.
The state Department of Finance and Administration is in charge of compiling the CAFR annually, and is therefore charged with fixing the cash reconciliation problem. The department only started auditing these financials last year.
Keller’s office reviewed the latest audited CAFR.
In a letter sent to the finance department earlier this week, Keller set a Feb. 15, 2016 deadline for the next audited CAFR release. He also wrote that New Mexico “needs to be able to balance its checkbook on an ongoing basis to provide an accurate presentation of the State’s financial health” and asked for “a written response regarding the status of your ongoing corrective action plan.
A document from the finance department released earlier this year provides some insight. In it, the finance department says it’s currently in the midst of a “Cash Remediation II” plan that’s expected to conclude next February.
Read that document below:
CAFR Summary Update by New Mexico Political Report
And read the state’s latest Comprehensive Annual Financial Report here: