State Auditor, treasurer issue joint alert about collateralization of public funds
On Monday, the State Auditor’s Office and State Treasurer’s Office issued a joint alert to all New Mexico counties and municipalities. The required annual audits submitted by counties and municipalities across the state showed that local governments are not appropriately following collateralization laws and Federal Deposit Insurance Corporation guidance, a press release said. “In recent months, some local governments bypassed the collateral requirements by adding multiple employees or elected officials to bank accounts to secure $250,000 of FDIC insurance for each account signer,” the release said. “New Mexico state law requires banks to have proper collateralization to safeguard taxpayers’ money. Any amount of public money held in banks over the $250,000 insured by the FDIC must be backed by other forms of sureties.”
Collateral is used to protect public funds in the event of a bank collapse.
The State Auditor’s Office did not comment on the exact number of local governments that may have fallen out of compliance with collateralization laws.