Quick Reads

State Auditor, treasurer issue joint alert about collateralization of public funds

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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.

audits

What the state Homeland Security Department needs to do

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As we wrote in a story published earlier today, the New Mexico Department of Homeland Security and Emergency Management just submitted its 2016 audit to the Office of the State Auditor. That audit hasn’t yet been released publicly, and that may take weeks or months. In the department’s 2015 audit, turned in nearly a year late, auditors found 19 significant problems and noted that “little progress” was made in passing through FEMA money to local governments and tribes. That audit also appears to show that staff leadership was either unwilling or unable to share the information accountants needed to understand what’s happening with its finances and grants. The independent auditors, for example, couldn’t say with certainty whether the agency’s financial records were reliable, and instead had to give the Auditor’s Office what’s called a “disclaimer of opinion.”
Related story: Homeland Insecurity: How ready is New Mexico for when disaster strikes? Here are some of the recommendations auditors offered the department in the 2015 audit.