Gov. Susana Martinez announced Wayne Johnson will take over as State Auditor through the 2018 election on Friday. Martinez made the appointment a day after Tim Keller resigned from the position. Keller will be sworn in as the mayor of Albuquerque Friday after easily winning in a runoff election last month. Johnson, a Republican, is a Bernalillo County Commissioner and told the Albuquerque Journal he expects to resign from that position at some point. Johnson ran for mayor of Albuquerque as well, but did not receive enough votes to make the runoff election.
One Democratic lawmaker already says he’s planning to run to for State Auditor, now that Tim Keller won the race for Albuquerque mayor. State Rep. Bill McCamley, D-Mesilla Park, confirmed to NM Political Report Tuesday night that he plans on entering the race. If Keller had lost the race, he would have been able to run for a second term. Instead, Keller will become mayor on Dec. 1.
A special audit of the University of New Mexico Athletics Department found a variety of problems dating back years. According to the Office of the State Auditor, responsibility ultimately lands in the lap of the university’s Board of Regents, which is supposed to ensure the university, including the athletics program, is fiscally responsible. Auditors found in many cases the UNM Athletics program fell short of that goal. The problems include “a tangled web of transactions” according to State Auditor Tim Keller. At the center of many of the findings are two non-profits that aid the athletics department in fundraising, the UNM Foundation and the UNM Lobo Club.
A special audit of the city of Jal found government officials in the southeastern New Mexico oil patch town gave “improper billings and adjustments” of more than $660,000 between 2008 and 2016. Those billings may violate New Mexico’s anti-donation clause, State Auditor Tim Keller concluded, which bars local and state governments from making donations to private individuals. The audit comes after NM Political Report and the Jal Record reported last September that city officials gave a local rancher a $1.2 million discount on commercial water use between August 2012 and April of 2014. At the same time, the city raised water rates on other customers. Jal officials also continued selling industrial water to the the Beckham Ranch, Inc., for six months after a ban on industrial water sales went into effect.
An audit of the embattled Office of the Superintendent of Insurance could not offer an opinion on the fiscal health of the department because of a lack of information. On Wednesday, the New Mexico Office of the State Auditor released the most recent OSI audit. “The annual audit highlights areas throughout the agency where safeguards of public funds are not adequate or existing rules aren’t being enforced,” State Auditor Tim Keller said in a statement. “These are critical areas that concern the collection and administration of hundreds of millions of our tax dollars each year. They need to be addressed for the financial health of our state.
The State Auditor released its annual ‘At Risk List’ of public entities that failed to submit their mandated audits on time. Three state agencies, four counties, four school districts, one college and ten municipalities failed to submit their annual audits. One entity had an audit opinion that found “significant problems with its financial statements” per the State Auditor press release: The Town of Estancia. State Auditor Tim Keller said in a statement why the list was important. “The ‘At Risk List’ helps policymakers and the public easily identify which entities are behind schedule or reporting financial information that often isn’t cutting it,” he said.
The highest-ranking official at the state Taxation and Revenue Department became somewhat reflective Tuesday over last week’s sudden resignation of his former boss, Demesia Padilla. At an annual state legislative conference hosted by the New Mexico Tax Research Institute, the department’s Deputy Secretary John Monforte said he’s known Padilla for 10 years and came to the department when she was appointed by Gov. Susana Martinez. Padilla resigned as secretary last week after an agent for Attorney General Hector Balderas filed a search warrant affidavit on her home. Monforte is now heading the department. The affidavit described an ongoing investigation that points to possible tax evasion and alleged embezzlement of money from a business she once did accounting work for, including while she was TRD secretary.
State Taxation and Revenue Department Secretary Demesia Padilla resigned from her position today, according to media reports. Padilla’s resignation came after New Mexico Attorney General Hector Balderas filed a search warrant on her house related to an investigation into allegedly aiding an ex-client by using her position as TRD head. Padilla worked as a certified public accountant before Gov. Susana Martinez appointed her to the helm of TRD in 2011. Related: The key parts of the Demesia Padilla search warrant
The search warrant sought Padilla’s personal and business income tax returns from 2011-2013, among other information, stemming from an anonymous referral sent to the Attorney General’s Office in July 2015 “alleging illegal and financially questionable acts” as well as a referral from State Auditor Tim Keller. The warrant also sought tax records from Jessie Medina Jr. According to the New Mexico Secretary of State’s Office, Jessie Medina was listed as an officer of Padilla’s private accounting firm.
State Auditor Tim Keller recently designated the City of Jal for a special audit on the city’s water billing issues. The move comes two months after Keller’s office opened a case into an arrangement where the city in the southeastern New Mexico oil patch gave a local ranch a discount on utility water worth $1.2 million over a 25-month period between 2012 and 2014. NM Political Report, in partnership with the Jal Record, first reported on the city’s water deal with the Beckham Ranch in September. Related: State Auditor to investigate Jal water deal
In a Dec. 2 letter to Jal Mayor Cheryl Chance*, Keller writes the special audit will look at Jal’s “compliance with applicable laws, regulations, policies and and procedures with respect to water utility billing practices.”
Jal City Manager Bob Gallagher told NM Political Report that he is “extremely pleased” with the state auditor’s decision for the special audit and said he has been cooperating with Keller’s office on the matter for the past two months.
Three state agencies expressed a lack of confidence Thursday in the Office of the Superintendent of Insurance’s (OSI) ability to collect millions of dollars back taxes owed to the state from health insurance companies. State Auditor Tim Keller, Department of Finance and Administration State Budget Division Director A.J. Forte and Legislative Finance Committee Deputy Director Charles Sallee all expressed doubts in OSI’s plans to collect an estimated $193 million that it failed to collect from premium health insurance taxes from 2010 through 2015. The comments came at an interim Legislative Finance Committee hearing. “I think it’s very notable there are three oversight agencies looking at this,” Forte told state lawmakers. “There are too many inconsistencies for me to feel comfortable in this process.”
The controversy began when Keller’s office revealed the uncollected revenue in a special audit earlier this year.