Clean books | | Santa Fe Reporter

It’s not just a matter of public trust, but Santa Fe could jeopardize critical funding. So goes the warning about the still overdue city audit from Stephanie Telles, director of the state auditor’s office of government accountability.

She’s preoccupied with Santa Fe books.

As it stands, the City of Santa Fe’s 2021 fiscal year audit is six months behind schedule. And the city is still moving slowly. Following the departure of the professional auditing firm, CliftonLarsonAllen, in April, the Office of the State Auditor announced the same month its intention to intervene in the capital, in view of “worsening fiscal mismanagement”. .

The latest step came after several letters of concern sent to the city over the past two years, documenting the backlog of audits and troubling findings, including “insufficient internal controls over financial reporting.”

Mayor Alan Webber, now six months into his second term, initially campaigned on a promise to clean up the financial mess.

He still sees the current situation as an improvement since he took over the town hall.

“If you go back and review what the McHard report said about the state of our financial operations, over a period of time, which we inherited, we have made substantial progress,” Webber told SFR. The 2017 McHard Report offered a major indictment of the city’s financial management and argued that there was significant potential for fraud.

Webber points to the addition of fraud and abuse protection systems and technology to track financial data.

The attempt to modernize the city’s business operations began in 2018 by moving transactions to enterprise resource planning systems, which officials say streamlined financial functions.

But it seems efforts to bring the city up to speed in the 21st century are still ongoing.

“What we’ve seen is sort of the modernization of municipal government,” says City Manager John Blair. “And part of what [we] We are currently working on putting the elements in place within the finance department to ensure this stability for our finance team and our chief financial officer.

Although he wasn’t with the city at the time of his introduction to city employees, acting deputy chief financial officer Ricky Bejarano says not all city employees who are expected to use the ERP system are proficient with it. “What probably happened was that there just wasn’t enough intense training,” he says.

This lack of training, and later pandemic-induced chaos that resulted from attempts to reconcile funds in city bank accounts, led to the current situation.

“It’s a matter of public trust. When the city – or any government entity that receives and spends public funds – fails to prioritize a statutorily mandated requirement…citizens should be concerned,” writes Such in an email response to questions from SFR.

“An annual audit is essential to provide an objective and independent review of the city’s financial reports and to help account for the use of public funds,” writes Telles.

Bejarano, who has decades of experience in government accounting, says the city’s predicament with overdue audits is concerning, but he’s seen worse in his career.

“What happened was that we got out of a bind with the ledgers and we had to go back and find those transactions and make sure they were properly accounted for,” says Bejarano, although “There is currently no indication that any money has been embezzled.”

Despite that assurance, Telles says there’s still fertile ground in Santa Fe for waste, fraud and abuse.

“Until the City completes the work that needs to be done, and in a timely manner, they cannot be audited. You can’t protect what’s there if you don’t know what you’re doing or don’t have,” she wrote.

Blair and Bejarano point to new hires the city is making in the finance department, including a comptroller and treasury officer to join the finance team and a citywide compliance officer to track deadlines. .

Blair also notes that the city is looking to relocate its employees to better meet the needs of the finance department.

“We also work with all city government employees who interact with the finance department so that they are aware of their responsibilities,” Blair says. “We’re trying to really develop the department’s ability to operate successfully both as its own entity, but also working with all the other organs of the city administration.”

Bejarano notes the need for more stability within the department to ensure the city submits audits on time in the future.

Over the past decade, the city has welcomed a revolving door of CFOs. Since Kathryn Raveling last resigned in September 2011 after retiring and being rehired less than a year later, the city has hired five administrators.

The most recent to hold the position, Mary McCoy, quit working for the city in April, just days after the auditor’s announcement.

Webber notes that McCoy, who started the job in 2018, lasted much longer in the role than his predecessor. He cites this continuity for some of the city’s successes in modernizing the finance department.

“The city was a very different administrative operation before the charter change that created the full-time mayor,” says Webber.

The town’s hunt for a new manager is on. Blair doesn’t have a target hire date, but he notes that the additional support from Deputy City Manager Layla Archuleta-Maestas in making the new hire has been invaluable.

“I call it the ‘gas pedal’ of this effort,” Blair said.

The way forward to restore confidence in the city’s stewardship of public funds is clear, Blair and Bejarano say.

“The only thing that’s going to give citizens or oversight agencies confidence is doing it,” Bejarano says. “These things take time, they didn’t develop overnight, and they’re not going to disappear overnight.”