State warns mayor over late audit
Johnson says ‘serious consequences’ could impact Santa Fe financially
State Auditor Wayne Johnson has expressed concern about the city of Santa Fe’s thrice-delayed annual external audit, now five months overdue. He warned Mayor Alan Webber, in a letter dated Tuesday, about the “serious consequences” the city could face if extension requests persist.
“I understand the staff turnover and change in administration occurring in the city of Santa Fe have contributed to the delays in finalizing the 2017 audit,” Johnson wrote in the letter. “However, I have become increasingly concerned [with] each new request for an extension.”
“Late audits have serious consequences for your organization including possible bond-rating downgrades and an inability to qualify for state capital outlay funding,” Johnson added.
The city of Santa Fe is one of only a few local government agencies in the state with reports from the last fiscal year that are considered “at risk” by the State Auditor’s Office. Also on the list are the cities of Grants and Tucumcari, counties of Cibola and Torrance and the small town of Vaughn in Guadalupe County.
Santa Fe’s comprehensive annual financial report for the fiscal year that ended in June 2017 was expected to be delivered to the State Auditor’s Office in December.
The Albuquerque accounting firm reviewing the city’s report has requested three extensions. The most recent pushed the deadline to May 15.
Johnson, a Republican appointed by Gov. Susana Martinez late last year, wrote he would “strongly encourage” that the city use an independent public accountant “or any other resources available to help you finalize the remaining pieces needed to complete this audit by the current … deadline.”
In late March, after the second extension request, then-city Finance Director Adam Johnson attributed the delays to “significant challenges” on the city’s side, including “personnel issues” and city finance staff missing “agreed-upon deadlines.”
“Ultimately, I accept the responsibility for the failing and will ensure the issue is not repeated,” Adam Johnson wrote in a city memo. He resigned shortly thereafter to take a position at St. John’s College.
City spokesman Matt Ross said late Monday the city finance staff had “fairly recently” submitted its report to the Albuquerque firm, CliftonLarsonAllen, for final review.
“We’ve heard back from them on a couple of things already,” Ross said. “We anticipate their final responses, questions, follow-up that might need to be done, in coming days.”
After that, he said, the audit would move forward to the State Auditor’s Office.