City unveils plan to fix its financial practices
Finance Committee tasked with larger oversight role
Mayor Alan Webber and his top ally on the City Council, Roman “Tiger” Abeyta, on Wednesday announced a 10-point plan to improve the city of Santa Fe’s financial management and oversight, with an eye toward once and for all fixing procedural soft spots that led an external reviewer last year to declare the city was highly exposed to possible fraud, waste and abuse.
Some of the measures outlined in the corrective action plan, unveiled at a news conference, had been floated previously as Webber administration priorities, though the mayor on Wednesday presented the full suite of initiatives as a collective, comprehensive path forward — one he said would ultimately demTAOS
onstrate the city can effectively manage hundreds of millions of public dollars.
The plan comes as City Hall seeks to shore up public confidence in the wake of fiscal controversies in recent years and only a few days before the expected release of the city’s annual external audit for the last fiscal year, which Webber has said he anticipates will reveal “very difficult” findings. That would come atop the scathing review of city financial processes released in September by an Albuquerque firm, McHard Accounting Consulting, which identified 62 distinct issues that raised the city’s risk for fraud and waste.
The action plan envisions at least 10 audits in the next fiscal year; a continued emphasis on an ongoing multimilliondollar internal modernization project; a reorganized Finance Department, with two new top positions; new internal controls; more frequent and “more transparent” public reports; an overhauled accounts receivable process; better tracking of capital assets; and rebuilt information technology systems, among a few other changes.
“We want to start to get ahead of these longstanding problems,” Webber said. “It’s not the only 10 points I think we’re going to do. But I think the intent is to demonstrate our commitment to change, our commitment to taking seriously these challenging audits and to use them as a map.”
Following that map, he added, should bring the city to a more sure-footed internal financial environment in which audits show “regular, consistent, steady improvement.”
Although some measures outlined in the corrective action plan clearly are aimed at addressing the McHard findings — the ongoing internal modernization project, in particular, has been pinpointed by city officials
as mitigating many of the issues — Webber said the plan is not simply a response to a tough report.
“If I were elected mayor and there was no McHard report, we would still have to do this work,” he said. “We are really behind.”
“The financial condition of the city is what creates the quality of life,” said Abeyta, who chairs the council’s Finance Committee, which is empowered in the corrective action plan to take on a larger oversight role.
The multiyear modernization project — also called the ERP, for Enterprise Resource Planning — became the focus of a blistering controversy early in Webber’s term after The New Mexican revealed the city manager at the time had quietly authorized nearly $400,000 worth of 10 percent and 15 percent raises for select employees working on the project without the City Council’s knowledge.
After requesting the city manager’s resignation, Webber put those raises on hold. At the time, he said the pay proposals might be presented to councilors. On Wednesday, he said that is not likely to be the case.
“I don’t expect to bring back a financial measure,” Webber said, adding that some employees working on the project were giving up “personal time” to contribute to the effort. “We want to look for ways that solve the problem without going over the same ground — not directly with financial compensation.”
The Finance Department reorganization, according to the action plan, entails the creation of two new roles: a controller to oversee the annual city audit, day-to-day reporting and regulatory compliance, and an assurance officer, who will work on compliance and “perform ongoing internal evaluation” of financial processes.
Also, the announcement of the city’s new full-time finance director could come soon, officials said.
The menu of audits planned for the fiscal year that begins next month includes a risk assessment and as many as six internal audits, the work of which the city plans to outsource for the first time. Also planned are three “forensic-style” audits: a compliance audit that will examine the city’s adherence to internal controls; a performance audit to evaluate the efficiency of specific programs; and a fullon forensic audit, which will dig into everything from travel reimbursements to “unexplained pay rate increases.”
The Finance Committee will begin to receive quarterly financial reports, Abeyta said. Webber said the goal is to eventually present reports on a monthly basis.
The five-member committee — with two new councilors who were elected this year and Councilors Mike Harris and Signe Lindell, both of whom have a keen eye for detail — is set up well for the role, Abeyta said.
“We have the right group,” he said.
Upon the release of the McHard report, then-City Manager Brian Snyder placed two top financial employees on paid administrative leave: Assistant Finance Director Teresita Garcia and Purchasing Director Robert Rodarte. Five months later, in February, Garcia was permitted to return to work; city officials have declined to say why she was placed on leave and what determination, if any, was made about her conduct.
Rodarte, however, remains on paid leave — almost eight months after Snyder first took action. City officials also have been silent about the rationale for his leave.
Rodarte’s employment status had not changed as of Wednesday afternoon, a city spokesman said.
Pushed for an update and his feeling about the lengthy paid leave, Webber said, “I really don’t have a comment on that.”