Late audit? Welcome to business as usual

The city’s continuing inability to complete a financial audit on time is unacceptable. And the excuses need to end. Whether it’s because of the pandemic or severe staffing shortages, the reasons do not matter for people who expect more from city government. Santa Fe needs to conduct its financial business on time. Other cities in the state are completing audits as required by law, during the same pandemic, while also spending a glut of federal dollars and likely with staffing shortages.

They get the job done. Santa Fe does not. By contrast, the city now is late on its required 2021 fiscal year audit, despite repeated assurances from city Finance Director Mary McCoy all would be well.

That did not happen. What’s more, city councilors were informed about the missed Dec. 15 audit deadline via email just before 5 p.m. A news release went out after 5 p.m. to let citizens know.

A failure in execution in routine work was compounded by a failure in communication.

When this newspaper endorsed Mayor Alan Webber for a second term, we were straightforward: “There are clear successes, but let’s speak plainly: Webber’s first term was pockmarked with mistakes.

“Too often, even before the pandemic, he became bogged down in handling the regular business of the city. He needed to listen more, particularly to those who disagree with him. The city’s financial audit was late two years running. Not acceptable.” It remains unacceptable.

City leaders need to focus on what is happening — or not happening — in the Finance Department, centering on these questions:

Why was the office so short-staffed? Is no one applying for jobs? How are job searches being conducted? What affirmative steps are being taken to find help — contacting retirees, calling universities for leads on financial graduates, headhunting experts at the state or county? Once candidates are identified, how long does it take from posting a job to bringing an employee on board?

The city had a successful rapid hire event recently and is bringing in additional staff for the Finance Department. That’s encouraging news, but hiring does no good if people don’t stay on the job.

Focus on retention. That starts by looking at turnover in recent months. What happens once employees start working? Do they stay? If not, why not?

With a team assembled, then focus on taking care of outstanding tasks. That actually appears to be happening, according to a brief put together by McCoy.

An audit team is being formed to handle both fiscal year 2021 and fiscal year 2022 audits, including a contracted audit coordinator who will work with the Finance Department and staff from other city departments to complete the task. An independent review is planned to assess the systems, processes and structures of the city’s close and annual audit preparation process. That’s key to making improvements.

The community can help. In the late 1990s, Santa Fe Public Schools failed financially. Its finances were taken over by the state temporarily after the district discovered a $3.5 million shortfall. Brand-new Superintendent Veronica García — who inherited the mess — formed a financial oversight task force, and community members stepped up to assist the business office.

The city’s problems aren’t overspending but an inability to complete required audits on time and to fix past mistakes. The much-heralded McHard report that detailed a city financial system in chaos four years ago did not outline overnight solutions; the problems identified are still being corrected. The accounting system has been modernized, policies have been updated and better internal controls are in place.

It’s a work in progress, but not enough progress is being made. The late fiscal year 2020 audit still contained 10 significant deficiencies and eight material weaknesses. Despite progress, the audit needs to be on time and the deficiencies corrected.

Fortunately, the situation at the city of Santa Fe has not — yet — caused its financial ratings to falter. Unlike the schools in the 1990s, the city has plenty of money. What Santa Fe lacks is a Financial Department able to deliver on-time reporting on how dollars are being spent.

Webber has said a budget details a city’s priorities. True enough. But an on-time audit offers confidence spending went according to plan and law.

There, Santa Fe falls short. Unacceptable.