City announces FY23 audit submitted to state a day after self-imposed deadline
Nicholas Gilmore, The Santa Fe New Mexican
4 min read
May 16—City of Santa Fe officials and finance staff turned in an overdue audit for fiscal year 2023 to the State Auditor's Office on Thursday morning after missing the previous day's self-imposed deadline.
It was the latest in a series of late city audit reports — due each year to the State Auditor's Office on Dec. 15 — and the third the city has completed in the last 10 1/2 months. The 2021 audit, finalized in late June, was more than 18 months late, and the 2022 audit was submitted nearly a year past its deadline.
Finance Director Emily Oster said the completion of last year's audit now puts the city "on-cycle," or on schedule, for its audit for fiscal year 2024, which ends June 30.
Will it be submitted to the state by the December deadline?
"I can promise that I will do everything in my power to get it in on time," Oster said.
The contents of the 2023 audit have not yet been made public.
State Auditor Joseph Maestas said Thursday he attended the city's audit exit conference Tuesday "because of my special interest in this audit," and "congratulated the city for the progress made in developing three audits in a 10-month period."
"There is still additional work that needs to be done to address ... repeated findings, which my office will be monitoring," Maestas said.
In January, after the 2022 audit was made public, Oster predicted some of its findings regarding issues with financial controls also would appear in the 2023 report.
There were fewer findings in 2022 than in 2021 — a decrease to 17 from 22 — but significant findings were carried over from previous years, including persistent problems with the internal financial reporting system and the process of tracking federal grants.
There were some new findings in 2022, including problems with payroll controls.
During a Thursday afternoon meeting of the city Audit Committee, Chairman Randy Grissom, a former Santa Fe Community College president, lauded the finance staff for getting the audit over the finish line.
The city's struggle to complete audit reports on time has prompted criticism of Mayor Alan Webber's administration and has spurred frustration among some city councilors.
But officials have said the problem spans more than 20 years, and the Finance Department under Oster, who stepped on board in November 2022, has worked to get the city on track.
"From a personal standpoint, I'm really getting tired of 'gotcha politics' and 'gotcha journalism,' " Grissom said.
He added he "wasn't happy" with The New Mexican's report Thursday the audit had not been submitted to the state by May 15. "To me, the real story should have been that this team came in two years ago to address issues, and in the past 10 months they've completed three audits — that's unheard of," he said.
The city stated in a news release Thursday afternoon its most recent audit was submitted May 15, the target date set in December. However, Grissom and Oster confirmed during the Thursday meeting it was submitted a day later. The online platform for the State Auditor's Office also says it was submitted May 16.
The city said in its news release the completion of three late audits "on an accelerated timeline shows that internal process improvements, software upgrades, and additional finance personnel have made a difference in how the City meets its audit obligations."
In recent years, the city has spent millions of dollars hiring outside accounting firms to help complete late audits as it wrangled with a high rate of staff vacancies in the Finance Department.
The city signed a contract with Albuquerque-based financial firm CliftonLarsonAllen in 2022 for "audit preparation" for a little more than $3 million per year, with increases to the contract since it was first approved. The most recent amendment, approved by the City Council in March, increased the amount of the contract by $375,000 for "professional services," including "technology fees and occasional travel to Santa Fe for remote team members."
The budget approved for the Finance Department's accounting division for the coming fiscal year is just under $5 million.
City officials wrote in a March memo completing the recent audits "would not be possible" without the firm — which had dropped the city as an audit client earlier in 2022 amid what then-State Auditor Brian Colón called a "broken financial situation."
Oster said in an interview last year her long-term goals included building out the Finance Department and weaning the city off contracts with outside firms, but she acknowledged Thursday the city is planning to renew the contract with CliftonLarsenAllen into 2025.
"We're in the process of recruiting and filling permanent positions, and as we do that we are shifting work from CliftonLarsonAllen to those staff positions," Oster said. "We are transitioning, but as we do that, we anticipate that we will need services from them in 2025."
Vacancy rates for the Finance Department have fluctuated in recent years. Out of 56 full-time positions, her department had 14 vacancies as of March, a vacancy rate of 26.8%, Oster said.
When Oster started in the director's job, the department had 15 vacancies, and her highest worker shortage came in July 2023, with 19 vacancies.
