New Mexico government accounting principles

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The New Mexico State Auditor is required by New Mexico law to conduct annual financial audits of all government agencies. The State Auditor’s Office administers a competitive process whereby audit firms may submit applications and proposals to perform financial audits of certain agencies. Hector Balderas was elected New Mexico State Auditor in November 2006. The Office of the New Mexico State Auditor is a constitutionally established office, allowing the State Auditor to serve two consecutive four year terms. Additionally, the Audit Act, §§ 12-6-1 to 12-6-14, NMSA 1978, provides the laws in which the State Auditor operates. Audit reports are not currently published online.[1]

The State Auditor has two statutory purposes:[2]

  • Ensure that the financial affairs of every agency shall be thoroughly examined and audited each year by the state auditor, personnel of the State Auditor’s Office designated by the State Auditor or independent auditors approved by the state auditor and
  • Cause the financial affairs and transactions of an agency to be audited in whole or in part. Section 12-6-3, NMSA 1978. These two statutory purposes grant the State Auditor the authority to conduct both financial and special audits.

In a report published in May 2012, The Institute for Truth in Accounting (IFTA) rated New Mexico “Tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 23 states timely, 24 states tardy, and 3 states excessively tardy. IFTA does not consider the state's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[3] New Mexico's CAFRs are prepared and published online by the New Mexico Department of Finance and Administration, Financial Control Division.[4]

New Mexico Department of Finance and Administration, Financial Control Division is under the State Controller and is responsible for:[5]

  • Determining the legality of and authority for proposed expenditures
  • Centrally processing and recording transactions
  • Assuring that sufficient cash and budget are available prior to the commitment of public funds
  • Maintaining central filing system for documents supporting financial transactions
  • Issuing financial reports to state agencies
  • Compiling and issuing financial reports including the "State Annual Financial Report" to the Legislature and other entities
  • Issuing state employee biweekly payroll

Anthony Armijo is State Controller and Director of New Mexico Financial Control Division, Department of Finance and Administration.[6]

Accounting transparency checklist

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Comprehensive Y
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Balanced budget Y
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Timeliness N
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Usability P
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The good

  • The website has Comprehensive Annual Financial Reports (CAFR) dating back to 2002.[7]
  • An independent auditor’s report is published on page 2 of the document.[8]
  • It provides supplements to the budget workup, starting on page 128.
  • The budget is posted using organized and consistent methods of financial reporting.
  • New Mexico law requires a balanced budget and a deficit is forbidden.[9]
  • It includes all costs incurred by the government, including long-term liabilities, starting on page 224 of the document.[8]
  • The CAFR compares estimated and actual budgetary numbers, such as on page 128 of the document.[8]

The bad

  • The New Mexico office was tardy in submitting the budget.
  • The CAFR is posted in a PDF format, so it’s not searchable online.

External links

References