Audit reveals corrections are still needed

By Jim Maniaci
Cibola County Bureau

MILAN — The village government hopes to catch up soon on its belated audits, with trustees receiving their final copy at Monday morning's special meeting.

The fiscal year 2003-2004 audit contained more than a dozen pages of findings, which is audit language for things which need to be corrected. The initial presentation letter from Gary E. Gaylord of Albuquerque was signed Dec. 30, 2005.

Previously Mayor Tom Ortega had noted several times that several municipalities in the state also got caught short when the original auditor couldn't finish the financial reviews. The mayor is now going into his third consecutive term of four years.

In the 2003-2004 book of 126 pages, Gaylord noted four of 11 findings were repeated from 2002-2003, including not meeting state-required deadlines, lacking a current list of fixed assets, not properly reporting debt and having deficits in several funds.

At its Aug. 17 meeting, Ortega wants trustees to award a contract for at least the 2004-2005 audit and possibly the 2005-2006 audits, which face the same fall and winter deadlines. Audits are supposed to be released in January, something both Milan and Grants have not achieved in recent years.

The state's goal is for villages, towns and cities to have their audits in time to help plan their next budget.

Current year's findings cover internal controls and other compliance issues. Internal findings include incomplete accounting records, journal entry approvals, the concept of matching funds not being followed, court deposits and credit card usage. Compliance findings include travel advances, sale of salvage equipment, employee use of village vehicles, expenses exceeding their budget and the interim budget not being submitted on time.

Here are the village's responses to each new finding:

• Incomplete accounting records (not recording the auditor's adjustments or cash activities in several escrow accounts) "Recently we had our software vendor on site to present a two-day training to all of our accounting staff on these procedures."
  
  
• Journal entry approvals (all being done by one person) "Procedures will be implemented ensuring that all journal entries must be reviewed and approved by the manager."
  
  
• Matching concept not being followed (buying land and water rights from the Joint Utility Fund and paying the debt from the General Fund when a special gross receipts tax fund should be used for the payment) "This finding has been corrected."
  
  
• Court deposits (not being made within one business day) "All court deposits are being made within the 24-hour time frame."
  
  
• Credit card usage (15 Visa cards for the mayor and board being used by employees) "Recommendations stated above have been implemented." (Adopt written policy on credit card use with stated limits, canceling any cash advance privilege, reducing the $10,000 limit significantly and signing in and out each time used.)
  
  
• Travel advances (100 percent allowed) "These recommendations have been implemented." (Staff learning the Per Diem and Mileage Act and limiting advances to 80 percent of the expected cost.)
  
  
• Salvage equipment sale (not notifying the State Auditor before conducting one) "The village has not had a surplus sale since (the) year ending June 30, 2004. Any future sales will comply with your recommendations."
  
  
• Employee use of village vehicles (not including the commute from home to work on employees W-2 forms) "These procedures are in the process of being implemented."
  
  
• Expenditures in excess of budget authority ($145,260 for the General Fund, $32,331 for the Debt Service Fund and $9,193 for the Street Improvement Fund, or a total of $186,784) "Recommendations will be followed, as well as training from the DFA (Department of Finance-Administration) office and other resources will be requested." (Red ink spending is usually covered by later budget transfers.)
  
  
• Missing the June 1 deadline to submit the interim budget "The new software appears to be working well and newly hired staff will be informed about budget deadlines."

To contact reporter Jim Maniaci in Grants, telephone 285-6184 or (505) 870-7775 (cellular).