The state hasn’t properly balanced its checkbook for more than six years, according to the New Mexico Department of Finance and Administration.
DFA Public Information Officer Tim Korte said the DFA warned lawmakers that New Mexico’s cash surplus in fiscal year 2014 could be $70 million to $460 million less than expected. He said it is unclear exactly how large the cash discrepancy is. Nonetheless, the state has allotted $70 million in the FY 2014 budget to accommodate the potential liability, although it could take as long as a year before the exact shortfall is established, Korte said.
According to a DFA document titled “Cash Reconciliation Briefing,” the problem began in 2006 with the implementation of a new computer accounting system called Statewide Human Resource Accounting and Managerial Reporting System, or SHARE. According to the document, SHARE had problems converting the previously separate accounting systems used by various agencies into one centralized system. Because of this, individual agencies have reported amounts that are higher than what is reflected in bank accounts managed by the treasurer’s office.
Korte said that because many agencies have recorded their transactions improperly, it is impossible to determine the exact amount of the discrepancy without further research.
Korte said the amount of the liability was based on the department’s most recent estimates, which are from the last fiscal year. Because the amount that DFA confirmed is not final, it is unclear if funding for academic programs in UNM or in the UNM Hospital will be affected.
“At this point, the only financial impact we have confirmed is the $70 million liability, which would come from general funds,” he said. “I don’t know if this will actually directly affect the Higher Education Department or any of the universities specifically.”
Korte said that despite how long it has been a problem, the budget discrepancy did not come to light until October 2011.
“The problem wasn’t identified until state controller Ricky Bejarano was appointed by Gov. Martinez,” Korte said. “The people who were appointed to these types of positions by Gov. Martinez were not aware of the situation until they came into office. …
As to why it wasn’t detected or why it wasn’t publicized before Gov. Martinez, that’s a question for Gov. Richardson or (former state controller) Anthony Armijo,” said Korte.
The Daily Lobo could not find Armijo’s contact information, and Richardson was not immediately available for comment as of press time.
According to a DFA document titled “Book to Bank Reconciliation and Remediation Efforts,” the DFA is taking comprehensive measures to ensure proper cash reconciliation in the future. According to the document, state agencies will be required “to participate in interactive training sessions.” The document also stated that “customizations that were made to SHARE to accommodate outdated business processes” will be eliminated.
According to the “Cash Reconciliation Briefing,” consultants who are experienced with SHARE software have already determined what changes officials need to make. According to the document, these officials have started to implement changes across various state agencies, and the DFA expects the changes to be fully implemented by July.