NMFA IMPLEMENTING AUDIT RECOMMENDATIONS
FOR IMMEDIATE RELEASE
December 14, 2012
For More Information Contact:
John Gasparich, Interim CEO
New Mexico Finance Authority
SANTA FE – NMFA Board Chair, Nann Winter announced that the findings and recommendations contained in three recently published reports will immediately provide a blueprint for procedural and oversight restructuring at NMFA. The latest report, a Special Audit conducted by the Office of the State Auditor and the nationally recognized accounting firm of PricewaterhouseCoopers was presented to the NMFA Board today by State Auditor Hector Balderas.
“We have already taken a number of actions to strengthen fiscal oversight and assure compliance with laws and rules governing our audits and financial activity,” Winter said. The latest report, a comprehensive forensic review of NMFA books found no evidence of theft or embezzlement of NMFA funds, but detailed numerous instances where proper management practices, statutes and audit rules were not followed.
Winter expressed relief that the Special Audit did not cite any instances where NMFA funds and especially those funds dedicated to repayment of investors were compromised. She did note that: “Lax supervision and a casual attitude toward the audit statutes and rules are a thing of the past.”
Chief Executive Officer John Gasparich listed the following examples of recent NMFA improvements:
The audit committee was restructured to include the Secretary of Finance and Administration and is chaired by the State Controller.
An experienced CPA who has been both an auditor and a CFO is now NMFA’s Chief Financial Officer.
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An Internal Auditor position has been established and is expected to be filled early next year.
NMFA accounting staff, management and Board are now actively involved in NMFA’s financial audit.
New loan servicing software will improve transparency and provide additional safeguards.
Additional training for staff, management and Board members will also be a high priority in the new year to ensure that lessons learned will result in lasting change. Gasparich explained that additional goals will require more time to complete. “We need to do a thorough analysis of our staffing levels,” Gasparich said.
“Rating agencies and the investor community have been very patient waiting for the various investigations to run their course. I believe that they will react positively to this well reasoned report confirming that NMFA’s core operations were not compromised” said Michael Zavelle, Chief Financial Strategist at NMFA.
Although, the investigations are finished, the annual financial audits have yet to be completed. The NMFA 2011 audit is expected to be finished in January 2013 with the 2012 audit complete by the end of March 2013. “After the 2012 audit is done we will again be able to issue bonds and do our part to build New Mexico’s infrastructure and improve our economy,” Winter said.