Regarding NMFA 2011 Financial Statements

NEW MEXICO FINANCE AUTHORITY ISSUES STATEMENT REGARDING REPORTED FINANCIAL RESULTS FOR FISCAL YEAR ENDED JUNE 30, 2011
SANTA FE, July 12, 2012 -The New Mexico Finance Authority (“NMFA”) announced today that it discovered this week that an audit of its financial results for the fiscal year ended June 30, 2011 was not completed properly. As a result, the financial results have been presented erroneously as “audited” since earlier this year. NMFA has withdrawn the 2011 financial statements.
NMFA senior management was alerted to the issue by the State Auditor’s Office. The NMFA management and Board promptly investigated and determined that NMFA’s former Controller, who left his position in early June 2012 before the issue was discovered, had misrepresented to senior management the status of the audit and provided financial statements for use with third parties that he falsely represented as “audited” by NMFA’s outside auditing firm Clifton Gunderson LLP.
NMFA is taking all necessary actions to rectify this issue as quickly as possible. As soon as it became aware that the financial statements had been misrepresented, NMFA immediately took steps to retain Steptoe & Johnson LLP as independent legal counsel to conduct a thorough investigation to determine how the misrepresentation occurred and to recommend steps for strengthening financial reporting procedures. The international accounting firm, KPMG, is being retained to complete the audit of NMFA’s financial results for the period and to conduct a full forensic investigation on the results to ensure their integrity. NMFA will reissue fully audited financial results for the fiscal year ended June 30, 2011 after KPMG has completed its work.
Richard E. May, NMFA Chief Executive Officer, said, “This matter is deeply concerning but it will have no effect on NMFA’s ability to meet its financial obligations. NMFA remains financially strong and has ample resources to meet all scheduled bond payments and other expenses.”
He added, “In addition to communicating with ratings agencies, investors and public officials, we have, in accordance with New Mexico law, notified the appropriate law enforcement authorities. We are committed to the absolute integrity of our operations,
207 Shelby Street Santa Fe, NM 87201 505-984-1454
1-877-ASK-NMFA * Main Fax: 505-9929635 Accounting Fax: 505-992-9640 * www.nmfa.net
we are cooperating fully with all reviews, and our Board intends to communicate the findings of the independent investigation into this matter as soon as possible.”
Under the circumstances, NMFA has delayed the planned offering of Series 2012B Senior Lien Public Project Revolving Fund Revenue Bonds until after the audit of its financial results has been completed. The offering had been scheduled to be priced on July 26, 2012.
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Media Contact
Jamie Tully/Brooke Gordon Sard Verbinnen & Co 212-687-8080
Investor Contact
Richard May, CEO
Michael Zavelle, Investor Relations
New Mexico Finance Authority
505-9841454

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