In a holdover from public records requested during the reporting of this week's cover story, SFR finally got its hands on the final bit of our Dec. 11 public records request to the New Mexico Department of Health: an external audit of the department by Meyners + Company—which according to the new state contracts database made $210,223 for this, in what amounted to its fourth most lucrative government contract of 2009. (To see the audit contract info, visit this page and search under "Meyners" or the DOH contract number, 84980.)

Some things here are suspect. Meyners, for one: It's hard not to connect the dots between the firm's $2.3 million-plus in government contracts last year (and plenty more since Gov. Bill Richardson took office) and Meyners CEO Bruce Malott's campaign donation generosity. Then  (according to his 16-page résumé) there's Malott's former position as the Richardson campaign's treasurer. Recently, Malott has been plagued by pay-to-play allegations, and this month he was named as a defendant in a pay-to-play class action suit.



Perhaps it should be no surprise, then, that what jumps about the Meyners audit isn't so much what's there, but what's missing. And in this case, it's $1.7 million.

Although the audit details some past problems with the WIC program—"lack of effective controls and procedures to ensure the grant [money is] only drawn on for actual expenditures" was one—it says nothing of the $1.7 million in WIC (the federal Women, Infants and Children nutrition program) funds that whistle-blower Bob Ortiz alleged was improperly moved.

How could an unbiased—if it were that—team of auditors fail to interview the one man who had been vocal about the very types of concerns such audits are meant to investigate? What's more, it's not as if Ortiz's concerns were new: According to Ortiz and others, meetings on WIC's most recent financial problems  began in February 2009. Any audit of that fiscal year should have at least addressed the $1.7 million issue—not to mention the regular, $1 to $2 million offset that Ortiz says was the product of fiscal inattention to WIC since 2006.

Instead, the Meyners audit—while purporting to examine the WIC program—found only one problem: $231,000 in over-drawn federal grant money (which the DOH eventually paid back to the USDA). Of course, $231,000 is only slightly more than the cost of the audit itself, and small potatoes compared to the $1.7 million Ortiz says he was ordered to fudge into FY09 when, he says, it was actually spent in FY08.

"The Department should have effective controls and procedures in place to ensure the grant is only drawn for actual expenditures," Meyners recommends.

While the audit seems to suggest there was no $1.7 million problem, other documents tell a different story. In addition to extensive financial records obtained by SFR, the "$1.7 million issue" crops up repeatedly in minutes from formal meetings of DOH higher-ups. Case in point:The minutes from an Aug. 19 meeting with most of the same attendees—with the notable exception of Bob Ortiz—read thus:

1.7 Million Issue: Duffy announced that David Gonzales of OIA has been assigned to investigate and resolve this issue. As such, David will be contacting participants for information. The team is encouraged to provide David with requested information as quickly as possible as it is hoped this issue may be resolved within a fortnight.

The problem? OIA, the DOH's Office of Internal Audit, did address the $1.7 million issue. So how could an external audit ignore it? Ortiz says the Meyners auditors didn't even talk to him about it.

Meanwhile, back at the DOH, we hear things are a little funny. On Jan. 14, the day after SFR's cover story on the DOH, "Carlos" posted the following comment: