More than two years after first bringing his allegations of fraud to SFR, former New Mexico Department employee Bob Ortiz is finally planning to file a lawsuit next week.---

Earlier this month, Ortiz was fired after six months of paid administrative leave for "inappropriate and unprofessional conduct, disingenuous or irresponsible communication with the media, and creating a hostile work environment." DOH views Ortiz' public statements over the past two years as a violation of workplace policy that prevents employees from officially speaking for the Department without its consent.

Ortiz and his attorney Diane Garrity, however, say he was retaliated against for expressing concerns to the media as a private citizen, a right protected under the Whistleblower Protection Act.

"These are the type of people that should be encouraged to come forward," Garrity tells SFR.

In November 2008, DOH hired Ortiz as a deputy director in its Administrative Services Division. Ortiz brought  27 years of experience handling large financial contracts at Los Alamos National Laboratory. He says he was hired in part to help correct DOH's accounting problems.

The following month, Ortiz says his team found various discrepancies in the Women, Infants and Children program, which provides food and nutritional services to low-income women and children, dating back to 2006. One of these included a $1.7 million expenditure from the fiscal year 2008 that Ortiz maintains was wrongly listed in the FY 2009 books.

After his team triple-checked the $1.7 million, Ortiz says, he moved the expenditure to FY08, back where he says it belonged.

"We were recording costs in [the] wrong year and drew the money in the wrong year," Ortiz tells SFR. "I was obligated to put them in the right place."

In April 2009, Ortiz met with the US Department of Agriculture's Food and Nutrition Service in Dallas to request money while the DOH was fixing the problems that caused the $1.7 million error. FNS denied the DOH the extra funding.

"Well, that's about no help at all," then-Administrative Services Deputy Director Mike Mulligan wrote in a May 1, 2009 email to Ortiz.

The following June, Ortiz alleges Mulligan and former Deputy Secretary Duffy Rodriguez ordered him to "reverse" the entry back to FY09 to avoid the overrun and effectively cover up the cost.

Ortiz says he made the transaction, writing "requested by management" on it. Eventually, he says he felt guilty and reported the transaction to his superiors.

"I have not had a good night sleep since that draw was completed," Ortiz wrote to in a formal complaint then-Cabinet Secretary Alfredo Vigil on August 10, 2009.

Emails between Mulligan and Ortiz from that same month detail their disagreements over the nature of the $1.7 million expenditure.

"If not by reversing [the journal entry], how do you propose to remedy the fact that the FFY08 WIC Food Grant is over-expended as a result of that JE by $1.4 million?" Mulligan wrote to Ortiz on Aug. 11, 2009.

Ortiz responded: "It is the right thing to do. You post expenditures to correct program [sic] and in this case grant year they were for. It is the law!"

Mulligan and DOH didn't comment for this week's story, but in the past both have denied the allegations. Both have also accused Ortiz of nearly creating a costly overrun. Ortiz doesn't dispute that part, but he says that criticism leaves out the full picture: that the $1.7 million expenditure belonged in FY08 because it was spent in FY08.

To back up his claim, Ortiz cites state law that defines fraud as "intentional misappropriation or taking of anything of value that belongs to another by means of fraudulent conduct, practices or representations." He also cites federal law that states: "any cost allocable to a particular Federal award ... may not be charged to other Federal awards to overcome fund deficiencies."

Last July, an audit by the US Department of Agriculture's Food and Nutrition Service found a $500,000 error in the WIC program during FY 2008. It attributed the error to sloppy bookkeeping during the state's transition to a new accounting system and added that no instances of fraud were found.

However, FNS spokeswoman Georgina Castillo confirmed to SFR last September that the federal audit wasn't intended to investigate fraud and that the $500,000 error came from a "judgmental sample" consisting of 45 WIC transactions over a three-year period. Ortiz criticizes the audit for leaving out the full picture.

Last September, then-Deputy Secretary Walle Vette told SFR that DOH wouldn't have to pay back the full $500,000 to the feds because both the state and federal accounts "were reconciled." At the time, Vette said DOH would have to pay back "close to $100,000."

Vette was wrong, according to an email to Ortiz dated May 15 of this year from Greg Henderson, an assistant special agent with the federal Office of the Inspector General.

"At this time FNS is preparing to ask NMDOH to repay approx. $500,000 as a result of the audit findings," Henderson writes. (read the full email below).

After more than two years of what Ortiz describes as retaliation from DOH for expressing his concerns, he's preparing to file a lawsuit asking for damages. But as for trying to punish the department for fraud, Ortiz says "I've done everything I can."

"The Attorney General's Office can read," he says.

Read emails between Mulligan, Ortiz and more below: