Earlier this year, Martin and Sandra Urban were worried about losing the business they’d spent more than 20 years building. Contracts were coming in and they had plenty of good workers, many of whom they hired from the nearby Pueblos.
After wildfires and floods in the Sangre de Cristos, their excavating company won the contract to do cleanup and recovery work at the Pojoaque Valley Irrigation District's reservoir. Completed in the spring of 2015, the work had been inspected and approved—and money from the Federal Emergency Management Agency had already passed into the state's hands.
But when the state's Department of Homeland Security and Emergency Management (DHSEM) continued holding onto the cash, it put the Urbans in a bad spot. Owed more than $2.3 million, the Urbans couldn't pay all their bills, and they were at risk of losing the bond rating that allows them to bid on government contracts.
After SFR and KUNM-FM reported on the problems in early September, US Sen. Martin Heinrich reached out to the state and the Urbans. Shortly afterwards, the state's Department of Finance Authority issued two checks to the irrigation district: one for $380,845.48 and the other for $1,469,339.57. After that, the Urbans got their money.
But months later, it's still unclear what other problems exist behind the scenes at the state agency.
Due 11 months ago, the department's state-required audit for FY 2015 finally arrived at New Mexico State Auditor Tim Keller's office late Monday afternoon.
In February 2015, the Office of the State Auditor had noted that the department had $40 million in open budgets related to disaster declarations in New Mexico. According to that letter, his office couldn't identify "any valid reason" for maintaining those high balances.
Speaking in October, before his office received the draft audit this week, Keller said that despite the red flag, his office was trying to give them the benefit of the doubt.
"By and large, audits tend to reflect management of the department—and this is the only cabinet agency that has a late audit," said Keller.
When asked if there might be others like Urban who are awaiting payments, Keller could only say that his office is concerned that it's a statewide issue. "We've had dozens of complaints through the fraud hotline," he said. "If [DHSEM] can't get their act together shortly, they're probably going to face legal action from folks who can easily come together with a class action or qui tam suit."
In September, Keller's office also sent a letter to Gov. Susana Martinez, asking for her help with the troubled agency. One suggestion he offered was having the state's Department of Finance and Administration oversee disaster grants instead, and take over DHSEM's critical financial functions.
DHSEM Cabinet Secretary M Jay Mitchell would not grant interviews with SFR. The department's public information officer, Karen Takai, has not answered our inquiries as to whether the agency has begun its 2016 audit, which is due next month.
In September, Mitchell's agency did issue a $256,151.99 contract to RPC CPAs & Consultants, a large accounting firm. That's on top of the contracts the agency already has for other accounting work.
Meanwhile, Martinez' office says that the Department of Finance doesn't need to take control of the agency's finances. According to an emailed statement from Press Secretary Michael Lonergan, in Mitchell's two years as agency head, he has "righted the ship and made significant and undeniable progress when it comes to their finances."
Lonergan points to a June 2016 letter from FEMA that recognizes the agency's progress following federal monitoring visits that exposed myriad problems at the state.
But that letter is far from complimentary, noting that the department still lacks a standard file management convention, has some questionably ineligible reimbursements, doesn't properly document the monitoring of subgrants and fails to include financial documentation in its grant files.
The agency also appears to have serious staffing issues.
In early November, 22 of the agency's 66 positions were vacant. (In October, those numbers were 25 vacancies out of a total of 69 positions.) When asked why one-third of the staff positions remain unfilled, Takai responded that the vacancy rate has been "greatly reduced" over the past year.
"One area that continues to remain strong in the department is our readiness, capability and capacity to respond to emergencies and disasters in New Mexico," she wrote. "Our preparedness outreach programs to our communities, our statewide training for responders, our interagency net working for keeping New Mexico safer will continue to stay strong. It is due to the commitment of the mission and the work ethic of our employees that made this happen."