The office of the state auditor has once again singled out an entity that’s already under scrutiny for how it managed millions of federal dollars meant to boost rural broadband access. There will be a second “special audit,” this time for how it handled funds for New Mexico’s aging population.
The Non-Metro Area Agency on Aging (NMAAA) accused the North Central New Mexico Economic Development District (NCNMEDD), its fiscal manager, of overbilling providers more than $430,000, State Auditor Wayne Johnson tells SFR.

SFR reported in December that the state auditor was looking into the economic development district because it couldn’t entirely account for $10.5 million in federal stimulus money for the development of broadband infrastructure. Tim Armer, executive director of the entity that managed both the aging agency and REDI Net finances, said then that he was sure the audit of broadband money would affirm the entity was in the right—but he would not comment on the second special audit designated for the management of senior services money.

The allegations from the Agency on Aging led to the second special audit, which Johnson confirmed Jan. 17. Special audits are normally triggered by allegations or evidence of wrongdoing or mismanagement, allowing investigators to delve into financial transactions and bank records in greater detail. They differ from the scores of “routine audits” the office conducts each year as a matter of course, Acting Deputy State Auditor Kevin Souriseau told SFR in December.
The state department that monitors NMAAA sent a letter to the agency on Dec. 20 saying it would end the contract with the agency, but quickly reversed course and announced it would continue the contract with increased oversight.
Gino Rinaldi, director of the Division of Senior Services for Santa Fe, says the conflict is disrupting plans for the city’s growing service demands for older adults—and he’s not getting answers from higher-ups.
“I said, ‘What the hell is going on? Who am I under contract with?’ There needs to be better communication and it needs to stop happening via press releases and legal dealings,” he says.
Although 70 percent of senior service revenue comes from local dollars, the smaller percentage of money from the state and feds still helps meet needs. Rinaldi says the conflict could negatively impact nonprofit providers and other local governments that are cash-strapped.
“Northern and eastern counties don’t get a lot of revenues and don’t have a lot of people, and therefore they don’t have the tax base,” he says.
NMAAA contracts a network of providers in New Mexico that offer adult day care, home-delivered meals, respite care and transportation.The New Mexico Aging and Long-Term Services Department (ALTSD) monitors the agency and reimburses spending every month based on its reports. But, according to the department’s acting secretary, the agency reported it spent more than it actually did in 2017 and the department reimbursed it for money it didn’t spend.
In a letter to Auditor Johnson, acting Secretary KyKy Knowles wrote that NMAAA admitted it reported spending $2,821,328 on program costs in 2017, when it actually spent $2,484,493—a discrepancy of more than $300,000. The department also found inflated reimbursement requests topping $100,000 for a federal program supporting grandparents raising grandchildren, ALTSD spokesman Paul Rhien writes SFR in an email.
The department evaluated four other programs, finding the same pattern of inflated monthly reimbursement requests, according to Knowles’ letter to the auditor asking for assistance in investigating the whereabouts of the public funds. ALTSD announced it would end its contract with the agency in December to avoid jeopardizing funding for being out of compliance with state and federal rules.
“Our highest priority is to ensure that we continue to provide valuable services and programs to the seniors who need them most, and that those services are not disrupted. These actions were taken to ensure New Mexicans continue to receive these critical services while we safeguard taxpayer dollars,” Rhien writes.
Some elected officials opposed ending the contract, saying the decision would cause a major disruption to senior services. Congresswoman Michelle Lujan Grisham, a Democrat who is running for governor, complained to the US Department of Health and Human Services, calling the state’s decision to terminate the contract reckless and a violation of federal law. Lujan Grisham also called the department’s accusations against the agency vague and ambiguous.
“She’s not defending NMAAA. Her concern is that by abruptly cancelling the contract, they’re eliminating and not having a plan to replace services,” Grisham’s Deputy Chief of Staff Nathan Schelble told SFR while Grisham was at the State of Union earlier this week.
State Rep. Deborah Armstrong, D-Albuquerque, tells SFR there’s a pattern in the state’s current administration of canceling contracts without completing investigations. Armstrong said the 2013 cancellation of contracts with 15 behavioral health agencies due to allegations of Medicaid fraud was “all done for nothing.” She pointed out that the attorney general’s office cleared the agencies of fraud after an extensive audit.
ALTSD would have contracted and paid service providers directly for six months after ending the contract, and the termination was supposed to take effect Feb. 1. But now they’ve put on the brakes and say they won’t terminate. The North Central New Mexico Economic Development District filed an action in state District Court to temporarily halt the contract termination, Rhien says, and under the agreement, NCNMEDD will dismiss its case.
While senior service providers like Rinaldi are left in the dark about an agreement reached through confidential conversations between higher-ups, the office of the state auditor still hasn’t released the first special audit on NCNMEDD. In December, Sourisseau said it would be ready “early this year.”