The City of Santa Fe’s late audit for Fiscal Year 2022 should be completed by contractors no later than Dec. 4, the city finance director says. But she remains unsure whether the city can catch up and turn in its Fiscal Year 2023 audit when it is due Dec. 15.
The City Council approved a contract Wednesday with accounting firm Carr, Riggs & Ingram to compile the city’s ‘23 audit for $269,454. Elected officials also received what Finance Director Emily Oster said was her 36th audit presentation during her year on the job so far.
“The city is really all on the same page that these audits need to get done as soon as possible. This is a team effort and an all-hands-on-deck type of situation,” Oster said. “Accounting and auditing are very methodical. If we come across a problem, we have to fix it before we move on to the next step. That’s normal. We are on the right track.”
When councilors pressed for a more specific timeline, she said, “I don’t have an estimate for FY23. We are working as hard as we can on both. Having the contract for FY23 approved is very helpful, and I will continue to keep you updated as the process develops…We have two full months between now and Dec. 4, and a lot can happen in that time.”
Oster and city Manager John Blair both fielded questions from councilors reacting to a story this week in which The Santa Fe New Mexican obtained a letter sent from the state Department of Finance Administration last month affirming that state officials plan to continue to withhold legislative appropriations until the city is compliant on all audits. (Its 2020, 2019 and 2018 audits were late, and the audit for 2021 only just wrapped last month.)
City councilors say they only learned about the letter just before the newspaper published a story and faulted Blair for not disclosing it sooner.
“I think this is an ongoing pattern we need to break, because it just makes us that much stronger,” said District 1 Councilor Renee Villarreal. “It’s better for everybody if we understand what’s happening. I think it would be important to keep the transparency to us so we can also be transparent to our constituents.”
While Blair said he had not shared the letter for “complicated policy and political and communication issues related to trying to resolve the issue,” and because “the fewer people who knew, the better.”
Webber told the council he and Blair have been negotiating with the state. The issue, Webber said, highlighted the balance between administrative matters in the mayor’s control and policy controlled by the City Council.
“There is a difference between the administration seeking to come to outcomes that are successful..and the policymaking body that directs policy, so it’s always a judgment call,” as to what information to divulge to councilors and when, Webber said.
While the Legislature had appropriated $1 million in cash for Midtown campus infrastructure; $1.8 million for construction of the Teen Center and three other projects for FY21, the city still can’t access the 2021 cash. The Teen Center opened this month and the Midtown campus project “needs the funds ASAP,” Oster said.
In addition to the capital appropriations that have been held up, the city’s upcoming application for future funds with the Water Trust Board will also require a waiver from that board since the city still has an overdue audit, she said.
District 3 Councilor Lee Garcia said he’d heard a lot about the late audits from his constituents and raised the idea of the council’s power regarding the city manager’s position. Under the city code, the city manager may be dismissed by a majority vote of all members of the governing body.
“I think at some point it becomes the responsibility of this governing body to either approve or disapprove the people in charge of the audits, and ultimately I know it’s the finance director who works directly under the city manager at the pleasure of the mayor,” Garcia said, adding later, “I think at some point the buck stops with somebody.”
Blair replied: “There are probably no two people more frustrated that the audits aren’t done than Director Oster and myself…We are getting better, we are getting faster, we are getting stronger, but it takes some time to get caught up…The buck stops with me.”
Councilor Michael Garcia, up for re-election in the Nov. 7 contest, also addressed the topic of Blair’s job performance during a forum hosted last week by the Hispanic Chamber of Commerce. When moderator David Fresquez asked: “The City of Española just fired the city manager for allegedly not having their finances in order; our city manager John Blair has stated many times that the 2023 audit would be done on time. If not submitted in the required timeframe, would you vote to release him of his duties?” Garcia answered “Yes.”
Oster, who joined city staff in September 2022 after formerly working in the state Department of Finance and Administration, said the department had 19 vacancies when she began and should be down to about 10 when current hires in the pipeline come onboard. She has hired a grants manager, a chief purchasing officer, a controller and is preparing to hire a chief accounting officer, she said.
District 4 Councilor Amanda Chavez commended the finance director’s work, but joined the chorus of councilors upset about communication from the administration.
“I think it has to be acknowledged that you are working from behind, and you are picking up a mess that was already made. I think it needs to be understood that in a year you have put forward such great efforts,” Chavez said. “However, another very evident truth, which is outside of your work, so I really want to separate that…Our city government is not being transparent.”
Editor’s note: An earlier version of this story was updated to correct the date the FY 23 audit is due to the state.