Citing Late Audits, State Takes Over $1 Million City of Santa Fe Parks Funds

The state Department of Finance Administration has redirected $1 million in 2021 capital outlay funds designated for City of Santa Fe parks to the state General Services Department to oversee.

Santa Fe City Manager John Blair announced the news late Friday afternoon in news release in which he also apologized for not informing the Santa Fe City Council and public about a prior DFA letter forecasting the potential withholding of capital outlay and other state funding due to the city’s late audits. City councilors first learned of the letter in a story in the Santa Fe New Mexican and castigated Blair and Mayor Alan Webber over the lack of disclosure at last week’s City Council meeting.

“Hindsight is always 20/20, and I understand that I should have shared the [DFA] letter with city councilors and the public in a timely manner,” Blair said in a statement Friday. “I apologize for not doing that.”

Regarding the parks allocation, Blair’s statement says he and other city officials were “working to understand the legal authority for, and the implications of, such an action.”

DFA spokesman Henry Valdez tells SFR via email the authority comes from a 2013 executive order signed by former Gov. Susana Martinez, which states that recipients of capital outlay appropriations require “timely audits” to safeguard the funds. “Pursuant to that executive order, because of the failure of the City to submit multiple years of audits timely and with the expiration date of 2021 projects approaching on 6/30/2025, the City cannot independently access its 2021 capital projects,” Valdez writes.

Moreover, he notes, “the $1 million appropriation to DFA calls for upgrades to Santa Fe parks in Santa Fe County. The legislation allows DFA the authority to determine the suitable entity for the project. We provided the funds to GSD directly to ensure the completion of this capital project and avoid further delay in improving parks in Santa Fe.”

Valdez says DFA recommends the city work with a fiscal agent until it can complete its outstanding audits. “We are ready to assist the city to any appropriate extent to comply with the Executive Order so the community can benefit from the numerous appropriated capital outlay projects on the table,” he writes.

State Auditor Joseph Maestas also cited the 2013 executive order in a letter to the city in March outlining the potential withholding of capital outlay funds; the city subsequently released its FY2021 audit in July, more than six months after its initial due date. The city’s 2020, 2019 and 2018 audits also were late. At last Wednesday’s meeting, Finance Director Emily Oster said the city’s 2022 fiscal year audit should be completed by Dec. 4, but said she remains unsure whether the city can catch up and turn in its Fiscal Year 2023 audit when it is due Dec. 15.