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The 2024 audit report, posted publicly Monday on the website of the State Auditor鈥檚 Office, was submitted to the state Dec. 16, marking the first time in five years the city turned in an audit on time.

The audit was declared unmodified or 鈥渃lean,鈥� meaning the auditor believes the city鈥檚 financial statements are accurate.

Finance Director Emily Oster said in an interview Monday the audit鈥檚 timely submission and fewer findings 鈥� following an audit backlog and scramble to catch up in recent years 鈥� shows the city is back on track.

鈥淚 think we鈥檙e in a very good place with regard to audits,鈥� Oster said, noting the process has taken 鈥渁 tremendous amount of work鈥� on behalf of people throughout the city, along with contractors.

Improvements in findings

Out of this year鈥檚 eight findings, two were material weaknesses, four were significant deficiencies and two were other issues with noncompliance. Four findings were repeated from the previous year, while nine other previous findings were resolved.

Over the last four years, Oster said the city has resolved a total of 37 findings identified in audits.

鈥淭hat really shows that, as issues have come up in these audits, we鈥檝e addressed them even though we were also continuing to still be continuously under audit for that whole time period,鈥� she said.

The city worked with external auditing firm Carr, Riggs & Ingram on the audit report, and Albuquerque-based accounting firm CliftonLarsonAllen helped with audit preparatory work. The city will put out a request for proposals this year for an external auditor, Oster said, because it is only allowed to work with the same firm for four years in a row without a bid process.

Oster described CliftonLaresonAllen employees as 鈥渆ssential鈥� to getting the city caught up on its overdue audits. Now that the task has been achieved, she added, the department is working to become less reliant on outside contractors.

鈥淚t is an ongoing conversation about what we think our contracting needs are going to be in the future,鈥� she said.

Like in past audits, the city cited prior issues with personnel vacancies as the cause for many of the findings listed in the 2024 audit. Oster said there are currently nine vacancies in the 57-person department, one of which will be filled at the beginning of February.

She said the department has made 鈥渟ignificant鈥� process in filling key positions over the past two and a half years, and is working on both recruitment of new hires and retention of existing employees.

The two material weaknesses involved issues with the city鈥檚 tracking of construction projects underway, leading to a failure to add completed projects to a capital asset subledger in a timely manner and issues tracking real property, as required for projects funded with federal grants.

A significant deficiency was tied to issues with Munis ledger software that were not identified and corrected in a timely manner. According to the audit, $3 million in expenses was recorded in the wrong fund and $1.4 million in revenue and fees for the Buckman Direct Diversion was not logged in another fund.

The city stated in the audit that going forward it will have periodic reconciliations between its ledgers.

Another significant deficiency was tied to reimbursement requests, with the audit stating the city 鈥渟ubmitted reimbursements for grants in an untimely fashion for multiple months at a time in the Federal Transit Cluster and only at year-end in the Airport Improvement Program.鈥� It recommended the city implement procedures for requesting reimbursements on a monthly basis.

Internal controls for federal grants were cited in a significant deficiency regarding payroll, which stated the city duplicated a payroll check in a request for reimbursement on a federal grant for the 疯客直播 Fe Regional Airport totaling $2,694. The report stated the city repaid part of the amount and is in the process of repaying the other.

Other issues included a CitiBank account being under-collateralized by $5,605 and budget deficits in excess of available cash balances in the Capital Equipment Reserve Fund.

A problem cited in the previous year鈥檚 audit in which a person no longer employed by the city was listed as a signer on a bank account has been resolved.

Future of agent uncertain

The city has been required by the state Department of Finance and Administration to work with a fiscal agent to access capital outlay from the past several years because of an executive order requiring local governments to be up to date on financial audits and to have corrected any past deficiencies to be eligible for capital project grants.

The city entered into a contract with the North Central New Mexico Economic Development District, which has been extended several times.

It鈥檚 unclear how long the city will be required to work with the fiscal agent, but Oster said Monday she hopes having completed an on-time audit after catching up on its overdue audits will demonstrate to the state the city now has a handle on its finances.

鈥淚 certainly hope that [the department] will see the progress that I see in these audit results, and take that into consideration in regards to whether or not the city of 疯客直播 Fe needs a fiscal agent,鈥� she said.

Department of Finance and Administration spokesperson Henry Valdez said he could not comment Monday on the agency鈥檚 plans because at the time the staff had not yet reviewed the audit, something he said would happen shortly.

City councilors are expected to receive presentations on the findings of the 2024 audit at a Feb. 10 Finance Committee meeting and Feb. 12 council meeting.