- Associated Press - Monday, January 26, 2015

SANTA FE, N.M. (AP) - New Mexico’s checkbook is out of balance by an estimated $100 million, leaving lawmakers to question top finance officials about their efforts to reconcile the books and protect the state’s borrowing power.

Department of Finance and Administration Secretary Tom Clifford told members of the Senate Finance Committee on Monday that the estimate is his agency’s best guess, but the difference between the state’s check register and what it actually has had in the bank during the last several years could actually amount to more than $460 million.

Clifford’s agency has been working with other state departments to make adjustments and to improve the accuracy of the general ledger, but some lawmakers voiced concerns that it could take another two years to solve the problem.

Senate Majority Leader Michael Sanchez, a critic of Republican Gov. Susana Martinez, said Monday it was inexcusable that her administration cannot account for the state’s spending.

“This administration has had four years to reconcile state government agency accounts worth millions of dollars, but again today no concrete solutions were offered,” said Sanchez, D-Belen. “Simply put, they cannot tell us how much revenue came in, how much was spent and how much is still in the bank.”

The problem stems from accounting software the state purchased several years ago during Democrat Gov. Bill Richardson’s administration.

Agencies use data from the software system to create budget requests. The Legislature then uses the information to make appropriations, so officials said having an accurate ledger is critical.

The Department of Finance and Administration and the state treasurer’s office reported to lawmakers in 2012 that the state had hundreds of thousands of unreconciled transactions that represented billions of dollars. Since then, the finance agency has been given funding to address the accounting deficiencies and resolve the historical cash differences.

Budget recommendations from the governor and the Legislative Finance Committee include more funding to continue the work during the next fiscal year.

Credit rating agencies have already taken notice of New Mexico’s problem, with Standard and Poor’s changing the state’s outlook from stable to negative.

“That’s why we need to be as proactive as possible,” State Auditor Tim Keller said. “If our credit rating goes down, that means the cost of borrowing goes up, which means we have less money for capital improvements.”

Keller said another concern is that the missing money could have gone to pay for education programs or other state needs.

“We’re the only state with a non-balanced checkbook, so from a national perspective there’s not a lot of sympathy for New Mexico on this issue,” he said. “Everyone else seems to be able to get it right.”

Some lawmakers asked Clifford whether there was any evidence of fraud or malfeasance. While he hasn’t seen any indications, he said only a forensic audit would be able to make that determination and it would require more money to conduct such an investigation.

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