- Associated Press - Tuesday, July 28, 2015

July 28—An official from the State Auditor’s Office told the city Finance Committee on Monday that the agency will contract out a special audit of how the city spent funds from a controversial 2008 parks and trails bond issue and will seek a legal opinion on whether the funds were spent appropriately.

Sunalei Stewart, chief of staff to State Auditor Tim Keller, told city councilors on the panel that the state is now in control of the probe into how the city handled the $30.3 million voter-approved bond issue. “We’re going to remain in the driving seat,” he said of the special audit, which he said could cost “at least six figures” — to be paid by city taxpayers.

The state audit comes amid calls from the chairwoman of a parks advisory commission for the state Attorney General’s Office to get involved.

Bette Booth, chairwoman of the Parks and Recreation Advisory Commission, had long raised questions about the bond spending and had asked for a review. Then in late March, an accounting firm hired by the city, Albuquerque-based REDW LLC, issued a scathing report about the spending practices and said some of the spending was not well documented. Rather than hire contractors to complete the planned park projects, the city used the bond funds to pay its own staff to do park and trails work in an effort to avoid layoffs. But records on the work is incomplete.

Stewart said the State Auditor’s Office has set out a process to try to answer two fundamental questions: “One, can the funds be accounted for, and two, were the funds used in a manner that were consistent with laws, regulations, policies and procedures.” He said the State Auditor’s Office plans to complete the process by January.

In July 2011, an assistant city attorney issued a legal opinion stating that parks bond money could be used for employee salaries as long as the work they were performing was “to improve” parks, trails and open space. Two months later, then-city attorney Geno Zamora told councilors that the bond language was “quite liberal” and could include pulling weeds or repainting.

“I talked to three city attorneys, and they all said they vehemently disagreed with Geno Zamora’s ruling,” Booth told councilors Monday. “One of them was a former Santa Fe city attorney. If he would’ve been in Geno’s place, we would not be here this evening.”

Booth was one of about nine people who spoke during a public hearing on the bond issue Monday.

City Councilor Joseph Maestas raised the most concerns about the special audit’s scope of work, saying he wanted to avoid a repeat of the report prepared by REDW.

“I’m just concerned that it’s kind of a watered-down kind of a compliance review,” Maestas said. “I expected this to be much more in-depth and targeted.”

Sanjay Bhakta, deputy state auditor, disagreed with Maestas’ description that the special audit would be “watered down.” He said it will require a legal opinion to be issued, a key difference between the new review and the REDW audit.

“This is more of a compliance examination,” Bhakta said. In this case, he said, the burden of determining the scope of work is shifted to the auditor. ” …. They will have to figure out in their professional judgment what should be the scope. … That scope is not limited to what they can do. They can ask for more because they’re required to form an opinion.”

Other councilors expressed concerns about the lack of detail in the scope of work, saying city staffers have yet to provide information or answers to years-old questions.

“We’re still asking for things that have promised now for some months,” Councilor Patti Bushee said.

Maestas said requiring the independent auditor to render an opinion doesn’t mean it will be final or answer all the questions.

“In some instances, there was a lack of information to fully explain and answer all the questions that are being asked,” he said, referring to the REDW review. “In light of all that, if we have the documentation but it lacks information … we still may get an opinion that will be inconclusive.”

Bhakta said that was a possibility.

Stewart told the committee that the State Auditor’s Office “welcomes input. We think that there’s a lot of knowledge, experience and important information that we can gather from the public, from this governing body, from management that will inform the decisions that we make,” he said. “But ultimately, we are going to make the decision.”

Contact Daniel J. Chacón at 986-3089 or [email protected] Follow him on Twitter @danieljchacon.

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