- Associated Press - Tuesday, June 27, 2017

SANTA FE, N.M. (AP) - The New Mexico Higher Education Department lacks adequate controls to oversee financial reporting and erroneously is recording investments, according to a new state audit made public Tuesday.

The audit by New Mexico Auditor Tim Keller claims the department did not follow policies and procedures in 2016 and recorded around $3 million in the Lottery Tuition Fund in the wrong year. The audit conducted in coordination with an independent auditing firm also said the department overstated the amount of federal grants it received.

Lida Alikhani, a spokeswoman for higher education department, did not immediately return phone and email messages seeking comment.

State Auditor Tim Keller said recent budget cuts prevented the department from hiring staff to provide financial oversight.

“The Higher Education Department’s audit demonstrates the impact spending cuts can have on safeguards aimed at protecting taxpayers’ money,” Keller said.

The audit comes weeks after Republican Gov. Susana Martinez and Democratic lawmakers ended a budget standoff amid declining oil revenue.

The budget crisis triggered public tuition increases at several state colleges, layoffs at state museums and a shortage of public defenders. State university presidents said the impasse inflicted long-term damage by frightening off prospective students and undermining efforts to recruit faculty and research scientists.

New Mexico lawmakers eventually sent a long list of budget-balancing measures including new taxes on internet sales and gasoline to Martinez.

New Mexico’s finances were hit hard over the past two years by a downturn in state revenue from the oil and natural gas sectors. The state also struggles with a weak overall economy and one of the nation’s highest unemployment rates.

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