A formal audit of the Village’s finances for the fiscal year ending June 30 last year produced a generally positive evaluation and raised no red flags. But the auditor’s report discussed at the Village Council’s April 27 meeting did call attention to “material weaknesses” in internal financial controls as well as “significant deficiencies” in that area.
The audit report was presented via Zoom by Alan Bowers, Jr., a partner in the firm Carr, Riggs and Ingram LLC. Areas of concern related to “allocation of pooled cash,” “maintenance of capital assets and “franchise tax review process.”Regarding the latter, Bowers pointed out that “The Village could potentially be missing revenues earned by not reconciling franchise tax revenues to authorized rates and terms.” On the other hand, Corrales could be collecting more than franchise agreements stipulate.
The Village is supposed to earn fees from entities such as CenturyLink and Comcast, Verizon and United Private Networks. In another area, the auditors found a “significant deficiency” regarding capital assets. The Village is supposed to conduct a physical inventory at the end of each fiscal year, but that was not done. “The Village was aware of the requirement, but was unable to complete the observation due to limitations resulting from the COVID-19 pandemic.”
Another flaw noted involved payments for travel and per diem. “The Village reimbursed per diem rates that were in excess of the amounts allowed by New Mexico State statute.… For one out of five travel reimbursements tested, the employee was reimbursed the maximum daily rate of $45 for actual expenses instead of being limited to the actual cost of meals totaling $22.48.”
Over all, the audit reported that revenues for the Village’s General Fund were “very consistent over the five-year trend with small increases in gross receipts tax revenues received over time.” Similarly, expenditures from the General Fund were consistent over five years.. The auditors noted a “moderate increase of $800,000 in the General Fund during 2020.”
The report showed total assets in the General Fund of $6,780,151, as well as $1,658,722 in a special fund for money awarded by the Federal Emergency Management Agency (FEMA) for stormwater flood mitigation and $469,196 in the Village’s Waste Water Project Fund.
Nowhere in the Zoom report to the mayor and council did the auditors state explicitly what became of the “extra” $4.7 million that turned up in the Village’s accounts last year, nor its origin. Village government’s long-term liabilities amount to $5,420,874 to pay municipal bondholders. “The Village has pledged a portion of future gross receipts tax to repay the $3,445,000 gross receipts tax revenue bond issued in January 2014 and the $2,000,000 general obligation bond issued in 2018.… Total principal and interest remaining on the bond is $3,670,000, payable through May 2033. For the current year, principal and interest paid and total pledged gross tax receipts were $929,590 and $158,756 respectively.”