News & Announcements

February 25, 2019
City of Santa Fe Audit Report Released - Fiscal Year 2018 Comprehensive Annual Financial Report received an unmodified Opinion

 

The Annual Audit of the City of Santa Fe—known as the CAFR or Comprehensive Annual Financial Report—was released today for public review and is available for download here . This year the Audit was filed with the State Auditor’s office on time and in conformance with all requirements.

In releasing the report, Mayor Alan Webber said, “This year’s audit demonstrates the progress the City is making in strengthening both our financial stability and our financial position. City residents should gain renewed confidence that we are acting as trustworthy stewards of their money.

In a significant improvement over the 2017 CAFR, the City’s Audit this year received an unmodified ranking, the equivalent of the best, highest level of assurance. In achieving this ranking, the City successfully strengthened its internal controls, achieved improved oversight of the City’s financial records, and resolved a previous material weakness.

“Getting the Audit done on time and with an unmodified opinion is a tribute to our Finance Department; it’s a team effort. The Audit shows a picture of progress around the City’s financial health and our controls when it comes to managing the public’s money.”

The Audit contains detailed financial information that allows Santa Feans to assess the City’s financial operation and controls. It conforms to the generally accepted accounting principles for government and the requirements of the New Mexico Office of the State Auditor. In releasing it for public review, the City is living up to its promise of transparency and accountability in its financial practices.

“I would like to acknowledge the outstanding effort of the City’s new Controller Debra Harris-Garmendia and the City’s accounting and finance team in completing this year’s CAFR with significant improvements over the prior year,” said Finance Director Mary McCoy. “The work done in the CAFR this year is in compliance with national auditing standards, represents a fair and accurate depiction of the City’s books, and meets our mission of promoting accountability, integrity, and clarity in City finances,” said Director Mary McCoy .

The CAFR includes the opinion of CLA LLP, the City's independent external auditor, that the financial statements are presented fairly and in conformity with U.S. generally accepted accounting principles.

Key Points

For the Fiscal Year 2018 audit, the City of Santa Fe’s most notable resolution was the material weakness finding from the prior year that was the basis for the modified opinion. The prior year’s material weakness identified was related to controls and reporting of capital assets. The City and CliftonLarsonAllen (CLA) reviewed City assets to determine proper and accurate financial assessment and reporting in the Fiscal Year 2018 audit process, thereby resolving the primary finding for the Fiscal Year 2017.

The City of Santa Fe’s Finance Department submitted the audit on-time, the prior year’s audit was submitted late, resulting in a compliance and other matters audit finding.  The City implemented a new year end closing process, which adheres to best practices in both approach and analysis. Additionally, a timeline and tracking system was implemented and audit staff meetings were held on a regular basis to facilitate communication and submittal of work Citywide.

Through several measures, the staff were able to reduce the number and magnitude of findings from the prior year’s audit. For FY2017, the City incurred 14 findings; for FY2018 the City incurred 10 findings.

The City resolved the material weakness finding from the prior year that was the basis for the modified opinion. The City resolved both significant deficiency in internal controls and other matters audit findings. Improvements were accomplished through enhanced fiduciary oversight of the City’s financial records and strengthened internal controls. The City was able to resolve half of the compliance and other matters audit findings. With continued oversight, enhanced internal controls and implementation of new processes we anticipate further reduction in the number and weight of future findings.

 

Additional Information

Findings From the Audit with Corrective Action Summaries

 

2018-001: Internal Controls over Financial Close and Reporting – Material Weakness

The City continues to work towards the establishment of improved internal controls in all areas pertaining to financial resources. The City has hired staff to fill key positions within the Finance Department including a new Finance Director to provide strong leadership and a newly created Controller position for improved oversight of the City’s financials. During the fiscal year, there have been increased efforts to update and refine the Chart of Accounts as well as more stringent accounting practices of the various bank accounts.

 

2018-002: Accounts Receivable – Material Weakness

The Finance Department anticipates resolving this finding through the hiring of the Controller who has been charged with the implementation of monthly period closing practices as well as proper internal control procedures in the next fiscal year.

 

2018-003: Internal Controls over Information Technology – Significant Deficiency

The City’s ITT Department continues to implement a long-term solution for disaster recovery including the infrastructure, maintenance processes and emergency response efforts. Additionally, the ITT Department, in tandem with the Finance and Human Resources Departments continues to assess the IT needs and transitions for City personnel.

 

2018-004: Period of Performance – Significant Deficiency and Other Matter

As grants are a large source of resource funding, the Finance Department has undertaken the restructuring of the grant management process in order to provide through and timely oversight of this critical area.

 

2018-005: Cash Management – Other Noncompliance

The Finance Department anticipates resolving this finding through the hiring of the Controller who has been charged with the implementation of monthly period closing practices as well as proper internal control procedures in the next fiscal year.

 

2018-006: Internal Controls over Cash Disbursements – Other Noncompliance

The City’s Accounts Payable Office continues to refine the stringent processes performed by this office. The staff strive towards additional oversight and review of payment requests and reimbursements to be completed in a timely and appropriate manner.

 

2018-007: PERA-Census Data Testing – Noncompliance

The Human Resources Department has added new procedures, processes and coding for employee rosters to assist with differentiating terms of employment. Previous procedures were either severely outdated or did not exist.

 

2018-008: State Audit Rule Compliance – Other Noncompliance

The City entered into a professional services contract for a fraud prevention engagement. The engagement was not an audit, but an external review of potential fraud risk. The Office of the State Auditor was informed by the Finance Department of the engagement.

 

2018-009: Lack of Adequate Cash Collection Procedures for Parking Garage – Compliance and Other Matters

The City’s Parking Division is in the process of transitioning to a modern parking system that will automate pay-on-exit functions in garages. Given current staffing levels, this transition will provide better service at peak customer demand times and provide greater revenue control.

 

2018-010: Budgetary Noncompliance – Compliance and Other Matters

The Finance Department anticipates resolving this finding through the hiring of the Controller who has been charged with the implementation of monthly period closing practices as well as proper internal control procedures in the next fiscal year.

 

Additionally, the Finance staff provides quarterly financial status reports for the Governing Body as a means to identify potential budget issues throughout the year and develop appropriate solutions.

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