Audit Questions How N.M. Handles Disaster Funds

Jan 18, 2017

When disaster strikes New Mexico, the federal government sends money to New Mexico’s Department of Homeland Security and Emergency Management. Journalist Laura Paskus of NMpoliticalreport.com reported a few months ago that the state did not release tens of millions of dollars to local contractors.

Paskus has asked for answers from state government many times and has mostly been ignored. A long-overdue audit was just released, but it raised even more questions. She said the issue’s had a big impact on local people running small businesses.

PASKUS: We found out last summer that there was a contractor in northern New Mexico, who had done a bunch of work after a flood, and he waited a year and a half. He’d done all the work. He’d rented the equipment, paid his employees, and he was still waiting on about $2.3 million to be passed through so he could get paid. And he was facing losing his bond rating. He had, you know, credit that he needed to be paying off.

It is sort of this complicated financial story, but it affects people’s lives in pretty deep ways.

KUNM: There’s an audit of this department that’s supposed to be doling out the money. And this audit was due to our state auditor like more than a year ago, and it finally just came in. So what did it show? And what’s missing from the audit?

PASKUS: All of the state agencies and local agencies, hundreds of them across the state, have to hand in their audits every December. And Homeland Security was almost a year late. They were the only state agency that was late on their audit like that. And when it finally came in, the independent contractor who performed the audit, had found 19 problems at the agency and had found that they were hanging onto about $34 million in this federal money that should have been passed through.

But the thing that struck me is because I’d been covering this issue I’d been waiting for this audit and was pretty excited to see “Oh my gosh, what’s going on at the department,” and part of the audit says the contractor wasn’t provided enough information from the agency to really know if the auditing results are accurate and if their financial records are actually reliable.

KUNM: So do we have any idea about why Homeland Security isn’t paying out the FEMA money that it gets to cover this stuff? Is that money going somewhere else?

PASKUS: I think it’s really complicated. There’s issues that the state has brought up of staffing and turnover. And there are, there are a lot of vacant spots at that agency. So I don’t doubt that there are some people at that agency who are working really hard to do everything they can to be getting this grant money out, but there is clearly some sort of problem—or many different problems—of what’s happening. Why there’s such high staff turnover, why there are these vacancies, and why they’re not able to process and pass through that money.

KUNM: State Auditor Tim Keller reached out to Gov. Susana Martinez and said maybe another department should take over these disaster grants. Has there been any response from Gov. Martinez about what’s going on?

PASKUS: As far as I know, Gov. Martinez has not responded to Auditor Keller. He wrote that letter in September asking for her to help with this troubled agency and suggested that maybe the Department of Finance could take over some of its responsibilities, including the grant administration.

KUNM: So you reported that Santa Clara Pueblo, after floods and a wildfire, managed to start working with FEMA directly and just skip the state department altogether. Do you think others will follow suit.

PASKUS: The reason that Santa Clara was able to do that is because it’s a sovereign nation, so it can have a government-to-government relationship with the federal government. I think other tribes could likely follow what Santa Clara did. But if you’re just like the Pojoaque Valley Irrigation District or Bernalillo County or the city of Alamogordo, or any of the smaller agencies, you’re really at the mercy of the state to be that sort of liaison between the federal government and you.

Oftentimes what happens is that these small agencies who were supposed to be paying out the money to their contractors who’ve done the work, you know they don’t have the money in their budgets to be able to cover that. And so I think it’s probably very likely that there are other small business owners who are struggling across the state because they’re not getting paid.