Sanjay Bhakta, CPA, CGFM, CFE, CGMA
Deputy State Auditor

Timothy M. Keller
State Auditor

State of New Mexico
OFFICE OF THE STATE AUDITOR
Via Email and U.S. Mail
September 14, 2016
The Honorable Susana Martinez
Governor
State of New Mexico
490 Old Santa Fe Trail, Room 400
Santa Fe, New Mexico 87501

Re: New Mexico Department of Homeland Security and Emergency Management
Dear Governor Martinez:
The Office of the State Auditor (“OSA”) continues to be deeply concerned regarding financial
management practices at the New Mexico Department of Homeland Security and Emergency
Management (“Department”). Over the last several years, the OSA has received numerous
allegations and concerns regarding the Department and multiple federal oversight agencies have
conducted reviews which identified significant problems, including substantial delays in
allocating emergency assistance. The Department’s Fiscal Year 2015 financial and compliance
audit is about nine months late, making it the only cabinet level state agency on the OSA’s “AtRisk” list.
During this last year, we have provided time and guidance for the Department to correct these
issues. While Secretary Mitchell has expressed a desire to address the various problems and has
acted in good faith, to date we have witnessed little tangible progress. For example, to the best of
our knowledge, millions of dollars in assistance for communities may still be outstanding. In the
wake of the Fiscal Year 2014 audit, the OSA cautioned the Department about excessive unspent
funds, which suggested an inability to deploy funds that communities needed after emergencies
and disasters. Despite these efforts the OSA has not received any documentation that would
suggest that the Department has fixed the larger systemic issues the OSA identified over a year
ago.
As the primary agency responsible for emergency management efforts, the Department handles
millions of dollars of federal and state funds. Sound fiscal management and operations are
critical to maintaining our state’s readiness and its capacity to prevent and respond to
emergencies. Delays in getting resources to communities and in paying for services rendered,
inadequate oversight and management of grant programs, and high turnover and vacancy rates,
may jeopardize our State’s readiness and access to federal funds. In an effort to address longstanding problems at the Department, we strongly recommend the Administration take
immediate steps to assist the Department in managing its financial affairs, such as instructing the

2540 Camino Edward Ortiz, Suite A, Santa Fe, New Mexico 87507
Phone (505) 476-3800 * Fax (505) 827-3512
www.osanm.org * 1-866-OSA-FRAUD

 The Honorable Susana Martinez, Page 2
Department of Finance and Administration (“DFA”) to directly oversee grant management and
other critical financial functions.
Since 2015, the OSA has had multiple discussions with the Department regarding the necessity
of taking prompt corrective actions. Secretary Mitchell has expressed a sincere commitment to
get the agency on track; however, staffing challenges and the fundamental underlying issues
remain unaddressed. Obtaining the assistance of DFA may provide the support required to
implement the necessary changes. With your help we hope that these challenges can be corrected
and will not require further actions by our Office, such as special audits and additional
investigations.
We appreciate your attention to this issue.
Respectfully,

Timothy M. Keller
State Auditor
cc:

Keith Gardner, Chief of Staff, Office of the Governor
M. Jay Mitchell, Secretary, Department of Homeland Security and Emergency
Management
Duffy Rodriguez, Secretary-designate, Department of Finance and Administration
David Abbey, Director, Legislative Finance Committee
Farley Vener, Hinkle + Landers

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