OFFICE OF THE STATE AUDITOR

Regional Coalition of LANL Communities
Special audit
For the Period of July 1, 2014 through June 30, 2018

1   P a g e  
 

 Regional Coalition of LANL Communities
TABLE OF CONTENTS
TABLE OF CONTENTS

Page
2

OFFICIAL ROSTER

3

BACKGROUND

4

EXECUTIVE SUMMARY

6

SCOPE AND PROCEDURES

8

GENERAL OBSERVATIONS

10

SCHEDULE OF FINDINGS AND RESPONSES

12

EXIT CONFERENCE

38

2   P a g e  
 

  

Regional Coalition of LANL Communities
 

OFFICIAL ROSTER
COALITION COUNCIL
Mayor Alan Webber and Former Mayor Javier Gonzales City of Santa Fe
Commissioner Barney Trujillo

Rio Arriba County

Commissioner Henry Roybal

Santa Fe County

Councilor Chris Chandler

Los Alamos County

Representative Ron Lovato

Ohkay Owingeh

Mayor Javier Sanchez and Former Mayor Alice Lucero

City of Espanola

Commissioner Mark Gallegos

Taos County

Councilor Darien Fernandez

Town of Taos

Lt. Governor Ward Yeppa

Jemez Pueblo

COALITION OFFICIALS
Andrea Romero Consulting, LLC and
Formerly JLH Media, Inc.

3   P a g e  
 

Executive Director

 Regional Coalition of LANL Communities
Special Audit Report
For the Period of July 1, 2014 through June 30, 2018
 

I.

BACKGROUND

On October 13, 2011, New Mexico Department of Finance and Administration approved a Joint
Powers Agreement (JPA) authorizing the creation of the Regional Coalition of Los Alamos
National Laboratories (LANL) Communities (hereafter “RCLC”).
The JPA provides that the purpose of the RCLC is to promote economic development, including
new missions for the LANL; advocacy of long-term stable funding of LANL missions; promotion
of new and diverse scientific endeavors at LANL focusing on employment and educational
opportunities; support of business incubation and business development on non-federal lands;
support of workforce development and training and promotion of awareness of LANL and its
contribution toward and impact on the region. The RCLC was also formed to engage in promotion
and coordination of environmental protection including clean-up activities and site maintenance;
planning activities and prevention of future contamination; and evaluation of cleanup, planning,
implementation and oversight for protection of workers and neighboring communities.
The JPA also provides that the RCLC will participate in regional planning and evaluate policy
initiatives and legislation, to include participation in public comment, outreach initiatives and
advocacy in state and federal legislative process and administrative proceedings.
The Regional Coalition is comprised of elected and tribal officials from the City of Española,
County of Los Alamos, County of Rio Arriba, City of Santa Fe, County of Santa Fe, Pueblo of
Jemez, Ohkay Owingeh Pueblo, Town of Taos, and the County of Taos.
The JPA provided that Los Alamos County, a member entity, would serve as the fiscal agent for
the newly formed entity. On February 20, 2013, the Office of the State Auditor (OSA) notified
the RCLC that the entity met the definition of a “special district” and that the entity was subject to
the Audit Act under the monetary tier levels provided for “local public bodies.” The records
indicate that RCLC acted in limited form with a budget of less than $50,000 annually from its
inception through June 30, 2014. Under the Audit Act, the entity did not become subject to audits
through an agreed-upon procedures process until its budget exceeded statutory thresholds.
The entity began to receive sufficient public funds in FY2014 to require it to have annual audits
under the Audit Act. Beginning in FY2014 (November 2013), the RCLC Board entered into a
contract with JLH Media, Inc., a New Mexico consulting firm to provide Executive Director
Services through November 2015.
Under the terms of the contract, the Executive Director’s services were subject to the Travel Policy
adopted by the RCLC Board. In August 2015 (FY2016), the Executive Director applied and
received a grant from the U.S. Department of Energy (DOE). The DOE Grant provided $500,000
in funding for a five (5) year period (July 1, 2015 to June 30, 2020). Under the Grant, the RCLC
receives $100,000 each fiscal year.
4   P a g e  
 

 Regional Coalition of LANL Communities
Special Audit Report
For the Period of July 1, 2014 through June 30, 2018
 

In March 2016 (FY2016) the RCLC Board advertised and selected a new company to provide
Executive Director Services. Andrea Romero Consulting, LLC became the new contract
Executive Director. Ms. Romero had been employed by JLH Media, Inc. the previous Executive
Director.
Since FY2015, the Regional Coalition of LANL Communities has received $100,000 annually in
restricted funding from the DOE Grant, as well as approximately $97,000 annually from its
member entities. Its average budgeted expenditures are approximately $189,500 for FY2015,
FY2016, FY2017 and FY2018. Based on these amounts and the RCLC’s formation as a JPA
entity, the RCLC is subject to the Audit Act and should have submitted annual audits to the OSA
for FY2015-2017.
On January 22, 2018, the (“OSA”) received a letter from a member of the public alleging misuse
of public funds by the RCLC. The OSA initiated the process set forth in the Audit Rule for
investigation of complaints received. Subsequently, the OSA received another letter of concern
that had been sent to the RCLC’s Board Members, again alleging misuse of public funds.
In March 2018, Los Alamos County, the fiscal agent for the RCLC, provided the OSA with an
internal audit report in response to the allegations sent to the RCLC Board. The internal audit
report appeared to support some of the allegations contained in the complaint. The OSA conducted
additional fact finding procedures to determine if the transactions were in compliance with
relevant laws, regulations, policies, procedures, the New Mexico Procurement Code and
agreements applicable to the RCLC and its member entities.
The OSA’s fact-finding procedures led to the OSA designating the RCLC for a Special Audit.
Under § 12-6-3(C) NMSA 1978 (“Audit Act”), the State Auditor, in addition to annual financial
audits, “may cause the financial affairs and transactions of an agency to be audited in whole or in
part.” Additionally, under 2.2.2.15 NMAC (“Audit Rule”), the State Auditor may initiate a special
audit regarding the financial affairs and transactions of an agency or local public body based on
information it receives.
On March 12, 2018, the OSA formally designated RCLC for a special audit. The scope of work
was agreed upon and set forth in the contract dated April 27, 2018.
The OSA notes that, in addition to this Special Audit, Los Alamos County entered into a contract
with the Adams + Crow Law Firm, to “conduct an investigation into matters related to alleged
administrative misconduct of County employees and County Officials, with respect to
reimbursements and expenditures associated with the Regional Coalition of LANL Communities,
and any additional matters related thereto.”

5   P a g e  
 

 Regional Coalition of LANL Communities
Special Audit Report
For the Period of July 1, 2014 through June 30, 2018
 

II.

EXECUTIVE SUMMARY

The Internal Audit Report produced by Los Alamos County raised significant concerns of noncompliance by the RCLC with state law. That Report found that Andrea Romero Consulting, LLC
had been reimbursed $2,246.90 more than should have been allowed under the RCLC’s adopted
Travel Policy. In April 2018, the Andrea Romero Consulting, LLC reimbursed the Coalition for
that amount. The report also found that two of the member representatives of the RCLC had not
been properly reimbursed resulting in underpayments of $411.54 and $425.43.
The Scope of Work for this Special Audit provided that the OSA would review specific
transactions to determine if they were compliant with relevant laws, regulations, policies,
procedures, the New Mexico Procurement Code and agreements applicable to the RCLC.
Additionally, the OSA considered the risks of potential fraud, waste or abuse and addresses the
need for additional internal controls.
The Special Audit scope included a review of:
1. Detailed audit of all payments since March 1, 2015 paid to ANDREA ROMERO
CONSULTING, LLC for compliance with duly adopted RCLC Board policies,
contractual agreements between the parties and applicable procurement code.
2. Detailed audit of all payments for FY 2015, 2016, 2017 and 2018 for all payments of
reimbursements to any Board member or member entity of the RCLC for compliance
with duly adopted RCLC Board Policies, Joint Powers Agreements and applicable
procurement codes.
3. Audit to determine whether ANDREA ROMERO CONSULTING, LLC or any Board
member or entity received reimbursement for travel or per diem which represented a
double reimbursement, including, but not limited to, whether ANDREA ROMERO
CONSULTING, LLC was paid twice for travel with two staff members attending the
same meeting or event; and whether any Board member or entity received
reimbursement from the RCLC, in addition to any other entity.
4. Audit of the Request for Proposals No. 2016-01, the procurement process and all
resulting contracts between RCLC and ANDREA ROMERO CONSULTING, LLC for
compliance with the Joint Powers Agreement, duly adopted Board Policies and
applicable procurement code.
The RCLC’s fiscal agent, Los Alamos County, provided documentation of RCLC’s expenditures
and revenues for the conduct of the Special Audit. The OSA also obtained additional
documentation from certain member entities and received further information as part of the
complaints that were filed with the OSA’s Special Investigation Division.
6   P a g e  
 

 Regional Coalition of LANL Communities
Special Audit Report
For the Period of July 1, 2014 through June 30, 2018
 

The Special Audit makes a number of findings related to the RCLC’s reimbursements paid to JLH
Media, Inc. and Andrea Romero Consulting, LLC which violate the Per Diem and Mileage Act,
§ 10-1-1 et seq. NMSA 1978, as well as NMAC 2.42.2.1 regarding the payment of mileage and
per diem to public officials. Additionally, the Special Audit makes findings regarding the RCLC’s
failure to follow its own Travel Policy and contract provisions between the RCLC and the
respective contracted Executive Director with regard to reimbursements for guests, alcoholic
beverages and recreational expenses.
Specifically, the RCLC Board approved reimbursements to both JLH Media, Inc and Andrea
Romero Consulting, LLC for meals for board members while the Board member was in his or her
home jurisdiction. The RCLC also approved improper reimbursement for alcoholic beverages and
recreational items (baseball tickets). Hotel reimbursements do not comply with the Travel Policy
and there is a lack of adequate documentation to support many expenditures, in the form of
itemized receipts, again in violation of the published Travel Policy and state law. It also appears
the Executive Director(s) may have been reimbursed for some expenses by both the RCLC and
the Energy Communities Alliance (ECA), a third party entity.
During the course of the special audit, the OSA noted that reimbursements requested for
mileage were duplicated by the contracted Executive Director and its staff. The individuals
collected mileage for travel to and from the same location on the same day. The OSA identified
twenty-eight (28) instances of duplicate mileage reimbursements totaling $1,115.76.
The Special Audit makes several findings regarding the RCLC Board’s oversight and compliance
duties and responsibilities under the Joint Powers Agreement Act. Specifically, the RCLC Board
failed to comply with the Joint Powers Agreement Act, the Joint Powers Agreement itself, and the
Per Diem and Mileage Act, § 10-8-1 et seq. In addition, the RCLC failed to comply with the Audit
Act, § 12-6-1 et seq. NMSA 1978, and the Audit Rule, NMAC § 2.2.2.1 et seq. despite being on
notice from the State Auditor’s Office as early as 2013 that it was required to do so. Finally, the
RCLC issued 1099 statements which were incorrect and the RCLC budget contained accounting
errors which may have been misleading to the Board.
The Special Audit also makes findings regarding the actions of the fiscal agent, Los Alamos
County. The County pooled the RCLC funds in an account with Los Alamos County funds and
certain funds were miscoded and paid by the wrong entity. The RCLC Board and Los Alamos
County do not appear to have maintained full and adequate records of all expenditures.
The OSA has made recommendations for corrective actions and provided the RCLC Board with
an opportunity for response.

7   P a g e  
 

 Regional Coalition of LANL Communities
Special Audit Report
For the Period of July 1, 2014 through June 30, 2018
 

The following table summarizes the OSA’s findings:
Finding No.
2018-001
2018-002
2018-003
2018-004
2018-005
2018-006
2018-007
2018-008
2018-009
2018-010
2018-011
2018-012
2018-013
2018-014
2018-015
2018-016
2018-017
2018-018

Finding Description
Reimbursement for Board Members meals, alcoholic beverages or entertainment in
violation of Per Diem and Mileage Act and NMAC 2.42.2.1
Reimbursements for guests, which is prohibited by both the Travel Policy Section VII and
the Per Diem and Mileage Act
Reimbursement for alcoholic beverages, entertainment and recreation and personal items
in violation of the Travel Policy and State Law
Gross Receipts tax charged on reimbursements resulting in double taxation
Duplicate billing of mileage by contractor
RCLC Governing Board not exercising control over finances in accordance with the Joint
Powers Agreement Act
Travel expenditures in excess of board approved budget
Potential non-compliance with DOE Grant specifically with regard to explicitly prohibited
lobbying
Potential violation of Executive Order 12674, Fourteen Principals of ethical Conduct for
Federal employees’ item 4 related to the solicitation or acceptance of gifts
Breach of Fiduciary Duty by the Fiscal Agent- Los Alamos County
Failure to comply with State Audit Act
Fiscal Agent combined RCLC monies with Los Alamos County’s polled cash account
resulting in a lack of transparency
Miscoding of expenditures and using a polled cash account resulted in the RCLC paying for
expenditures of Los Alamos County
Improper reporting of contract labor
Improper accounting for reimbursements, including the netting of reimbursements with
expenditures
Management could not provide all requested information
Budget irregularities
Expense reimbursements that may violate the Anti-donation clause of the New Mexico
Constitution

SCOPE AND PROCEDURES
The scope of the Special Audit required the OSA to consider whether specific sampled
transactions are compliant with relevant laws, regulations, policies, procedures, procurement code
and agreements applicable to the agency. The OSA will consider the risks of potential fraud,
waste or abuse and, at a minimum, the following:
1.
Detailed audit of all payments since March 1, 2015 paid to ANDREA ROMERO
CONSULTING, LLC for compliance with duly adopted RCLC Board policies, contractual
agreements between the parties and applicable procurement code.
8   P a g e  
 

 Regional Coalition of LANL Communities
Special Audit Report
For the Period of July 1, 2014 through June 30, 2018
 

2.
Detailed audit of all payments for FY 2015, 2016, 2017 and 2018 for all payments of
reimbursements to any Board member or member entity of the RCLC for compliance with duly
adopted RCLC Board Policies, Joint Powers Agreements and applicable procurement codes.
3.
Audit to determine whether ANDREA ROMERO CONSULTING, LLC or any Board
member or entity received reimbursement for travel or per diem which represented a double
reimbursement, including, but not limited to, whether ANDREA ROMERO CONSULTING,
LLC was paid twice for travel with two staff members attending the same meeting or event; and
whether any Board member or entity received reimbursement from the RCLC, in addition to any
other entity.
4.
Audit of the Request for Proposals No. 2016-01, the procurement process and all resulting
contracts between RCLC and ANDREA ROMERO CONSULTING, LLC for compliance with
the Joint Powers Agreement, duly adopted Board Policies and applicable procurement code.
This report was developed based on information from interviews, observations, and the OSA’s
review of selected documentation and records.

9   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

GENERAL OBSERVATIONS
REIMBURSEMENTS PAID TO CONTRACTED EXECUTIVE DIRECTOR
Improper Variances between the RCLC Travel Policy and State Law
The RCLC meets the definition of a local public body under the Audit Act, as well as the NMAC
Regulations governing mileage and per diem. NMAC 2.42.2.7 defines a “local public body” to
mean “every political subdivision of the state, whether created under general or special act
including, but not limited to, counties, municipalities, drainage, conservancy, irrigation, school or
other districts, that receives or expends public money from whatever source derived.” That section
defines “public officers”, which include “all board, advisory board, committee and commission
members elected or appointed to a board, advisory board, committee or commission specifically
authorized by law or validly existing as an advisory committee pursuant to Section 9-1-9 NMSA
1978.”
Under Rule 2.42.2.8, “per diem rates shall be paid to public officers and employees only in
accordance with the provisions of this section.”
The RCLC Board adopted a Travel Policy (in its Resolution 2012-03) which did not entirely
comply with the Per Diem and Mileage Act. While the Board’s own Travel Policy may contain
provisions that are more restrictive than the Administrative Rules, it cannot adopt a policy that
provide more generous per diem and mileage rates for its public officers and employees.
Specifically, the Travel Policy contains provisions that exceed the allowable rates under the
Administrative Rule by providing for an in-state per diem rate of $50 per day, including taxes and
gratuities. The maximum rate provided under state law, NMAC 2.42.2.9, is $30 per day for instate travel. The Travel Policy establishes an out-of-state per diem rate of $60 per day, while the
rate published in Rule 2.42.2.9 is $45 per day. The Travel Policy provides that no receipts are
required for these expenditures, while the Rule, in subsection (3) expressly provides that “the
public officer or employee must submit receipts for the actual meal and lodging expenses
incurred.”
NMAC 2.42.2.8(C)(3) also addresses the situation where Board members are serving in a dual
capacity. That section provides:
Non-salaried public officers who also serve as public officers and employees of state
agencies or local public bodies may receive mileage and per diem rates from only one
public entity for any travel or meeting attended. Furthermore, non-salaried public
officers who are also public officers or employees may not receive per diem rates for
attending meetings held in the place of their home or at their designated posts of duty
unless they are on leave from their positions as public officers or employees. Local
public bodies may adopt regulations with respect to the receipt of per diem rates by
10   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

employees or officers of local public bodies who also serve on boards or commissions,
subject to this rule.
JLH Media, Inc. and Andrea Romero Consulting, LLC (ARC) served as the contracted Executive
Directors of the RCLC pursuant to a contract, which provided for specific compensation. Section
C of the contract provided that ARC would receive a flat fee of $140,000 per fiscal year, plus
reimbursable expenses to be paid in accordance with the RCLC’s Travel Policy. The Contract in
Subsection C (3) states:
Reimbursable Expenses: Reimbursement of travel cost shall be subject to the annual
budget as approved by the Board and will be paid in accordance with the Regional
Coalition’s travel policy.
The contract does not provide for the contracted Executive Director to be reimbursed for any
expenses outside those contained within the Travel Policy. The Travel Policy also provides that
staff members are expected to use the most economical means available with reasonable
consideration given to the time and distance involved.
The Travel Policy specifically prohibits certain types of expenses, including specifically gifts,
entertainment and recreation expenses, alcoholic beverages, and expenses for spouses, guests or
family members.
The internal audit performed by Los Alamos County and the special audit by the Office of the
State Auditor found numerous expenditures for meals that included guests of the Executive
Director, including meals with alcohol costing hundreds of dollars at restaurants in Washington,
D.C. and Santa Fe. Some of these meals appear to have included employees of the DOE. The
Executive Director was not entitled to reimbursement for these types of entertainment expenses,
nor for any expenditures for alcoholic beverages, under her contract with the RCLC and the Travel
Policy. The Executive Director was not authorized to bill for or be reimbursed for any meal
expenses for third parties, including Board Members, entertainment expenses or expenses for
alcohol. Additionally, it would be inappropriate for the RCLC to have reimbursed the Executive
Director for any meals that may have been provided to DOE employees in violation of federal
rules.
The internal audit identified expenditures for tickets to a baseball game which constitute prohibited
entertainment or recreational expenses under the Travel Policy. The Executive Director was not
entitled to reimbursement under the contract or Travel Policy for those expenditures.
The RCLC Board cannot reimburse its contract Executive Director for meals or expenses for its
Board members when those members would not have been entitled to reimbursement themselves
under the Mileage and Per Diem Act, or the NMAC Rule.

11   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

SCHEDULE OF FINDINGS AND RESPONSES
Finding 2018-001 The RCLC Board approved reimbursements to Andrea Romero
Consulting, LLC or JLH Media, Inc. for meals, alcoholic beverages or entertainment
expenses for Board members who would not have been entitled to receive per diem and
mileage themselves, in violation of the Per Diem and Mileage Act and NMAC 2.42.2.1
(Material Weakness)
Condition
The contracted Executive Director(s) were reimbursed $ 780.22 for the following meals, alcoholic
beverages or entertainment expenses on behalf of board members:
$34.99 for “in-room entertainment”, and $5.29 for “Honor Bar beverage” made by Board Member
Peter Ives at the Hotel Palomar in Washington, D.C.
$7.50 for Merlot at Antoine’s with Mayor Lucero and Andrew.
$22.00 for a ticket to the Tony Hseih Venture Capitalist Seminar.
$40.00 for tickets to a museum.
$307.00 for major league baseball tickets.
$286.78 at the Bull Ring Restaurant in Santa Fe. The billing detail for this dinner states that the
guests were Board member Javier Gonzales and Harris Walker, NNSA. Board member Javier
Gonzales was not entitled to receive per diem for a meal in his home jurisdiction of Santa Fe.
$38.91 for a “meeting with Mayor Alice” at El Paragua Restaurant in Espanola. Alice Lucero was
not entitled to receive per diem for a meal in her home jurisdiction of Espanola.
$37.75 for “Lunch with Mayor Alice” at La Cocina Restaurant in Espanola.
Criteria
NMAC 2.42.2.8 (C)(3) addresses public officers who serve in dual capacities. It states:
Non-salaried public officers who also serve as public officers or employees of state
agencies or local public bodies may receive mileage or per diem rates from only one public
entity for any travel or meeting attended. Furthermore, non-salaried public officers who
are also public officers or employees may not receive per diem rates for attending meetings
held in the place of their home or at their designated posts of duty unless they are on leave
from their positions as public officers or employees. Local public bodies may adopt
regulations with respect to the receipt of per diem by employees or officers of local public
bodies who also serve on boards or commissions subject to this rule.
12   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-001 The RCLC Board approved reimbursements to Andrea Romero
Consulting, LLC or JLH Media, Inc. for meals, alcoholic beverages or entertainment
expenses for Board members who would not have been entitled to receive per diem and
mileage themselves, in violation of the Per Diem and Mileage Act and NMAC 2.42.2.1
(Material Weakness) (Continued)
Cause
The RCLC Board and its fiscal agent, Los Alamos County, appear to have been unaware of the
prohibition on paying per diem for non-salaried public officers who serve in a dual capacity on
two different boards when they attend a luncheon or dinner meeting that would not otherwise
qualify for per diem because it is held in the officer’s home jurisdiction.
Effect
The RCLC appears to have improperly reimbursed JLH Media, Inc. or ARC, LLC for meal
expenses for public officers in their home jurisdictions.
Recommendation
The RCLC Board should ensure that it follows the requirements of NMAC 2.42.2.1 et seq. when
providing mileage or per diem reimbursements to any of its Board members.
Response
The RCLC does not agree with portions of the listed conditions. Some Board members have
indicated that they did not charge back for entertainment or alcohol but rather paid for those items
directly themselves.
The RCLC concurs with the recommendation and will be changing its policies and procedures to
ensure that it complies with the requirements of NMAC 2.42.2. The recently adopted FY 2019
RCLC budget has been changed to assume that all board member travel is handled by the
respective local governments directly. In addition, the new executive director services contract
also assumes that the executive director’s travel is handled directly by that vendor and not as a
reimbursable expense. If there are any instances where the RCLC board approves any exceptions
and pre-approves any travel to be paid by the RCLC, the RCLC will ensure compliance with the
requirements of NMAC 2.42.2.

13   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-002 The RCLC Board approved reimbursements to Andrea Romero
Consulting, LLC or JLH Media, Inc. which included expenses for other guests, which is
prohibited by both the Travel Policy Section VIII and the Per Diem and Mileage Act
(Material Weakness)
Condition
The RCLC Board reimbursed both JLH Media, Inc. and Andrea Romero Consulting, LLC for meal
and drink expenses for guests, totaling $5,799.69, which include the following reimbursements:
$6.98 for “coffee with Carlos @ Ohori’s”
$31.83 for Lunch with James Ross, Governors Cabinet
$25.62 for “Alex and me” @ Angelina’s Restaurant
$30.29 for lunch with Andrew @ Blue Window Bistro
$70.04 at La Fonda for Chris, Alex, Mark, and Oswald
$32.48 at Blue Corn with Marie Longseere
$25.89 for breakfast with Councilor Maestas
$86.31 at Gabriel’s Restaurant for Chris M, Davis Griscom, Sean M, and David Trujillo
$64.59 at Jinga Bar and Bistro for David Trujillo and Chris Madrid
$66.85 at Old Martina’s Hall for Tom, Andrew, and Chris
$24.56 lunch for Darien Cabral and Vangie
$31.73 at Angelina’s with Chris Madrid
$197.12 at Monafuku CCDC for RCLC Group
$6.96 lunch for Henry Roybal at El Parasol
$140.78 for “Xmas Lunch” at El Paragua Restaurant in Espanola
$144.87 at Bourbon House Restaurant in New Orleans
$162.70 at Antoine’s Restaurant in New Orleans
$322.48 for “dinner with NMED, LA county” in New Orleans
$32.90 for “lunch with Duncan Sill, REDI net”
$286.78 at the Bull Ring Restaurant in Santa Fe. The billing detail for this dinner states
that the guests were Board member Javier Gonzales and Harris Walker, NNSA.
$1,850.95 at the Casa Luca Restaurant in Washington, D.C.
$396.26 for a meal for “EM and Board Members Dinner” at El Parasol Restaurant
$21.09 for a meal at the Santa Fe Bar and Grill with guest, Peter Woerhle
$30.50 for “lunch with Jeff of RDC/LANL MSC” at the Compound Restaurant in Santa
Fe
$20.64 for “Lunch with Liddie @ RDC” at La Mesita Eatery
$38.75 for “lunch with Patrick Woerhle, LANS” at La Cocina Restaurant
$121.95 for “lunch for RCLC meeting” at Beestro Restaurant in Santa Fe
$33.09 for “lunch with Comm. Gallegos” at Capitol Grill
$33.19 for “lunch with Councilor Fernandez” at Gutiz
$38.91 for a “meeting with Mayor Alice” at El Paragua Restaurant in Espanola
$37.27 for “lunch with Brent Jaramillo, Econ Dev. Taos” at the Gorge Restaurant in
Taos
14   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-002 The RCLC Board approved reimbursements to Andrea Romero
Consulting, LLC or JLH Media, Inc. which included expenses for other guests, which is
prohibited by both the Travel Policy Section VIII and the Per Diem and Mileage Act
(Material Weakness) (Continued)
$11.21 for “Mtg w/Councilor Ives, Santa Fe” at the Sage Bakehouse in Santa Fe
$18.76 for “Mtg with Michele, Sen Udall’s staff” at Vinaigrette Restaurant in Santa Fe
$39.22 for “Meeting with Jeff, LANL-MSC” at La Cocinca Restaurant in Espanola
$31.19 for “Meeting with Patrick Woerhle” at Clafoutis in Santa Fe
$37.75 for “Lunch with Mayor Alice” at La Cocina Restaurant in Espanola
$18.56 for “Lunch with Dave Lyons” at Blue Window Bistro
$49.09 for “lunch with Patrick W, LANL” at Gabriel’s Restaurant in Pojoaque
$26.02 for “Dinner with Brian Crone, Rep. Lujan” at Paper Dosa Restaurant in Santa Fe
$35.59 for “lunch with Kathy Keith, LANL CPO” at La Posada Restaurant in Santa Fe
$29.03 for “lunch with Justin Greene, review of CPO” at La Posada Restaurant in Santa
Fe
$796.25 for “RCLC/ECA group dinner” at Casa Luca Restaurant in Washington, D.C.
$131.07 for “RCLC group lunch” at Thunder Grill
Criteria
Section VIII of the Travel Policy states, “Prohibited expenses include, but are not limited to, the
following:
 Personal items, including personal grooming items
 Beverages and snacks, hotel mini bar charges
 Gifts
 Entertainment and recreation expenses, including hotel movie and health club
activities
 Golf outings, fitness events and other “recreational” activities
 Alcoholic Beverages
 Expenses for spouses, guests or family members
NMAC 2.42.2.1 et seq. does not contain any provisions that allow for payment of per diem rates
to persons who are not public officers or employees.
Cause
The RCLC did not follow its own Travel Policy or the NMAC Rule with regard to reimbursements
for meals for third party guests of the Executive Director.
Effect
The RCLC improperly expended public funds to pay for meals for individuals who are not public
officers or employees.
15   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-002 The RCLC Board approved reimbursements to Andrea Romero
Consulting, LLC or JLH Media, Inc. which included expenses for other guests, which is
prohibited by both the Travel Policy Section VIII and the Per Diem and Mileage Act
(Material Weakness) (Continued)
Recommendation
The RCLC should follow the rules applicable to a local public body when paying any per diem
reimbursements.
Response
The RCLC does not agree with portions of the listed conditions. Some charges are clearly for only
one person indicating that the guest paid separately. In other cases, guests have indicated that they
reimbursed the Executive Director directly in cash.
The RCLC concurs with the recommendation and will be changing its policies and procedures to
ensure that it complies with the requirements of NMAC 2.42.2. The recently adopted FY 2019
RCLC budget has been changed to assume that all board member travel is handled by the
respective local governments directly. In addition, the new executive director services contract
also assumes that the executive director’s travel is handled directly by that vendor and not as a
reimbursable expense. If there are any instances where the RCLC board approves any exceptions
and pre-approves any travel to be paid by the RCLC, the RCLC will ensure compliance with the
requirements of NMAC 2.42.2.

16   P a g e  
 

 

Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-003 The RCLC Board approved reimbursements to JLH Media, Inc. or
Andrea Romero Consulting, LLC for expenditures for alcoholic beverages, personal
expenses and entertainment and recreation expenses, in violation of the Travel Policy and
state law. (Material Weakness)
Condition
The RCLC reimbursed JLH Media, Inc. or Andrea Romero Consulting, LLC for alcoholic
beverages, personal expenses and entertainment and recreation expenses, totaling $2,639.90.
$286.78 for a meal at the Bull Ring Restaurant in Santa Fe that included ten (10) alcoholic
beverages.
$22.00 for a ticket to the Tony Hseih Venture Capitalist Seminar.
$10.81 for a mirror at Ross Dress for Less.
$1,850.00 for a meal at Casa Luca in Washington, D.C. that included $380.00 in charges
for alcoholic beverages, including four (4) bottles of wine and ten (10) additional
alcoholic beverages.
$37.48 for charges at the Hilton Alexandria Hotel in Alexandria, VA for “Finn & Porter”
and $41.11 for “room service” for Board member Peter Ives.
$64.72 for charges at the Hilton Alexandria Hotel in Alexandria, VA for “Finn & Porter”
for Board member Javier Gonzales.
$20.00 for a ticket to the Lensic Theater in Santa Fe.
$307.00 for (12) tickets to a baseball game in Washington D.C.
Criteria
Section VIII of the Travel Policy states, “Prohibited expenses include, but are not limited to, the
following:
 Personal items, including personal grooming items
 Beverages and snacks, hotel mini bar charges
 Gifts
 Entertainment and recreation expenses, including hotel movie and health club
activities
 Golf outings, fitness events and other “recreational” activities
 Alcoholic Beverages
 Expenses for spouses, guests or family members
The RCLC did not follow its own Travel Policy or the NMAC Rule with regard to reimbursements
for meals for third party guests of the Executive Director.
Effect
The RCLC improperly expended public funds to pay for entertainment expenses and alcoholic
beverages for both its own Board members as well as individuals who are not public officers or
employees.
17   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-003 The RCLC Board approved reimbursements to JLH Media, Inc. or
Andrea Romero Consulting, LLC for expenditures for alcoholic beverages, personal
expenses and entertainment and recreation expenses, in violation of the Travel Policy and
state law. (Material Weakness) (Continued)
Recommendation
The RCLC should follow the rules applicable to a local public body when paying any per diem
reimbursements.
Response
The RCLC does not agree with portions of the listed conditions. Some Board members have
indicated that they did not charge back for entertainment or alcohol but rather paid for those items
directly themselves.
The RCLC concurs with the recommendation and will be changing its policies and procedures to
ensure that it complies with the requirements of NMAC 2.42.2. The recently adopted FY 2019
RCLC budget has been changed to assume that all board member travel is handled by the
respective local governments directly. In addition, the new executive director services contract
also assumes that the executive director’s travel is handled directly by that vendor and not as a
reimbursable expense. If there are any instances where the RCLC board approves any exceptions
and pre-approves any travel to be paid by the RCLC, the RCLC will ensure compliance with the
requirements of NMAC 2.42.2.

18   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-004 JLH Media, Inc. charged NM gross receipts tax on mileage and travel and
per diem expenditures resulting in double taxation to the RCLC. (Significant deficiency)
Condition
The invoices submitted by JLH Media, Inc. include charges for gross receipts taxes on
reimbursements mileage and reimbursements totaling $271.65.
Criteria
DFA 95-1 permits the reimbursement of mileage and actual receipts for expenditures up to $30
per day (in state) and $45 per day (out of state) excluding lodging. NM Gross Receipts tax is not
calculated on reimbursements to the extent that it would equate to taxing an already imposed tax.
Cause
JLH Media, Inc. did not consider taxation regulations when compiling expenditures and mileage
to be included in the monthly billing and the Fiscal Agent did not adequately review invoices prior
to payment, indicating that neither party understands NM taxation regulations.
Effect
The contracted Executive Director claimed NM gross receipts tax on mileage and travel and per
diem expenditures resulting in double taxation to the RCLC.
Recommendation
Invoices should be scrutinized for clerical or application errors prior to payment by the fiscal agent.
Response
The RCLC concurs with the recommendation and will be developing and implementing an
agreement with the fiscal agent that specifies these duties.
Los Alamos County, as fiscal agent (LAC) concurs with the recommendation and will be
developing and implementing an agreement with the RCLC that specifies these duties.

19   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-005 Duplicate billing of mileage by Contractor (Significant deficiency)
Condition
During the course of the special audit, the OSA noted that reimbursements requested for
mileage were duplicated by both Executive Directors and their staff. The individuals collected
mileage for travel to and from the same location on the same day to attend the same meeting.
The OSA identified twenty-eight (28) instances of duplicate mileage reimbursements totaling
$1,115.76.
Criteria
The Contact agreement for Executive Director Services provides that reimbursement of travel
costs shall be in accordance with the RCLC’s Travel Policy. The Travel Policy provides that
“No specific mode of transportation is mandatory. However, staff members are expected to
use the most economical means available with reasonable consideration given to the time and
distance involved.” The Travel Policy also provides for in-state travel to be approved by the
Executive Director.
Cause
A lack of proper monitoring by the Executive Director prior to submission to the fiscal agent for
processing of payment. Additionally, the Executive Director is responsible for approving the instate travel for which her company requests reimbursement. There is a lack of internal controls in
the Travel Policy which can allow a contract Executive Director to financially benefit from his or
her own travel approvals.
Effect
The RCLC reimbursed what appear to be excessive, duplicate mileage charges by the Executive
Director that do not appear to comply with the Travel Policy.
Recommendation
The Executive Director should not be allowed to approve in-state travel if the Executive Director
will receive reimbursement for that travel under his or her contract. The Coalition should ensure
that all expenditures related to the contract Executive Director be reviewed and authorized by
someone other than the Executive Director.
Response
The RCLC concurs with the recommendation and will be changing its policies and procedures to
ensure that all expenditures related to the executive director contract be reviewed and authorized
by someone other than the Executive Director.

20   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-006 The RCLC Governing Board not exercising control over finances in
accordance with the Joint Powers Agreement Act, § 11-1-5(D), NMSA 1978 (Material
Weakness)
Condition
The RCLC Board approved reimbursement checks for travel and per diem expenditures that did
not appear to be adequately reviewed against the RCLC’s Travel Policy, the Per Diem and Mileage
Act, and NMAC 2.42.2.1.
Criteria
The RCLC Board’s responsibility for control over the Coalition’s finances is set forth in the Joint
Powers Agreement Act § 11-1-4(D) and Section 9 of the Joint Powers Agreement which formed
the RCLC. Both the statute and the Agreement provide that the RCLC Board is “strictly
accountable” for all receipts and disbursements of the entity.
Cause
The RCLC failed to follow the requirements of the Joint Powers Agreement Act, and the
Agreement itself.
Effect
The RCLC improperly expended public funds in violation of state law.
Recommendation
In order to ensure that each party is fulfilling its statutory duties and fiduciary responsibilities to
the RCLC, the Executive Director and Coalition Board should implement and formalize policies
and procedures for the processing of transactions. Additionally, the Coalition Board should
provide training to all members and contractors. Only payments reviewed in accordance with the
policies and procedures and related laws and regulations should be approved by the Board’s
Treasurer prior to processing by the fiscal agent.
Response
The RCLC concurs with the recommendation and will be formalizing and implementing policies
and procedures for the processing of transactions so that only appropriate transactions are approved
by the RCLC Treasurer prior to payment processing by the fiscal agent. The RCLC Board will
also provide training to all members and contractors. These updated policies and procedures will
also be reflected in the upcoming fiscal agent agreement.

21   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-007 Travel expenditures in excess of board approved budget (Material
Weakness)
Condition
In fiscal years 2015 and 2018, the RCLC expended more than the approved $10,000 annual
budget for travel purposes separately for contract staff and board. The fiscal agent combines
the travel into one line-item making it difficult to ascertain whether either or both exceed
budgetary authority. The total amount for 2014-2015 was $433.22 over the combined budgeted
total of $20,000. The total amount for 2017-2018 was $1,012.04 over the combined budgeted
total of $20,000.
Criteria
The RCLC Travel Policy states that both the board and contract staff are separately authorized
up to $10,000 annually for travel purposes.
Cause
The Coalition’s Board and fiscal agent did not perform adequate oversight and approval of
expenditures. By combining the expenditure in one account it was impossible to verify
compliance with the budget.
Effect
The RCLC reimbursed unauthorized expenditures totaling $1,445.26. Non-compliance with the
RCLC travel policy requirement not to exceed $10,000 for travel purposes separately by the
Contract staff and the Board resulting in unauthorized expenditures.
Recommendation
The Coalition’s Board and fiscal agent should review appropriate travel policies and should
perform regular and consistent oversight and approval of expenditures in relation to their adopted
policies.
Response
The RCLC concurs with the recommendation and will be changing its policies and procedures to
ensure that it complies with the requirements of NMAC 2.42.2. The recently adopted FY 2019
RCLC budget has been changed to assume that all board member travel is handled by the
respective local governments directly. In addition, the new executive director services contract
also assumes that the executive director’s travel is handled directly by that vendor and not as a
reimbursable expense. If there are any instances where the RCLC board approves any exceptions
and pre-approves any travel to be paid by the RCLC, the RCLC will ensure compliance with the
requirements of NMAC 2.42.2. In addition, the RCLC will be formalizing and implementing
policies and procedures for the processing of transactions so that only appropriate transactions are
approved by the RCLC Treasurer prior to payment processing by the fiscal agent.

22   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-008 Potential non-compliance with the Department of Energy Grant Award
with regard to explicitly prohibited lobbying (Material Weakness)
Condition
The RCLC appears to be engaged in prohibited lobbying activities. The RCLC documentation
provided contains a statement that the RCLC “has positioned itself as sole, consistent lobbying
body for legacy waste cleanup dollars into LANL at the Congressional level.” Further,
Statements contained in a letter dated February 22, 2018, from Executive Director Andrea
Romero Consulting, LLC outline state and federal activities by the RCLC which appear to be
lobbying, as follows:
Following the House Tax and Revenue tabling of our Bill on March 3, 2017, we worked
diligently in the interim session to ensure that we had the best technical capacity on our
bill going into the 2018 session with the Legislative Finance Committee and Legislative
Council.
 Gained supporters of GRT Legislation: North Central Regional Transit District, New
Mexico Association of Counties, City of Espanola, City and County of Santa Fe, and
the New Mexico Municipal League.
 Reworked strategy to move bill through Senate and pre-filed the bill to get a low
number. Senate Bill 17
 Engaged with NNSA and House Armed Services on alternatives and discussion on our
strategy to ensure this revenue is protected.
 Presented to NM’s Radioactive and Hazardous Waste Subcommittee on RCLC
engagement on waste and cleanup, where legislators were alerted on the GRT losses
on September 21, 2017 in ongoing outreach efforts.
 Served as an ‘expert’ to impact bill in relationship to the Laboratory through 30-day
session. 2018 Legislative Session marked last chance for protection of this tax revenue
stream to the State and local communities. Provided handouts, updated each
committee hearing to ensure we addressed common questions and themes.
 January 26, 2018 – Passed through Senate Corporations and Transportation
Committee
 February 1, 2018 – Passed through Senate Finance Committee
 February 3, 2018 – Defended on Senate Floor and passed 31-4
 February 12, 2018 – Passed through House Taxation and Revenue Committee and
passed 10-5. Prepared testimony with NCRTD to serve as testimony provider.
 February 13, 2018 – Passed through House.
 Prepared letter of support for NM Governor Susana Martinez citing all communities
and organizations in support of legislation in hope that she will sign the bill into law.

23   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-008 Potential non-compliance with the Department of Energy Grant Award
with regard to explicitly prohibited lobbying (Material Weakness) (Continued)
Criteria
The Department of Energy Grant contains an explicit restriction on federal lobbying efforts.
Paragraph 17 of the Grant Agreement states:
By accepting funds under this award, you agree that none of the funds obligated on the
award shall be expended, directly or indirectly to influence congressional action on any
legislation or appropriation matters pending before Congress, other than to communicate
to Members of Congress as described in 18 U.S.C. 1913, Lobbying with appropriated
moneys. This restriction is in addition to those prescribed elsewhere in statute and
regulation.
Section 18 U.S.C. 1913 provides:
§1913. Lobbying with appropriated moneys
No part of the money appropriated by any enactment of Congress shall, in the absence of
express authorization by Congress, be used directly or indirectly to pay for any personal
service, advertisement, telegram, telephone, letter, printed or written matter, or other
device, intended or designed to influence in any manner a Member of Congress, a
jurisdiction, or an official of any government, to favor, adopt, or oppose, by vote or
otherwise, any legislation, law, ratification, policy, or appropriation, whether before or
after the introduction of any bill, measure, or resolution proposing such legislation, law,
ratification, policy, or appropriation; but this shall not prevent officers or employees of
the United States or of its departments or agencies from communicating to any such
Member or official, at his request, or to Congress or such official, through the proper
official channels, requests for any legislation, law, ratification, policy, or appropriations
which they deem necessary for the efficient conduct of the public business, or from making
any communication whose prohibition by this section might, in the opinion of the Attorney
General, violate the Constitution or interfere with the conduct of foreign policy, counterintelligence, intelligence, or national security activities. Violations of this section shall
constitute violations of section 1352(a) of title 31.
Cause
The RCLC may have failed to abide by the terms of the DOE Grant when it “Engaged with NNSA
and House Armed Services on alternatives and discussion on our strategy to ensure this revenue
is protected.” In addition, the RCLC’s self-described state lobbying activities may have
violated 18 U.S.C. 1913.

24   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-008 Potential non-compliance with the Department of Energy Grant Award
with regard to explicitly prohibited lobbying (Material Weakness) (Continued)
Effect
Possible non-compliance with the DOE grant agreement which could result in the claw back of
approximately $372,000.
Recommendation
The Coalition’s Board and fiscal agent should ensure that it follows all lobbying restrictions with
regard to any federal or state grant funds it receives.
Response
The RCLC disagrees with this finding. Only a minority fraction of RCLC’s activities and
expenditures relate to advocacy activities. There is clearly more than enough non-grant member
contribution revenue to cover those costs, ensuring that restricted grant revenues are not utilized
for prohibited lobbying activities.
RCLC agrees with the recommendation that the RCLC Board should ensure that it follows all
lobbying restrictions with regard to any grants it receives. The RCLC’s new executive director
contract requires that invoices show the allocation of tasks and compensation due split between
those that are DOE grant applicable and those that are not. The RCLC will also be contracting
for third party accounting services that will provide for a segregated special revenue fund for
grant activity accounting.
LAC disagrees with the recommendation as it related to LAC. As fiscal agent, LAC is not
responsible for ensuring RCLC’s compliance with lobbying restrictions nor for any portion of
grant reporting.
The respective duties and obligations of the RCLC and LAC will be clarified in the new
agreement to be entered into between them.

25   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-009 Potential violations of (Executive Order 12674) Fourteen Principals of
ethical Conduct for Federal employees’ item 4 related to the solicitation or acceptance of
gifts. (Material Weakness)
Condition
The RCLC paid for meals and entertainment of DOE employees. Although all of the
participants could not be identified, the OSA was able to identify the participation of certain
DOE employees.
Criteria
(Executive Order 12674) Fourteen Principles of Ethical Conduct for Federal Employees states:
4. Employee shall not, except as permitted by the Standards of Ethical Conduct, solicit
or accept any gift or other item of monetary value from any person or entity seeking
official action from, doing business with, or conducting activities regulated by the
employee's agency, or whose interests may be substantially affected by the
performance or nonperformance of the employee's duties.
Cause
Unknown cause however, the appearance is that the meals and entertainment may have been used
to influence an official action.
Effect
Potential non-compliance with DOE’s (Executive Order 12674) Fourteen Principals of ethical Conduct
for Federal employees’ item 4 related to the solicitation or acceptance of gifts.

Recommendation
The Coalition’s Board should create a policy that prohibits any coalition staff from purchasing,
gifts, meals or entertainment for federal employees.
Response
The RCLC disagrees with the finding. The criteria relates to the actions of federal employees and
is not a standard that applies to the actions of the RCLC.
However, given the expected occasional interactions with federal employees, the RCLC concurs
with the recommendation and will be changing its policies to prohibit RCLC Board, staff and
contractors from purchasing gifts, meals or entertainment for federal employees.

26   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-010 Breach of Fiduciary Duty by the Fiscal Agent – Los Alamos County
(Material Weakness)
During the special audit, the OSA noted several emails where the Board treasurer or representative
questioned specific expenditures but upon receiving a response from Los Alamos County, the
fiscal agent, they allowed the reimbursement of those expenditures. In each of these questioned
transactions, the response by the fiscal agent, Los Alamos County, appeared inadequate to
sufficiently validate the legitimacy of the expenditures by New Mexico laws, regulations and
statutes.
The Executive Director filed reimbursement claims that were improper under the Per Diem and
Mileage Act, NMAC 2.42.2.1 et seq. and the Travel Policy. The fiscal agent, Los Alamos County,
approved and/or facilitated the approval of improper expenditures without regard to New Mexico
laws, regulations and statutes.
Criteria
The fiscal agent has a fiduciary duty to process receipts and expenditures. In addition, the fiscal
agent should exercise due care in reviewing proposed expenditures and obtain proper approval
from RCLC officers prior to payment. Also the County had no written procedures regarding
processing of RCLC transactions.
Cause
Since there were no standard procedures, expenditures were made without prior written approval.
The County did not seek approval subsequent to the expenditures by the contractor and/or board
members. In addition, the subsequent approval was made by someone not familiar with the rules
regarding travel and per diem.
Effect
The RCLC paid expenditures that were not eligible under state law or travel and per diem policies.
Recommendation
The Board should create and implement policies and procedures for expenditures that require
approval of the board or authorized representative prior to payment. The policies should adhere
to all applicable state laws and administrative rules.
Response
The RCLC concurs with the recommendation and will be formalizing and implementing policies
and procedures for the processing of transactions so that only appropriate transactions are approved
by the RCLC Treasurer prior to payment processing by the fiscal agent.
LAC disagrees with the finding. LAC’s duties as fiscal agent are not defined, and this likely
contributed to this situation. However, since they are not defined, it is not appropriate to presume
27   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

what level of responsibility LAC had. This is especially true given the clear responsibility placed
upon the Treasurer in the RCLC by-laws and upon the Executive Director in those contracts. LAC
has always sought approval from the RCLC Treasurer prior to disbursements and always provided
whatever information it had available, generally from the Executive Director, to the Treasurer.
LAC concurs with the recommendation.  

28   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-011 Failure to comply with State Audit Act (Material Weakness)
Condition
The funds of the RCLC were not subjected to the State Audit Act. Despite seeking and receiving
an opinion by the NM Office of the State Auditor, the RCLC and its fiscal agent, Los Alamos
County, made a decision based on advice from the County’s auditor to classify the funds as an
agency fund of Los Alamos County. Classifying the RCLC as an agency fund circumvents
transparency in the use of public monies.
Criteria
The Joint Powers Act Section 11-1-1 to 11-1-7, NMSA 1978, specifically, Section 11-1-5 C states:
“The agency shall possess the common power specified in the agreement and may exercise it
in the manner or according to the method provided in the agreement, subject to any of the
restrictions imposed upon the manner of exercising such powers of one of the contracting
public agencies or such restrictions of any public agency participating which may be designated
or incorporated in the agreement.”
Additionally, on February 20, 2013, the OSA issued a letter of determination stating that the RCLC
was a “special district”, further classified and subject to all regulations and laws of a “local public
body”, including the Audit Act.
Cause
A deliberate decision was made by the RCLC and/or its fiscal agent to avoid an audit of the
RCLC funds.
Effect
The lack of oversight of public monies through the Audit Act led to improper payments from public
funds and non-compliance with laws, regulations, statutes and agreements which may result in
criminal violations.
Recommendation
Beginning with the fiscal year ending June 30, 2018, the Coalition should immediately become
compliant with the State Audit Act and have all financial statements audited by an approved
auditor on the OSA website.
Response
The RCLC concurs with the recommendation and will become compliant with the State Audit Act.
LAC disagrees with the finding. LAC does not have authority to contract for audit services on
behalf of the RCLC and has no decisions making authority regarding the RCLC’s choices in this
matter. The decision to account for the receipts and disbursements of the RCLC in an Agency
Fund of LAC is the correct accounting treatment for LAC’s accounting records as fiscal agent.
29   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

There were no efforts by LAC to circumvent transparency in the use of public money as is
demonstrated by LAC’s regular reporting of fiscal activity to the RCLC board.
LAC concurs with the recommendation and will assist RCLC to become compliant with the State
Audit Act.
The respective duties and obligations of the RCLC and LAC will be clarified in the new
agreement to be entered into between them.

30   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-012 Fiscal Agent combined RCLC monies with Los Alamos County’s pooled
cash account resulting in a lack of transparency (Material Weakness)
Condition
The cash of the RCLC and Los Alamos County was being accounted for in one bank account
making it difficult to distinguish between the expenditures of each entity.
Cause
The fiscal agent uses a pooled cash account for all transactions of Los Alamos County including
those of the RCLC.
Effect
The inability to identify discrepancies and to reconcile the individual funds included in pooled
cash. Additionally, it does not appear that the RCLC or Los Alamos County have properly
reconciled cash accounts.
Recommendation
It is recommended that the RCLC, through its fiscal agent, create a separate bank account and a
special revenue fund to track the assets, liabilities, equity, revenues and expenditures of the RCLC.
Response
The RCLC concurs with the recommendation and will be creating a separate bank account. The
RCLC will also be contracting for third party accounting services that will provide for a
segregated special revenue fund for grant activity accounting.
LAC disagrees with the finding. The use of a one bank account and a pooled cash account does
not make it difficult to distinguish between the expenditures of each entity because RCLC
transactions are segregated into a separate fund. Similarly LAC has no difficulty distinguishing
between the transactions of its own separate funds.
However, LAC concurs with the recommendation to create a separate bank account in order to
simplify the interactions with the anticipated third party accountant.

31   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-013 A miscoding of expenditures and using a pooled cash account, resulted in
the RCLC paying for expenditures of Los Alamos County (Material Weakness)
Condition
On June, 29, 2017, the Regional Coalition of LANL Communities issued a check for $5,000
to the ECA Annual Membership. Upon the OSA’s inspection of this check, it appeared that
the ECA conference dues were billed to Los Alamos County. Further investigation revealed
that the invoice did belong to Los Alamos County, however, the expenditure was coded to
RCLC and paid out of RCLC funds. The improper payment was not identified through the
reconciliation of the pooled cash account and went undetected until the special audit. It was
noted that the Coalition did recoup the $5,000 from Los Alamos County in June 2018.
Cause
The fiscal agent uses a pooled cash account for all transactions including those of the RCLC. The
fiscal agent utilizes the same chart of accounts with only slight variation.
Effect
The RCLC paid for expenditures that were not intended for the RCLC. As a result there is a
misappropriation of Coalition cash assets and the financial reports presented to the board may not
be accurate.
Recommendation
Together the Coalition and the fiscal agent should brainstorm ways to rectify the lack of controls
and monitoring while minimizing the impact to the Coalition vendors who receive payment. It
would be advisable to create a separate bank account and a special revenue fund to track the assets,
liabilities, equity, revenues and expenditures of the RCLC.
Response
The RCLC concurs with the recommendation and will be creating a separate bank account.
The RCLC will also be contracting for third party accounting services.
The miscoding of a single check was a clerical error unrelated to the pooled account. However,
LAC concurs with the recommendation to create a separate bank account in order to simplify the
interactions with the anticipated third party accountant.

32   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-014 Improper reporting of contract labor (Material Weakness)
Condition
The taxable earnings of contractors were not properly reported on form 1099. In calendar year
2016, ARC was paid a total of $121,467.95 however the 1099 was issued for $113,721.66, a
difference of $7,746.29. In calendar year 2017, ARC was paid a total of $189,493.18 however the
1099 was issued for $ 176,957.44, a difference of $12,535.74.
Criteria
Internal Revenue Service Code states that all earnings are subject to tax. For a contractor, all
payments are reported on form 1099 and are subject to federal, state and self-employment tax
on the net income of the contractor.
Cause
The Coalition, through its fiscal agent, did not properly accumulate all payments to the contractor
in each calendar year.
Effect
The Coalition has not complied with IRS requirements nor the State of New Mexico’s taxation
requirements. The Coalition issued incorrect 1099’s which were used in the reconciliation of annual
federal and state taxes.
Recommendation
The Coalition will need to evaluate the potential consequences with the IRS and NM Taxation and
Revenue Department and find ways to rectify the noncompliance while minimizing the impact to
the Coalition. Further analysis of 1099 forms and contractor payments is required for all
contractors paid more than $600 in each calendar year. At a minimum, the Coalition should analyze
1099’s from inception of the RCLC to current and make every effort to correct 1099 forms and
related reporting. The Coalition and its fiscal agent staff responsible for the issuance of public
monies should receive additional training with regard to IRS regulations related to
contractors/vendors.
Response
The RCLC and LAC concurs that 1099 forms should be correct. LAC as fiscal agent making
disbursements for the RCLC will conduct a review of all RCLC vendor information to ensure the
1099 forms are correct.

33   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-015 Improper accounting for reimbursements, including the netting of
reimbursements with expenditures. (Significant deficiency)
Condition
During the course of the special audit, the OSA noted that some of the reimbursement claim
forms had a credit amount applied to them. Further research revealed that these were
reimbursements for travel expenditures provided by the ECA. These credits reduced the amount
of the total reimbursement but did not accurately report the reimbursement as a contra-revenue
but instead netted the reimbursement against expenditures.
Criteria
Generally accepted accounting principles and grant accounting do not provide for the netting of
reimbursements with expenditures as it creates misstatements in both revenues and expenditures
for the period.
Cause
The Executive Director filed the reimbursement claim with the refund reflected but the fiscal agent
did not properly apply U.S. GAAP when processing the reimbursement perhaps as a result of no
Board approved fiscal policies or procedures.
Effect
The Coalition’s financial statements may be misstated. Additionally there may be a violation of
U.S. GAAP and of grant accounting. Netting of reimbursements with expenditures does not allow
for proper follow-up of reimbursements due to the RCLC and creates an environment ripe for
fraud, waste and abuse.
Recommendation
The Coalition should comply with U.S. GAAP and grant accounting to ensure proper reporting
and tracking of reimbursements due to the RCLC.
Response
The RCLC concurs with the recommendation and will be contracting for third party accounting
services that specifies compliance with U.S. GAAP, grant accounting and tracking of
reimbursements due to the RCLC.

34   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-016 Management Could Not Provide All Requested Information (Material
Weakness)
Condition
The Coalition and its fiscal agent did not provide the OSA investigators with all supporting
documentation related to transactions for the period July 1, 2014 through June 30, 2018. One
example is the lack of a contract for professional services of $10,000.
Criteria
Section 14-3-13 NMSA 1978 requires the Coalition to carefully preserve and protect public
records.
Cause
It is unknown why the Coalition and its fiscal agent did not provide all supporting documentation.
Effect
The Coalition’s Board or its fiscal agent did not provide all supporting documentation requiring
the OSA to obtain documents through other means and resulting in a concern that there may be
other documents that were not provided or that there may be an underlying reason for not
providing the documentation. Missing records can be indicators of more serious issues including
fraud.
Recommendation
The Coalition and its fiscal agent should have a filing system that enables them to locate
supporting documentation for all Coalition transactions.
Response
The RCLC concurs with the recommendation and will be changing its policies and procedures
to ensure that supporting documentation for all transaction is properly maintained.
LAC provided all documentation that was provided to it by the Executive Director to the OSA.
LAC concurs with the recommendation and will be developing and implementing an agreement
with the RCLC that specifies what documentation must be received prior to authorized
disbursements occurring.

35   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

Finding 2018-017 Budget irregularities (Significant deficiency)
Condition
During the course of the OSA’s special audit, it was noted that the budget did not foot correctly
and presented a misleading projection regarding unrestricted fund balance to the board.
Additionally, the budget includes a statement that the DOE grant will be used for RCLC
operating expenses but not for travel. If there is a violation of the grant agreement, then there
would not be sufficient funding to cover operating expenditures, not including travel.
Criteria
Good accounting practices indicate that financial data should be clerically accurate.
Additionally, the statement on the budget indicates that it is the Boards intent to not utilize the
DOE grant funding for travel.
Cause
A lack of proper oversight by the Board and fiscal agent with regard to budgeting.
Effect
The Coalition’s budget is not accurate and may be misleading for the board.
Recommendation
The Coalition should prepare its budget and ensure that it is clerically accurate and that the RCLC
has appropriate funding for all costs associated with the RCLC.
Response
The RCLC concurs with the recommendation and will be contracting for third party accounting
services that specifies preparation of a budget that is clerically accurate and has appropriate
funding for all costs associated with the RCLC.

36   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

2018-018 Failure to comply with the State Constitutions Anti-Donation of Public Monies Act Article
IX (Material Weakness)
Condition
The OSA’s special audit revealed many expenditures paid by the RCLC to governing board
members, the Executive Director(s) and third parties totaling $51,519.45 in improper
expenditure payments from July 1, 2014 through June 30, 2018.
JLH Media
Andrea Romero Consulting, Inc.
Alice Lucero
City of Santa Fe
Crescent Strategies
ECA Annual Conference
Los Alamos County Credit Card

4,793.42
26,862.18
2,324.08
1,872.81
10,000.00
5,000.00
666.96
51,519.45

Criteria
Article IX, Section 14 of the New Mexico Constitution (the Anti-Donation Clause) prohibits
any donation to or in aid of any person, association or public or a private corporation.
Cause
The Executive Director Firms submitted, to the fiscal agent, previously paid invoices and receipts
for reimbursement by the RCLC. Many of these reimbursement requests did not have prior
approval by the Board so the fiscal agent would obtain, after the fact, approval to pay the
reimbursement via email correspondence with a Board member. The Board members may not
have had adequate time to review the reimbursements against the RCLC policies and procedures,
NMAC 2.42.2.1, and applicable laws and regulations.
Effect
The improper payments may have constituted an unwarranted donation of public funds to private
individuals in violation of the Anti-Donation Clause.
Recommendation
The Coalition should require review and approval of all invoices prior to the processing of
payments by the fiscal agent. Additionally, the Coalition should follow federal and state laws,
regulations and agreements with regard to expenditures.
Response
The RCLC concurs with the recommendation and will be changing its policies and procedures to
ensure that appropriate reviews and approval of invoices for compliance with all applicable
37   P a g e  
 

 Regional Coalition of LANL Communities
Schedule of Findings and Responses
For the Period of July 1, 2014 through June 30, 2018
 

regulations occur prior to authorizing the fiscal agent to make payments. The RCLC board will be
developing and adopting financial policies that clearly delineate the roles and responsibilities of
the RCLC board, the Treasurer, the executive director, the third party accountant, and the fiscal
agent as it relates to the fiscal transactional business of the RCLC.

EXIT CONFERENCE
On July 30, 2018 the OSA held an exit conference with the following individuals to discuss the
results of the consulting service engagement and the findings.
Regional Coalition of LANL Communities
Harry Burgess, County Manager
Steven Lynne, Deputy County Manager
Helen Perraglio, CPA, Chief Financial Officer
David Griego, Senior Management Analyst
Commissioner Henry Roybal, RCLC Chair
Councilor Morrie Pongratz, RCLC Secretary

Los Alamos County
Los Alamos County
Los Alamos County
Los Alamos County
Santa Fe County
Los Alamos County

Office of the State Auditor
C. Jack Emmons, CPA, CFE, Deputy State Auditor
Bob Parker, Chief Governmental Accountability Officer & General Counsel
Melissa Santistevan, CPA, CFE, CGMA, CICA, Director of Special Investigations

38   P a g e  
 

  

Wayne Johnson
State Auditor

C. Jack Emmons, CPA, CFE
Deputy State Auditor

State of New Mexico
OFFICE OF THE STATE AUDITOR
August 7, 2018
Governing Board
Regional Coalition of LANL Communities
c/o Los Alamos County Manager
1000 Central Avenue Suite 300
Los Alamos, NM 87544
Dear Coalition Directors:
The Office of the State Auditor performed a special audit of certain accounting and financial records
maintained by the Regional Coalition of LANL Communities (the “Coalition”) for the period of
July 1, 2014 through June 30, 2018. The purpose of the special audit was to determine if certain
transactions issued by the Coalition were compliant with relevant laws, regulations, policies
and procedures, procurement code and agreements applicable to the agency. In the course of
the special audit, additional findings were uncovered which are set forth in the audit report.
The Office entered into a contract with the Coalition for the conduct of the Special Audit. The special
audit was conducted in accordance with Standards for Consulting Services established by the
American Institute of Certified Public Accountants.
Coalition management is responsible for maintaining the accounting records and for
establishing and maintaining effective internal control over compliance with applicable laws,
regulations, and procurement policies of the Coalition. The Special Audit was limited in its
scope. Had the OSA performed additional procedures, other matters might have come to our
attention that would have been reported to you. The OSA may, in addition to this Special Audit, refer
matters found to the Coalition’s independent public accountant to be reviewed as a part of the Coalition’s
2018 annual audit.
This report is intended to identify violations of state and local law, and provide recommendations to the
Coalition to correct the existing violations found, as well as provide recommendations to prevent future
violations and lack of adequate controls. If the Coalition wishes to discuss the report and
recommendations in further detail, please do not hesitate to contact our office at (505) 476-3800.
Sincerely,
C. Jack Emmons, CPA, CFE
Deputy State Auditor
2540 Camino Edward Ortiz, Suite A, Santa Fe, New Mexico 87507
Local (505) 476-3800 * Fax (505) 827-3512 http://www.osanm.org * 1-866-OSA-FRAUD