October 25, 2021

Former CEO of New Mexico Finance Authority Not Eager to Take Blame for Fake Audit Fiasco

Remember earlier this year when an audit of the New Mexico Finance Authority turned out to be 100% bogus and the controller in charge, a fella by the name of Greg Campbell, said he was "probably negligent" to "assemble the [it] in that manner"? Sure you do.

Well it turns out that, despite all the fun and games, no money went missing and the NMFA has turned over a new leaf, says board chair Nann Winter: 

“We have already taken a number of actions to strengthen fiscal oversight and assure compliance with laws and rules governing our audits and financial activity,” Winter said in a statement.
 
The latest report, a forensic review of the NMFA’s books, found no evidence of theft or embezzlement of NMFA funds, but detailed numerous instances where proper management practices, statutes and audit rules were not followed, the agency acknowledged.
 
Winter expressed her relief that the special audit did not cite any instances where NMFA funds were compromised, especially those funds dedicated to repayment of investors. “Lax supervision and a casual attitude toward the audit statutes and rules are a thing of the past,” she noted.
So, the days of fake audits of the NMFA are over. That's great! But what about placing blame? Former CEO Richard May seems to be taking on a lot of it and he is not happy about it. For starters, he says, this whole episode could have been avoided if anyone other than him, including external auditor CliftonGunderson, would have done what he said and/or taken some initiative:
“I directed key Finance Authority staff to provide whatever information DFA requested. Further, if DFA staff was aware there were missed deadlines regarding the FY 2011 audit, DFA Secretary Tom Clifford must have known of this information. Mr. Clifford is a Finance Authority Board member. If this information was available to DFA, then it is inexcusable that Mr. Clifford failed to notify the Board and senior management of this missing audit.
 
The facts clearly show the entire fraudulent audit would have been avoided if the State Auditor’s contractor, Clifton Gunderson LLC, would have notified me just once between Dec. 15, 2011 and March 12, 2012 that the fiscal year 2011 audit had not been filed by the statutory deadline. Yet, no such communication was ever received.”
But wait!
“In addition, I was only CEO of the Finance Authority for three months when the FY 2011 audit was due and was not an accountant familiar with the state audit process,” said May. “I am unfairly being held responsible for the former controller’s criminal behavior, responsible for the failures of the State Auditor’s office and of Clifton Gunderson the outside auditor, responsible for the failures of the Finance Authority Board, the audit committee, Finance Authority outside counsel, and more experienced staff who never detected the audit was fraudulent and that proper procedures were not followed.”
Got it? He was just the CEO. Geez.
 

 

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Related articles

Friday Footnotes: Deloitte Complains Its Way to a Contract; Deficiencies Abound; Beyond the Windowless Audit Room | 10.22.21

How CPAs can rise above a polarized political climate [Journal of Accountancy] Aside from being prepared for these possible changes, [Publisher and editor-in-chief of The Cook Political Report Amy] Walter recommends that CPAs break away from the polarization that has made each side feel like an election is an existential fight for the real America. […]