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State auditor resorts to subpoenas to find missing cash

SANTA FE – The Office of the State Auditor has reconstructed how most of $1 million that previously couldn’t be accounted for by a broadband project in northern New Mexico was spent.

State Auditor Wayne Johnson on Thursday released a follow-up report on the REDI Net project that also said there is now “more than likely no missing fiber optic cable” from the project.

An audit prepared for Johnson’s office by a private firm and released earlier this year couldn’t account for 12 miles of cable. That same audit said the project couldn’t document how $955,000 had been spent.

The REDI Net project was financed in 2010 with $10.5 million in post-recession stimulus money from the federal American Recovery and Reinvestment Act. The money went through the North Central New Mexico Economic Development District (NCNMEDD), a consortium of counties.

Johnson said in a news release that his office “relied on subpoenas” issued to vendors and reconstructed $778,952 of the expenditures previously unaccounted for.

He said there remains $178,007 in spending for which his office “has not yet issued subpoenas to multiple additional vendors of smaller invoices.” The office did find one invoice that did not match the amount of the payment, with an apparent overpayment of $30,358 in 2011.

“Based on the comparison of the subpoena responses to the table of missing expenditures with missing documentation, the OSA does not find evidence of large-scare theft or fraud of funds or assets,” says the new report.

The release from the Auditor’s Office said the process never should have been this difficult” and that the office “was forced to resort to subpoenas to produce records and recreate much of REDI Net’s expenses. The project’s fiscal agent, the NCNMEDD, “was unable or refused to produce complete records,” the release said.

“We can’t allow an entity that is spending taxpayer dollars to stonewall, delay or evade annual audits by ‘losing or ‘misplacing’ the public records, or by refusing to provide them,” Johnson said.

“I will follow state statute and issue subpoenas whenever records on how public money is spent are kept in the dark.”

The broadband project is providing high-speed internet to about 75 “anchor” institutions like schools, hospitals and government agencies. The system is set up for other internet providers to take on the role of “last mile” services to individual customers like homes and businesses.

State Rep. Jim Trujillo, D-Santa Fe, is board president of the NCNMEDD. He said Thursday a former staffer had incorrectly destroyed the paper records of the spending that had been unaccounted for and that’s why the auditor’s office had to subpoena the documents from vendors. He said the previously unaccounted-for cable had been swapped to the Jemez Mountains Electric Cooperative in return for use of its poles by REDI Net.

“I think it’s going to turn out OK,” Trujillo said of the probe into the project’s spending.