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Auditors warn official about access

Copyright © 2013 Albuquerque Journal

State auditors warned a top executive under Bernalillo County Treasurer Manny Ortiz this fall not to restrict their access to county employees, suggesting auditors had faced “interference from county personnel” in the past.

The letter, dated Sept. 25, doesn’t explain what triggered the warning as the state conducts a routine audit.

Deputy State Auditor Carla C. Martinez addressed the one-page letter to Deputy County Treasurer Fidel A. Bernal.


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She said the State Auditor’s Office and a private firm, Moss Adams LLP, are jointly conducting an audit of Bernalillo County, focusing on the fiscal year that ended June 30. Such audits are routine.

The letter notifies Bernal that auditors won’t always tell his office ahead of time what they want and that they might ask Bernal’s staff questions during their visits.

“Our office will conduct the audit in accordance with the applicable standards and does not anticipate further interference from County personnel in the application of our audit procedures,” Martinez said in the letter.

The letter – which wasn’t sent to any other county departments, the state said – is the latest sign of increasing scrutiny of the county treasurer’s office.

In written statements to the Journal, the State Auditor’s Office didn’t elaborate on why the letter was sent.

“We began the audit planning and assessment phases this past July,” State Auditor Hector Balderas said, “and earlier this week my staff auditors arrived at the County Treasurer’s Office to conduct fieldwork for that portion of the audit. We expect to complete the audit report by Nov. 15.”

Bernalillo County commissioners and the financial advisers they have hired have raised questions about the county’s investment portfolio. The commission is concerned about whether too much of the county’s cash is tied up in long-term investments and is unavailable to pay daily bills.

The county lost about $758,000 in recent months when Ortiz sold bonds at a loss to cover expenses.


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Investigators for the state Securities Division are also looking at Bernalillo County’s investments. They’ve interviewed top county officials and requested information on the county’s investment portfolio and policies, the county has said.

Ortiz said Thursday he expected to meet with the Securities Division later that day. The Journal wasn’t able to reach him later for a response to the letter from state auditors. An administrative officer said Ortiz was in meetings.

But Ortiz has defended himself in letters to the County Commission. He said the county has realized $3.5 million in investment income during his tenure, which began Jan. 1.

Ortiz also said he will work with commissioners to minimize risk, maximize return and ensure there’s enough cash to pay the county’s bills.

During a meeting of the county investment committee Thursday morning, Ortiz said the county administration hasn’t provided him with the reports he needs to help manage how much cash the county needs available.

“For 10 months now, I have been asking for that, I’ve been promised that,” he said. “It has not come forth.”

Both Ortiz and his investment officer, Patrick Padilla, were at the meeting. Padilla was the previous county treasurer and Ortiz served as his investment officer. The two switched jobs when Ortiz won election last year.

Tension between the treasurer’s office on one side and county and state officials on the other was obvious during the morning meeting.

Ortiz said investment policy changes proposed by the County Commission aren’t practical.

“There’s a schedule in there that I couldn’t even get a Philadelphia lawyer to understand how it would work,” he said. “It would convolute the whole investment scheme.”

County Attorney Randy Autio repeatedly urged both the treasurer’s office and county administration to cooperate with each other.

Addressing Ortiz, Autio at one point stopped himself mid-sentence, apparently in response to something Padilla did or said.

“Mr. Chair,” Autio said. “I would recommend that we do a – I’m your legal counsel, if you don’t mind, Mr. Padilla, if you don’t want to listen to my advice, that’s OK. I represent both the board of commissioners and the treasurer. I recommend we work together.”

Ortiz, the county administration and other members of the investment committee agreed to meet again next week to continue trying to reach agreement on a new investment policy.