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State auditor shares concerns about APS audit changes

ALBUQUERQUE, N.M. — State Auditor Tim Keller has entered the debate about the future of Albuquerque Public Schools’ internal audit department.

APS plans to place most of internal audit’s functions within the accounting office under the supervision of a new district controller, who will join the district this summer. Responsibility for a whistle-blower hotline called Ethical Advocate will move from internal audit to the Student, Parent, Employee Service Center.

The district anticipates about $200,000 in savings through the reorganization, according to a May 5 district white paper the Journal obtained Monday.

But those changes raised concerns for Keller, who sent APS a letter April 27 questioning whether they will weaken APS’ ability to detect fraud, waste and abuse.

“There is clearly a cost associated with accountability and strong internal controls,” Keller wrote. “Robust internal controls are a good investment in advancing good government.”

But APS Superintendent Raquel Reedy said that the district has already addressed the concerns the auditor outlined in his letter.

She related those efforts to Keller during a meeting May 2 and told the Journal that she appreciated his input.

“We really listened to some of the things he brought out, and it made a lot of sense,” Reedy said. “And actually, as it turns out, we had already zeroed in on some of those very things that he was talking about, but he wasn’t aware of it.”

For instance, the new controller is a Certified Public Accountant and Certified Fraud Examiner with extensive experienced and strong credentials, which touches on Keller’s questions about “the overall professional qualifications of staff.”

The controller will be the district liaison with the Office of the State Auditor and report directly to Reedy on any internal audit concerns.

APS auditors will continue to conduct school activity fund audits, investigate whistle-blower tips and conduct superintendent-directed audits on financial matters.

Justine Freeman, deputy chief of staff for the state auditor, said she understands that money is tight at the district, which faces a $9.5 million budget shortfall, but the auditor’s office is “concerned about any efforts to dismantle” internal audit.

“Since our engagement on this issue, we received an updated plan from APS that expresses a commitment to restructuring the office in a way that touches on several of these concerns,” she wrote in an emailed statement. “Our office will closely monitor how this proposal is implemented to determine if APS will be able to appropriately deal with internal fraud, waste and abuse.”

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