WNMU president and board engaged in wasteful spending, audit finds

Western New Mexico University’s president and members of the institution’s governing board engaged in tens of thousands of dollars in wasteful spending and improper use of university funds over five years, according to the state auditor’s office.

The special investigations division of the office found that WNMU President Joseph Shepard and members of the Board of Regents racked up more than $363,000 for 402 instances of “extravagant” travel and 91 instances of purchasing related to “high-end custom furnishings” for the president’s official residence, according to a news release from State Auditor Joseph M. Maestas and a letter of concern issued from his office to the university’s board chair on Tuesday.

The university also provided expense accounts and purchasing cards to someone not a university employee, the auditor and the university both said.

The noncompliant spending and actions occurred between July 1, 2018, and June 30, 2023, according to the auditor’s office letter and news release.

The auditor’s letter, sent to Mary Hotvedt, president of the WNMU Board of Regents, blamed the university’s behavior on “an appearance of management overreach and a lack of a strong ‘tone at the top.’”

While the auditor’s office noted the university’s reforms since the accusations came to light, the letter said “the university remains at significant risk for fraud, waste, and abuse” without effective leadership. The letter, however, did not call on specific officials to resign.

In an interview on Tuesday, Maestas called the findings against the Silver City university “egregious” and “systemic.”

“This university faces some significant financial oversight challenges,” he said. “I think this is an indirect message to other higher (education) institutions that they should do the same thing — reassess their policies and procedures and ensure that they have reasonable cost controls. Just because you can do something doesn’t mean it should be done.”

He said that “it’s time (for the university) to come clean” with the community about what occurred and take actions to ensure the conduct does not happen again.

Maestas said his office is not an enforcement agency, but it does have recommendations for the university, including working to strengthen its internal controls and training for board members on finances.

Hotvedt declined an interview with the Journal and referred the newspaper to a prepared statement she made regarding the audit.

In that statement, Hotvedt said she appreciated the “time and insights from the Office of the State Auditor” examining “serious concerns which have been addressed by Western New Mexico University leadership.”

She noted revisions of the university’s travel and procurement procedures as well as staff training to ensure compliance; an independent cost-benefit analysis of international initiatives; and the engagement of an independent auditor to conduct a special audit of the concerns raised, which remains ongoing, Hotvedt said.

“This insight from the State Auditor and others, in conjunction with the leadership of our Board of Regents reinforces Western New Mexico University’s path forward of focusing on student and community success,” Hotvedt said.

Maestas said he applauded WNMU for its special audit and the reforms made to the university’s policies since his office began an investigation. When asked if he thought the university had “come clean” regarding its conduct, Maestas said he was awaiting the results of the special audit.

Mario Sanchez, WNMU assistant vice president of marketing and communications, told the Journal by phone that the university would stand on the board chair’s statement now and not answer any other questions, including ones about the future of Shepard’s tenure and whether he has the support of the campus community.

Shepard, who has served as WNMU president since 2011, came under scrutiny for his spending late last year when the news organization Searchlight New Mexico reviewed the university’s financial records. The expenses included trips abroad to court international students and lavish furnishings for the president’s residence, including Indian dhurrie rugs and antique Tibetan chests.

Shepard, the spouse of ex-CIA agent Valerie Plame, told Searchlight the trips are about playing “the long game” to attract international students and that the furniture plays “a critical unspoken role” in hosting fundraising events.

He conceded in the interview that the university never conducted a cost-benefit analysis to review such spending, but it did so after the allegations came to light.