Facing special audit, Mora County officials say disaster relief funds fully accounted for

SANTA FE — Three weeks after New Mexico’s state auditor ordered a review of Mora County’s handling of state disaster relief loan funds, county officials said $2.7 million in unaccounted for money was not embezzled and has been accounted for.

But Mora County officials also acknowledged they’ve struggled to hire and retain qualified financial staff, and said they’re taking steps to improve financial controls.

“Change is coming to Mora County,” interim county manager Richard Trujillo said in a statement this week. “We have an obligation to properly account for funds, to move necessary ... wildfire recovery projects forward, and to demonstrate that Mora County will adhere to the highest standards regarding procurement processes, financial accounting practices and transparency.”

State Auditor Joseph Maestas last month ordered a special audit of Mora County to pinpoint what happened with $2.7 million in public funds. Attorney General Raúl Torrez also opened an investigation into the issue after being asked by a top state budget official to do so.

The probes come as Mora County is sitting on roughly $41 million in state loans intended to jump-start recovery efforts after the 2022 Calf Canyon/Hermits Peak Fire, the largest wildfire in modern New Mexico history.

Maestas met with Mora County officials last week and said in a Thursday statement the special audit is set to move forward.

He expressed confidence the outside audit will “address many unanswered questions and set Mora County governance on a path of transparency and the regaining of the public’s trust,” while adding the $2.7 million in question was never characterized as having been embezzled.

Mora County officials said this week the county’s interim finance director Ruthie Castellon had alerted state officials about the missing funds earlier this year, but recently told county commissioners the money has since been identified. The situation was likened to someone failing to update their checkbook ledger.

In addition, county officials said the $41 million is currently in an investment account overseen by State Treasurer Laura Montoya’s office and can be put to use on road repair projects upon Federal Emergency Management Agency approval.

The disaster relief funds that Mora County received stem from 2023 legislation that authorized up to $100 million in no-interest loans for cities and counties impacted by the Calf Canyon/Hermits Peak wildfire and subsequent flooding.

The money was intended to be used for road repairs, culvert restoration and fixing other damaged public property. Disaster relief and compensation for damages on private property are covered by a separate FEMA program.