State auditor delivers report on spending at Western New Mexico University

SILVER CITY — New Mexico State Auditor Joseph Maestas appeared before Western New Mexico University’s Board of Regents on Friday to present a special audit report probing allegations about excessive spending at the university under its former president.

After the regents voted to accept the audit report, former president Joseph Shepard told the Journal he felt satisfied the report, conducted by the Jaramillo Accounting Group under contract with the State Auditor’s Office, was independent and fair.

“What I have always objected to, up until today, was that I never got due process,” Shepard said. “I thought they did a professional job.”

The 90-page report states that auditors did not find evidence of fraud, misappropriation of public funds or corruption such as personal financial gain. It did, however, detail improper expenditures ranging from improper procurement and excessive travel to the problematic issuance of university purchasing cards to non-employees, including Shepard’s spouse, Valerie Plame. The report flags expenditures totaling over $360,000.

In some cases, the audit said spending decisions appeared to be excessive because less expensive options were available, even if it was consistent with the university’s strategic goals and broad discretion the regents had granted to Shepard.

The report also details weak internal controls, poor oversight and policy gaps that led to missing documentation, after-the-fact approvals or self-approvals of expenses and other issues, including potential violations of the Governmental Conduct Act and Open Meetings Act.

Wasteful spending identified included trips to Africa by Shepard and university leadership, purchases of custom furniture for Shepard’s residence and resort accommodations — at a cost exceeding $900 per night — for an administrator.

The audit largely cleared Shepard on allegations that he diverted funds for building a walkway and handicap-accessible ramp toward expanding a patio adjacent to his residence and accelerated the schedule so it would be ready in time for his daughter’s wedding in 2023.

On that matter, auditors said the evidence showed legitimate reasons for changes to the project, that the timeline was consistent with graduation planning and that Shepard had paid the university $3,655 for wedding activities on campus.

However, the report found that Shepard influenced the decreased scope and timing of the project in a way that created at least the appearance of a conflict of interest.

The 10 findings also addressed reimbursement policies; weak controls for electronic devices issued to employees; a lack of planning for multiple regent resignations, as happened in December; as well as weaknesses in the university’s preparation for the cyberattack that hobbled its systems from April to May of this year.

The report alerted the new regents to an Open Meetings Act violation this summer, when the board went on a tour of campus together outside of a noticed public meeting without issuing a notice of a potential quorum. The law forbids members of public bodies from discussing business outside of open meetings; violations risk invalidating actions by the body and even fines. The tour took place on July 31.

A procurement violation was identified when the university awarded a sole-source contract for professional services to the Ritz Carlton Leadership Center in 2021 without proper notice, according to the report.

The audit recommended establishing internal audit processes at the university, which Kelley Riddle, WNMU’s vice president of business and finance, said would be done by an independent contractor. The findings also pointed to a need for anonymous reporting tools.

Responses from WNMU administration in the report indicated that corrective actions had already been completed or were in the works, without any challenges to the findings.

“We want to make sure all of these policies and procedures and so forth are where they ought to be,” Regent Chairman Steven Neville remarked after the board unanimously accepted the audit report.

Maestas said the report had been referred to the state Department of Justice as well as the State Ethics Commission, which is pursuing its own litigation. All of the cases are civil proceedings. Shepard has not been charged with a crime.

”We’re in the business of public trust. … It can be lost in one instant, and to regain that trust is difficult,” he told reporters following the regents’ meeting, while commending steps regents were taking as well as the whistleblowers who came forward with concerns about the university.

The audit examined university expenditures from July 2017 through 2024. Shepard, who had served as WNMU’s president since 2011, resigned in December 2024 after Maestas announced an investigation into the spending, which also drew scrutiny from lawmakers, the state Higher Education Department and the State Ethics Commission.

The entire board of regents at the time resigned at the request of Gov. Michelle Lujan Grisham after they approved a new contract granting Shepard a $1.9 million severance package as well as a faculty appointment. The new board of regents declared that contract invalid this summer, saying that it was negotiated in violation of the state’s Open Meetings Act. The university’s new leadership and Shepard are battling over that decision in state district court, while the state Department of Justice is seeking to reclaim the severance paid to Shepard.

”We’re turning a page,” Regent John Wertheim told reporters, adding that he hoped for a global settlement resolving litigation involving multiple entities and Shepard.

Without commenting on those lawsuits, Shepard said he felt some vindication at the audit report, telling the Journal, “I know I’m not perfect, but I’m not crooked.”