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County to look into numerous issues found regarding Fire Excise, State Fire Funds

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An audit report regarding Eddy County’s activities in relation to the Fire Excise and State Fire Funds was conducted and presented by Moss Adams, LLP, of Albuquerque Tuesday morning at the Eddy County Commission meeting.

The report summarizes forensic consulting procedures, findings, and recommendations as they relate to the evaluation of the Fire Excise and State Fire Funds’ activities for the period from July 1, 2009, through June 30, 2014.

“A lot of these findings were between 2009 and 2014, and a lot of that time, there were several changes in finance directors,” said Commissioner Susan Crockett. “And a long period of that time, there was no finance director at all. Now that Roberta [Smith] has been in place, things are so much better and she’s following the procurement laws.”

Moss Adams conducted interviews and obtained financial accounting records and other documents relative to the consulting procedures and noted the following issues:

• Internal controls over the expenditures of Fire Excise and State Fire Funds were not consistently applied to ensure proper segregation of duties, transactional authorization, adequate documentation of records, physical control of assets and records, and independent checks of performance.

• Expenditures were made using Fire Excise funds that were not in compliance with local ordinances (O-01-47, O-95-25) or New Mexico Statute (Section 7-20E-1 through 7-20E-28 NMSA 1978) that limit expenditures for the purpose of financing the operational expenses, ambulance services or capital outlay costs of independent fire districts or ambulance services provided by the county.

• Purchases of equipment above $5,000 were not consistently or accurately recorded in the fixed asset system. Additionally, sensitive equipment like radios were not inventoried or tracked to the individuals to whom they were assigned.

• The county lacks a system to properly track and monitor volunteer workers and to ensure that all volunteer Public Employees Retirement Association of New Mexico (PERA) eligibility forms are complete and accurate.

• Large purchases were not properly bid or were not supported by statewide purchasing agreements.

• Lack of control over monitoring of related party activities.

Recommendations to resolve these issues included implementing and maintaining effective accounting policies and oversight, implementing a procedure to inventory cell towers, radios and other sensitive equipment, seeking the opinion of the county’s legal counsel to determine whether fire volunteers should be considered employees under New Mexico Procurement Code, updating the county’s policies regarding compliance with ordinance O-04-47, and ensuring all disbursements are properly approved by management and the commission as required.

“We’re definitely going to look at all of these findings and see how we can rectify them,” said County Manager Rick Rudometkin. “A lot of them are recommendations, so we’re going to look at what to do.

“Change is hard, because in the past, we’ve done certain things and it’s been okay. And I anticipate the next three to five years’ auditing processes are going to be more restricted as things change. Having good people in place to bring this to the fire departments will help.”

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