The state’s Department of Finance and Administration has identified three issues that led to a budget shortfall of more than $3 million in the Secretary of State’s Office last year.
The problems occurred under the administration of former Secretary of State Rebecca Vigil-Giron, who left office at the end of 2006. The DFA report was delivered to the governor’s office two weeks ago, and found that:
• Vigil-Giron’s office spent money, in some instances, without first issuing purchase orders that are required by state law.
• The office cancelled some purchase orders it had issued, then spent the money anyway.
• Two of Vigil-Giron’s political appointees – former Elections Supervisor Ernie Marquez and spokesman Ray Baray – were paid a significant amount for working overtime when they should have instead taken comp time.
The first two, the report states, were due to a “lack of sound internal accounting and budgeting practices and controls at the SOS” under Vigil-Giron’s leadership. Read the full report, which includes a response from Vigil-Giron, by clicking here.
In an interview, Vigil-Giron said the Legislature put her in a difficult position because she had to implement new federal regulations and the state’s shift to paper ballots, which was an unfunded mandate, and was told by lawmakers to run the election and come back later to seek supplemental funding to cover expenses.
In some instances, she said, she had no choice but to break one state rule to comply with another. For example, she was required to spend more than $1 million publishing notice of the election in newspapers around the state, she said, but the Legislature didn’t give her funding to do it.
She called the findings “minor” and said that, put in the context of her 12 years as secretary of state, they don’t indicate a systemic problem. She said she has a reputation for integrity.
“The challenges of that office are tremendous and you have to be smart,” she said. “You’ve got to think on your feet. You’ve got to create.”
Implementing an unfunded mandate
In the review, the DFA noted the fact that Vigil-Giron was trying to implement the unfunded switch to paper ballots. The purchase orders at issue included $1.76 million to print the new ballots.
But the DFA disputed many of Vigil-Giron’s assertions, and has referred the findings to the state auditor and attorney general for further review.
Vigil-Giron said the DFA had as much a role as she did by approving the expenditures, and called the situation “character assassination 101.”
“My shoddy bookkeeping – bologna – they approved everything,” she said. “I have a damn good reputation in my state and outside my state. I follow every law to the letter. I follow every rule to the letter. I don’t just make it up as I go.”
She said the Legislature has had a longstanding policy of underfunding the office in election years and allowing the secretary of state to come back the next year for a supplemental appropriation, and said she was told to do that with the 2006 election. She noted that she did make a supplemental request before she left office, for more than $3 million, and the money was granted this year to her successor, current Secretary of State Mary Herrera, to cover the costs of last year’s election.
Vigil-Giron also said DFA rejected her request for an exemption to the rule that prohibits agencies from overspending their budgets, and that she sought emergency funds from the Board of Finance but was told none were available.
The DFA refuted both assertions. In the report, it stated that Vigil-Giron withdrew her request for an exemption to the so-called 50 percent rule before DFA could act on it. Had she not done that, the request would have been approved because “the rule does not apply to the SOS in a general election year, due to the seasonal nature of its operations,” the report states.
The memo also states that Vigil-Giron made only one request to the Board of Finance – for $200,000 to hire an auditor to canvass the election results – and the request was granted in September. More than $1.5 million was still available at the time, according to the DFA, and the minutes of that month’s Board of Finance meeting do not indicate that Vigil-Giron requested more money.
In the end, the DFA memo states, Vigil-Giron didn’t use the $200,000 she had been granted.
‘Going outside the approval process’
Vigil-Giron also stated, in her response to the DFA findings, that “all of the secretary of state’s purchases were made through contracts approved by the Attorney General’s Office or purchase orders approved by the Department of Finance and Administration.”
Phil Sisneros, spokesman for the attorney general, said his office doesn’t approve expenditures, but only looks for “legal sufficiency.” Asked about details like securing purchase orders before signing contracts, he said there is “the assumption that the agency has already done that part.”
Stephanie Lenhart, DFA spokeswoman, said the agency “did not approve the creation of unpaid and unencumbered liabilities. The secretary of state created those liabilities by working outside of DFA’s financial control procedures, or this is what she appears to have done.”
For example, Lenhart said, “If she doesn’t issue a purchase order, then there’s no P.O. for us to approve. If she’s going outside the approval process, then we don’t know about it.”
The Legislative Finance Committee has also expressed concerns about the shortfall. The complaints of a number of lawmakers and Herrera led to the DFA review. Sen. John Arthur Smith, chair of the LFC, said Vigil-Giron had a history of seeking supplemental funding in years that followed elections. He said the Legislature was concerned about the office “not giving us budgets and just relying on supplementals and deficiencies.”
He said the Legislature is now trying to push the secretary of state and all agencies to do a better job of proposing accurate budgets, which will increase oversight.
“We’re just wanting some greater accuracy in the budget process,” he said.
At the same time, Smith acknowledged that Vigil-Giron was in a difficult position in implementing new state and federal rules without the funding for the paper-ballot switch, and called the concern about the additional costs for paper ballots “legitimate.”
“I don’t think she’s done anything, at this point in time and with the information I have, anything wrong,” he said.
An uncertain future
Vigil-Giron has publicly stated her goal of succeeding Diane Denish as lieutenant governor, and is a current applicant for the position of executive director of the Democratic Party of New Mexico. Gov. Bill Richardson appointed her to be director of the state’s film office earlier this year, but that led to the public outcry over the budgetary issues in the secretary of state’s office, and the deal fell apart.
Vigil-Giron has also said she’s talking with
But the potential troubles for Vigil-Giron aren’t over. Sisneros said his office is “looking into” the situation. A regularly scheduled annual audit will further probe many of the issues identified by the DFA, and the state auditor might decide to conduct a special audit.
In addition, federal auditors have been looking into the possibility that Vigil-Giron’s office misspent almost $20 million in federal election money. The review is one of about two dozen across the nation.