Balderas’ office is examining why the audits didn’t find the widespread problems that crippled most of the housing authority system
State Auditor Hector Balderas says his office is conducting a review of why several independent audits of the state’s affordable housing system turned up none of the widespread problems that led to its scandalous and nearly total collapse in 2006.
As I reported earlier this week, the five audits, completed by the firm Meyners + Company, didn’t flag any of the major problems that preceded the Albuquerque-based Region III Housing Authority’s default on $5 million in bonds it owed the state. The state auditor and State Investment Council have both since released damning reports about the operations of the housing authorities during the time Meyners was conducting its audits.
Balderas said in a statement released by his office on Thursday that the housing authority special audits conducted by his office “revealed the startling extent to which bond money was misspent and the public trust was compromised.”
“Certainly, I am concerned about the accuracy and transparency of the financial reporting on the regional housing authorities in the years previous to my administration,” he said.
Balderas said his office has been conducting an ongoing “quality control review” since May 2008 of the housing authority audits conducted by Meyers. He didn’t say when he expects his office to complete the review, which was not announced to the public before Thursday.
The housing authority scandal is also the subject of a criminal investigation by the attorney general’s office. One of the topics the AG is considering is why the Meyners audits were not completed in a timely manner.
‘Taxpayers are entitled to truthful reporting’
In my Monday article, Meyners attorney Sam Bregman said the financial audits conducted by Meyners weren’t intended to serve as much more rigorous inquiries known as forensic audits. He said Meyners did its job and, when it did turn up problems in 2006, ceased working on the audits and notified the state auditor.
However, though financial audits are less rigorous than forensic audits, the state auditor rule — which lays out requirements of firms that audit government agencies in New Mexico — makes clear that financial audits are nonetheless expected to help root out fraud, waste and abuse.
Problems with the housing authorities had been widespread since at least 2004, and the Meyners audits conducted in 2004 and 2005 revealed none of the problems that led to the collapse of most of the system in 2006.
In Thursday’s statement, Balderas said contractors who conduct government audits “should strictly adhere to government auditing standards in order to provide independent and objective financial analyses.”
“New Mexico’s taxpayers are entitled to truthful reporting on the actions and financial well-being of their government agencies,” Balderas said.
Bregman said Thursday that he had no comment on the state auditor’s review of the Meyners audits “other than to say that their audits were done in an appropriate, complete manner.”