By Georgie Ortiz and Janet Pacheco-Morton
In the spirit of high journalistic standards and following recent coverage referencing Meyners + Company’s entry into the realm of state government auditing for large agencies (see this Feb. 4 New Mexico Independent article), we would like to convey some of what we see as the rest of the story.
We feel particularly expert on the subject, since it is we who are in large part at the real heart of Meyners + Company’s government auditing success since joining Meyners in 2004.
The New Mexico Office of the State Auditor is responsible for auditing all state and local government agencies. Because of limited resources, the state auditor often contracts out the auditing function to nearly 60 different independent public accountants (IPAs). The state procurement code requires competitive bidding on all professional services contracts that are expected to exceed $50,000.
The truth of the matter is that Meyners’ success procuring government auditing contracts in recent years can be traced back directly to the talent, expertise, experience and passion of the many people who make up our government auditing unit, if we do say so ourselves.
In January 2004, we were hired by Meyners + Company, along with two other key staff members, to create a specialized government auditing unit. Currently we have the largest number of accountants in New Mexico with the distinction of being certified government financial managers (CGFM). CGFM is a national certification that is built on a code of ethics and lifelong learning. It focuses specifically on governmental accounting and indicates that the person has heightened expertise specifically in this area.
We increased business dramatically in our first year at Meyners because we are good at what we do. And to that point, we also had a similar record of success at another firm before we joined Meyners.
Thus the firm’s growth in its government accounting contracts should really be attributed to the addition of a top-notch government accounting unit hired to achieve this goal, pure and simple.
We’re not the only ones who are successful
Meyners competes primarily with three other large accounting firms for contracts to audit large state agencies and other governmental units in New Mexico. One of these firms has more accounts than Meyners and, not surprisingly, bills nearly twice what we do. They have grown by a greater volume than we have since 2000.
It is probably also worth noting that there are only a handful of firms that have the resources to do the work necessary to perform proper audits, especially of the state’s larger agencies. We currently have nearly 80 team members at Meyners.
Meyners + Company goes through the same competitive bidding process as everyone else when applying for government contracts. The availability of agency audit business is typically posted on the agency’s Web site in the form of a request for proposals (RFP).
Meyners examines the opportunity and determines our ability to serve the potential client, writes the proposal and makes the bid. Sometimes these proposals can run up to 100 pages. Proposals are then scored independently within the agencies. It is actually the state auditor’s office that is responsible for any final procurement decision. Over the years Meyners has won some large accounts, but there are also many in which we were not successful.
Several accounting firms have had large gains in their auditing business with the state of New Mexico during this time. But this can and should be attributed to good work on behalf of the taxpayers rather than anything nefarious or untoward. These are quality firms that do quality work.
Exposing problems
We would like to also take this opportunity to point out that it was Meyners + Company that exposed to the FBI the Bernalillo County Metropolitan Courthouse fraud that ultimately became known as “MannyGate.”
And it was Meyners + Company that pushed back from the table, and walked away in the middle of a contract, rather than look the other way in the instance of the Region III Housing Authority.
Though Meyners + Company’s managing principal Bruce Malott has served in appointed positions in the Richardson administration, it is also true that Bruce is actually a holdover at the Educational Retirement Board, having originally been appointed not by Gov. Bill Richardson, but by Gov. Gary Johnson.
Furthermore, overall growth of IPA work in New Mexico went from approximately $7 million in 2000 to $15 million in 2008, more than doubling the workload.
In every year since 2000, 50-60 percent of the total IPA work was completed by five firms, and nearly 50 percent of that work was done by a single company. That firm is not Meyners.
It is also worth pointing out that our government business today represents only 15 percent of the total contracts supervised by the state auditor.
We’re proud of our work
Though this is not highly profitable work, it can make business sense if a firm does enough of it — especially in a post-Enron world where rules changes have made it even harder for smaller firms to specialize and provide the audit service required by our profession’s rules and regulations.
We have chosen to gain specialty expertise in order to provide our governmental clients the highest caliber of audit service, and have done it well with many satisfied clients. The results have meant greater value for taxpayers and more transparency in government books and records. And if agency executives take seriously our findings, their programs generally run better for it.
We are proud of the contribution we have made to better government in New Mexico and take our auditing role very seriously.
Ortiz and Pacheco-Morton are certified public accountants and certified government financial managers for Meyners + Company.