Santa Fe posts clean FY24 audit; eight findings remain including two material weaknesses

The City of Santa Fe received an unmodified ("clean") opinion on its fiscal year 2024 financial statements and on federal compliance testing, City Finance Director Emily Oster told the governing body at its Feb. 12 meeting.

"This was an unmodified opinion for the financial statements and the federal compliance audit," Emily Oster, finance director, said, adding that the audit showed fewer findings than the prior year. Auditor A.J. Bowers of Carr, Riggs & Ingram explained details of program testing and control findings during the presentation.

The nut of the audit presentation was that external auditors were able to substantiate balances and transactions to the level required by generally accepted accounting principles, while also reporting eight findings in the FY24 report. Officials said the number of findings dropped from 13 the prior year; the city reported resolving nine FY23 findings during the FY24 audit process and a total of 37 prior findings across audits for FY21–FY24.

Bowers described the audit scope and timeline: planning began mid‑2024, fieldwork occurred in the October–December window, the independent auditor's report is dated Dec. 16, 2024, and the New Mexico state auditor released its review Jan. 27. The auditors tested three major federal programs as required by the Uniform Guidance: the Airport Improvement Program, the Federal Transit Cluster, and the Coronavirus State and Local Fiscal Recovery Fund, and issued unmodified opinions on those programs.

The FY24 report lists eight findings: two material weaknesses, four significant deficiencies, and two matters reportable under the New Mexico State Audit Rule. Auditors flagged a material weakness in controls over construction in progress and another material weakness related to equipment and real property management for federally funded airport awards. Federal award findings included reimbursement request documentation, allowable‑cost/payroll matters and subrecipient monitoring concerns. Auditor Bowers said some federal program findings were repeats from prior audits but reduced in severity in some cases.

City staff described steps and deadlines to address findings. Finance officers said the city has hired a capital asset accounting manager and plans to implement a capital‑asset module in the Munis enterprise resource system to improve tracking of construction‑in‑progress and fixed assets. Staff and auditors told the council that six of the eight current findings have planned corrective actions targeted during fiscal year 2025, while some items tied to system implementation or external collateral requirements have longer timetables.

Finance Director Emily Oster emphasized the work across departments: staff from IT, legal, municipal court, parking, utilities, human resources, transit, youth and family services, economic development, airport operations and contract partners supported the compressed audit timeline. Accounting officer Matt Bonhoeffer was singled out by Oster for leading much of the corrective work since joining about a year earlier.

Council members pressed for clarity on repeated findings, timelines and measures to prevent recurrence. Auditors and staff described how several repeat findings were "modified" because the underlying facts or affected accounts changed from the prior year; they also described procedural changes (shifting grant draws and centralizing grant review) that reduced the size and frequency of some errors reported in prior years.

City and audit staff provided several quantitative items during the discussion: FY24 had eight findings (2 material weaknesses, 4 significant deficiencies, 2 state‑audit items); the city resolved nine FY23 findings during the FY24 audit process (69% of FY23 issues); auditors reported a total of 37 prior findings resolved across the last four audits (FY21–FY24). The audit opinion is dated Dec. 16, 2024; the state auditor released the report Jan. 27, 2025.

The presentation concluded with council questions and staff requests for continued support for staffing, systems work and follow‑up reporting. No formal votes were taken on the audit itself at the meeting.

Staff noted they will return with progress updates on corrective actions and implementation milestones for the Munis capital‑asset module and other system fixes.

Ending: The FY24 audit gives Santa Fe a clean opinion while leaving a small set of control and compliance issues to be corrected. City staff and outside auditors told the council they expect to correct most findings during the coming fiscal year and will report back on milestones.