Auditors give Santa Fe an unmodified opinion but report repeat material weaknesses

Auditors from Carr, Riggs & Ingram presented the FY2025 audit to the Santa Fe governing body and delivered an unmodified opinion on the city’s financial statements, meaning the statements were fairly stated in accordance with GAAP. AJ, the partner overseeing the engagement, stated plainly: "It's an unmodified opinion."

AJ explained the audit involved three parts: the financial-statement audit, a single audit covering three major federal programs (airport improvement, federal transit cluster, and highway planning and construction), and compliance testing under the New Mexico state-audit rule. He described a unique filing year driven by federal compliance-supplement delays and federal shutdown-related timing changes that required filing under two covers (financial statements and the federal single-audit) to meet revised deadlines.

The audit yielded two material weaknesses tied to financial-statement controls: (1) controls over construction-in-progress accounting and (2) general-ledger correction procedures. AJ also reported a repeat material weakness for the airport improvement program related to equipment and real-property management — a finding that has recurred across multiple years. The single-audit opinions for the major federal programs were otherwise unmodified, but the airport program retained the repeat finding; auditors flagged budgetary compliance and cash-appropriation matters under the state audit rule as other reportable items.

Councilors asked detailed questions. Councilor Castro pressed auditors and staff about the recurring airport finding and about the cash-appropriation issue, which staff explained is driven largely by timing differences in GRT remittances and year-end accounting that complicate final cash balances. Staff reported progress: several prior-year findings had been resolved and total findings have trended downward over the last few years.

Next steps: auditors and staff noted corrective actions and follow-up reporting requirements, including management responses in the report and an ongoing commitment to reduce repeat findings. The governing body did not take legislative action at the meeting; staff will pursue remediation steps and monitoring as described by the auditors.