Jemez Springs council accepts FY2022 audit after auditors cite material weaknesses and compliance gaps

The Jemez Springs Village Council voted Aug. 19 to accept the Village—s fiscal year 2022 audit, after auditors with Pattillo, Brown and Hill, LLP described a partial opinion and multiple control and compliance findings.

Chris Garner, a partner at Pattillo, Brown and Hill, LLP, told the Council the audit was conducted under "standard auditing practices and government 'Yellow Book' standards" and said auditors provide "reasonable assurance," not an absolute guarantee, that financial statements are free of material misstatement. He explained the firm could not render an opinion on the income statement because the beginning balances from prior years were unaudited, producing a disclaimer that affected the current opinion.

Garner listed the audit findings that drove the partial opinion: unapproved pay rates and time sheets, repeat mismanagement of pooled funds caused by improper cash recording and missing bank reconciliations, an initially inaccurate trial balance (later corrected after Finance Director Consultant Jim Cox joined Village management), missing support for selected cash disbursements, absent documentation for cash receipts and journal entries, late submission of the audit report, missing support for multiple credit card and travel transactions, a lack of procurement documentation for selected purchases, and budget overruns in eight funds that violate state law.

Mayor Michael Nealeigh read Resolution 2025-012, Accepting and Approving the Fiscal Year 2022 Audit. Trustee James McCue moved to approve the resolution, Trustee Manolito Sanchez seconded, and a roll call vote was taken: Trustee Boyd, aye; Trustee McCue, aye; Trustee Sanchez, aye. The resolution passed and the Mayor said a corrected copy referencing fiscal year 2022 would be provided for signatures.

Finance Director Consultant Jim Cox told the Council the Village has already implemented numerous internal control improvements and that a new state law gives the Department of Finance and Administration increased oversight for entities with similar findings. Cox and the auditor said Pattillo, Brown and Hill is contracted to perform the FY2023, FY2024 and FY2025 audits and plans to pre-select samples across those years to expedite work and help the Village achieve a clean opinion in FY2023.

Why it matters: A partial audit opinion with material weaknesses and repeat findings signals weaknesses in financial controls and compliance that can trigger closer state oversight and hamper the Village—s ability to demonstrate fiscal stewardship. Council materials state the auditors and the finance consultant will continue work to remedy findings and finalize subsequent years— audits.

The Council did not set a separate remedial vote at the meeting; the auditor and Finance Director Consultant said improvements are underway and that the contracted audit work for the next three fiscal years intends to bring the Village current by the stated timetable.