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F I S C A L I M P A C T R E P O R T

SPONSOR T. Garcia

ORIGINAL DATE

LAST UPDATED

1/22/08

HB 257

SHORT TITLE Community Land Grant Audits

SB

ANALYST Propst

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$50.0

Non-recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Office of the State Auditor (OSA)

SUMMARY

Synopsis of Bill

House Bill 257, Making an Appropriation to the State Auditor to Conduct Audits of Community

Land Grants, appropriates $50.0 thousand from the general fund to the State Auditor to conduct

audits of community land grants that receive public funds.

FISCAL IMPLICATIONS

The appropriation of $50.0 thousand and contained in this bill is a non-recurring expense to the

general fund. Any unexpended or unencumbered balance remaining at the end of FY09 shall

revert to the general fund.

SIGNIFICANT ISSUES

The Office of the State Auditor noted that it is unable to assess whether $50.0 thousand is

sufficient to conduct the audits. The OSA is unaware about how many community land grants

receive public funds and would need to be audited, how complete or complicated their financial

reporting systems are, or the condition of their financial records. Depending on the size and

complexity of each land grant, $50.0 thosand may be sufficient to conduct all the audits or it may

be enough.

House Bill 257 – Page

2

TECHNICAL ISSUES

The OSA noted that the bill does not specify what type of audit should be conducted. Is the

intent to have a financial audit conducted, or some other type of audit such as a special,

compliance or performance audit. Additionally, if a financial audit is requested, the bill

provides funding for one year and not for following years, which is required by the State Audit

Act for entities that receive public funds.

The OSA also noted that if public funds are appropriated to the community land grants, the land

grants will be required to comply with Governmental Accounting and Financial Reporting

Standards (GAAP), the State Audit Act, NMSA 12-6-1 to 12-6-14, the State Auditor Rule, 2.2.2

NMAC, and applicable state and federal laws and regulations.

WEP/mt