I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
While environmental activists played their part yesterday during demonstrations at the capitol building, going so far as to dress up as solar panels and to sing the tune of “You Are My Sunshine,” their counterparts, the anti-cap-and-trade contingency who has…
Roughly one quarter of University of New Mexico students are unimpressed with the state’s flagship public school, according to a survey that questioned college students about their higher education experiences.
State Auditor Hector Balderas couldn’t help but think in historic terms on Friday when discussing the embezzlement uncovered at Jemez Mountain School District.
“I put my most experienced auditor on this,” Balderas said in a phone interview. A special audit released Friday showed $3.3 million stolen over several years from the tiny school district near Cuba–an amount nearly equaling the district’s $3.8 million annual budget in fiscal year 2008. “He’s been auditing in New Mexico for about 30 years. He has never seen anything like this, in terms of the sophistication.”
Kathy Borrego, the district’s former business manager, is suspected of masterminding the embezzlement scheme that involved stealing more than 530 checks, forging signatures and clearing them through the Valley National Bank in Española over seven years, according to an executive summary of the special audit.
Five hundred and thirty five of the checks were cashed or deposited into various personal accounts, while three checks were “provided to other subjects who cashed or deposited the amounts into their accounts,” the summary shows.
It is unclear who those other individuals are.
But it is clear that Borrega was controlling the money going in and out of the school district, Balderas said. “She was shifting balances and even altering [bank] statements,” he said.
While checks were drawn on 10 separate school district accounts, Borrego allegedly used the payroll account and an account called “SB-9″ more than the others to pull off the scheme, the summary shows. A total of 104 checks totaling $621,000 were drawn on the payroll account while 210 checks worth more than $1.34 million were drawn on the “SB-9″ account, according to the summary.
Good fiscal practices demand divvying up duties, say putting one person in charge of purchasing, another of bank statements and still another watching the internal ledger, Balderas said. “All this was consolidated under her,” he said.
Those kinds of bad financial practices led to a state takeover of the district’s finances Friday with New Mexico Public Education Department Secretary Veronica Garcia explaining what that meant in easy-to-understand terms.
“We hold their checkbook,” she told the Independent Friday, referring to the school district. “They will ask us for checks. They will not be signers on their checks. We monitor to make sure they are making good decisions.”
The district also will be required to submit monthly reports to the state, which likely will act as Jemez Mountain’s fiscal overseer for the next few years, Garcia said.
“I think it’s going to take at least two years to put in place what they need to do and to show a track record,” Garcia said. “We still hold West Las Vegas’ checkbook.”
The state Public Education Department took over West Las Vegas school district‘s finances in 2006 after that district’s former bilingual coordinator Roberta Vigil spent nearly $10,000 on an invitation-only bash in April 2006. The party, which featured music by Al Hurricane and was called a “workshop” on requisition forms, was paid for through a special appropriation passed by the Legislature with the help of Vigil’s husband, state Rep. Richard Vigil, D-Ribera.
A jury this year convicted Roberta Vigil of fraud over $2,500 and conspiracy to commit fraud over $2,500.
Attempts to reach Jemez Mountain School District Superintendent Adan Delgado, who first became suspicious of Borrego, Balderas said, were unsuccessful.
Part of the striking quality of the Jemez Mountain School District embezzlement scheme is that it went undetected for so long at such a small school district.
Jemez Mountain is a five-school district snuggled in the verdant, rolling lowlands north of the Jemez mountains looming over the town of Cuba.
As of the last school year, there were 373 students enrolled in district schools, state records show. Meanwhile, its budget for the 2007-08 fiscal year was $3.8 million, according to a state fact sheet.
The district also appears to cater to a mostly low-income population, with the vast majority of Jemez Mountain’s students approved for free or reduced-price lunches. (There are 106 of 135 students enrolled at the district’s middle and high schools listed as approved for free or reduced lunches, according to a state fact sheet; 196 of the district’s 217 elementary school students qualify.)
“It’s very disgusting,” Garcia said of the scheme.
Balderas said the embezzlement went undetected for so long because the state is in “an accountability crisis.”
Last week Balderas issued a risk advisory to school district school board members, superintendents and administrators statewide. The advisory warned school districts that certain weaknesses in internal control structure and the failure to submit annual audits may create an environment in which fraud and embezzlement can easily occur.
“The very fact that I have 12 to 15 auditors is just not enough to provide adequate protection to not just school districts but all levels of government,” Balderas said. “We are trying to issue advisories so districts can take greater responsibility.”
The Rio Arriba County Sheriff’s Department already has begun an investigation into the embezzlement scheme. According to a July 17 story in the Albuquerque Journal, investigators with the Rio Arriba County Sheriff’s Department confiscated computers, bank statements and financial documents while serving a search warrant at Borrego’s Abiquiu homes.
