The City of Santa Fe notified the New Mexico State Auditor that its fiscal year ’21 audit will not be submitted by the December 15, 2021, deadline. The city requires additional time for its audit preparation as a result of the unprecedented and extraordinary circumstances related to completion of the City’s fiscal year ’20 audit. The City anticipates submitting a Trial Balance to our external auditors by March 31, 2022, and a target date for submission of the financial statements to the State Auditor no later than June 30, 2022.

The audit process was delayed in part by unprecedented circumstances such as a 20 percent vacancy rate across all City departments, a 40 percent vacancy rate in the Finance Department, turnover in the Accounting Officer position, and a late FY20 Audit that required extraordinary effort to complete.

“We have a corrective action plan in place to both complete the fiscal year ’21 audit with fewer findings and complete the fiscal year ’22 audit on time,” said Mayor Alan Webber. “I’m disappointed by this delay, as all Santa Feans should be, but I do want to stress that Santa Fe’s finances are strong and stable.”

The City has completed key deliverables for Budget, Procurement, and Payroll and is continuing to work with all City departments to complete reconciliations. The steps in the corrective action developed by the Finance Department include: 

1. Contract with an Audit Coordinator who will be responsible for coordinating onsite with City staff across all departments and audit preparation contractors.
2. Form a special, focused audit team for both the FY21 and FY22 audits including the Audit Coordinator, Finance Department staff and staff from the following departments: Public Works, Public Utilities, Community Health and Safety, Community Development, and the contractors.
3. Work with accounting firms to assist with expediting the year-end closing for the 2021 fiscal year.
4. Continue to fill critical positions across all City departments to build capacity to manage financial functions citywide.
5. Conduct an independent review to assess the systems, processes and structures involved in the City’s close process and annual audit preparation process and implement recommendations for the improvements identified in the assessment.

As a result of its sound fiscal management, the City of Santa Fe recently received AA+/AA by Fitch Ratings and S&P Global for its Subordinate Lien GRT Revenue Refunding Bond, while having all the other bonds affirmed with the same ratings.

The ratings agencies cited the Santa Fe’s strong economic fundamentals and the City’s sound budget management during the pandemic. Characterizing the City's rating outlook at "stable," Fitch said, "The city's strong budget management was demonstrated by its efforts to maintain sustainability in anticipation of pandemic-induced revenue pressures via significant restructuring of its operations."