“I may be incompetent, but I’m not a criminal,” Rick May blurted out shortly before the the New Mexico Finance Authority Board (August 9) placed him on paid leave .  He was obviously emotional and under great stress. One could not help but feel compassion for a man caught in a tightening vise not completely of his own making.

Rick May, center, at NMFA Board Meeting

He said “there is so much misinformation out there. “  He complained that  New Mexico Watchdog had wrongfully accused him of criminal conduct.  We asked him to be specific, but he was called away to the special NMFA Board meeting that resulted in him being replaced at the helm of his agency (See related story by Rob Nikolweski)

We sent Mr. May an e-mail inviting him to offer his version of events.  He had previously not responded to our request for comment for our August 2 story, “NMFA Audit Mess Gets Worse for CEO Rick May.”  This time he responded.  His answers are published in full.

New Mexico Watchdog:  You say the Auditor did not report to you in December of 2011 that he had not received the audit.  I have heard State Auditor Balderas twice say that your office was notified in December 2011 that the audit was not received by his office.  Am I correct in understanding you that it was the Department of Finance and Administration that notified you in 2011 that the State Auditor had not received the NMFA 2011 audit, and not the office of the State Auditor that made that contact with your office?

May:  The Finance Authority did not receive any notification from the State Auditor’s Office in December 2011 that our audit was late.   The only notice we received from the Auditor’s Office was the May 23, 2012  letter informing the Finance Authority that we were being placed on the “At Risk List.”  It was after this May 23rd letter when the former Controller, Greg Campbell, informed top management of the Finance Authority that we were placed on the “At Risk List” by mistake and that we would be removed from the list.

In regards to the email I received on January 26, 2012 from the DFA staffer, this email was a request for an update on the FY 2011 audit (which I had been told by the former Controller had been filed on time) to complete the State CAFR.  I replied to that email by saying the former Controller would provide the information requested.   This January 26 email was the only email I received from this DFA staffer as I assumed the former Controller provided the information requested.   Further, I sent an email to the former Controller and Mr. Duff asking why the Finance Authority’s audit was part of the State CAFR [comprehensive annual report] as we were not a state agency and later told the former Controller to give the DFA staffer the information requested.

(New Mexico Watchdog was able to speak with State Auditor Hector Balderas for clarification while we were waiting to hear from Mr. May.  Balderas says his office notified DFA that the audit had not been received by the December 15, 2011 deadline, and DFA then contacted NMFA on that issue.  Balderas said his office notified NMFA in February 2012 of its failure to submit its audit, and once more before formally placing NMFA on the State Auditor’s “at risk” list in May.  Balderas also noted that no employees from NMFA attended an audit training session his agency held for state agencies in or around March 2012.)

New Mexico Watchdog:  You told me that the State Auditor did not “discover this situation.  It was discovered by DFA.”  Can you explain that statement any more?

May:  It was the Finance Authority’s management team that discovered the Finance Authority had a fraudulent audit. The State Auditor did not discover it, as it was me and other members of my staff who contacted the State Auditor’s Office at approximately 5 PM on Wednesday, July 11 to let that Office know we had a major problem with our FY 2011 audit.  Prior to our call at 5 PM on July 11, there were numerous email exchanges with the State Auditor’s Office regarding whether they had any record of the filing of our FY 2011 audit, and through these email exchanges we determined that no audit had been filed.  Further, the State Auditor’s Office had no knowledge that there was a fraudulent audit involved, as they only knew that no audit was ever filed with their Office and that our audit was, therefore, late.  (If I said DFA, I misspoke as I meant to say the Finance Authority.)

New Mexico Watchdog:  You said I had accused you of criminal conduct.  “I may be incompetent but I am not a criminal,” you told me.  I have never written that you are a criminal or have accused you of violating any criminal act.  You cannot find in any report I have written where I say you have broken any criminal law.  Please tell me where I have said you have engaged in criminal conduct.

May:  At the conclusion of your August 2, 2012 report, you stated there were two reasons why I had told the Finance Authority’s Board that our FY 2011 audit had been filed and approved by the State Auditor.   The two reasons you gave were either I was “derelict in my duties” or I had “intentionally … misled the Board.”   I think any reasonable reader understood your report to mean that I had provided fraudulent information to deceive the Finance Authority’s Board and such action, in my opinion, could only interpreted as being illegal or criminal activity.

My point to you earlier, although I may have misspoke from being somewhat emotional under the circumstances, was that I provided the Finance Authority’s Board with information, in good faith, regarding the FY 2011 audit — the same information which I had been given by the former Controller and which I believed was true and accurate.   If you listen to the actual recording of this March 22, 2012 Board meeting, you will hear clearly that I made my positive statement about the FY 2011 audit, I then asked the former Controller if I was correct, and he then confirmed my statement.   Senior management at the Finance Authority depended upon the former Controller for this information regarding the FY 2011 audit because it was his responsibility to have the audit completed in a timely basis through working in partnership with the Finance Authority’s external auditor, Clifton Gunderson LLC.   Based on many years of service at the Finance Authority, the former Controller was well respected and a highly regarded employee by staff both inside and outside the organization.  [end of comments from Rick May]