The audit covering the last six months of Mary Herrera’s time as New Mexico Secretary of State found that she failed to maintain an accurate inventory of the state’s voting machines and caused the state to lose $100,000 in federal voting funds.  The audit also reported that when the current Secretary of State Diana Duran defeated Herrera and moved into office, her staff found many problems overlooked in prior audits.  Always passionate in her own defense, Herrera has questioned the auditor’s competency and taken a few shots at the woman who put her out of her job.

Duran Inherits Problems Missed in Prior Audits

The Santa Fe accounting firm of Zlotnick, Laws and Sandoval audited the 2011 fiscal year of the Secretary of State’s financial statements and practices.  The 2011 fiscal year spanned the last six months of Herrera’s and the first six months of Duran’s terms.  The prior years of Herrera’s term had been audited by the Albuquerque firm of Atkinson &  Company. Upon taking office, Duran and her staff “encountered issues of great concern related to agency financials and governance,” according to a statement included in the 2011 FY audit.   “The incoming administration also reviewed prior year agency audit reports and noted that no findings had been issued. The agency chose to contract with a neutral third-party independent public accountant that could provide a thorough audit of the agency’s financials and internal controls.”  That independent audit was conducted by the Zlotnick firm and recently published on the website of the State Auditor.  The full audit is available at this link.

Duran says she found the following problems that had been  missed in prior audits:

–The Office of Secretary of State received loans from the Board of Finance totaling $1.5 million during Herrera’s term.  Although Herrera received a loan of $550,100 in 2008, she never spent the funds and it was carried for years as a liability on SOS books.  Duran repaid the loan in the first six months of her term and reduced the SOS debt to the Board of Finance.

–The Department of Finance and Administration (DFA) informed the SOS of uncollected balances dating as far back as fiscal year 2007. According to DFA, amounts owed to it by the Secretary of State included travel advances that occurred in fiscal years 2007 through 2010. In June 2011, Duran paid the amount owed.

–The Herrera administration terminated its voter registration election management system (VREMS) maintenance and support agreement and over a three year period accumulated $575,000 of past due payments for VREMS. The new administration negotiated down the amount owed on VREMS and turned to the Board of Finance for a $466,146.44 loan to pay off the arrearage.

–Under Herrera the SOS did not maintain a comprehensive listing of the state’s voting machines.  According to Duran’s statement:  “The agency worked with its current auditor to obtain the asset list used by the previous auditor when it prepared the fiscal year 2010 financial statements. While the prior auditor’s list of furniture and equipment included identification numbers for each item, staff was unable to locate any identification tags on any furniture and equipment in the office. Staff has since tagged and inventoried the furniture and equipment and will maintain an up-to-date list, as well as verify inventory annually.”

–Herrera lost $100,000 in federal funds that would have been provided through the Help America Vote Act.  “Because grant awards expire after five years and draw downs were not made between 2007 and 2010 a $100,000 grant, likely the 2005 award, was lost. In 2011, the current administration drew down all remaining eligible federal funds but because a $100,000 grant expired there was not sufficient grant money to cover $36,000 in expenditures made by the prior administration.”

Duran states that she had to seek funding from the Legislature or loans to cover the shortfalls caused by Herrera’s financial mismanagement.

Auditor Confirms Duran’s Complaints

The Zlotnick firm contacted federal authorities responsible for HAVA funding.  It found that Herrera’s office had indeed failed to request reimbursement within five years after expenditures were made.  As a result $100,000 of federal funding for 2005 was lost. Consequently, the Secretary of State’s office “did not have resources available to address other priorities because of the over expenditure of federal funds.”

The auditor also confirmed that Herrera did not maintain an inventory of the state’s voting machines.  Duran’s staff has now had more than 18 months to track down and identify the machines in the state’s inventory.  Ken Ortiz, Duran’s chief of staff, informs New Mexico Watchdog that the lack of an inventory for the state’s voting machines “will not impact our ability to ensure we have a fair and accurate election.”

Duran’s payment of debts incurred by Herrera were reflected in the audited FY 2011 financial statements.

The auditor also found other failings from Herrera’s term in addition to those flagged by Duran.  The Zlotnick firm found that SOS staff may have been using state vehicles for commuting because Herrera’s administration “did not exercise any control over vehicle usage.”  The auditors also found that Herrera’s administration did not leave behind a listing of assets valued at under $5,000.  Duran’s staff has since tagged such assets and compiled an updated inventory list to remedy the problem.  The Zlotnick firm also found that Herrera failed to make reversions to the General Fund for 2009 and 2010 in totaling $70,166, even though her staff had been notified to made the adjustments.

Duran “Needs to Do Her Job and Quit Campaigning,”  Herrera Says

We provided a copy of the FY 2011 audit to former Secretary of State Mary E. Herrera.

Mary Herrera news conference 8/26/10

When we informed her of the audit’s negative findings, her immediate response was, “They should have called me.”  She questioned the validity of the FY 2011 audit because, “I got zero findings before.  This auditor is new and may not know what he is doing.”

As for the inventory of voting machines, she says that was the first thing she did.  “I sent out a few temps and a special coordinator and tagged all machines.”   In one of several e-mails we received after sending her the audit she wrote, “It is impossible not to have an inventory of Voting Machines, it is against the Law.”

Herrera has not yet responded to the findings that she lost $100,000 in federal funding, failed to control car usage, and ran up debts that Duran had to pay.  She did provide us the following general statement.  The original was sent from a phone and contained typos that we agreed to correct before publication:

“I accomplished all my goals when I was in that office, and more, and of course you never get the credit or the good said to the public. I never would have accomplished a Zero Finding Audit ending June 2010 (unqualified) had I not followed the guidelines set by the State of New Mexico for fixed assets. This Auditor may not know the guidelines of the State since he is new and hired directly by Dianna Duran. I agree however, that ALL items of value should be tagged like we did at Bernalillo County. I kept an internal inventory list of items bought under 5,000 dollars because it was not a requirement under the State of New Mexico. So that is not an honest Finding.  Hector Balderas better say something about that, it is his job. And ALL Voting Machines bought when the State law changed to purchase an All Paper Ballot system. My first accomplishment was to go out to every county and inventory all that equipment and machines and we found some equipment was never delivered, some machines needed parts, needed maintenance and some counties received more voting equipment than they were supposed to, and vice versa, some did not receive the equipment they were supposed to receive. We straightened that whole inventory out and ES and S had to comply. If that list was missing from IT division, I cannot answer to why.  We worked hard to make sure we maintained all the voting machines before the warranty expired. After all this there were extra voting machines and I gave Bernalillo County, Taos and others (don’t remember) some of those extra machines rather than them sitting in the warehouse. Its all on record. Tired of Dianna Duran always trying to make herself look good. She needs to do her job and quit campaigning.”

We continued to receive e-mails after that initial response, including the following:

“Jim, when I left office, I invited Mary Quintana to come into the office the week of Christmas through New Years to go over everything, they refused. I asked Dianne Brown, Chief Financial Offer to stay the first week of January to go over all Financial issues and Dianna Duran did not use her or sit down with her, she treated her bad that week and she wanted to retire December 31st but she did that because I asked he to because I never received a transition and it was hard to go in and find no financial person there. I know I did the right thing but mean spirited people are unhappy!”