Ruidoso officials celebrate clean audit

Ruidoso scored a perfect audit with no findings for Fiscal Year 2018.

But Village staff announced the result before the date when the audit was ready for public release. That action earned the audit one finding, which was releasing the news of a perfect audit too soon.

“You’re getting a finding for saying you had no findings,” said auditor Jaime Rumbaoa with Axion certified public accounting.

The news didn’t dampen the enthusiasm at the village council meeting last week.

Mayor Lynn Crawford and Village Manager Debi Lee recalled that a decade ago the village was in a financial maze, was late turning in audits and was hit with 238 findings in a special audit conducted by the state.

Judy Starkovich, village director of finance, explained that the council must approve a resolution officially accepting the audit and acknowledging that it has been reviewed, although it became a public document on March 25, five days after a letter from the state auditor arrived approving the audit.

Starkovich and her staff have been given much of the credit for ensuring compliance, tidying up finances and tracking federal dollars on numerous projects. The village also now prepares its own financial statements, something that is rare, especially for small communities, Rumbaoa said.

Less than 5 percent of communities prepare financial statements, he said, adding that the village is lucky to have someone capable of performing the task.

He noted that the audit received the highest form of auditing opinion.

In her summary, Lee wrote that the assets and deferred outflows of resources of the Village exceeded by $75,771,204 its liabilities and deferred inflows of resources at the close of the most recent fiscal year. Of that amount, $14,506,048 represents an unrestricted net position, which may be used to meet the government’s ongoing obligations to citizens and creditors, she wrote.

“The Village’s total net position increased $7,799,849, which is a dramatic increase over the prior year,” Lee wrote. “This is mainly due to the increase in Gross Receipts Taxes and Intergovernmental Grants for capital projects and the reduction in overall department spending.  

"At the close of the current fiscal year, the Village’s governmental funds reported combined fund balances of $15,264,599, an increase of $2,383,761 in comparison with the prior year. Approximately 22.1 percent of this amount, $3,303,121, is available for spending at the government’s discretion.”

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At the end of the current fiscal year, the unrestricted fund balance, which is the  total of the assigned and unassigned component of the general fund balance, was $6,349,502, or about 47.7 percent of total general fund expenditures, she wrote.

A net pension liability of $17,511,645 is related to the village’s proportionate share of the Public Employees Retirement Association (PERA), a multiple employer cost sharing defined benefit pension, she wrote.

More:No findings in Ruidoso's Fiscal Year 2018 audit

Lee pointed out that the unfunded pension liability only would be a financial negative, if everyone retired from the village at the same time.

“It is not a realistic outcome that you would have to pay this all out at one time,” she said.

Rumbaoa added that the situation was created by changes initiated by the New Mexico Legislature, which will require entities to reduce benefits or increase contributions, or both.

“Is it that some communities haven’t put up enough money?” Crawford asked. “Why are they recognizing it this way. It seems odd.”

Changes were needed because retirement funds were not making enough money, Rumbaoa said.

Internal controls and compliance looked good, as well as single audits that are conducted when entities pass a threshold on spending federal dollars, he said. All findings from the 2017 audit were resolved, he said.

The Village of Ruidoso's contract with Axion ends this year.

Rumbaoa speculated that the clean audit will draw many firms trying to secure the next auditing contract.