Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

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attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

F I S C A L I M P A C T R E P O R T

SPONSOR Varela

DATE TYPED 1/25/05

HB 49

SHORT TITLE Creating a State Comptroller

SB

ANALYST Hadwiger

APPROPRIATION

(in $000s)

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$750.0

Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates SB170. Both are submitted on behalf of the LFC.

SOURCES OF INFORMATION

LFC Files

Responses Received From

No responses had been received from the State Auditor, Department of Finance and Administra-

tion, State Personnel Office or General Services Department at the time this fiscal impact report

was prepared. The FIR will be updated as responses are received.

SUMMARY

Synopsis of Bill

House Bill 49 would create an Office of the State Comptroller as an adjunct agency, administra-

tively attached to the Department of Finance and Administration. The comptroller would be ap-

pointed by the Governor with the advice and consent of the Senate. The bill sets out the comp-

troller’s required qualifications—that he or she be a certified public accountant with audit and

government experience. The comptroller would serve for a term of six years and be removed

only for cause.

House Bill 49 sets forth the following duties for the state comptroller:

1.

Oversee the executive branch’s implementation of the Accountability in Government Act

2.

Oversee statutory oversight duties of specified divisions of the Department of Finance

and Administration, as well as the State Personnel Office, Public Education Department,

General Services Department, and Commission on Higher Education to assure compli-

ance with statutory duties

House Bill 49 -- Page 2

3.

Conduct periodic reviews and recommend revisions in policies, procedures and resources

of the agencies above to assure statutory compliance

4.

Work with the State Auditor on annual and special audits

5.

As requested by interim legislative committees, gather, analyze and validate state agency

information

6.

Conduct performance audits pursuant to the Accountability in Government Act

7.

Perform duties as assigned by the governor

8.

Assist state agencies in resolving audit findings and reviewing performance measures

9.

Contract for special audits and investigations

10.

Promulgate rules as necessary to carry out these duties.

House Bill 49 requires state agencies to provide complete cooperation to the state comptroller in

the conduct of a performance audit and requires employees of state agencies to provide the

comptroller access to specified public records and documents as well as to such property of a

contractor of the agency. Inspectors general and internal auditors of state agencies would report

to the comptroller periodically and as requested. The inspectors general and internal auditors,

with the New Mexico state police, would be required to conduct such audits and special investi-

gations as are requested by the state comptroller. The bill provides that final audits and reports of

the comptroller would be public documents, but working papers would be confidential.

House Bill 49 also makes it a duty for the Legislative Finance Committee (LFC) to conduct per-

formance audits pursuant to the Accountability in Government Act. It also requires state agen-

cies to provide complete cooperation to the LFC in the conduct of a performance audit and re-

quires employees of state agencies to provide the LFC access to specified public records and

documents as well as to such property of a contractor of the agency. The bill provides that final

audits and reports of the LFC would be public documents, but working papers would be confi-

dential.

House Bill 49 appropriates $750 thousand from the general fund to the Office of the State Comp-

troller in the Department of Finance and Administration to carry out the provisions of the act.

Significant Issues

House Bill 49 proposes creation of an agency within the executive branch (the Office of the State

Comptroller) that would provide a single point of oversight, or umbrella oversight, of statutory

compliance of other state agencies. Currently, several state agencies are responsible for statutory

and regulatory compliance with regard to a limited sector of state government activities. The

State Personnel Office (SPO), for example, enforces the Personnel Act, as well as oversees state

compliance with federal law and other federal and state regulations. However, aside from the

legislature, there is no agency assigned to assure that SPO complies with these statutes and regu-

lations. In this and other instances, agencies are often called upon to oversee themselves, creat-

ing a clear conflict of interest.

Other possible central oversight agencies lack both the resources and mandate to provide broad

oversight of this nature. The State Auditor generally focuses on assuring accuracy of annual fi-

nancial reports and lacks sufficient staff and resources to perform extensive special audits of

non-financial activities. The Attorney General lacks sufficient resources to enforce against vio-

lations of statute except when the violations have significant implications with regard to criminal

behavior or general state policies. In the past, the Legislative Finance Committee (LFC) auditors

House Bill 49 -- Page 3

have performed this function largely; however, an executive branch agency could be more proac-

tive in avoiding statutory and regulatory violations.

The comptroller would also provide performance audits of agencies and oversee other aspects of

implementation of the Accountability in Government Act. Encoded in Chapter 5, Laws of 1999,

the Accountability in Government Act promoted use of performance budgeting to tie agency ap-

propriations to performance measures and targets. Unfortunately, performance measurement is

only as good as the data reported and accuracy of data presented. HB49 would task the comp-

troller and LFC with conducting performance audits under this act.

PERFORMANCE IMPLICATIONS

Under House Bill 49, the Office of the State Comptroller and LFC would play a critical role in

assuring the validity of performance measures submitted under the Accountability in Govern-

ment Act and in assessing agency performance under the Act.

FISCAL IMPLICATIONS

The appropriation of $750 thousand contained in this bill is a recurring expense to the general

fund. Any unexpended or unencumbered balance remaining at the end of FY06 would revert to

the general fund.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

House Bill 49 duplicates Senate Bill 170. Both are sponsored for the LFC.

DH/yr