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

SPONSOR Griego

ORIGINAL DATE

LAST UPDATED

2/19/07

HB

SHORT TITLE State Auditor Operational Expansion

SB 1124

ANALYST Propst

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$635.3

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Office of the State Auditor

Public Education Department

SUMMARY

Synopsis of Bill

Senate Bill 1124 makes an appropriation of $635.3 from the General Fund to the Office of the

State Auditor (Office) for expenditure in fiscal year 2008 for the following purposes:

1. $112.0 for 2 FTE investigators for fraud and special audits;

2. $238.2 for 2 FTE audit managers to conduct financial, special and fraud audits

3. $75.0 to open a satellite office in Albuquerque

FISCAL IMPLICATIONS

The appropriation of $636.3 contained in this bill is a recurring expense to the General Fund.

Any unexpended or unencumbered balance remaining at the end of FY08 shall revert to the Gen-

eral Fund.

SIGNIFICANT ISSUES

The Office of the State Auditor reports that currently the Auditor has 270 fraud/special audit in-

Senate Bill 1124 – Page

2

quiries pending. Several fraud or special audits were referred to Independent Public Accountants

(IPAs) because of a lack of auditors and investigators in the Office. The proposed investigators

and auditors would increase the number of fraud and special audits as well as financial audits

performed by the Office.

Further the Auditor notes that 41% of IPAs conducting governmental audits and 28% of gov-

ernmental entities required to be audited are located in the greater Albuquerque area. An office

in Albuquerque might be both cost effective and efficient.

ADMINISTRATIVE IMPLICATIONS

The addition of more investigators and auditors could allow the Auditor to operate in a more re-

sponsive manner. The addition of a satellite office in the greater Albuquerque area would also

allow the agency to be more responsive to agencies and IPA’s located within the area. It would

also allow the agency to retain and recruit qualified employees residing in the largest populous

area of the state.

WEP/nt