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).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

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 Ryan

ORIGINAL DATE

LAST UPDATED

2/24/07

HB

SHORT TITLE Albuquerque Public Schools Audit

SB SJM59

ANALYST Patel

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

N/A

N/A

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Office of the State Auditor

SUMMARY

Synopsis of SJM 59

Senate Joint Memorial 59 is requesting the Legislative Finance Committee, the Office Education

Accountability and the State Auditor to audit the Albuquerque Public School district to

determine how much of the district’s budget goes to administration and if the district is

classifying expenditures in the appropriate sub-funds or functions of the new uniform chart of

account. SJM59 requires a report of findings and recommendations to the legislative finance

committee, the legislative education study committee and the public education department by

November 1, 2007.

FISCAL IMPLICATIONS

There is no appropriation included in this memorial.

SIGNIFICANT ISSUES

The Legislative Finance Committee had issued performance review report “Review of Public

School Accountability" on October 16, 2003, which identified problems with administrative

costs per pupil; costs (expenditure) misclassifications; inadequate chart of accounts, etc.

Senate Joint Memorials 59 – Page

2

Recommendations included for PED to adopt and implement the National Center for Education

Statistics (NCES) chart of accounts for all school districts. New Mexico legislature has

appropriated $2.5 million (2004, 2005 and 2006) from the general fund to the Public Education

Department to implement NCES uniform chart of accounts.

According to Office of the State Auditor" the office of state auditor normally performs annual

financial audits and special audits related to fraud. The office of state auditor usually does not

conduct performance audits of this nature. These types of audits are usually conducted by the

audit staff of the legislative finance committee."

PERFORMANCE IMPLICATIONS

The Legislative Finance Committee has tentatively approved following issues in 2007

performance audit work plan in education area:

•

Developing and retaining teachers, principals and superintendents, including

implementation of the three tier system.

•

Review of Regional Education Cooperative Centers

•

Course alignment for high school graduation to college entrance

•

Cost effectiveness and outcomes of the charter schools

•

Review of Virtual school concept, including technology in schools

•

Research and public services project funding, performance and outcomes for higher

education institutions.

ADMINISTRATIVE IMPLICATIONS

According to the office of the state auditor “the audit would place staffing implications upon the

legislative finance committee, the office of education accountability and the office of the state

auditor to conduct the audit, and the Albuquerque Public Schools to provide the necessary

documentation.

Furthermore, the office of state auditor is required to produce a certain amount of billables each

year. As a result, the office of state auditor bills agencies for work performed during an audit. It

would have to be determined to what extent the work performed on the Albuquerque Public

School District would be billed as the audit function would be shared amongst three agencies. It

would also have to be clarified that the joint memorial is requesting a performance audit versus a

financial audit."

MP/mt