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City Manager Report

Posted on: December 29, 2020

City of Las Cruces Audit Report Released

City Hall view of the flags

The Office of the New Mexico State Auditor (OSA) has released a report involving a fraud examination and investigation initiated by the City of Las Cruces.

The report identified serious conflicts of interest and revealed more than $1.8 million in mishandled or misused City funds related to the Las Cruces Convention and Visitors Bureau, income and spending by the Friends of Visit Las Cruces, various city-sponsored events including the Las Cruces Country Music Festival, and several vendors holding contracts or doing business with the City from 2016 through 2019.

"The City of Las Cruces is dedicated to transparency and accountability. We are happy that this report is being made public so that citizens will know we take these items very seriously. The findings in this report have already resulted in many changes to make the City a better organization. I am also proud that the latest external audit did not show any repeat findings. We are committed to continuous improvement," said Mayor Ken Miyagishima.

An internal investigation into irregularities began in December 2018. In June 2019, the Las Cruces City Council approved a contract with the McHard Firm, based in Albuquerque. The McHard Firm was contracted to review and investigate irregularities and findings of the City’s internal investigation. The City and the McHard Firm notified OSA and the New Mexico Attorney General’s office of preliminary findings in August 2019.

The final investigation spanned 11 months and included an extensive review of data equivalent to approximately 3 million pages of documentation. The McHard Firm was able to successfully reconstruct City-related revenue and spending. The report remains under review by the Attorney General’s office.

Since the discovery of the irregularities that initiated this investigation, the City has updated internal controls and policies, implemented an Accountability in Government Ordinance, restructured the Office of Internal Audit, and named an Oversight Committees. Results of the most recent annual Ethics Survey showed that employees viewed the City as more ethical than they did in previous years. The City’s 2020 annual external audit did not uncover any repeated irregularities or findings.

The entire report can be found on the OSA website at this link.

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