Audit scandal costs NMFA exec his job

Associated Press

Updated: Sep 28, 2012 4:37 PM

SANTA FE (AP) — The New Mexico Finance Authority on Friday fired its top executive, who had been on leave with pay since last month amid a scandal over a fake financial audit.

The authority's governing board made the decision to terminate CEO Rick May after members met in a closed session. Only one member, Bill Fulginiti of the New Mexico Municipal League, opposed the firing, which was effective immediately.

Authority board chairwoman Nann Winter declined to comment because it was a personnel matter and could become the subject of a lawsuit.

"It is time to move on," she said.

May said in a statement the move was an attempt to make him the "scapegoat" for the fake audit and to shift the blame.

The authority's former controller was indicted on forgery and securities fraud charges after officials said annual financial statements were falsified to make it appear they had been audited by an outside accounting firm.

State securities regulators contend the false audit misrepresented the authority's finances to ratings agencies and investors that purchased the authority's bonds.

"I have done nothing wrong in regards to the fraudulent audit," May said. "I have cooperated fully with all investigations. I have provided nothing but the facts. Yet, all I received in return is termination."

He said he is considering a lawsuit "to preserve and protect my longstanding reputation for honesty and integrity." The board didn't give him an opportunity to appear before all members and answer their questions about the audit, he said.

May joined the authority last year after serving as Gov. Susana Martinez's cabinet secretary of the Department of Finance and Administration. He was paid $150,000 a year as CEO.

Since he was placed on leave, the authority has hired former state budget director John Gasparich to serve as interim CEO through at least early next year as the agency copes with fallout from the forged audit.

May's firing came a week after a grand jury indicted former controller Greg Campbell but declined to bring charges against the authority chief operating officer John Duff, who remains on leave without pay.

The Finance Authority provides low-cost financing for capital projects by cities, counties, schools and other New Mexico governmental organizations. It operates independently from any state agency and functions like a bank for governmental infrastructure.

Gasparich said the authority has hired a chief financial officer, Donna Trujillo, who will start on Oct. 15. Trujillo is a certified public accountant and information systems auditor.

She has been CFO and acting administrative services division director at the state Department of Workforce Solutions since May 2010. She previously worked in the Department of Health and was CFO at the Department of Finance and Administration in 2006-2008.

A forensic audit is under way to determine how the fake audit occurred, whether any money is missing and why it wasn't detected until July after the state auditor's office questioned why the authority's 2011 audit was late.

Campbell has acknowledged in statements to the media that he faked the audit earlier this year but has said he didn't steal any money.

Fulginiti said he objected to the board firing May without first trying to negotiate a settlement for the CEO to leave. But he acknowledged that a management shakeup was necessary because of the fake audit.

"I think we need to move forward. I think we had to do this," Fulginiti said in an interview.

Copyright 2013 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Political Pulse

We welcome your thoughtful comments. Be the first to participate in the discussion. All comments will display your username and avatar.