As lawmakers grapple with what that means for the budget – and things like raises for state workers – there are questions for the governor.
Why didn’t she bring this up before?
We tried asking her, but the Martinez office said she wasn’t available for an interview.
There was no mention of the shortage in the State of the State address, nor in the highlight’s of the Governor’s budget recommendation.
The only mention it gets in the 137 page document is in the appendix.
A footnote gives an explanation for the reserve fund number with millions less than it was supposed to be: "Reflects $70 million contingent liability established by the FY12 General Fund Audit for potential charges related to unreconciled cash transactions.”
The Governor's office sent us a statement, saying the checkbook issues were a result of the state's SHARE accounting system.
“The issue with SHARE reconciliation dates back to 2006. It was discovered by the Martinez administration in 2011. The Department of Finance and Administration is continuously working to reconcile the balance sheet; however, this is a problem that had been ignored for years and it will take some time to completely resolve. The discrepancy is accounted for in DFA’s budget request and it is important to emphasize that no cash is missing from the state’s accounts.”
On Thursday, the Department of Finance and Administration also blamed the 2006 implementation of the SHARE system, but admitted it’s the DFA’s job to reconcile transactions – and that hasn’t been happening.
“It's been in the statutes as very specifically DFA's responsibility since 2003. Why it wasn't looked at or followed, we don't know,” said Deputy Cabinet Secretary Ricky Bejarano.
The new administration took office in 2011, but they say it’s taken two years just to identify the depth of the problem.
“Since we've identified it, it's been a slow process partly because we didn't have the bandwith, the technical staff internally to diagnose it,” said DFA Secretary Tom Clifford.
Rep. Lucky Varela, D-Santa Fe, pushed for funding during the last legislative session to get to the bottom of the checkbook issues with SHARE.
“We started expressing concerns with the state auditor - where is the reconciliation? And they said it's not being done,” Varela said.
Now, there's a ton of work ahead for lawmakers who are trying to set up a budget.
“We can't start appropriating money when we don't know where those dollars belong,” he said.
The DFA said if the checkbook discrepancy is $70 million dollars there would still be plenty left in the reserve funds.
However, if the number is more like $460 million – which the Legislative Finance Committee said was a possibility – it would bring reserves down to 3 percent. That’s well below the 10 percent level that’s usually been the policy.
Clifford says DFA has already spent a half million dollars to diagnose the problem and start working on a fix.
DFA estimates it will take $11 million more to upgrade the system and properly train workers to run it – and it will cost even more to figure out how big the shortage actually is.
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New Mexico is located in the southwestern region of the U.S. Inhabited by Native American populations for many centuries, New Mexico has also been part of Imperial Spain, part of Mexico, and a U.S. territory.