A new audit released Monday by the New Mexico Office of the State Auditor found that Mora County officials mishandled millions of dollars in state disaster loans and also repeatedly skirted competitive bidding requirements to award contracts in a community where, as one county employee described it to auditors, residents are “all pretty much related in one way or another.”
State Auditor Joseph Maestas told Source NM on Tuesday that the audit’s 21 findings represent the most “widespread” public trust abuses he’s seen in three and a half years in the office.
“There’s every type of violation under the procurement code here,” he said, “which is really troubling.”
The 100-page special audit’s central finding involves $3 million that the county earned in interest from $41.1 million the county received from Senate Bill 6, a 2023 bill intended to quickly award disaster funds through zero-interest loans to public entities struggling to recover after wildfires and floods in 2022.
Despite the Legislature’s aim to allocate funds quickly, Mora County has yet to spend any of the funds and county officials believed the $3 million in interest constituted “unrestricted” funds. As such, auditors couldn’t determine where the money had been spent and noted that the interest payments were commingled in the county’s general fund and often used for unspecified “operational expenses.”
The auditors concluded that the mismanagement of the $3 million in interest payments may make the state ineligible to receive Federal Emergency Management Agency reimbursement for those funds.
Mora County Commission Chair George Trujillo told Source NM on Tuesday that he believed “most” of the $3 million went to disaster-related expenses, like clearing debris-clogged culverts or road repairs. He could not immediately recall Tuesday where any additional funding might have gone.
He also stressed that the state Department of Homeland Security and Emergency Management, one of several state agencies helping local governments with the loans, had told county officials that the county could use the interest payments for whatever it deemed fit.
“All I have to say is there’s no money missing, and we had permission to spend that [$3 million] that they’re crying about,” he said.
DHSEM officials did not immediately respond to Source NM’s request for comment.
Potential conflicts in contracts
In addition to the interest payments, the auditor specified several instances of potential conflicts of interest or procurement code violations related to the county’s post-disaster spending.
County Sheriff Americk Padilla’s snow removal company received nearly $6,000 in an emergency contract in December 2023, for example. He did not properly file a required conflict-of-interest form with the county, and the contract violated state procurement requirements, according to the audit. Padilla did not immediately return Source NM’s request for comment Tuesday.
Commission Vice-Chair Johnny Trujillo, who worked for a gravel company that received county contracts specified in the audit, defended the potential conflicts in his statement to auditors. Mora, he said, “is a small town. Everyone is related in this town. And no one is giving any business based on relationships. Just recommendations.”
In one instance, Tina Cruz served as county attorney during a bidding process for the county’s hiring of outside counsel to represent it as it sought FEMA funding. Cruz also had a subcontract with firm Singleton Schreiber, the law firm that ultimately received the contract.
According to the audit, Cruz told commissioners that she did not have a conflict of interest as long as she did not bill the county for her work with Singleton Schreiber on behalf of the county’s FEMA claim. However, she did bill the county for 17 separate instances of work in September 2024 related to the wildfire, according to the audit.
Auditors could not determine how much Cruz received in “overbilling,” and they did not interview her as part of their audit.
Cruz, in a statement Tuesday to Source NM, denied that she ever “double billed” the county. She said she ultimately opted out of becoming a Singleton Schreiber subcontractor because of the “logistics” of working for both the firm and the county. As a result, she said she never received payment from Singleton Schreiber and billed the county only “nominally” for her work on its behalf.
Her statement did not specify how much money she asked for from the county for her work.
“All other work, which was a significant investment of time and effort on my part, went unbilled,” she said. “I opted to provide the support to the County pro bono to better assist Singleton Schreiber with the aim of helping my client recover from the devastating wildfire.”
In another contract auditors criticized, Cordova Contracting and Development LLC, an Albuquerque-based general contractor, received an “emergency” county contract in April 2024 for clearing plugged culverts.
Because the base contract was for only $60,000, county officials were not required to issue a request for multiple competitive bids. The contract Cordova received did not specify the contract duration or how county officials arrived at the $60,000 figure, according to the audit.
The company ultimately received more than $100,000 in compensation from the county, nearly twice as much as the contract specified, even though auditors could find no supporting documentation showing which culverts Cordova cleared over an 11-day period.
Company founder Mark Cordova told Source NM on Tuesday that he had not seen the audit, but he said the company cleared “quite a bit of” culverts under the contract. He referred additional comment to his wife and fellow owner Shari, who did not immediately respond to Source NM’s request for comment.
FEMA reimbursements jeopardized
The audit outlined other instances in which the Mora County Commission used “emergency” contracts inappropriately and noted the county will likely not receive FEMA reimbursement as a result.
The state procurement code has specific requirements for emergency contracts, including that they can only be issued in instances where an imminent threat exists to “public health, welfare or safety” due to floods, fires, riots, acts of terrorism or other disasters. And public entities are required to solicit competitive bids if possible even during those periods.
Trujillo told Source NM that the county was dealing with “emergency after emergency,” including repeated rounds of flooding each year since the 2022 wildfire, and that the three-member county commission did its best in trying to respond.
“To me, it’s a learning lesson,” he said of the audit’s findings. “We got to do things right in the procurement thing. But, you know, we’ve been under an emergency since 2022.”
Maestas told Source NM on Tuesday that the auditor’s office is continuing to monitor Mora County and that it has made referrals to other state agencies for additional investigations based on the findings. He also said the New Mexico Department of Justice may be interested.
“We found no potential criminal behavior, but that doesn’t mean that it didn’t exist,” he said.
He also said the audit underscores the need for additional oversight of small local governments, especially those that receive windfalls of state funds.
“The state really needs to think about any entity that they want to appropriate money to, that they’re capable of effectively managing it,” he said. “I think troubled governments really, really require adequate oversight. … And a statewide inspector general could possibly provide that kind of oversight.”
