Late bank deposits did not hurt City of Carlsbad 2022 financial audit

Failure to meet a 24-hour deposit requirement did not tarnish an overall auditing report of City of Carlsbad finances in 2022, according to an Albuquerque accounting firm.

The Carlsbad City Council approved the audit report Tuesday night conducted by Hinkle and Landers.

In a memo to councilors City of Carlsbad Finance Director Melissa Salcido said the audit was "unmodified."

More: Audit report cites continued growth of Eddy County finances during 2022 fiscal year

“An Unmodified Report is an opinion of the auditor that provides a high level of assurance that the financial statements are presented, in all material respects, in accordance with applicable financial reporting standards,” read part of her memo.

Farley Vener, president and managing shareholder of Hinkle and Landers, said the City of Carlsbad did not deposit money from the COVID-19 American Rescue Plan (ARP) as required by the New Mexico State Auditor’s rule that requires 24-hour deposits of certain funds.

More: Audit report: Eddy County finances grew during five-year period

In the audit report, Vener wrote the 24-hour deposit rule requires public money received by any state official or agency, “unless otherwise specified by statutory exception,” be placed in the state treasury before the close of the next business day after receipt of the funds.

“Out of 25 randomly selected deposits, 16 of the 25 sampled deposits, totaling $163,520, were delivered to the bank more than 24 hours after receipt. Eight of these deposits were received by the bank more than five days after the date of collection,” Vener noted in his report.

He said the city had a staffing shortage that prevented money from being deposited in a timely manner.

More: City of Carlsbad audit receives an unmodified opinion

Vener said untimely deposits could cause the City of Carlsbad to be at risk of misappropriations of funds.

“We recommend that the City consider hiring and training sufficient staff to ensure that deposits can always be made within the 24-hour period required by state statute,” he wrote in the audit report.

Ward One City Councilor Edward T. Rodriguez said the audit was in-depth and intense.

“Although we did have findings (and) I consider them insignificant and just an oversight that will not be seen again. I’m happy that we have the report that we have,” he said.

Carlsbad Mayor Dale Janway was pleased with the unmodified audit. He said Hinkle and Landers was very thorough in reviewing 2022 finances.

“Financial accountability to the taxpayer is of the utmost importance, and we appreciate the hard work of our financial department, administrative team and Carlsbad City Council,” he said.

Mike Smith can be reached at 575-628-5546 or by email at MSmith@currentargus.com or @ArgusMichae on Twitter.

This article originally appeared on Carlsbad Current-Argus: Late bank deposit does not hurt City of Carlsbad 2022 audit