GRANTS, NM - NM State Auditor Joseph Maestas and State Treasurer Laura Montoya have issued a joint alert to all counties and municipalities throughout the State. This is due to collateralization laws and Federal Deposit Insurance Corporation guidance being inconsistently followed across the State.
They said in a joint statement, 'We trust that this Alert will direct attention to the importance of the underlying issue of safeguarding public funds.'
The recent failures of large-scale banks have brought attention to the need to safeguard money in banks. Audits of state entities have shown that some local governments have bypassed collateral requirements by adding multiple employees or elected officials to bank accounts to secure $250,000 of FDIC insurance for each account signer. New Mexico state law requires banks to have proper collateralization to safeguard taxpayers’ money. Any amount of public money held in banks over the $250,000 insured by the FDIC must be backed by other forms of sureties. Treasurer Montoya stated that, 'This practice is inconsistent with state and federal law, and my office will continue to work with government agencies and banks to ensure that New Mexico funds are not at financial risk.'
Auditor Maestas has stated that “Without an independent audit, thesesafeguards would have been bypassed and our public funds could have been in jeopardy.”
With attention and clarification being placed on these issues, they anticipate that banks and other agencies will be able to revise their policies and procedures to ensure compliance for the future.