FOR IMMEDIATE RELEASE:
Daniel Maki, Office of the State Auditor (505)396-0829 Jerri Mares, Office of the State Treasurer (505)795-3141
SANTA FE – With recent high profile bank failures raising serious concerns about the need to safeguard money in banks, New Mexico State Auditor Joseph M. Maestas and New Mexico State Treasurer Laura M. Montoya have issued a joint alert to all counties and municipalities throughout the State. Audits of state entities have caught the attention of the State’s top financial watchdogs, indicating that collateralization laws and Federal Deposit Insurance Corporation (“FDIC”) guidance are inconsistently followed across the State.
In recent months, some local governments bypassed the 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.
“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,” said Treasurer Laura M. Montoya. “This is why audits are important,” said Auditor Maestas. “Without an independent audit, these safeguards would have been bypassed and our public funds could have been in jeopardy.”
“We trust that this Alert will direct attention to the importance of the underlying issue of
safeguarding public funds,” the officials said in a joint statement. “Additionally, we anticipate
clarification of these issues can further assist agencies and banks in reviewing and revising their policies and internal procedures to ensure compliance with their fiduciary duties.”
A copy of the Alert is linked here