Pursuant to Section 12-6-3 NMSA 1978, the State Auditor may designate any agency for a special audit. The Office of the State Auditor may perform the audit or provide that it be conducted by an independent public accounting firm approved by the office. All costs of the audit are borne by the audited agency in accordance with Section 12-6-4 NMSA 1978.
Special audits may also be initiated by agencies. In these instances, an agency shall follow the provisions of the Audit Rule (22.214.171.124 NMAC) when entering into a professional services contract for a special audit, performance audit or attestation engagement regarding the financial affairs and transactions of the agency relating to financial fraud, waste and abuse.
Pursuant to Section 12-6-6 NMSA 1978 (criminal violations), an agency or auditor shall notify the state auditor immediately, in writing, upon discovery of any violation of a criminal statute in connection with financial affairs. The notification shall include an estimate of the dollar amount involved and a complete description of the violation, including names of persons involved and any action taken or planned.