The reasonable cost of all audits shall be borne by the agency audited, except that:

A. a public housing authority other than a regional housing authority shall not bear the cost of an audit conducted solely at the request of its local primary government entity; and

B. the administrative office of the courts shall bear the cost of auditing the magistrate courts. A metropolitan court shall be treated as a single agency for the purpose of audit and shall be audited as a unit, and the cost of the audit shall be paid from the appropriation to the metropolitan court. The district courts of all counties within a judicial district shall be treated as a single agency for the purpose of audit and shall be audited as a unit, and the cost of the audit shall be paid from the appropriation to each judicial district. The court clerk trust account and the state treasurer account of each county's district court shall be included within the scope of the judicial district audit.

History: 1953 Comp., § 4-31-4, enacted by Laws 1969, ch. 68, § 4; 2001, ch. 142, § 1; 2007, ch. 240, § 2.

Compiler's notes. — During calendar years 1992 and 1993 the District Court for the First Judicial District entered three orders in Vigil v. King, SF 92-1487(C), prescribing the procedure to be followed for selecting independent auditors for state agencies and local public bodies. In summary, the court orders provide:

If a state agency or local public body is notified that it has been designated for audit to be conducted by an independent auditor, the state agency or local public body shall select and submit the name of an independent auditor to the state auditor. The state auditor may, within five days after receipt of the state agency's or local public body's selection, disapprove of the choice of the agency or local public body. A disapproval must be in writing and set forth the reason(s) for disapproval. A disapproval is subject to judicial review;

If the state auditor finds that a state agency or local public body audit is not being conducted in accordance with generally accepted auditing standards or pursuant to the auditing contract between the parties, the state auditor may either complete the audit or contract with another independent auditor to complete the audit. If the state auditor contracts with another independent auditor, the contract amount is limited to the remaining amount owed on the original auditor contract;

The state auditor, pursuant to the Procurement Code, may, under conditions specified in the order, contract with independent auditors to assist the state auditor in conducting any special audit pursuant to 12-6-3 NMSA 1978. The state agency being audited is not a party to this contract. The total cost of the contract entered into by the state auditor cannot exceed 25% of the contract amount provided in the agreement between the state auditor and the agency to be audited.

The 2007 amendment, effective June 15, 2007, added Subsection A.

The 2001 amendment, effective July 1, 2001, deleted "and the cost of the annual audit of the state treasury shall be borne by special appropriations to the state board of finance" at the end of the first sentence, and inserted the second sentence concerning the audits of metropolitan courts.

The state auditor's practice of assigning contract auditor's to assist the state auditor in conducting agency audits illegally circumvents the legislature's decision to place the selection of such contract auditors and contract negotiations with the agencies themselves. 1992 Op. Att'y Gen. No. 92-06.