State Auditor Hector Balderas will assist the Department of Cultural Affairs (DCA) and its independent auditing firm, Moss Adams, in the “full and independent” audit of state fresco funds ordered by DCA Cabinet Secretary Veronica Gonzales.

The funds were managed by the National Hispanic Cultural Center Foundation, and had been intended for the completion of muralist Frederico Vigil’s 40,000 square-foot fresco depicting New Mexico history, at the Center’s Torreon Building.

“I spoke with (DCA) Secretary (Veronica) Gonzales this morning and we agreed to work together. We’ll be assisting with the audit,” Balderas told Veritas New Mexico. “We’ll help with the scope of the audit and will review the final report.”

Gonzales demanded the Foundation’s return of $379,000 of the fresco money in a letter dated March 30, 2011.

The audit will be completed by late May, Balderas said.

“I spoke with (auditing firm) Moss Adams and they’ll expedite this report,” he said Tuesday. “We’re committed to turning this around quickly, in the coming month.”

Asked if the audit will be a “forensic” audit, as requested by former Center board member Matt Martinez, Balderas said that “standards require risk and fraud factors be considered.”

There have been no allegations of embezzlement of fresco funds, Balderas noted.

But his office is nevertheless required to look for indicators of fraud, he said.

“There are post-Enron accounting standards that require that,” Balderas said. “There’s no discretion for the auditor. …We will test operations and whether expenditures were proper.”

Balderas’s office put the Foundation on “corrective action” status in early January and opened a file at the Investigations Division last fall, Balderas said.

“We’ve been monitoring the agency since then,” he said.

The DCA conducted in December 2010 a “Special Review” of the Foundation’s management of state fresco funds, based largely on documents prepared by the Foundation, such as Apodaca’s Dec. 3, 2010 fresco expense report. But DCA auditor Michael Miera, tasked by then-DCA Secretary Stuart Ashman with conducting the special review, did not obtain copies of the Foundation’s actual financial “QuickBooks” ledgers, Svetnicka confirmed.

“We reviewed that report and conducted a general risk analysis based on that review, and provided that to Secretary Ashman and Clara Apodaca,” Balderas said. “We required them to take corrective action. We also did a case intake at the Special Investigations Division based on a citizen complaint — opened a case file and risk review.”

Balderas would not confirm that the citizen complaint came from former Center board member Matt Martinez, but Martinez told Veritas in a Dec. 30, 2010 interview that he had spoken to Balderas about his suspicion that the Foundation had misappropriated state fresco funds.

The state auditor’s risk analysis letter, dated Dec. 28, 2010, directed the DCA and Foundation to correct problems identified in the DCA  special review’s findings, Balderas said.

Photo: Peter St. Cyr