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Hispanic Cultural Foundation told to return additional $147,000 of state fresco funds (UPDATED)

15 August 2011 Written by:

Updated 7 p.m. Monday: New Mexico Cultural Affairs Secretary Veronica Gonzales and State Auditor Hector Balderas demanded Monday that the National Hispanic Cultural Center (NHCC) Foundation return $147,000 of $812,500 in taxpayer funds intended for completion of a 45-foot-tall fresco of New Mexico history at the Center’s Torreón (pictured).

“I fully expect the Foundation to repay the thousands in public money it improperly spent,” Balderas said.

The Albuquerque accounting firm Moss Adams found in its state-ordered audit that the Foundation had misspent $147,000 from lawmakers’ 2008 fresco appropriations.

The Foundation had already returned March 31 what it said was an unspent balance of $138,361 of the state fresco funds.

The state will now pursue the return of an additional $147,000, Department of Cultural Affairs (DCA) Deputy Secretary Doug Svetnicka said Monday.

Foundation President Clara R. Apodaca could not be reached for comment.

DCA hired Moss Adams to investigate the fate of $812,500 in state fresco funds, which the agency had turned over to the NHCC Foundation for the mural project in 2007 and 2008.

A “draft” report on the Moss Adam audit was turned over to DCA last month, Svetnicka has confirmed, but officials have not explained the delay in its public release. The report was originally due out in May.

Approximately 20 percent of the state fresco money was kept by the Foundation as “administrative fees.”

Apodaca reported spending part of the money on Foundation salaries, including her own, and lobbying expenses, in an expense report obtained by Veritas New Mexico.

Despite the fresco exhibit’s lack of visitor seating, lighting and climate controls — and its need for roof and floor work — Apodaca had planned to spend remaining state fresco funds on brochures, coffee books and a video about the fresco, Foundation and state records show.

“State law requires that funding for capital projects is limited to so-called ‘bricks and mortar’ construction,” states a DCA press advisory released Monday. “The Foundation provided an invoice listing indirect expenses that included educational materials, production of a videotape and overhead costs.”

Not all records were available for auditors’ inspection, the newly-released report suggests.

“Our examination was limited to … the documents available and interviews performed,” the audit report cryptically states. “Had we reviewed other periods or areas or documents, other matters may have been identified warranting DCA’s attention.”

It is unclear which documents Moss Adams requested and what was provided by the Foundation.

The firm’s auditors did not ask for Foundation bank statements for the account into which the state’s $812,500 was deposited, Balderas’s chief of staff Evan Blackstone told Veritas NM Monday evening. Svetnicka had previously said Moss Adams auditors would ask for the bank statements.

The Foundation previously refused to disclose bank statements to the DCA..

The Moss Adams auditors were unable to locate a 2007 purchase agreement for the painting, Blackstone reported. (Veritas New Mexico reported April 27 that its records inspections indicated several documents related to the fresco funds, appeared to be missing from DCA files and state archives.)

“The copy of the purchase agreement ultimately provided to the auditors was not signed by anyone from the Department,” Blackstone noted. “Overall, the report’s findings indicated a lack of record-keeping and oversight at the Department over the appropriations.”

Three Foundation chief financial officers have resigned since 2009.

The fresco painting was not completed until earlier this year.

“It was highly improper for the Department to pay the Foundation more than $500,000 three years prior to completion of the painting,” Balderas said Monday. “The mismanagement and lack of oversight of taxpayer dollars demonstrated by this case is troubling.”

Foundation officials have not responded to numerous requests for interviews and comment since Veritas NM began reporting on its alleged misappropriations and commingling of state fresco money.

It is unclear whether or not the fresco is insured against water damage or other harm. Veritas NM filed a public records request for state insurance records May 3, but DCA has yet to disclose those documents.

Photo: Peter St. Cyr


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