The bill amends the Audit Act to enhance audit requirements and redefine key terms related to public financial management in New Mexico. It revises the definition of "local public body" to exclude entities with annual revenues below $100,000 and expands the definition of "agency" to include organizations that support public post-secondary educational institutions. Additionally, the bill introduces provisions for statewide federal single audits starting in fiscal year 2028, ensuring compliance with federal laws for major assistance programs. It also modifies audit requirements based on local public bodies' financial metrics, establishing new thresholds for financial reporting and compliance, while creating an "audit fund" in the state treasury to support the state auditor's activities.

Moreover, the bill clarifies procedures for contract audits by requiring state agencies and local public bodies to notify the state auditor when designated for an audit and to contract with an independent auditor of their choice, adhering to the state auditor's rules. It mandates that state-chartered charter schools and agencies overseen by education departments obtain approval from their oversight agencies before selecting an auditor. The state auditor retains the authority to select an auditor if no recommendation is submitted within sixty days. Payments for the state auditor's salaries and expenses will be drawn from the audit fund, which will not revert at the end of the fiscal year, and the state auditor will review all audit reports, authorizing progress payments based on work completed. Final payments will only be made after confirming that audits were conducted competently and in accordance with the contract.

Statutes affected:
introduced version: 6-6-1, 12-6-2, 12-6-3, 12-6-5, 12-6-13, 12-6-14