New Mexico Doc Financial Report Fy2009 Parta

• Topics: Misconduct/Corruption, Corrections Audits

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Financial Statements and Schedules
With
Independent Auditors' Report
For the Fiscal Year Ended June 30,2009
Prepared by the New Mexico Corrections Department
Financial Management Bureau

ANNUAL FINANCIAL REPORT
OF THE NEW MEXICO CORRECTIONS DEPARTMENT
FOR THE FISCAL YEAR ENDING JUNE 30, 2009
TABLE OF CONTENTS
INTRODUCTORY SECTION

Page

Transmittal Letter

iii

Official Roster

Organizational Chart

vii

List of Abbreviations

viii

FINANCIAL SECTION
Independent Auditors' Report

MANAGEMENT DISCUSSION AND ANALYSIS (required supplementary information)

BASIC FINANCIAL STATEMENTS

Government-Wide Financial Statements
Statement of Net Assets

Statement of Activities

Fund Financial Statements
Governmental Fund Financial Statements
Statement of Governmental Funds - Balance Sheet

Reconciliation of the Balance Sheet to the Statement of Net Assets -Governmental
Funds

Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental
Funds

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund
Balances of Govemmental Funds to the Statement of Activijies

Statement of Revenues, Expenditures, and Changes in Fund Balance - BUdget and
Actual- General Fund

Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and
Actual- Community Corrections Special Revenue Fund

Proprietary Fund Financial Statements
Statement of Net Assets - Proprietary Fund

Statement of Revenues, Expenses, and Change in Fund Net Assets - Proprietary Fund

Statement of Cash Flows - Proprietary Fund

Agency Fund Financial Statement
Statement of Fiduciary Assets and Liabilities - Agency Fund

Notes to the Financial Statements

INDIVIDUAL FUND STATEMENTS AND SCHEDULES
General Fund
Statement of Revenues &expenditures - Budget and Actual, By Program
Program Support

Inmate Management and Control

Inmate Programming

Community Offender Management

Community Corrections - Vendor Operated

Computer Systems Enhancement

Multi-Year Budgets and Z codes

66-73

Statement of Revenues &Expenditures - Budget and Actual, By Fund
Building Fund, SHARE System Fund 89800

General Operating Fund, SHARE System Fund 90700

Probation and Parole General Operating Fund, SHARE System Fund 91500

State Capital Projects, SHARE System Fund 99700

Combining Balance Sheet General Fund Types - GAAP Basis

Combining Statement of Revenues, Expenditures and Changes in Fund Balance
General Fund Types - GAAP Basis

Enterprise Fund
Schedule of Revenues and Expenses, By Enterprise

80-81

Schedule of Revenues and Expenses, Furniture

Schedule of Revenues and Expenses, Cleaning Products

Schedule of Revenues and Expenses, Textiles

Statement of Revenues &Expenses - Budget and Actuals
(GAAP Budgetary Basis)

Agency Fund
Schedule of Changes in Assets and Liabilities

D. SINGLE AUDIT SECTION
Schedule of Expenditures of Federal Awards

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed In Accordance With Government
Auditing Standards

Report on Compliance with Requirements Applicable to Each Major Program and on
Internal Control Over Compliance In Accordance with OMB Circular A·133

Summary Schedule of Prior Audit Findings

Schedule of Findings and Questioned Costs

Exit Conference Personnel In Attendance

STATE OF NEW MEXICO

CORRECTIONS DEPARTMENT
Central Office Administration: 4337 State Road 14, Santa Fe, New Mexico 87508
Post Office Box 27116, Santa Fe, NM 87502-0116
Main Number (505) 827-8600 Fax (505) 827-8533
www.corrections.state.nm.us

Bill Richardson, Governor
Central Administration:
Joe R. Williams

Division Directors:
Charlene Knipfing, Probation and Parole, 827-8830
Fernando Gallegos, Trammg '\cademy, 827-8900

Secretary of Correction~, 82 -8884

Jolene M. Gonzales

Willie Marquez, Corrections Industnes, 827-8838

Deputy Secretary, Administration, 827-8667

Tony E. Marquez Jr., Adrrunistratiyc Sen'ices, 827-8601
Larry Pacheco, Information Technology, 827-8713
James R. Brewster, General Counsel, 827-8662

Tim LeMaster
Deputy Secretary, Operations, 827-8767

December 11 , 2009

The Honorable Bill Richardson, Governor
and
Hector H. Balderas, New Mexico State Auditor
New Mexico State Legislators
Citizens of New Mexico

The Annual Financial and Compliance Audit Report for the State of New Mexico Corrections Department (the Department) for the
fiscal year ending June 30, 2009 is hereby submitted.
Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all
disclosures, rests with the Department. The enclosed data is accurate in all material respects and is presented in a manner
designed to fairly set forth the financial position and the results of operations of the Department on a Government-wide
(Department-wide) and Fund basis. All disclosures necessary to enable the reader to gain an understanding of the Department's
financial activities have been included.

FINANCIAL CONDITION
The Management Discussion and Analysis (MD&A) summarizes the Statement of Net Assets (page 13) and the Statement of
Activities (page 14) and reviews the changes from the beginning to the end of the current period. These Government-wide
(focusing on the Department as a whole) statements are intended to present the Department in a more corporate style basis.
The Fund Financial Statements, starting on page 15, are designed to address the major individual funds by category
(govemmental, proprietary, and fiduciary). Explanation of the fund financial statements is included in the MD&A (page 4) and in
Note 2 (page 27).
The following review of the types of commitments against net assets for the governmental and business-type activities is intended
to supplement the information provided in the MD&A and the Notes to the Financial Statements.

iii

Commitments Against Unrestricted Net Assets

The Unrestricted Net Assets is intended to be a corporate-style measure of well being for the Departmenrs governmental and
business-type activijies. This amount includes non-reverting cash balances as well as cash restricted for bUdgetary requirements
wijhin the Department. For further explanation of these funds please see Note 2 (page 37) and Note 15 (page 52).
Business-Type Activities

The Department's business-type activity is the Corrections Industries Division. The Corrections Industries Division (CID) was
created under the Corrections Industries Act in 1978 to:
Enhance the rehabilitation, education and vocational skills of inmates through productive involvement in enterprises and
public works of benefit to state agencies and local public bodies and to minimize inmate idleness.
Results of operations for the various enterprise functions within Corrections Industries are presented in the Schedule of Revenues
and Expenses, By Enterprise (pages 80-84).
GENERAL INFORMATION
Accounting & BUdgeting Systems

The Department used the Statewide Human Resources, Accounting, and Management Reporting System (SHARE) as ijs'
accounting system in fiscal year 2009, which provides management with financial and budget information. The Department is in
ijs' third full year of SHARE since the implementation at the beginning of fiscal year 2007. The Department has designed intemal
processes and controls to provide reasonable assurance regarding (1) the proper recording of financial transactions and (2)
reliability of the financial records for preparing financial statements.
Budgetary controls are maintained wijhin the system to ensure compliance wijh the appropriations. Requisitions are entered online for the required account codes and encumbrances established are verified against the available budget authorized. Open
purchase orders and contract encumbrances at year-end are disencumbered and recreated in the subsequent fiscal year resulting
in the reduction of the available budget in the imminent fiscal year.
Budget to actual comparisons demonstrate how the actual expenses/expendijures compare to both the original and final approved
budget. Following each comparison are the adjustments necessary to reconcile to Generally Accepted Accounting Principles
(GAAP). The following identifies where these comparisons can be found:

Governmental Major Funds
o General Fund - Page 19.
o Community Corrections Special Revenue Fund - Page 20.
Proprietary - Corrections Industries Revolving Fund - Page 85.

Also included in this report are individual statements by appropriation unij beginning on page 60.
REPORTING ENTITY

The New Mexico Corrections Department is a cabinet level agency wijhin the State of New Mexico. The financial statements
issued in this report are separate and stand-alone. The focus is on the Department rather than the State as a whole. All reference
to govemment-wide financial statements contained wijhin these statements refers only to the New Mexico Corrections
Department.

REPORT FORMAT
The Annual Financial and Compliance Audit Report is presented in two sections: Introductory and Financial. The Introductory
section includes the table of contents, this transmittal letter, the Departmenfs organizational chart, and a list of abbreviations. The
Financial section includes the independent auditor's opinion, Management's Discussion and Analysis, Basic Financial Statements,
Supplementary Information and Single Audit section.

INDEPENDENT AUDIT
Pursuant to the Aud~ Act (§12-6-1 through §12-6-14, NMSA 1978), an audit of accounts and financial statements has been
completed by an independent Certified Public Accountant, Meyners + Company, LLC. Their report is included in this report.

ACKNOWLEDGEMENTS
The Annual Financial and Compliance Audit Report was prepared by the staff of the Financial Management Bureau of the
Administrative Services Division under the direction of Deputy Director Pat Lopez, Bureau Chief Raphael Torres and Accounting
Manager Bryan M. Maestas. We express our sincere appreciation to Mr. Lopez, Mr. Torres and Mr. Maestas, and their staff for
their work in the preparation of this report, as well as all add~ional individuals throughout the Department who assisted in this
effort. Appreciation is also expressed to the Deputy Secretaries, Wardens, Division Directors, Bureau Chiefs and Business
Managers for their diligence and professionalism regarding matters pertaining to the financial affairs of the Department.
Sincerely,

Joe R. Williams - Secretary of Corrections
New Mexico Corrections Department

Jolene M. Gonzales - Deputy Secretary of Administration/Chief Financial Officer
New Mexico Corrections Department

Tony E. Marquez, Jr. - Director
Administrative Services Division

Pat S. Lopez - Deputy Director
Administrative Services Division

Raphael Torres - Bureau Chief
Financial Management Bureau

Bryan M. Maestas, CGFM - Accounting Manager
Financial Management Bureau

NEW MEXICO CORRECTIONS DEPARTMENT
OFFICIAL ROSTER
JUNE 30, 2009
Administrative Officials
Joe R. Williams
Jolene M. Gonzales
Tim LeMaster
Charlene Knipfing
Fernando Gallegos
Willie Marquez
Tony E. Marquez, Jr.
Larry Pacheco
James Brewster

Secretary of Corrections
Deputy secretary - Administration
Deputy Secretary - Operations
Director of Probation and Parole
Director of Corrections Training Academy
Director of Corrections Industries
Director of Administrative Services
Director of Information Technology
General Counsel

Corrections Industries Commission
George Marquez
Mark Jaramillo
John R. Holler
Nick H. Brown
Barri Roberts
John Serrano
Michele Marshal

Chair
Member
Member
Member
Member
Member
Member

NEW MEXICO CORRECTIONS DEPARTMENT
ORGANIZATIONAL CHART
JUNE 30, 2009

Secretary of
Co rrections

Admin"
Assistant

Public
Infonnation

OfflClRr

•

u.puqo
Secretary of

~in"

Admin"

Assistant

Prison
Reform Czar

rvicesDep~

......

Din!ctDr

I--

Assistant

L
~~pment
1-

IP-aIe

Prabation
Divis!

Training

Acad8my

Filmily
Services

t--

standard
Supervision

Victim
Services

Volunteer
Services

....-

Addiction
Services

Facilities
Management

Speciill
Projects

Admin

Wor1dorc:e

InfonNltion
Technology

5tIcNtiIry of

Special
Investigations
nternal Affal"

Human
Resou~

_"J'

Admlnlstrativ;

Budget

General
Counsel

Opportunity
Office
IAdmlni
Servlcles
DiredlDr

Financial
Management

Reentry &

•
Equal
~

•

Office Of

Community
Corntc:tioI w

Special

Programs

I--

Male Prison...

Ftlmale
Prisoner
Services

...-

CassifiC3tion

J-

ee-dlnallDr
Food Services

Central
RecDrds

Safety

Audlb
a: standards
.
Co

Health
Services

Mental Health I

vii

Division

ServiC18S

Inb!rnal

t--

Adult Prisons

Security

1'hreat
InbtDiaence
Emergency
Preparectn.s
M
Prison Rape
"m1natian Ad
ee-dlnator

NEW MEXICO CORRECTIONS DEPARTMENT
List of Abbreviations
JUNE 30, 2009
ASB

- Addiction Services Bureau

APD

- Adult Prisons Division

ASD

- Administrative Services Division

Community Corrections / Vendor Run [Program]

CID

Corrections Industries Division [Program]

COM

- Community Offender Management [Program]

CNMCF

CTA

- Corrections Training Academy

DFA

EDB

- Education Bureau

GSD

- General Services Department

HSB

- Health Services Bureau

IMAC

- Inmate Programming [Program]

ISP

Probation and Parole Intensive Supervision [Program]

ITO

Information Technology Office

NMCD

- New Mexico Corrections Department

PNM

PPD

- Probation and Parole Division

RCC

- Roswell Correctional Center

SCC

Springer Correctional Center

Statewide Human Resources, Accounting, and Management Reporting System

Central New Mexico Correctional Facility

Department of Finance and Administration

Inmate Management and Control [Program]

Penitentiary of New Mexico

Program Support [Program]

SNMCF

- Southern New Mexico Correctional Facility

WNMCF

- Western New Mexico Correctional Facility

viii

INDEPENDENT AUDITORS' REPORT

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Mr. Joe R. Williams, Secretary, Corrections Department,
New Mexico Corrections Commission and
Mr. Hector H. Balderas
New Mexico State Auditor

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As discussed in Note 2, the financial statements of the Department are intended to
present the financial position, and the changes in financial position and cash flows,
where applicable, of only that portion of the governmental activities, the business type
activities, each major fund, and the aggregate remaining fund information of the State of
New Mexico that is attributable to the transactions of the Department. They do not
purport to, and do not, present fairly the financial position of the entire State of New
Mexico as ofJune 30, 2009, and the respective changes in its financial position and its
cash flows, where applicable, for the year then ended in conformity with accounting
principles generally accepted in the United States of America.

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We conducted our audit in accordance with auditing standards generally accepted in the
United States of America and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An
audit includes consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Department's internal
control over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used
and the significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis
for our opinions.

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We have audited the accompanying financial statements of the governmental activities,
the business-type activities, each major fund, and the aggregate remaining fund
information of the New Mexico Corrections Department (the Department), as of and
for the year ended June 30, 2009, which collectively comprise the Department's basic
financial statements as listed in the table of contents. We have also audited the financial
statements of each of the Department's individual SHARE funds and all the budgetary
comparisons presented as supplementary information in the accompanying combining
and individual fund financial statements and schedules as of and the for the year ended
June 30, 2009, as listed in the table of contents. These financial statements are the
responsibility of Department's management. Our responsibility is to express opinions
on these financial statements based on our audit.

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Mr. Joe R. Williams, Secretary, Corrections Department,
New Mexico Corrections Commission and
Mr. Hector H. Balderas
New Mexico State Auditor

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, the business-type activities, each major fund, and the aggregate
remaining fund information of the Department, as ofJune 30, 2009, and the respective changes in financial
position and cash flows, where applicable, thereof and the budgetary comparison for the general fund and major
special revenue fund for the year then ended in conformity with accounting principles generally accepted in the
United States of America. In addition, in our opinion, the financial statements referred to above present fairly,
in all material respects, the respective financial position of each of the individual SHARE funds of the
Department as ofJune 30, 2009, and the respective changes in financial position thereof and the budgetary
comparisons for the governmental and enterprise funds for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
In accordance with GovernmentAuditing Standards, we have also issued our report dated December 7, 2009, on
our consideration of the Department's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The
purpose of that report is to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on the internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards and should be considered in assessing the results of our audit.

The management's discussion and analysis on pages 1 through 12 are not a required part of the basic financial
statements but is supplementary information required by accounting principles generally accepted in the United
States of America. We have applied certain limited procedures, which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the required supplementary
information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the basic financial statements, and on the
combining and individual fund financial statements and budgetary comparisons. The accompanying
supplemental information is presented for additional analysis and are not a required part of the basic financial
statements, including the Agency Fund-Schedule of Changes in Assets and Liabilities. The accompanying
schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S.
Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations,
and is also not a required part of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit
of the basic financial statements and, accordingly, we express no opinion on them.

+am~1 L.Lc-

December 7, 2009

FINANCIAL SECTION

MANAGEMENT'S DISCUSSION AND ANALYSIS

The New Mexico Corrections Department (NMCD) discussion and analysis is designed to (a) assist the reader in
focusing on significant financial issues, (b) provide an overview of the Department's financial activity, (c) identify
changes in the Department's financial position (ability to address future year challenges), (d) identify any material
deviations from the financial plan (approved budget), and (e) identify fund issues or concerns.
The Management's Discussion and Analysis (MD&A) is designed to focus on the current year's activ~ies, resulting
changes and currently known facts; please read it in conjunction with the transmittal letter at the front of this report and
the Department's financial statements and notes which follow this section.

HIGHLIGHTS

Financial Highlights

The Department's net assets increased by $4,096,692. The governmental net assets increased by $3,302,507 and the
business-type net assets increased by $794,185.
The business-type activities (Corrections Industries Division) operating revenue decreased by $447,761 and net results
from activities (net income) increased by $845,262 for a net income of $794,185 for fiscal year 2009.
The total cost of all Department programs was $304,680,273.
Department Highlights

The mission of the New Mexico Corrections Department (NMCD) is to provide a balanced-system approach to
corrections, from incarceration to community-based supervision with training, education, programs and services that
provide opportunities for offenders to transition to communities.
In fiscal year 2009, NMCD's total budget increased by 7 percent to $320.5 million, mostly attributable to the opening of
the Northeastern New Mexico Detention Facility in Clayton; probation and parole offender growth and sex offender
monitoring; the cost of inmate medical services; and salary increases for staff. However, nearly midway through the
fiscal year, the State of New Mexico recognized a severe revenue shortage that resu~ed in a statewide hiring freeze
and a 1.9 percent reduction in NMCD's operating budget.
In fiscal year 2009, the probation and parole offender population increased by 4.1 percent, and the year-end inmate
population increased to 6,440, or 1.7 percent more than the previous fiscal year. The Department experienced a
decline in inmate popUlation the previous two fiscal years after a census high of 6,803 in fiscal year 2006. In fiscal
year 2009, the Department suspended or terminated three private prison contracts. These included two facilities for
men in Torrance and Santa Fe counties and the Camino Nuevo Correctional Center for women in Albuquerque.

Other Highlights
NMCD continues to monitor its budget closely to reduce costs. NMCD has successfully completed each fiscal year
overspending any program or category appropriation, and has avoided a supplemental appropriation five of the
last six fiscal years.

w~hout

Central Office Manager Bryan Maestas was selected as one of New Mexico Business Weekly's top performing CFOs.

• 1-

Each year, the publication honors New Mexico's top financial stewards in large, small, private and nonprofit
companies. Mr. Maestas was the winner in the public company category.
The Central Office, Training Academy, Corrections Industries, Probation and Parole, Roswell Correctional Center and
Guadalupe County Correctional Facility all passed their American Correctional Association (ACA) re-accreditation
audits. All facilities scored 100 percent compliance for all mandatory standards. The Central Office, Training
Academy, Probation and Parole and Guadalupe County Correctional Facility each scored 100 percent on nonmandatory standards, while Corrections Industries scored 98.6 percent and Roswell Correctional Center attained 99
percent.
NMCD negotiated a contract amendment with the health services vendor in fiscal year 2009 to provide quality care to
inmates at the Northeast New Mexico Detention Facility in Clayton at an amount approximately 75 percent less than
the estimated cost.
To maintain adequate supervision, the Probation and Parole Division was appropriated 12 new positions, which were
assigned to high-risk specialized caseloads and to the Response Center to combat the increasing number of violent
offenders. The creation of additional positions has allowed the division to construct high-risk caseloads for officers
that specialize in the supervision of high-profile offenders, and those with a history of violence or a sex offense. This
allows standard supervision officers to work with offenders who may need less supervision but more treatment services
and support programs.
The Information Technology Division's (ITO) use of technology has grown from tracking and storing information to
opening and securing prison doors, video surveillance, prison canteen, purchasing and Global Positioning System
(GPS) monitoring. lTD has also used advanced technology to facilitate video conferencing for offender reentry, inmate
family visitation, statewide training, and parole and court hearings. The Offender Management Program (OMP)
software module is complete and was implemented at all public and private prisons. The module allows the
department to manage all aspects of programming available to offenders.
Probation and Parole is in the process of implementing the New Mexico Risk and Need Assessment tool, in
conjunction with the Institute for Social Research, for placement in the OMP module as a tool to provide more accurate
assessments of offenders under probation and parole supervision in New Mexico. The results of the needs
assessment will be utilized to assist staff in placing offenders into the appropriate programs that will provide
opportunities for offenders to successfully transition to communities. The progress of offenders in the programs will be
tracked using the OMP module.
The Sanctioned Parole Violator Unit continues to help address population control. The sanctions for technical parole
violators range from 30, 60 or 90 days of incarceration. The Probation and Parole Division recommends sanctions but
approval by the Parole Board is required.
All private contracted facilities are continuously audited by the department for contract compliance. Private facilities
include Lea County Correctional Facility (Hobbs), Guadalupe County Correctional Facility (Santa Rosa), New Mexico
Women's Correctional Facility (Grants) and Northeast New Mexico Detention Facility (Clayton). Each facility is
required to develop acorrective action plan for deficiencies.
The Health Services Bureau and Correctional Medical Services (Department's medical vendor) continues to improve
the successful telepsychiatry program already implemented, augmenting it by on-site psychiatric visits and technology
improvements designed to maintain the quality of an already successful program. This program was expanded to
NNMDF in Clayton.
A comprehensive study of therapeutic community program inmate graduates indicates a recidivism rate of 26 percent
over 35 months, which is significantly lower than the department's overall rate of 47 percent.
The Training Academy Division was selected by the United States State Department as a host agency and training
model for international corrections training techniques. The first international cadet class participated in the training
academy program and graduated successfully.

- 2-

In the spring of 2008, Governor Bill Richardson convened a prison reform task force that examined and reported the
accumulation of issues associated with incarceration in New Mexico. The report focused on facilitating successful
reentry and reintegration of inmates. It examined the impact incarceration has on individuals, families and
commun~ies. The report and the SUbsequent creation of an Office of Reentry and Prison Reform by Governor
Richardson and NMCD, have set the stage for successful implementation of a reentry offender program.
In fiscal year 2009, the Department completed cr~ical-maintenance projects and purchased needed
at the pUblic prisons. Some of the ~ems include:

cap~al

outlay

~ems

•

Connecting the water and sewer systems of Central New Mexico Correctional Facility (CNMCF) to
the Village of Los Lunas due to arsenic problems.

•

Replacing boilers at CNMCF, Penitentiary of New Mexico (PNM) and Western New Mexico
Correctional Center (WNMCF).

•

Repairing roofs at the Roswell Correctional Center (RCC), Springer Correctional Center (SCC), PNM,
CNMCF and Southern New Mexico Correctional Facility (SNMCF).

•

Replacing fire alarms and sprinkler systems at PNM and CNMCF.

•

Replacing cell-door control panels at WNMCF.

•

Purchasing a medical modular unit at RCC.

•

Purchasing k~chen, laundry and secur~

•

Retrofflting various buildings and un~s.

•

Family Vis~ation Modular at SNMCF.

cap~al

- 3·

outlay.

USING THIS ANNUAL REPORT
This annual report is presented under the Governmental Accounting Standards Board (GASB) pronouncement #34.
The primary focus in State government is on both the Department (government-wide) and the major individual funds
and the financial statements that comprise them. Both perspectives (government-wide and major funds) allow the user
to address relevant questions, broaden a basis for comparison and enhance accountability. Although the Department
is one of several agencies wnhin the State of New Mexico Government, the Primary Government focus in this financial
report is the Department and not the State of New Mexico as a whole.
The cornponents of presentation include Management's Discussion and Analysis (MD&A), Governrnent-wide financial
statements and fund financial statements, and Required Supplementary Information (RSI). These ~ems along w~
their subcomponents are addressed in the following sections contained within this report.
Management's Discussion and Analysis
The purpose of the MD&A is to prOVide an objective and easily readable analysis of the government's financial
activities based on currently known facts, decisions, or conditions. It provides an analysis of the government's overall
financial position and results of operations to assist users in assessing whether the financial position has improved as
a result of the year's activities. Addnionally, it addresses analyses of signijicant changes that have occurred in funds
and significant budget variances.
Government·Wide Financ/al Statements
The government-wide financial statements are designed to be corporate-like in that all governmental and businesstype activities are consolidated into columns that add to a total for the Primary Government and consist of a statement
of net assets and a statement of activities. These statements should report all of the assets, liabilities, revenues,
expenses, and gains and losses of the government. Both statements distinguish between the governmental and
business-type activities of the primary government. Fiduciary activities whose resources are not available to finance
the government's programs are excluded frorn the government-wide statements.
The government-wide financial statements of the Department are divided into two categories:
~

Governmental Activities - Most of the Department's basic services are included in the governmental
activities. State appropriations and federal grants finance most of these activities. The funds included in
Governmental Activities for the Department are the General Operating Fund (including Probation and Parole
activities and the Building Fund), the Community Corrections Special Revenue Fund, and State Capital
Projects Fund.

Business-type Activities - The Department's Corrections Industries Division charges customers a fee for
goods and services. These activnies are accounted for as a business-type activity.

Fund Financial Statements
Fund financial statements consist of a series of statements that focus on information about the major governmental
and enterprise funds. Fund financial statements also report information about a government's fiduciary funds.
Governmental fund financial statements are prepared using the current financial resources measurement focus and the
modified accrual basis of accounting. Proprietary fund financial statements (enterprise funds) and fiduciary fund
financial statements are prepared using the economic resources measurement focus and the accrual basis of
accounting.

- 4-

Emphasis on fund financial statements is on the major funds in either the govemmental or business-type categories.
Non-major funds (by category) or fund type are summarized into a single column. Due to the Iim~ed fund structure of
the Department, all funds have been classified as Major Funds.
The Department has three types of funds:
~

Govemmental funds - Most of the Department's services are included in govemmental funds which focus on
(a) how cash and other financial assets, that can be readily converted to cash, flow in and out and (b) the
balances left at year-end that are available for spending. The governmental fund statements provide a
detailed short-term view that help the user determine whether there are more or fewer financial resources
that can be spent in the near future to finance the Department's programs. Since this information does not
include the additional long-term focus of the govemment-wide statements, reconciliation between the
government-wide statements and the fund financial statements is provided for governmental-type activities.

Proprietary funds - Goods and Services for which the Department's Corrections Industries Division charges
customers a fee are reported as proprietary funds. Proprietary funds, like the government-wide statements,
provide both long and short-term information.

Fiduciary funds - Fiduciary funds are used to report assets held in trustee or agency capacity for others and
therefore are not available to support Department programs. The reporting focus is upon net assets and
changes in net assets and employs accounting principles similar to proprietary funds. With the
implementation of GASB #34, fiduciary funds are not included with the governmental-type funds since these
funds are not available to support the Department's programs. The Department's fiduciary fund is the Inmate
Trust Account.

Notes to the Financial Statements
The notes to the financial statements consist of notes that provide additional information that is essential to a user's
understanding of the basic financial statements. The notes to the financial statements can be found starting on page
25.
Infrastructure Assets
GASB #34 requires that infrastructure assets (roads, bridges, traffic signals, etc.) be valued and reported within the
Governmental column of the Government-wide Statements. Additionally, the government must elect to either
depreciate these assets over their estimated useful life or develop a system of asset management designed to
maintain the service delivery potential. The Department does not own a material interest in any infrastructure assets
and therefore is not required to implement this portion of GASB #34.
Budgetary Comparisons
GASB #34 requires budgetary comparison statements for the general fund and for each major special revenue fund
that has a legally adopted annual budget to be presented as Required Supplementary Information (RSI). The
budgetary comparison statements present both the original and the final appropriated budgets for the reporting period
as well as the actual inflows, outflows and balances, stated on the government's budgetary basis.

As required by the Office of the State Auditor under 2.2.2 NMAC, the Statements of Revenues and Expenditures Budget and Actual are also presented. This information is provided at the approved budget level to demonstrate
compliance with legal requirements.
Corrections Industries Division is required by NMSA 1978 §33-8-6, section 0, item #1, to present a detailed financial
statement for each enterprise in each facility. This information has been included as a fund financial statement.

- 5-

FINANCIAL ANALYSIS OF THE DEPARTMENT AS AWHOLE
TableA-1
The Department's Net Assets

Current and Other Assets
Capital and
Non-Current Assets
Total Assets

Governmental Activities
FY2008
FY2009
43,655,726 $ 44,443,328

Business-Type Activities
FY2008
FY2009
$ 4,193,531 $ 4,884,940

Total
Percentage
Change

Total"

FY2008
47,849,257

FY2009
$ 49,328,268

2008-2009
3.09%

36,623,528
80,279,254

40,152,565
84,595,893

464,077
4,657,608

376,565
5,261,505

37,087,605
84,936,862

40,529,130
89,857,398

9.28%
5.79%

Current Uabilities
Long-Term Liabilities
Total Liabilities

34,709,210

35,723,342

657,443

467,155

35,366,653

36,190,497

34,709,210

35,723,342

657,443

467,155

35,366,653

36,190,497

2.33%
0.00%
2.33%

Net Assets
Invested in Capital Assets
net of Related Debt
Restricted

36,623,528
730,706

40,152,565
726,554

464,077

376,565

37,087,605
730,706

40,529,130
726,554

9.28%
-0.57%

7,993,432
48,872,551

3,536,088
$ 4,000,165

12,411,217
53,666,901

5.61%
8.26%

Unrestricted
Total Net Assets

8,215,810
45,570,044

4,417,785
4,794,350

11,751,898
49,570,209

"Inter-fund balances have been eliminated in the total column

Net Assets: Table A-1 summarizes the Department's net assets for the fiscal year ending June 30,2009. Net assets
for Governmental Activ~ies and Business-type Activ~ies were $48,872,551 and $4,794,350, respectively. Total
Department net assets for fiscal year 2009 is $53,666,901. However, most of those assets are e~her restricted as to
the purposes they can be used for or are invested in capital assets (buildings, equipment, etc.) The unrestricted net
assets in Governmental Activ~ies is $7,993,432 at the end of the fiscal year. The unrestricted net assets amount
includes long-term commitments. This results from the New Mexico State Legislature appropriating funds to pay for
future liabilities in the year in which they come due.
In the Business-type activ~ies, the unrestricted amount of $4,417,785 cannot be used in governmental activities. The
Department generally can only use these net assets to finance the continuing operations of its business activ~ies, such
as working capital requirements.

- 6-

TableA·2
Changes in the Depamnent's Net Assets

Revenues
Program Revenues
Charges for Services
Operating Grants &
Contributions
Capital Grants &
Contributions
General Revenues
State General Fund
Appropriations
Others
Total Revenues

Govemmental Activities
FY2008
FY2009

16,527,413

2,812,914

17,697,944

Total

Business-Type Activities
FY2009
FY2008

$ 4,847,376

$ 4,399,615

Total
Percentage
Change

FY2008

21,374,789

FY2009

2,812,914

834,538

22,097,559
834,538

2008-2009
3.38%
-70.33%

O.Oook

272,406,848
1,373,037
293,120,212

284,996,713
(315,392)
303,213,803

378,712
5,226,088

1,163,547
5,563,162

272,406,848
1,751,749
298,346,300

284,996,713
848,155
308,n6,965

-51.58%
3.50%

287,496,4n

299,911,296

5,2n,l65

4,768,977

292,n3,642

304,680,273

4.07%

5,623,735

3,302,507

(51,On)

794,185

5,572,658

4,096,692

-26.49%

Beginning Net Assets

40,946,309

45,570,044

4,051,242

4,000,165

44,997,551

49,570,209

10.16%

Net Asset Restatement

(1,000,000)

53,666,901

8.26%

Expenses
Public Safety - Corrections
Increase (Decrease) in Net Assets

Ending Net Assets

45,570,044

(1,000,000)

48,872,551

$ 4,000,165

$ 4,794,350

49,570,209

Changes in Net Assets: The Department's change in net assets for fiscal year 2009 was an increase of $4,096,692.
[fable A-2). A signifICant portion, 92%, of the Department's revenue comes from State General Fund Appropriations,
7% comes from charges for services, and 1%for all other revenue sources. (See figure A-1).
Figure A-1
Sources of Revenues for Fiscal Year 2009

Others
1%

4.62"10

Charges for
Services
7%

General Fund
Appropriation
92%

·7·

Functional Expenses for Fiscal Year 2009

Governmental-Type Activities
FigureA-2

Out-of-System
Beds
22%

Other
14%

Capital Outlay
2%
Personal
Services &
Employee
Benefits
46%
Medical
Services
15%

Contractual
Services
1%

The Departmenfs total expenditures for government-type activities during the fiscal year were $303.4 million.
Approximately half (46%) of the expenditures of the Department are in the area of personal services and employee
benefits. Approximately 56% of the total budgeted positions are for Correctional Officers. The Department has
continued to be aggressive in recruiting correctional officers, and in doing so was able to fill vacant posts and
SUbstantially reduce overtime.
The second largest area of expenditure within the Department is in the category of "Other" costs (38%), which
incorporates travel, maintenance, food, supplies, operating costs, and capital outlay. Of the total amount expended in
this functional area during fiscal year 09 approximately 22% was for the housing male and female inmates in contract
prisons, and the remaining 16% was for the other operating costs.
Contractual Services expenditures consumed 16% of the Departmenfs uses overall, with approximately 15% of these
expenditures directly related to medical services for inmates. Two percent of the total expenditures were for capital
outlay with the majority of those costs being for security upgrades. new capital construction, and renovation projects.
Business-Type Activities
Revenues of the Departmenfs business-type activity (Corrections Industries) decreased approximately nine percent
from $4.8 million to $4.4 million and expenses decreased by approXimately nine and a half percent from $5.3 million to
$4.8 million. Factors contributing to these results are primarily (1) The unanticipated budget cuts due to the shortfall in
expected state revenue (2) The purchase of large quanmies of raw materials to meet the anticipated end of the year
rush that did not materialize.

- 8·

Fund Balance
f:>s the Department completed the year, its govemmental funds reported a combined fund balance of approximately
$13.2 million, approximately $178 thousand lower than last year. The primary reason for the decrease relates to the
fact that the Department spent the majority of the multi-year appropriations appropriated to the Department last fiscal
year and other GAAP accruals affecting revenues and expenditures.

General Fund Budgetary Highlights

The New Mexico State Legislature makes annual appropriations to the Department. Adjustments to the appropriated
budget require approval by the Budget Division of the Department of Finance and Administration with review by the
Legislative Finance Committee.
Over the course of the year, the Department adjusts its budget as authorized in the Appropriation Act. These budget
adjustments fall into three categories:
~

Supplemental and special appropriations that are reflected in the actual beginning account balances
(correcting the estimated amounts in the budget adopted for the fiscal year).

Budget adjustment requests made during the fiscal year to allow the Department to utilize funds where
needed.

Budget adjustment requests that increase or decrease other state funds based on actual revenues.

Budget adjustment requests that adhere to required operating budget cuts in compliance with Legislative
actions.

There were no changes between the original and final operating budget that were deemed to be significant.

·9·

Capital Assets and Debt Administration
At the end of fiscal year 2009, the Department has invested a total of $40.2 million in govemmental-type activities and
$0.4 million in business-type activnies for a total amount of $40.6 million in a variety of capnal assets. This amount
represents a net increase (including additions and deductions) of $3.5 million (9%) over the last year. The major
increases in capnal assets during the fiscal year were in the area of Improvements other than Buildings ($1.6 million for
a 107% increase) and Machinery and Equipment ($1.5 million for a 7% increase). The increases were mainly due to
equipment and security improvements, replacements of heating/cooling units, purchase of modular unns, purchase of
emergency generators, and the installation of video conferencing telecommunications. Depreciation decreased by $2
million (7%) over the prior period.

Table A-3
Department's Capital Assets
Dollars in Millions

BUildings and Improvements
Improvements other than Buildings
Machinery and Equipment
Automotive
Depreciation

Governmental
Activnies
2008
2009
40.8
43.2
1.5
3.1
19.2
20.7
2.9
2.9
(27.8)
(29.7)
36.6
40.2

Business-type
Activities
2008
2009
0.6
0.6
2.0
0.7
(2.8)
0.5

2.0
0.7
(2.9)
0.4

Total
2008
2009
41.4
43.8
3.1
1.5
22.7
21.2
3.6
3.6
(30.6)
(32.6)
40.6
37.1

Total %
Change
2008 - 2009
6%
107%
7%
0%
7%
9%

Additional detailed information about the Department's capnal assets is presented in Note 5 to the financial statements.
GASB Statement #34 requires the recording and depreciation of infrastructure assets such as roads, bridges, traffic
signals, etc. The Department does not own any infrastructure assets.
Lonq-Tenn Debt
The Department did not have any long-term debt other than compensated absences associated fiscal year 2009. More
detailed information regarding the Department's long-term debt is presented in Note 10 to the financial statements.

- 10-

ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
In fiscal year 2009, the New Mexico Corrections Department's (NMCD) total budget increased by 7 percent to $320.5
million, mostly attributable to the opening of the Northeastern New Mexico Detention Facility in Clayton; probation and
parole offender growth and sex offender monitoring; the cost of inmate medical services; and salary increases for staff.
However, nearly midway through the fiscal year, executive agencies were notified of a major revenue shortfall in state
government. Oil and natural gas prices fell below projected figures, and gross receipts, corporate and personal
income taxes dropped due to the recession. A hiring freeze, which excluded correctional and probation and parole
offICers, and reductions in nonessential services and miscellaneous expenses was implemented by New Mexico
Governor Bill Richardson. The Department's operating budget was cut by $5.7 million.
Also in fiscal year 2009, the probation and parole offender popUlation increased by 4.1 percent, and the year-end
inmate population increased to 6,440 or 1.7 percent more than the previous fiscal year. The Department experienced
a decline in inmate population the previous two fiscal years after a census high of 6,803 in fiscal year 2006.
National consultant, JFA Associates, LLC, estimates New Mexico's total inmate population will grow at a rate of 2.3
percent in fiscal year 2010 and is projected to grow at an average rate of 1.3 percent from fiscal year 2010 to 2019.
With the current rate of growth, the estimates show that New Mexico will have an offender population of 7,338 by the
end of fiscal year 2019.
During fiscal year 2009, more than 20 percent of new commitments were persons convicted of serious violent offenses.
The average maximum sentence for all admissions (excluding lifers), was 52.3 months. This is slightly lower than the
fiscal year 2006 average of 58 months.
For fiscal year 2010, the Department submitted a general fund-base increase request of $9 million to cover inmate
population growth, reduce high-vacancy rates from the previous fiscal year, cover inflation increases for contractors,
and pay for building maintenance and utility expenses. The increase was not funded and the Department's budget
was reduced by an additional $12.5 million from the previous fiscal year. Because of the reduction in budget, the
Department incorporated strict budget austerity measures and was successful in maintaining flat contracts (no inflation
increases) and in many cases reduced contracts to ensure the budget will be balanced.
In November 2009, as a result of a larger revenue deficit in state government, the governor signed an executive order
reducing NMCD's fiscal year 2010 operating budget by $11.4 million (on top of an already reduced budget), and a plan
was outlined to furlough all state employees for five days (time off without pay). The time of this writing, a decision had
not yet been made on how the furloughs will affect correctional officers. All capital outlay projects were also temporarily
suspended.
The Corrections Industries Division (CID) has been severely impacted by the cutback in government spending, since
CID relies heavily on furniture sales from state agencies. If the program cannot sustain itse~, it could be forced to shut
down.
NMCD is requesting a total budget of $311.3 million from all funding sources for fiscal year 2011, which is 1.3 percent
more than the fiscal year 2010 beginning operating budget. However, NMCD's request for additional funding is
unlikely and the budget will probably be reduced further due to declines, in revenue projections.
Limited growth in New Mexico state government, on a bUdgetary basis, has continue to affect the Corrections
Industries (CID) ability to generate new orders for its standard product (Le. furniture) from potential state customers. In
addition, Corrections Industries did experience approximately 78% decrease in interest income for fiscal year 09 over
the prior period. This income is generated from the cash balance of the revolving fund that is held with the State
Treasurer's Office.

- 11 -

CONTACTING THE AGENCY'S FINANCIAL MANAGEMENT

This financial report is designed to provide citizens, taxpayers, customers, legislators, and investors and creditors with
a general overview of the Departmenfs finances and to demonstrate the Departmenfs accountability for the funds it
receives. If you have any questions about this report or need additional financial information, contact:
New Mexico Corrections Department
Financial Management Bureau
Attn: Bryan M. Maestas, CGFM, Accounting Manager
4337 NM 14
Post Office Box 27116
Santa Fe, New Mexico 87502-0116

-12-

NEW MEXICO CORRECTIONS DEPARTMENT
STATEMENT OF NET ASSETS
AS OF JUNE 30, 2009

Governmental
Activities

ASSETS
Investments
Receivables, net of allowance for doubtful accounts
Federal Grants Receivable
Other Receivables
Interest Receivable
Internal Balances
Due from Other State Agencies
Inventories
Prepaid Items
Total Current Assets
Capital Assets:
Buildings
Improvements Other than BUildings
Machinery and Equipment
Automotive
Less Accumulated Depreciation
Total Capital Assets, net of depreciation
Total Assets
LIABILITIES
Accounts Payable
Vouchers Payable
Payroll Benefits Payable
Payroll Taxes Payable
Accrued Wages Payable
Compensated Absences Payable:
Expected to be paid within one year
Due to State General Fund
Due to Other State Agencies
Deferred Revenue
Other Liabilities
Total Liabilities
NET ASSETS
Invested in Capital Assets
Restricted for:
Subsequent Years Expenditures
Unrestricted
Total Net Assets

$ 37,786,430

Business-type
Activities

21,156
297,763
8,949

24,313
297,763
8,949
122
1,597,759
7,276,5n
302,835
49,328,268

4,884,940

43,186,822
3,059,227
20,674,960
2,956,918
(29,725,362)
40,152,565
84,595,893

630,488

43,817,310
3,059,227
22,683,382
3,596,530
(32,627,319)
40,529,130
89,857,398

2,008,422
639,612
(2,901,957)
376,565
5,261,505

253,019

17,721,711
2,291,851
660,041
3,062,271

99,029

253,019
17,721,711
2,291,851
660,041
3,161,300

4,521,501
5,387,714
259
2,077,994

115,107

4,636,608
5,387,714
259
2,077,994

35,723,342

467,155

36,190,497

40,152,565

376,565

40,529,130

726,554
7,993,432
$ 48,872,551

4,417,785
4,794,350

726,554
12,411,217
$ 53,666,901

" Inter-fund balances have been eliminated in the total column.

The accompanying notes are an integral part of the financial statements

- 13 -

$ 39,819,950

122
475,851
572,493
1,799,797

(475,851)
1,025,266
5,476,780
302,835
44,443,328

2,033,520
3,157

Total"

NEW MEXICO CORRECTIONS DEPARTMENT
STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDING JUNE 30, 2009

Governmental
Activities
Expenses
Public Safety - Corrections
Corrections Industries
Program Revenues
Charges for Services
Operating Grants &Contributions
Capital Grants &Contributions
Changes in net Assets:
Net (Expense) / Revenue
General Revenues:
General Fund Appropriation
General Fund Subsidy
Transfers, net
Transfers, Severance Tax Bond Appropriation
Reversions to the State General Fund
Reimbursements
Other Revenue
Federal Aid
Unrestricted investment earnings
Total General Revenues
Transfers· Internal Activities
Total General Revenues and Transfers

$ (299,911,296)

Business-Type
Activities

(4,768,977)

Total

$ (299,911,296)
(4,768,977)

17,697,944
834,538

4,399,615

22,097,559
834,538

(281,378,814)

(369,362)

(281,748,176)

290,382,900

290,382,900
1,133,900
(762,220)
446,828
(5,386,187)

1,133,900
(762,220)
446,828
(5,386,187)

Change in Net Assets
Net Assets· Beginning
Net Assets· Ending

22,416

284,681,321

7,231
1,163,547

7,231
285,844,868

284,681,321

1,163,547

285,844,868

3,302,507

794,185

4,096,692

45,570,044

4,000,165

49,570,209

48,872,551

4,794,350

The accompanying notes are an integral part of the financial statements

- 14-

53,666,901

NEW MEXJCO CORRECTIONS DEPARTMENT
STATEMENT OF GOVERNMENTAL FUNDS· BALANCE SHEET
JUNE 30, 2009

General Fund
SHARE
System Fund

ASSETS
Investments
Receivables, net
of allowance for doubtful accounts
Federal Grants Receivable
Other Receivables
Due from Other State Agencies
Inventories
Prepaid Items
Total Assets

$ 35,336,630

Community
Corrections
Special Revenue
Fund SHARE
System Fund
90200
2,140,667
$

State Capital
Projects Fund
SHARE
System Fund
99700
$ 309,133

21,156
297,763
8,949
1,025,266
5,476,780
302,835

Total
$ 37,786,430
21,156
297,763
8,949
1,025,266
5,476,780
302,835

$ 42,469,379

2,140,667

$ 17,673,629
2,279,046
655,047
3,047,469
475,851
5,384,108
2,627
259
2,077,994

48,082
12,805
4,994
14,802

309,133

$ 44,919,179

LIABILITIES AND FUND BALANCES
Uabil~ies:

Vouchers Payable
Payroll Benefits Payable
Payroll Taxes Payable
Accrued Wages Payable
Due to Other Funds
Due to State General Fund
Stale Dated Warrants· Due to SGF
Due to Other State Agencies
Deferred Revenue
Other Liabilities
Total Liabil~ies
Fund Balances:
Reserved for:
Inventories
Prepaid Expenses
SUbsequent Years Expenditures
Petty Cash &Imprest Accounts
Unreserved (Deficit)
Designated for Future Expenditures
Total Fund Balance
Total Liabilities and Fund Balance

31,596,030

80,683

5,476,780
302,835
180,854
2,075

979

1,514,284
2,059,984

2,140,667

308,154
308,154

6,733,243
13,241,487

309,133

$ 44,919,179

Includes SHARE funds 89800, 90700, and 91500.

The accompanying notes are an integral part of the financial statements
- 15·

31,677,692

5,476,780
302,835
726,554
2,075

545,700

4,910,805
10,873,349

$ 42,469,379

979

$ 17,721,711
2,291,851
660,041
3,062,271
475,851
5,385,087
2,627
259
2,077,994

NEW MEXICO CORRECTIONS DEPARTMENT
RECONCILIATION OF THE BALANCE SHEET
TO THE STATEMENT OF NET ASSETS

GOVERNMENTAL FUNDS
FOR THE YEAR ENDING JUNE 30, 2009

Amounts reported for governmental activities in the statement of net assets are different because:

Total Fund Balances· Governmental Funds
(Governmental Funds Balance Sheet)

13,241,487

Amounts reported for governmental activities in the Statement of Net Assets are
different because:
Capital assets used in governmental activities are not financial resources and
therefore are not reported in the funds. These assets consist of:
Buildings
Improvements other than buildings
Machinery and Equipment
Automotive
Accumulated depreciation
Total Capital Assets

43,186,822
3,059,227
20,674,960
2,956,918
(29,725,362)
40,152,565

Some liabilities are not due and payable in the current period and therefore are not
reported in the funds.
Compensated Absences Payable

(4,521,501 )

Net Assets of Governmental Activities (Statement of Net Assets)

The accompanying notes are an integral part of the financial statements

- 16-

48,872,551

NEW MEXICO CORRECTIONS DEPARTMENT
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDING JUNE 30, 2009

General Fund
SHARE System
Fund

*
Revenues
Other State Funds
Federal Grants
Total Revenues

Expenditures, Current
Personal Services &
Employee Benefits
Contractual Services
Other
Expenditures, capital Outlay
Total Expenditures
Excess (deficiency) Revenues over
Expenditures
Other Financing Sources (uses)
State General Fund Appropriations
Inter-Agency Transfers-In
Transfers-In Severance tax bond Proceeds
Inter-Agency Operating Transfers-Out
Reversions to State General Fund
Net Other Financing Sources (uses)

17,554,549
834,538
18,389,087

Community
Corrections
Special Revenue
Fund
SHARE System
Fund
90200

813,200
41,945
3,259,371

4,114,516

135,532,749
49,623,982
111,623,220
6,611,355
303,391 ,306

(280,231,185)

(3,971,121 )

(656,518)

(284,858,824)

286,527,200
237,780

3,855,700

(979)
445,849

290,382,900
237,780
446,828
(1,000,000)
(5,386,187)
284,681,321

(210,669)

(177,503)

518,823

13,418,990

446,828
(1,000,000)
(5,385,208)
280,379,772

Fund Balance, Beginning of Year

3,855,700
(115,421 )

10,724,762

17,697,944
834,538
18,532,482

46,164
55,283
555,071
656,518

148,587

Total

143,395

134,719,549
49,535,873
108,308,566
6,056,284
298,620,272

Net Change in Fund Balance

Fund Balance, End of Year

143,395

State Capital
Projects Fund
SHARE
System Fund
99700

10,873,349

2,175,405

2,059,984

Includes SHARE funds 89800, 90700, and 91500.

The accompanying notes are an integral part of the financial statements
- 17 -

308,154

13,241,487

NEW MEXICO CORRECTIONS DEPARTMENT
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES

GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDING JUNE 30, 2009

Net Change In fund balances· Total Governmental Funds
(Statement of Revenue, Expenditures and Changes in Fund Balance)

(177,503)

Amounts reported for governmental activities in the Statement of Activ~ies are
different because:
In the Statement of Activ~ies, certain operating expenses - compensated absences
(sick and annual leave) and judgement and claims are measured by the amounts
earned during the year. In the Governmental funds, however, expend~ure for these
~ems are measured by the amount of financial resources used (essentially, the
amounts actually paid). The decrease (increase) in the liability for the year is:

(49,027)

Compensated Absences and Claims and Judgements

Governmental funds report capMI outlays as expend~ures. However, in the Statement
of Activities the cost of those assets is allocated over their estimated useful lives and
reported as depreciation expense. In the current period, these amounts are:
Cap~al

Outlay
Depreciation Expense
Excess of Depreciation Expense over Cap~al Outlay

The Statement of Activities reports the loss on the sale of Capital Assets, while the
Statement of Revenues, Expend~ures and Changes and Changes in Fund Balance
reports the proceeds. The reconcilinj:j amount is the difference:

Change in net assets of governmental activities
(Statement of Activities)

6,611,355
(3,052,887)
3,558,468

(29,431)

$ 3,302,507

The accompanying notes are an integral part of the financial statements

- 18 -

NEW MEXICO CORRECTIONS DEPARTMENT
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

GENERAL FUND
FOR THE FISCAL YEAR ENDING JUNE 30, 2009

Budgeted Amounts

Revenues
Other State Funds
Federal Funds
Total Revenues

Original

Final

$ 15,531,200
1,197,275
16,728,475

$ 15,255,451
1,351,203
16,606,654

Expenditures, Current
Personal Services &
Employee Benefits
Contractual Services
Other
Expenditures, Capital Outlay
Total Expenditures

133,786,000
55,022,193
124,021,259

135,586,425
50,957,930
119,423,956

312,829,452

Excess (deficiency) Revenues
over Expenditures
Other Financing Sources (uses)
State General Fund Appropriation
Transfers-In
Cash Balance Re-Budgeted
Operating Transfers-Out
Reversions to State General Fund
Net Other Financing Sources (uses)
Net Change in Fund Balance

Actual Amounts
Budgetary GAAP
Basis

17,554,549
834,538
18,389,087

Variance
Favorable
(Unfavorable)

(2,299,098)
516,665
(1,782,433)

305,968,311

134,719,549
49,535,873
108,308,566
6,056,284
298,620,272

866,876
1,422,057
11,115,390
(6,056,284)
7,348,039

(296,100,977)

(289,361,657)

(280,231,185)

(9,130,472)

294,341 ,200
257,000
1,502,777

287,621,100
237,780
2,502,777
(1,000,000)

286,527,200
237,780

1,093,900

296,100,977
$

2,502,777
(1,000,000)
(5,385,208)
280,379,772

289,361,657
$

Fund Balance, Beginning of Year,

148,587

10,724,762

Fund Balance, End of Year

10,873,349

The accompanying notes are an integral part of the financial statements

- 19-

5,385,208
8,981,885
$

(148,587)

NEW MEXICO CORRECTIONS DEPARTMENT
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
COMMUNITY CORRECTIONS SPECIAL REVENUE FUND
FOR THE FISCAL YEAR ENDING JUNE 30, 2009

Budgeted Amounts
Original
Revenues
Other State Funds
Federal Funds
Total Revenues

51,700

Final
$

51,700

Actual Amounts
Budgetary GAAP
Basis
$

143,395

Variance
Favorable
(Unfavorable)
$

(91,695)

51,700

143,395

(91,695)

Expenditures, Current
Personal Services &
Employee Benefits
Contractual Services
Other
Expenditures, Capital Outlay
Total Expenditures

847,500
56,800
3,623,600

846,300
62,560
3,544,240

813,200
41,945
3,259,371

33,100
20,615
284,869

4,527,900

4,453,100

4,114,516

338,584

Excess (deficiency) Revenues
over Expenditures

(4,476,200)

(4,401,400)

(3,971,121 )

(430,279)

3,930,500

3,855,700

545,700

4,476,200

4,401,400

Other Financing Sources (uses)
State General Fund Appropriation
Reimbursement
Cash Balance Re-budgeted
Operating Transfers-Out
Reversions to State General Fund
Net Other Financing Sources (uses)
Net Change in Fund Balance

545,700

3,855,700

Fund Balance, Beginning of Year

(115,421 )
2,175,405

Fund Balance, End of Year

2,059,984

The accompanying notes are an integral part of the financial statements
- 20-

545,700

115,421

NEW MEXICO CORRECnONS DEPARTMENT
STATEMENT OF NET ASSETS
PROPRIETARY FUND
JUNE 30, 2009

ASSETS
Current Assets:
Investments
Receivables (net of allowance for doubtful accounts)
Interest Receivable
Due from Other Funds
Due from Other State Agencies
Inventories
Total Current Assets
Noncurrent Assets:
Capital Assets:
Machinery and Equipment
Buildings and Improvements
Automotive
less Accumulated Depreciation
Total Noncurrent Assets
Total Assets

$ 2,033,520
3,157
122
475,851
572,493
1,799,797
4,884,940

2,008,422
630,488
639,612
(2,901,957)
376,565
5,261,505

L1ABILmES
Accounts Payable
Accrued Wages Payable
Compensated Absences Payable
Total Uabilities
NET ASSETS
Invested in Capital Assets
Unrestricted

253,019
99,029
115,107
467,155
376,565
4,417,785

Total Net Assets

$ 4,794,350

The accompanying notes are an integral part of the financial statements

- 21 .

NEW MEXICO CORRECTIONS DEPARTMENT
STATEMENT OF REVENUES, EXPENSES, AND CHANGE IN FUND NET ASSETS
PROPRIETARY FUND
FOR THE FISCAL YEAR ENDING JUNE 30, 2009

OPERATING REVENUES

Sales

$4,399,615

OPERATING EXPENSES
Cost of Goods Sold:
Cost of Materials Used
Direct Labor (inmate payroll)
Manufacturing and Administrative Overhead
Change in Work in Process and Finished Goods Inventory, Net
Depreciation Expense
Total Operating Expenses
OPERATING INCOME (LOSS)

1,636,512
366,815
2,567,914
95,813
101,923
4,768,977
(369,362)

Nonoperating revenue (expense):
General Fund Subsidy
Interest on Deposits with State Treasurer
Miscellaneous Income
Total nonoperating revenue / (expense)
CHANGE IN NET ASSETS

1,133,900
7,231
22,416
1,163,547
794,185

Total Net Assets, July 1, 2008

4,000,165

Total Net Assets, June 30,2009

$4,794,350

The accompanying notes are an integral part of the financial statements

- 22-

NEW MEXICO CORRECnONS DEPARTMENT
STATEMENT OF CASH FLOWS
PROPRIETARY FUND
FOR THE FISCAL YEAR ENDING JUNE 30, 2009

Cash Flows from Operating Activities:
Cash Received from Customers
Cash Payments to Suppliers for Goods and Services
Cash Payments to Employees for Services
Cash Payments to Inmates for Services

$ 4,399,615
(1,376,969)
(2,230,719)
(366,815)

Net Cash Provided by Operating Activ~ies

425,112

Cash Flows from Cap~al and Related Financing Activ~ies:
Purchase of Capital Assets
Net Cash Used by Capital and Related Financing Activities
Cash Flows from Investing Activities:
Interest Income
Miscellaneous Income
General Fund
Net Cash Received from Investing Activ~ies

7,231
8,005
1,133,900
1,149,136

Net Increase (Decrease) in Cash

1,574,248

Cash at Beginning of Year (including petty cash)

459,272

Cash at End of Year

$ 2,033,520

Reconciliation of Operating Income to Net Cash Provided by Operating Activities:
Operating Income (Loss)

(369,362)

Adjustments to Reconcile Operating Income to Net Cash Provided
by Operating Activities:
Depreciation

101,923

Changes in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable
(Increase) Decrease in Interest Receivable
(Increase) Decrease in Due from Other Funds
(Increase) Decrease in Due from Other State Agencies
(Increase) Decrease in Inventory
Increase (Decrease) in Accounts Payable
Increase (Decrease) in Compensated Absences Payable
Increase (Decrease) in Accrued Wages Payable

101,791
2,972
610,409
(8,022)
175,689
(185,746)
(3,806)
(736)

Total Adjustments and Changes

794,474

Net Cash Provided (Used) by Operating Activities

The accompanying notes are an integral part of the financial statements
- 23 -

425,112

NEW MEXICO CORRECTIONS DEPARTMENT
STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES
AGENCY FUND
AS OF JUNE 30, 2009

Inmate Trust
Account

ASSETS
Cash
Due from Others

$ 1,166,503
1,235,275

Total Assets

$ 2,401,778

LIABILITIES
Due to Other State Agencies
Due to Private Prisons
Deposits Held for Others
Total Liabilhies

26,149
785,319
1,590,310

$ 2,401,778

• Please refer to Schedule of Changes in Assets and Liabilities on page 86 for detail information.

The accompanying notes are an integral part of the financial statements
- 24-

NOTES TO THE FINANCIAL STATEMENTS

NEW MEXICO CORRECTIONS DEPARTMENT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING JUNE 30, 2009

TABLE OF CONTENTS

NOTE 1:

HISTORY, MISSION AND ORGANIZATION

NOTE 2:

SUMMARY OF SIGNIFICANTACCOUNTING POLICiES

NOTE 3:

SPECIAL APPROPRIATlONS

NOTE 4:

CASH

NOTE 5:

CAPITAL ASSETS

NOTE 6:

RETIREMENT PLANS (STATE PERA & ERA)

NOTE 7:

RETIREE HEALTH CARE

NOTE 8:

FUNDS HELD IN TRUST BY OTHERS

NOTE 9:

OPERATING LEASE COMMITMENTS••••.•••••••••••••••.••••••••••••••••••••••••....................................................... 48

NOTE 10:

CHANGES IN LONG-TERM LIABILITIES

NOTE 11:

OTHER FINANCING SOURCES AND OPERATING TRANSFERS

NOTE 12:

CONCENTRATIONS AND INTERFUND TRANSACTIONS

NOTE 13:

CONTINGENT LIABILITIES (CLAIMS & JUDGMENTS)

NOTE 14:

BOND PROCEEDS

NOTE 15:

FUND BALANCE

NOTE 16:

JPA AND MOU DiSCLOSURE

- 25-

NOTE 1:

HISTORY, MISSION AND ORGANIZATION

The New Mexico Corrections Department (the Department), a cabinet level department, was created by an act of the
legislature of New Mexico in 1978. §9-3-2 NMSA 1978, states that "The purpose of the Corrections Department Act...
is to create a single, unified department to administer all laws and exercise all functions formerly administered and
exercised by the corrections and criminal rehabilttation department and to ensure a comprehensive criminal justice
system in New Mexico".
The mission of the Department is to provide a balanced system approach to corrections from incarceration to
community-based supervision with training, education, programs, and services that provide opportunities for offenders
to transition to communtties. To perform this mission, the following departmental organization has been established in
part by Chapters 9 and 33, NMSA 1978:
Corrections Industries Commission
The Corrections Industries Commission is responsible for advising the Secretary of the Department and establishing
policy within the Corrections Industries Division. The Commission consists of seven members appointed by the
Governor. Terms are generally for four years with one or two members being replaced each year.
CommunitY Corrections Advisory Panel
The Community Corrections Advisory Panel is responsible for reviewing all applications for funding under the Adult
Community Corrections Act and making recommendations to the Secretary of Corrections regarding each application.
The Panel is appointed by the Secretary of Corrections and includes representatives from Corrections, the Judiciary,
law enforcement, local and tribal governments, interested organizations, and the general public.
Office of the Secretary
The Secretary is empowered to organize the Department and its divisions and may transfer or merge functions
between divisions in the interest of efficiency and economy. The Administrative Services Division provides overall
support.
Adult Prisons Division
The Director of the Adun Prisons Division is responsible to the Deputy Secretary of Operations to provide humane,
safe, secure and cost effective correctional faciltties for adult male and female inmates, thereby providing for the safety
of the general public.
Administrative Services Division
The Director of the Administrative Services Division is responsible to the Deputy Secretary of Administration to provide
administrative support to all divisions and top-level managers. The division is responsible for the data processing,
financial systems, budget, accounting, purchasing, personnel, financial reporting, and federal grant functions of the
Department.
Infonnation Technology Division
The Director of the Information Technology Division is responsible to the Deputy Secretary of Administration to provide
implementation and support of technology applications and infrastructure of the Department.
Office of the General Counsel
The General Counsel of the Office of the General Counsel is responsible to the Secretary of the Department to provide
legal advice and legal representation to the Department and its employee in several types of cases.

- 26-

Probation and Parole Division
The Director of the Probation and Parole Division is responsible to the Deputy Secretary of Operations to provide a
diversity of sentencing alternatives, which sUbstantially reduces costs associated with criminal sanctions while
supporting the purpose of the Department.

Training Academy Division
The Director of the Training Academy Division is responsible to the Deputy Secretary of Operations for the
improvement of employee recruitment, development and retention.

Corrections Industries Division
The Director of the Corrections Industries Division is responsible to the Deputy Secretary of Reentry & Prison Czar to
prepare inmates for return to a working society, provide constructive employment as an alternative to the deteriorating
effects of enforced idleness, and to operate the Division at a sen-sustaining economic level.
NOTE 2:

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements for the New Mexico Corrections Department (the Department) have been prepared in
accordance with Generally Accepted Accounting Principles (GAAP) as applied to governmental units. The
Governmental Accounting Standards Board (GASB) is the standard-setting body for governmental accounting and
financial reporting. Pronouncements of the Financial Accounting Standard Board (FASB) issued after November 30,
1989, are not applied in the preparation of the financial statements of the proprietary fund type in accordance with
GASB Statement #20. The GASB periodically updates its codification of the existing Governmental Accounting and
Financial Reporting Standards that along with sUbsequent GASB pronouncements (Statements and Interpretations),
constitutes GAAP for governmental un~s. More significant of these accounting policies are described below.
In June 1999, the Governmental Accounting Standards Board (GASB) unanimously approved Statement #34 "Basic
Financial Statements and Management Discussion and Analysis for State and Local Governments." The Department
has been reporting its financial statements to comply w~h GASB #34 since July 1999. As a part of this Statement,
there is a reporting requirement regarding the local government's infrastructure (road, bridges, etc.) The Department
does not own any infrastructure assets and therefore is unaffected by this requirement.
The Department has also implemented the provisions of GASB #37 and GASB #38 effective July 1, 2000. These
statements did not have a significant impact on the financial statements of the Department. Other subsequent GASB
pronouncements have not had a direct impact on the financial reporting or accounting methodologies and practices of
the Department.
A. FINANCIAL REPORTING ENTITY
The chief executive of the Department is the Secretary, who is appointed by the Governor of New Mexico and is a
member of the Governor's Cabinet. The Department is a component un~ of the executive branch and these financial
statements include all funds, account groups and activ~ies over which the Department Secretary has oversight
responsibility.
The Department is not included in any other governmental "reporting entity" as defined in Section 2100, Codification of
Governmental Accounting and Financial Reporting Standards. Even though the Governor appoints the Secretary, that
person has decision-making authority, the power to designate management, the responsibility to significantly influence
operations and primary accountability for fiscal matters.
In accordance with the cr~eria set forth in GASB # 14 for determining component units, the Department does not have
component units.

- 27-

B. BASIC FINANCIAL STATEMENTS - GASB STATEMENT #34
The basic financial statements include both government-wide (based on the Department as a whole) and fund financial
statements. The reporting model focus is on either the Department as a whole or major individual funds (within the fund
financial statements). Both the government-wide and fund financial statements (within the basic financial statements)
categorize primary activities as either governmental or business type activities. In the government-wide Statement of
Net Assets, both the govemmental and business-type activities columns are presented on a consolidated basis by
column using the economic resources measurement focus and the accrual basis of accounting and incorporates longterm assets and receivables as well as long-term debt and obligations.
The government-Wide Statement of Activities reflects both the gross and net cost per functional category (education,
labor, transportation, etc.), which are otherwise being supported by general govemment revenues. The Statement of
Activities reduces gross expenses (including depreciation) by related program revenues, operating and capital grants.
The program revenues must be directly associated with the function or a business-type activity. The Department
includes only one function (public safety and corrections).
The net cost (by function or business-type activity) is normally covered by general revenues (taxes, intergovernmental
revenues, interest income, etc). Historically, the previous model did not summarize or present net cost by function or
activity. The Department does not currently employ indirect cost allocation systems.
This government-wide focus is more on the sustainability of the Department as an entity and the change in aggregate
financial position resulting from the activities of the fiscal period.
The fund financial statements are similar to the financial statements presented in the previous accounting model.
Emphasis here is on the major funds in either the govemmental or business-type categories. Non-major funds (by
category) or fund type are summarized into a single column. Due to the limited fund structure of the Department, all
funds have been classified as Major Funds.
Totals on the business-type activities fund statements match the business type activities column presented in the
government wide statements, since there are no reconciling items.
The govemmental fund statements are presented on the current financial resources measurement focus and modified
accrual basis of accounting. This presentation is deemed appropriate to (a) demonstrate legal compliance, (b)
demonstrate the source and use of liquid resources, and (c) demonstrate how the Department's actual experience
conforms to the budget or fiscal plan. Since the governmental fund statements are presented on a different
measurement focus and basis of accounting than the government-wide statements' governmental column, a
reconciliation is presented on the page following each statement, which briefly explains the adjustment necessary to
transform the fund based financial statements into the governmental column on the govemmental-wide presentation.
The Departmenfs fiduciary fund (agency fund) is presented in the fund financial statements. Since by definition these
assets are being held for the benefit of a third party (inmates entrusted to the Department) and cannot be used to
address activities or obligations of the govemment, these funds are not incorporated into the govemment-wide
statements.

C. BASIS OF PRESENTATION
The financial transactions of the Department are maintained on the basis of funds, each of which is considered a
separate accounting entity. The operations of each fund are accounted for with a separate set of se~-balancing
accounts that comprise its assets, liabilities, fund balance, revenues, expenditures or expenses, and other financing
sources or uses. Government resources are allocated to, and accounted for, in individual funds based upon the
purpose for which they are to be spent and the means by which spending activities are controlled. The various funds
are summarized by type in the accompanying financial statements. The various funds are reported by generic
classification within the financial statements.
The reporting model, GASB Statement 34, sets forth minimum criteria for the determination of major funds based on a
percentage of the assets, liabilities, revenues or expenditures/expenses of either fund category or governmental and
enterprise combined. Due to the fund structure of the Department, all funds have been classified as major funds.

- 28·

The Department uses the following fund types:
Governmental Fund Types

The focus of Governmental Fund measurement (in the Fund Financial Statements) is based upon determination of
financial position and changes in financial posijion (sources, uses, and balances of financial resources) rather than
upon net income. The following is a description of the Govemmental Funds of the Department.
General Fund:
The General Fund is the general operating fund of the Department. It is used to account for all financial resources
except those required to be accounted for in another fund. The General Fund sources are comprised of SHARE
System Fund 89800 - Building Fund, SHARE System Fund 90700 - General Operating Fund, and SHARE System
Fund 91500 - Probation &Parole Fund.

General Fund revenues are both earned and appropriated. Sources of non-reverting revenue included in the General
Fund are from:
Permanent Fund Income and Land Income (§33-1-18/19 NMSA 1978 and §33-2-2 NMSA 1978) to which the
Department is a beneficiary.
Probation and Parole Fees (§31-20-6 NMSA 1978 and §31-21-13.1 NMSA 1978).
SPecial Revenue Fund
The Special Revenue Fund is used to account for the proceeds of specnic revenue sources (other than expendable
trusts or major capijal projects) that are legally restricted to expendijures for specified purposes. The Special Revenue
Fund is the Communijy Corrections Grant Fund, SHARE System fund number 90200.
Statutorv Creation: §33-9-3 NMSA 1978 "There is created in the state treasury a special fund to be known
as the "community corrections grant fund."
Use of Funds: §33-9-3 NMSA 1978 "The fund shall be for the purpose of prOViding programs and services
for the diversion of criminal offenders to community-based settings."
Reverting Status: §33-9-3 NMSA 1978 "All money appropriated to the fund or accruing to it as a result of gift,
deposit, investments or other sources shall not be transferred to another fund or encumbered or disbursed in
any manner except as provided in the Adult Community Corrections Act."
State Capital Proiects Fund
The State Capijal Projects Fund (SHARE System fund 99700) is established to account for financial resources to be
used for the acquisition for capijal expenditures financed by the issuance of severance tax bonds. The New Mexico
Department of Finance and Administration's policies require that capijal projects be accounted for in a separate fund.
Appropriations are multi-year and new organizational codes are established within the fund for each fiscal year in
which a new capijal project is approved and budgeted. f>.s a result of the multi-year appropriations, a budget to actual
presentation is presented on an inception to date basis in the accompanying financial statements.
Proprietary Fund Types

The focus of Proprietary Fund measurement is upon determination of operating income, changes in net assets,
financial position, and cash flows. The generally accepted accounting principles applicable are those similar to
businesses in the private sector.

- 29-

Enterprise Fund
Enterprise funds are required to account for operations for which a fee is charged to external users for goods and
services and the activity (a) is financed with debt that is solely secured by a pledge of the net revenues, (b) has third
party requirements that the cost of providing services including capital costs, be recovered with fees and charges or (c)
has a pricing policy designed for the fees and charges to recover similar costs. The Corrections Industries Revolving
Fund (SHARE System fund 07700) represents the Departmenfs only business-type activity and is included as a major
fund.
Statutory Creation: § 33-8-7 NMSA 1978 "There is created in the state treasury a fund which shall be
administered by the department secretary as directed by the commission and which shall be known as the
"corrections industries revolving fund."
Revenues: § 33-8-7 NMSA 1978 "All income, receipts and earnings from the operation of enterprises shall be
credited to the fund." "All interest earned on money in the fund shall be credited to the fund."
Use of Fund: § 33-8-7 NMSA 1978 "Money deposned in the fund shall be used only to meet necessary
expenses incurred in the maintenance, operation and expansion of existing enterprises and in the
establishment, maintenance, operation and expansion of new enterprises."
Reverting Status: § 33-8-7 NMSA 1978 "No part of the fund shall revert at the end of any fiscal year."
Fiduciary Fund Types
Fiduciary funds are used to report assets held in trustee or agency capacity for others and therefore are not available
to support Department programs. The reporting focus is upon net assets and changes in net assets and employs
accounting principles similar to proprietary funds.
AqencyFund
Agency funds are used to account for assets held by the Department in the capacity of trustee or agent. The agency
fund (SHARE System fund 55700) is custodial in nature (assets equal liabilities) and do not involve measurement of
results of operations.
Non-Current Governmental AssetslLiabilities
GASB Statement #34 eliminated the presentation of Account Groups, but provides for these records to be maintained
and incorporates the information into the Governmental column in the government-wide Statement of Net Assets.
D. BASIS OF ACCOUNTING
Basis of accounting refers to the point at which revenues or expenditure/expenses are recognized in the accounts and
reported in the financial statements. It relates to the timing of the measurements made, regardless of the measurement
focus applied.
The Government-wide Financial Statements and the Proprietary and Fiduciary Fund Financial Statements are
presented on an accrual basis of accounting. The Govemmental Funds in the Fund Financial Statements are
presented on a modified accrual basis.
Accrual
The enterprise fund is accounted for using the accrual basis of accounting. Revenues are recognized when eamed and
expenses are recognized when incurred.
Modified Accrual
All governmental funds are accounted for using the modified accrual basis of accounting. Under the modified accrual
basis of accounting, revenues are recorded when susceptible to accrual; i.e., both measurable and available.
"Available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the
current period. The Department considers funds available if received within "60 days" after year-end. Expenditures are
- 30·

generally recognized under the modified accrual basis of accounting when the related liability is incurred. The
exception to this general rule is that principal and interest on general long-term deb~ if any, is recognized when due.
In applying the ·susceptible to accruar concept to intergovemmental revenues pursuant to GASB Statement #33,
Accounting and Financial Reporting for Nonexchange Transactions the provider should recognize liabil~ies and
expenses and the recipient should recognize receivables and revenues when the applicable eligibil~ requirements
including time requirements, are met. Resources transmitted before the eligibil~ requirements are met, under most
circumstances, should be reported as advances by the provider and deferred revenue by the recipient.

Operating Revenues
For the purposes of the enterprise funds, operating revenues, include sales income from business operations. All
other revenue is considered non-operating.

E. BUDGETS AND BUDGETARY ACCOUNTING
The New Mexico State Legislature makes annual appropriations to the Department, which lapse at fiscal year end.
Legal compliance is mon~ored through the establishment of a bUdget (modified cash-basis) and a financial control
system, which perm~s a budget to actual expend~re comparison. Expend~ures may not legally exceed appropriations
for each budget at the appropriation un~ level. Budgeted appropriation unit amounts may be amended upon approval
from the Budget Division of the State of New Mexico Department of Finance and Administration w~in the lim~ations
as specified in the General Appropriation Act. The budget amounts shown in the financial statements are both the
original appropriation and the final authorized amounts as legally revised during the year. As per the General
Appropriation Act, Laws of 2007, Chapter 28, Section 3, Item N, "the State of New Mexico shall follow the modified
accrual basis of accounting for govemmental funds in accordance w~h the manual of model accounting practices
(MAPS) issued by the Department of Finance and Administration, except for accounts payable accrued at the end of
the fiscal year that do not get paid by the statutory deadline per Section 6-10-4, NMSA 1978. Those accounts payable
that do not get paid timely must be paid out of next year's budget. The State Budget Division is specifically authorized
to approve budgets in accordance with GAAP and the author~ to extend the availability period of an appropriation
through the use of an encumbrance shall follow the modified accrual basis of accounting for govemmental funds in
accordance w~h the MAPS issued by the Department of Finance and Administration."
Each year the Legislature approves multiple year appropriations, which the State considers as continuing
appropriations. The Legislature authorizes these appropriations for two to five years; however, it does not identify the
authorized amount by fiscal year. Consequently, the appropriation is bUdgeted in its entirety the first year the
Legislature authorizes it. The unexpended portion of the budget is carried forward as the next year's beginning budget
balance until either the project period has expired or the appropriation has been fully expended. The budget
presentations in these financial statements are consistent with this budgeting methodology.

The budgetary basis differs from the basis of accounting required by Generally Accepted Accounting Principles
(GAAP). Significant differences between the budgetary basis and GAAP include the following:
1.

The budget does not consider reversions to the State General Fund.

The budget includes encumbrances (obligations for unperformed contracts for goods or services). GAAP
does not include encumbrances.

The Department follows these procedures in establishing the budgetary data reflected in the financial statements:
1.

No later than September 1, the Department subm~s to the Legislative Finance Comm~ee (LFC), and the
BUdget Division of the Department of Finance and Administration (DFA), an appropriation request for the
fiscal year commencing the following July 1. The appropriation request includes proposed expenditures and
the means of financing them.

- 31 -

Budget hearings are scheduled before the New Mexico House Appropriations and Senate Finance
Committees. The final outcome of those hearings is incorporated into the State's General Appropriation Act.

The Act is signed into Law by the Governor of the State of New Mexico within the legally prescribed time
limit, at which time the approved bUdget becomes a legally binding document.

Not later than May 1, the Department submits to DFA an annual operating budget by appropriation unit and
object code based upon the appropriation made by the Legislature. The Budget Division of DFA reviews and
approves the operating budget, which becomes effective on July 1.

Formal budgetary integration is employed as a management control device during the fiscal year for the
General, Special Revenue, Capital Projects and Enterprise Funds.

F. ENCUMBRANCES
With the Laws of 2004, Chapter 114, "General Appropriations" establishing the modified accrual basis of accounting for
governmental funds as the bUdgetary basis of accounting for the State of New Mexico, there are no encumbrances
outstanding at year-end. In cases where the appropriations do not lapse at year-end, the encumbrances outstanding
are re-encumbered for the same amount outstanding at year-end and do not constttute expenditures or liabilities
because the commitments will be honored during the subsequent year. The Department does have appropriations,
which are multiple year appropriations that do not lapse at year-end.

G. ASSETS, LIABILITIES AND FUND EQUITY

Investments

The Department has defined Investments as Interest in the State General Fund Investment Pool (ISGFIP) with the
New Mexico State Treasurer's Office. State law requires the Department's cash investments to be managed by the
New Mexico State Treasurer's Office. The investments will include cash on deposit with the State Treasurer, cash on
hand, investment pools, and demand deposits. For purposes of cash flows, Corrections Industries considers all highly
liquid investments, which are on deposit with the State Treasurer in interest bearing accounts to be cash or cash
equivalents. GASB 40 disclosure related to the above items held within the New Mexico State Treasurer's Office, the
reader should refer to separate audited financial statements prepared by the New Mexico State Treasurer's Office
which will disclose the categories of risk involved.
The fair value of the investments maintained at the New Mexico State Treasurer's Office are as follows at June 30,
2009.
Investment
New Mexico State Treasurer's Office:
General Fund Investment Pool
Petty Cash held by the Department

Maturities

Fair Value *

1day to 3 years

$ 39,814,625
5,325

Total Investments or Cash Equivalents

$ 39,819,950

• Refer to Note 4 to see individual fund detail regarding holdings held at the New Mexico State Treasurer's Office.

Interest Rate Risk: The Department does not have an investment policy that limits investments maturities as a means
of managing tts exposure to fair value losses arising from increasing interest rates.

Credit Risk: The New Mexico State Treasurer's Office pool is not rated.

- 32-

Accounts Receivable:
Accounts receivable are recorded in the General and Enterprise funds. Where appropriate, an associated allowance
for doubtful accounts has been established. Enterprise fund receivables originate from the operations of Corrections
Industries related to the sales of goods and services. General Fund receivables include amounts receivable from other
state agencies and local govemments relating to various joint powers agreements (JPA) for inmate work crews and
billings for reimbursement of costs associated with housing county inmates in Department operated facilnies.
Accounts Receivable consists of the following:

Accounts Receivable

General Fund
172,676
$

Enterprise
Fund
$ 293,427

(151,520)

(290,270)

Less: Allowance for doubtful accounts
Net Accounts Receivable

21,156

3,157

Total
466,103
(441,790)

24,313

Federal Grants Receivable:
Various reimbursement procedures are used for federal awards received by the Department. Consequently, timing
differences between expendnures and program reimbursements can exist at any time during the fiscal year.
Receivable balances at fiscal year end represent amounts expended during the fiscal year that are related to a federal
grant, however the reimbursement for the expendnure was not received prior to the end of the fiscal year.

·33·

Due from I Due to Other Funds

These amounts represent inter-fund receivables and payables arising from inter-fund transactions within the
Department. Balances in these accounts relate to (1) amounts due to the enterprise fund for Department purchases of
goods and services from Corrections Industries Division, and (2) amounts due to the general operating fund for inmate
canteen purchases. Balances in these accounts are netted as part of the reconciliation to the Government-wide
columnar presentation.
Inter-fund receivables and payables as of June 30, 2009 consist of the following:

Inter·fund Receivables

Fund Type
Enterprise Fund

SHARE Fund
Number
07700

Due From
Other Funds
475,851

Due From
SHARE Fund
Number
90700

91500
Totals

475,851

Amount
456,091

19,760

$ 475,851

Inter·fund Payables

FundTvpe
General Fund

SHARE Fund
Number
90700

General Fund

91500

Totals

Due to Other
Funds
456,091

19,760

475,851

- 34-

Due to
SHARE Fund
Number
07700

07700

Amount
456,091

19,760

$ 475,851

Due to I Due from Other State Agencies

These amounts represent receivables and payables arising from transactions between the Department and other State
agencies. Balances in these accounts relate to (1) joint powers agreements (JPA) between the Department and
various other State agencies to provide inmate work crews, (2) goods and services provided to the Department by
other State agencies, and (3) other ~ems required to be accrued from other agencies per GAAP.
Inter-agency receivables and payables as of June 30, 2009 consist of the following:

Interagency Receivables

Fund Type
General Fund

Enterprise Fund

SHARE Fund
Number

Due From
Other
Agencies

Due From
SHARE
Agency
Number

Due From
SHARE Fund
Number

90700

$ 1,025,266

33700

60100

34100

76100

56,704

80500

20100

77,317

69000

06700

690

52100

19900

17,078

Various

700

33300

17200

153,733

69000

06700

63,454

80500

20100

77,921

Various

277,385

07700

Totals

572,493

$ 1,597,759

Amount

872,m

$ 1,597,759

Interagency Payables

Fund Type

SHARE Fund
Number

Agency Fund

55700

General Fund

90700

Totals

Due to
SHARE
Agency
Number

Due From
SHARE Fund
Number

26,149

78000

06300

259

30500

17000

Due to Other
Agencies

26,408

- 35-

Amount

26,149
259

26,408

Inventories

Supplies inventory are maintained on a consumption basis of accounting where nems are purchased for inventory and
charged to the budgetary accounts as the items are consumed. Inventories held by the General fund consist of generic
supplies and materials in the various department operated correctional facimies. Inventories are valued at cost using
the first-in, first-out method. The reported fund balance reservation indicates that supplies inventory does not represent
available expendable resources for Department programs.
Enterprise fund inventories consist primarily of fumnure, textiles, and other items held for resale. Inventories are valued
at estimated cost, using the first-in, first-out method, which does not exceed net realizable value.
Components of the Corrections Industries (enterprise fund) inventories are as follows:

Raw Materials
VVorkin Progress
Finished Goods
Total Inventory

750,023
150,631
899,143

1,799,797

Prepaid Items

These amounts represent prepayment of postage and fuel, which has benem to the Department beyond the fiscal year,
ending June 30, 2009. Prepaid nems are expensed when consumed under the consumption method. Therefore, these
items are allocated to the fiscal year in which they are used.

Capital Assets

Property, plant and equipment purchased or acquired is carried at historical cost or estimated historical cost.
Contributed assets are recorded at the fair market value as of the date received. Additions, improvements and other
capital outlays that significantly extend the useful me of an asset are capitalized. Other costs incurred for repairs and
maintenance are expensed as incurred. House Bill 1074 was enacted that amended the Audit Act for the capitalization
threshold. House Bill 1074 effective date was June 17,2005 and as a result, the State's capitalization policy threshold
was changed from $1,000 to $5,000 requiring agencies to capitalize only acquisitions greater than $5,000. Assets
purchased prior to the new capnalization threshold were not removed from the agency's listing but will remain on the
inventory list and will continue to be depreciated until the asset is fully depreciated. However, all capital outlay
purchases may not necessarily be capnalized.
Depreciation on all assets is provided on the straight-line basis over the estimated useful lives with no salvage value.
The Department utilizes IRS Publication 946 to estimate the useful lives on capnal assets as follows:
Building and Improvements - 40 years
Improvements other than Buildings - 20 years
Machinery and Equipment
Other Personal Property - 12 years
Software - 3 years
Furnnure and Fixtures -10 years
Automotive - 5 years
GASB Statement #34 requires the recording and depreciation of infrastructure assets. Infrastructure assets include
roads, bridges, traffic signals, etc. The Department does not own any infrastructure assets.

- 36·

Construction period interest, if any, is capitalized in the proprietary fund. There was no construction period interest
capitalized in 2009. There was no purchased or in-house developed software to cap~alize as of year-end.
6.

Compensated Absences

Qualified employees are enfnled to accumulate annual leave according to a graduated leave schedule of 80 to 160
hours per year, depending upon length of service and employee's hire date. A maximum of thirty working days (240
hours) of such accumulated annual leave may be carried forward into the beginning of the calendar year and any
excess leave is lost.
When employees terminate, they are compensated for accumulated unpaid annual leave as of the date of termination,
up to a maximum of 240 hours. Accumulated annual leave is not expected to be liquidated with expendable available
financial resources and is reported in the long-term liabilities.
Qualified employees are entitled to accumulate sick leave at the rate of one day for each calendar month of service.
There is no limit to the amount of sick leave that an employee may accumulate. Once per fiscal year in either January
or July, employees may elect to be paid for 50% of accrued sick leave in excess of 600 up to 720 hours, but not to
exceed 120 hours (net 60 hours can be paid). In the case of retiring employees, up to 200 net hours in excess of 600
hour minimum limit, can be paid. All sick leave balances from 600 to 720 hours have been recorded at 50% of the
employee's current hourly rate in the long-term liabilnies including those amounts paid in July of the subsequent fiscal
year, because no expendable financial resources are available as of the balance sheet date to liquidate the liability.
The non-eurrent portion (the amount estimated to be used in subsequent fiscal years) for Governmental Funds is
maintained separately and represents a reconciling ~em between the fund and govemment-wide presentations.
Annual leave and sick leave (in excess of 600 hours up to 720 hours) is accrued in the enterprise fund and reported as
a fund liability.
7.

Deferred Revenues

Deferred revenues represent a liability for the Govemmental Funds. Deferred revenues are used to account for (1)
amounts received from federal awards prior to expenditures occurring or (2) amounts identified as accounts receivable
that have not been received w~hjn 60 days of the end of the fiscal year and are accounted for on the modified accrual
basis in the fund financial statements.
8.

Due To State General Fund (Reversions)

Reversions to the State General Fund by the Department are based on the defin~ions of both reverting and nonreverting funds. Reversions are calculated by applying the percentage of reverting fund (total budget for the category)
to the unexpended amount for the budget category at fiscal year-end.
Reverting Funds. All funds that are not identified by law as non-reverting. Such funds are in excess of budgeted
and budgeted and actual revenues. Examples of such reverting funds currently generated by the
Department are miscellaneous revenues, sales and services revenues, and payments for care. Revenues for JPA, are
reimbursements for actual costs, and as such, are a receivable due to the Department. Any amounts collected for
these revenues over estimated budget are revertible funds, since they would be replacing reverting general fund that
was temporarily used to support such activ~ies. Reversions for JPA revenues are dependent on two criteria: 1) Period
of receipt (current year versus prior year) and 2) Period of accrual (revenue recogn~ion).
expend~ures

Non-Reverting Funds. All funds, which are e~er appropriated to or eamed by the Department and by law or staMe,
are not reqUired to be reverted to the state treasury upon completion of a fiscal period or project. The Department
currently classifies the following revenues and sources as non-reverting.

- 37-

Enterprise Funds/Other State Funds - Corrections Industries Revolving Fund (Fund 07700). All
revenues generated from sales and services and from other types revenues, which are specifically
eamed by and applied to the Corrections Industries Division, are non-revertible funds, except for
any appropriated General Fund or grant funds awarded to this specnic organization. Budget is
established in Corrections Industries, program code P533. [Section 33-8-7 NMSA 1978]

ii)

Building Fund (Fund 89800). Revenues, which support the Building Fund, are non-revertible. The
source of the revenues is from State Permanent Fund income, both Regular and Charitable. The
State Investment Council distributes this income to the Department on a monthly basis. These
revenues support expenditures for the payment of the Central OffICe and Training Academy
Complex, which are bUdgeted in Program Support, program code P530. [Section 33-1-18, 33-1-19
and 33-2-2 NMSA 1978]

iii)

Community Corrections Grant Fund (Fund 90200). General Appropriations made to this fund do not
revert to the State General Fund. Additionally, any unexpended appropriations to this fund are
classified as Cash Balance, which is made up from either designated or undesignated cash
balance or from non-expended budgeted cash balance. Revenue and expenditure budget is
established in Community CorrectionsNendor Run, program code P535. [Section 33-9-3 NMSA
1978]

iv) Permanent Fund Income (Fund 90700). Revenues, which support the general operating expenditures
at the Penitentiary of New Mexico and identnied as such, are non-revertible. The source of these
revenues is from State Permanent Fund income, both Regular and Charitable. The State
Investment Council distributes this income to the Department on a monthly basis. This distribution
commences 35 days from the previous months end date. Budget for revenues and expenditures
are established in Inmate Management and Control, program code P531. [Section 33-1-18, 33-119 and 33-2-2 NMSA 1978]
v)

Land Income (Fund 90700). Revenues, which support the general operating expenditures at the
Penitentiary of New Mexico and identified as such, are non-revertible. The source of these
revenues is from Land Income, both Regular and Charitable. The State Land Office distributes this
income to the Department on a monthly basis. Budget for revenues and expenditures are
established in Inmate Management and Control, program code P531. [Section 33-1-18, 33-1-19
sand 33-2-2 NMSA 1978]

vi)

Probation and Parole Fees (Fund 90200 and 91500). All Probation and Parole fees collected by the
Department are non-revertible funds. Accordingly, all budgeted Cash Balance revenues from
these fees that are not used to support current year operations are also not revertible to the State
General Fund. Revenue and expenditure budgets are established in both Community Corrections,
program code P535 and in Community Offender Management, program code P534. [Section 3120-6 and 31-21-13.1 NMSA 1978]

vii) Grant Funds (All Funds). Grant funds from any governmental source, such as Federal or state, direct or
indirect, do not revert to the State General Fund unless specifically identified in the grant contract
or appropriation law. In some cases, any over drawn grant funds may be reverted to the State
General Fund or be reverted to the granting agency. Currently, all grants in operation by the
Department are in the form of a reimbursement basis, whereby reimbursement for grant costs is
requested from the granting agency after the grant related expenditure has occurred. [Section 6-510 NMSA 1978]

- 38·

Unexpended and unencumbered cash balances of certain funds revert to the State General Fund at year-end. For
certain funds, cash recoveries during the fiscal year from stale dated warrants and prior year reimbursements are also
due to the State General Fund. Amounts recovered during fiscal year 2009 in the amount of $1,100 was reverted from
fund 91500 during the fiscal year and not included in the amount listed below. Amounts due to the State General Fund
for the year ending June 30,2009 were paid in September 2009 (estimated amount) and a second cash transfer was
paid in November 2009.
Current year reversions Due to the State General Fund as of June 3D, 2009 were as follows:

General Fund
Current Year:
BFY 09 Reversions
FY 09 Excess Revenues Over Budget
Prior Year:
Prior Year Refunds
Prior Year Reimbursements
Total FY 09 Reversions

SHARE
System Fund
90700

SHARE
System Fund
91500

SHARE
System Fund
99700

$ 3,226,817
173,957

$ 1,327,277
717

5,385
35,734

614,168
53

3,441,893

1,942,215

2,586

$ 3,444,479

$ 1,942,256

Stale Dated Warrants
Total Reversions Due to General Fund

979

Total
$

4,555,073
174,674
619,553
35,787

979

5,385,087
2,627

979

5,387,714

11. Reservations of Fund Balance
Reservations of fund balances on the Governmental Funds are created to either (1) satisfy legal covenants that require
that a portion of the fund balance be segregated or (2) identify the portion of the fund balance that is not appropriated
for future expenditures. Specific reservations of fund balance accounts are summarized below:
Reserved for encumbrances - State Capital Projects, fund 99700 only.
This reserve was created to represent encumbrances outstanding at the end of the year based on purchase orders and
contracts signed by the Department but not completed as of the close of the fiscal year.
Reserved for Petty Cash Accounts
This reserve was created to represent the portion of fund balance that is used in petty cash accounts at the various
facilnies and business offices.
Reserved for Inventories and Prepaid Expenses
This reserve was created to represent the portion of fund balance that is not available for expenditures because the
Department expects to use the resources within the next budgetary period.
Reserved for Subsequent Year's Exoenditure
This reserve was created to represent the portion of fund balance that has been requested by the Department and
appropriated by the New Mexico State Legislature for use in the SUbsequent fiscal year.
Unreserved, Designated for Future Exoenditure
This reserve was created to restrict the use of resources from special appropriations and to restrict cash balance
amounts that have been requested to be re-budgeted in subsequent years by the Department. Cash balance amounts

- 39-

re-budgeted in sUbsequent years is made up of non-reverting funds including Land and Permanent Fund Income and
Probation and Parole Fees. Addnionally, the Department maintains a cash balance designation for contingency
purposes. This designation is less than one ha~ of one percent (.5%) of the total operating budget.

H. REVENUES, EXPENDITURES AND EXPENSES
SUbstantially all governmental fund revenues are accrued.
Expendnures are recognized when the related fund liability is incurred except for the following permitted by generally
accepted accounting principles:
Prepaid nems and inventory costs are reported in the period when inventory items are consumed, rather than in the
period purchased.
It is the practice of the Department to use available unrestricted resources first unless otherwise specifically directed to
use restricted resources.

I. NET ASSETS
The government-wide and business types Fund Financial Statements utilize a net asset presentation. Net Assets are
categoriZed as investment in capital assets (net of related debt), restricted and unrestricted.

Investment in Capital Assets (net of related debt) - is intended to reflect the portion of net assets which are
associated wnh non-liquid, capital assets less outstanding capital asset related debt. The net related debt is the debt
less the outstanding liqUid assets and any associated unamortized cost.
Restricted Assets - are liquid assets (generated from revenues and not bond proceeds), which have third-party
(statutory, bond covenant or granting agency) limnations on their use.
Unrestricted Assets - represent unrestricted liqUid assets.

J. USE OF ESTIMATES
The preparation of financial statements in conformity wnh generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ from those estimates.

K. PROGRAM REVENUES
Revenues that (1) originate from the program or from parties other than the government's taxpayers or citizens as a
whole and (2) reduce the expenses of the function that has to be financed by general revenues. Revenues of this type
can originate from a governmental source, but the proceeds are a charge for services or products produced by a
government agency, where that agency is considered a vendor within the market place. Additionally, program
revenues are fees charged by the government agency that are used to support a specific operation of that
governmental unn.
The Department classifies the following types of revenues as program revenues: (1) All revenue received by
Corrections Industries for the sale of goods or services, (2) Permanent Fund Income and Land Income of which the
Department is a beneficiary, and (3) other charges for services such as Concession Merchandise, Meals, Payment for
Care - Individuals, etc.

- 40-

SPECIAL APPROPRIATIONS

NOTE 3:

The following describes the status of special appropriations received in fiscal year 2009.

Appropriations
Expended FY 09

( 1)
$ 2,532,000

(2 )
$ 500,000

2,532,000

485,261

(3 )
150,000

(4 )
$ 445,000

(5 )
$ 234,733

(6 )
$ 1,007,175

150,000

445,000

234,605

135,687

14,739

Reverted FY 09

(7 )
$ 75,000

15,000
871,488

$ 2,532,000

$ 500,000

150,000

$ 445,000

$ 234,733

135,687

75,000
$

29,867
946,488

$ 15,000

Laws of 2008, Chapter 3, Section 8 - "Compensation Appropriations". The purpose of the appropriation is for
salary increases subject to satisfactory performance or better and completed probation period for incumbents in
agencies covered by the Personnel Act. The appropriation was to the Department of Finance and Administration
for distribution to all state agencies and encompasses all funding sources. The general fund is distributed to
agencies via an operating transfer from DFA with the source listed as "general fund". Appropriation Period:
7/1/2008 - 6/30/2009. Outstanding Encumbrances: -D-. Unencumbered Balance: -D-.

Laws of 2008, 2nd session, Chapter 3, Section 5, "Special Appropriations". Item 85. The purpose of the
appropriation is for equipment and security improvements at correctional faciltties and probation and parole
officeS. The appropriation was budgeted within the general operating funds 90700 (Z80185) and 91500 (Z80185)
$405,000 and $95,000, respectively. Muni-year appropriation Period: 7/1/2007 - 6/30/2009. Outstanding
EnclJllbrances: -0-. Unencumbered Balance: -D-.

Laws of 2008, 2nd session, Chapter 3, Section 5, "Special Appropriations". Item 87. The purpose of the
appropriation is for the purchase of modular units. The appropriation was budgeted within the general operating
funds 90700 (Z80187) in the amount of $150,000. Muni-year appropriation Period: 7/1/2007 - 6/30/2009.
Outstanding Encumbrances: -0-. Unencumbered Balance: -0-.

Laws of 2008, 2nd session, Chapter 3, Section 5, "Special Appropriations". Item 88. The purpose of the
appropriation is to purchase an emergency generator and to build a vehicle service bay with storage unit. The
appropriation was budgeted within the general operating funds 90700 (Z80188) in the amount of $445,000. Multiyear appropriation Period: 7/1/2007 - 6/30/2009. Outstanding Encumbrances: -0-. Unencumbered Balance:-o-.

Laws of 2007, Chapter 28, Section 5, "Special Appropriations", Item 86. The purpose of the appropriation is to
install video conferencing telecommunications. The appropriation was budgeted wtthin the Program Support
program (Z80189). Laws of 2008, Chapter 3, Section 5, Item 89 extends the appropriation period through the end
of fiscal year 2009. Appropriation Period: Extends through the end of fiscal year 2009 (6130/2009). Outstanding
Encumbrances: -0-. Unencumbered Balance: -0-.

Laws of 2006, Chapter 109, Section 7, - "Data Processing Appropriations" (27) appropriated $300,000 for the
purpose of converting and customizing the booking module into muniple tiers. In addition $720,000 was
appropriated for the purpose of transitioning and modifying the Criminal Management Information System into a
web-based system. Laws of 2007, Chapter 28, Section 7, Item 27 extended the appropriation period through the
end of fIScal year 2008, in addition, authorizing the release of $24,604 originally appropriated in Laws of 2003,
Chapter 76, Section 7. Laws of 2008, Chapter 3, Section 7, Item 31 extends the final appropriation period through
the end of fiscal year 2010. The system will be designed to improve data collection, viewing, and use by
department constituents and other public safety, judicial, and law enforcement entities. The appropriation was
budgeted within the Computer Systems Enhancement. Appropriation Period: Extends through the end of fiscal
year 2010 (6/30/2010). Outstanding Encumbrances: -0-. Unencumbered Balance: $871,488.
- 41 -

Total
$ 4,958,908
3,982,553

128

Remainder
Amount Received

( 8)
$ 15,000

$ 4,012,420

Laws of 2009, Chapter 124, Section 5, "Special Appropriations·. Item 53. The purpose of the appropriation is to
replace k~chen equipment. The appropriation was budgeted ~in the general operating funds 90700 (Z90153)
in the amount of $75,000. Multi-year appropriation Period: 7/1/2008 - 6130/2010. Outstanding Encumbrances: 0-. Unencumbered Balance: $75,000.

Laws of 2008, Chapter 6, Section 30, "Special Appropriations·. Item 7. The purpose of the appropriation is for a
community-housing program in Bernalillo and Sandoval counties for sex offender persons released from prison.
The appropriation was budgeted within the general operating funds 91500 (Z81291) in the amount of $15,000.
Appropriation Period: 7/1/2008 - 6/30/2009. Outstanding Encumbrances: -0-. Unencumbered Balance: -0-.

NOTE 4:

CASH
Pledged Collateral

In accordance with Section 6-10-7 NMSA 1978, deposits of public monies are to be collateralized in an aggregate
equal to 50% of depos~s in excess of Federal Depos~ Insurance Corporation (FDIC) insurance coverage. Deposits
are exposed to custodial risks if they are not covered by depos~ory insurance.
On June 30, 2009, the Corrections Department had one bank account with a balance above $250,000:

Less: Alnount covered by FDIC
Total Uninsured Funds

Wells Fargo
Bank
$ 1,235,856
(250,000)
985,856

Amount requiring collateral (50%)*

Collateralization held by Bank of America:
FNCT 5.00% due 05/01/38 (31415LCN5), par value $10,275,000

Market Value
$ 9,769,140

Less: Collarteralization required
Overcollateralization

492,928
$ 9,276,212

TotalAinountonDepos~

492,928

Detail of pledged collateral specific to this agency is unable because the bank commingles pledged collateral for all
state funds it holds. However, the State Treasurer's Office collateral bureau mon~ors pledged collateral for all state
funds held by state agencies in such "authorized· bank accounts.
* The New Mexico State Treasurer's Office is responsible to ensure that all accounts have collateral at the required
level for amounts in excess of FDIC coverage. The New Mexico State Treasurer issues separate financial statements,
which disclose the collateral pledged to secure these deposits, the categories of risk involved, and the market value of
purchased investments, which may differ from the cash depos~ed by the Department.

- 42-

NOTE 4:
B.

Cash (continued)
Schedule of Invesbnent Accounts including cash held at the State Treasurer's Office

Name of DepositOry
General Fund:
NM State Treasurer
NM State Treasurer
NM State Treasurer
N/A

Account Name

Fund Type

General Operating
BUilding Fund
Probation and Parole
Various

General
General
General
General

General Operating

General

Correction Industries
Various

Enterprise
Enterprise

State Capital Projects

Capital Projects

Inmate Master Trust Account

Agency Inmate Trust

Total General Fund Cash
Special Revenue Funds:
NM State Treasurer
Total Special Revenue Fund
Enterprise Funds:
NM State Treasurer
N/A
Total Enterprise Funds
State Capital Projects Funds:
NM State Treasurer
Total State Capital Project Funds:
Agency Fund:
Wells Fargo Bank New Mexico
Total Agency Fund Cash

- 43-

SHARE
System Fund
No.
90700
89800
91500

N/A

90200

7700

N/A

99700

55700

Type of
Account

Interest
Bearing

BanklDFA
Statement
Balance at
06130I09

State Treasury
State Treasury
State Treasury
Petty Cash

No
No
No
No

$ 29,898,754
272,385
5,163,416
2,075

35,336,630

2,140,667

2,030,270
3,250

2,033,520

309,133

1,235,856

1,166,503

1,235,856

1,166,503

State Treasury

State Treasury
Petty Cash

State Treasury

Checking

Yes

- 44-

Reconciled
Book Balance
at 06130I09