Auditor's Audit of the Audit: Martinez administration OK'd improper payments to pro-GOP audit firm; $600,000 in improper payments to new Arizona providers

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Remember when Governor Martinez’s administration cancelled medicaid contracts for 15 New Mexico non-profit behavioral health providers and replaced them with Arizona companies instead?

All that happened because Governor Martinez’s administration paid $3,000,000 to a private company, PCG, that gave more than $100,000 in campaign contributions to a national Republican governors PAC that sent it right back to Martinez’s campaign before she took office. 

Need to catch up? Read our story on the money connections here. 

They were supposed to find fraud, but didn’t.  So the state’s Human Services Department changed the findings to say they did.  Seriously. 

 Did you miss it?  Read our story here on the edited audit from December, 2013

The Governor’s Office claimed their secret audit found evidence of financial mismanagement among those providers and put those New Mexico companies out of business.

While Attorney General Gary King is taking a look at the audit claims (he already said they exaggerated claims against one provider- read that story here), State Auditor Hector Balderas took a look at the way the Martinez administration handled the audit contract – and look what he found:

 Auditor finding: alcohol, meals, per diem

The administration approved payments to their private audit company for booze for auditors, meals for state employees and double billing for travel expenses.  

And that’s not all:  After giving those Arizona companies no-bid contracts on their promise to follow the rules, the companies billed taxpayers for more than $600,000 in improper expenses. 

 Auditor findings improper payments

For people hired to watch out for the public dollar, it seems they were watching out more for themselves — and the Martinez administration, so concerned with fiscal accountability, isn’t applying the same standard when their friends are involved. 


This story just keeps getting bigger and we need you to help spread it.  Check it out on our website where we link to State Auditor Hector Balderas’ entire report and visit our Facebook page so you can join the conversation and share this story.


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Read the full auditor’s report posted online here (PCG related items begin on page 96)