The Audit Act (12-6-1 to 12-6-14 NMSA 1978) requires that all government entities in New Mexico, including land grants-mercedes provide different levels of annual financial reporting dependent on their annual income. Under the Audit Act financial reporting requirement to the state are divided into 7 tiers. Each tier has it own set of review and reporting requirements. The tiers are determined based on two criteria. The first is the annual revenues, on a cash basis, of the entity, excluding certain type of revenue such as federal and private grants and state appropriated capital outlay. The second is whether an entity has received and expended any capital outlay appropriations from the State Legislature. Below is a list of the qualifications and requirements for each tier, for additional information on financial reporting requirements visit the Office of the State Auditor website, which can be accessed use tab to the left or view the Financial Reporting Guide also accessible using the tabs to the left.
Tier 1- The land grant-merced has annual revenue that is less than $10,000 and the land grant-merced did not directly expend at least 50% of, or the remainder of a single capital outlay award. The land grant-merced is exempt from submitting a financial report to the State Auditor and from having to submit an annual budget to the Department of Finance and Administration Local Government Division (DFA-LGD). The land grant-merced is still required to certify to the Office of the State Auditor and to DFA- LGD that it’s annual revenue is less than $10,000 and it does not have any capital outlay or has not expended at least 50% of a capital outlay award. Certification forms can be accessed by clicking on the tab label certification form on the left.
Tier 2- The land grant-merced has annual revenue that is $10,000 or more but less than $50,000. The land grant- merced does not have to submit a financial report to the State Auditor but they do have to submit the revenue certification form (Certification forms can be accessed by clicking on the tab label certification form on the left). The land grant-merced is required to submit and annual budget to DFA-LGD and comply with all quarterly and final budget reporting requirements pursuant to Section 6-6-3 NMSA 1978.
Tier 3- Land grant-merced has annual revenue of less than $50,000 and has expended at least 50% of, or the remainder of a capital outlay award. The land grant-merced is required to procure the services of an IPA for the performance of a Tier 3 agreed upon procedures engagement in accordance with the Tier 3 agreed upon procedures checklist developed by the State Auditor. The land grant- merced is also required to submit and annual budget to DFA- LGD and comply with all quarterly and final budget reporting requirements pursuant to Section 6-6-3 NMSA 1978.
Tier 4- The land grant-merced has annual revenue of $50,000 or more but less than $250,000. The land grant-merced is required to procure the services of an IPA for the performance of a Tier 4 agreed upon procedures engagement in accordance with the Tier 4 agreed upon procedures checklist developed by the State Auditor. The land grant-merced is also required to submit and annual budget to DFA-LGD and comply with all quarterly and final budget reporting requirements pursuant to Section 6-6-3 NMSA 1978.
Tier 5- The land grant-merced has annual revenue of $50,000 or more but less than $250,000 and the land grant-merced has expended any capital outlay funds. The land grant-merced is required to procure the services of an IPA for the performance of a Tier 5 agreed upon procedures engagement in accordance with the Tier 5 agreed upon procedures checklist developed by the State Auditor. The land grant-merced is also required to submit and annual budget to DFA-LGD and comply with all quarterly and final budget reporting requirements pursuant to Section 6-6-3 NMSA 1978.
Tier 6- The land grant-merced has annual revenue of $250,000 or more but less than $500,000. The land grant- merced is required to procure the services of an IPA for the performance of a Tier 6 agreed upon procedures engagement in accordance with the Tier 6 agreed upon procedures checklist developed by the State Auditor. The land grant-merced is also required to submit and annual budget to DFA-LGD and comply with all quarterly and final budget reporting requirements pursuant to Section 6-6-3 NMSA 1978.
Tier 7- The land grant-merced has annual revenue of $500,000 or more. The Tiered system of reporting does not apply to the land grant-merced. The land grant-merced must procure the services of an IPA for the performance of a financial and compliance audit in accordance with the generally accepted auditing standards and rules issued by the State Auditor. The land grant-merced is also required to submit and annual budget to DFA-LGD and comply with all quarterly and final budget reporting requirements pursuant to Section 6-6-3 NMSA 1978.
