The city of Las Cruces has $10.4 million in American Rescue Plan Act funding on hand for community and economic development initiatives.
While an initial request for proposal process identified select community nonprofits eligible to receive the funding, new concerns from both local nonprofits and the city auditor have prompted the Las Cruces City Council to reevaluate the application process before approving final funding priorities.
City Auditor Viola Perea presented the initial findings of an internal audit review to the council.
“Our preliminary observations show that the process followed to determine eligibility was not sufficiently designed or documented to support a clear, consistent and transparent eligibility determination,” Perea said.
Councilor Tessa Abeyta-Stuve made it clear she wants to review the full audit before voting on funding priorities.
“I do feel like we should wait and hear the full recommendations from our auditor and that final determination that she has,” Abeyta-Stuve said. “I think that's the best process…I think we'll be able to look at those next steps of what's most ethical, legal, and where we should proceed from there.”
In total, the city received 21 applications for review. Of those, nine were recommended to the council for funding.
Applications were first sent to a three-person committee to determine eligibility before being presented to a larger selection committee for scoring. Perea noted the lack of specific eligibility criteria during the initial review process, prompting questions about why some nonprofits were not recommended to the council for funding.
“We were not able to find a clear and concise list if you will, or a matrix, a checklist, something of that nature that would indicate these specific items would deem an application eligible and any deviation from that would deem them ineligible,” Perea said.
City Housing and Neighborhood Services Manager Natalie Green says the three-person committee, which she sat on, evaluated the applicants independently to determine eligibility.
“Now, was there an exact rubric that I was going to check off economic harm? No, that did not exist,” Green said. "I would chalk that up to professional experience, right. I know I can look at a project and I can determine whether it's eligible or not eligible under 2 CFR 200. I read the ARPA guidelines multiple times.”
The city auditor also voiced concern about potential areas of noncompliance, including select applicants having direct contact with the council. Councilor Gabe Vasquez was quick to note he did not want to see any organizations penalized for speaking out against the application process.
“I think the organizations that made contact with us during our last council meeting did so almost in a whistleblower spirit to make sure that the process was being followed correctly before council took a vote,” Vasquez said. “And then it was found by our internal auditor, at least from our preliminary recommendations, that some things weren't followed. So, it seems to me like a punishment to applicants to disqualify them after they rightfully highlighted some things that potentially are going to be found in this audit.”
Mayor Ken Miyagishima outlined what steps he would like to see the council take next.
“I think it's important that we come up with a determination, the definition of who's eligible,” Miyagishima said. “I don't want to go through a full new process but yet, address some of the concerns that were brought up in the audit. And then let council move forward and be able to vote on those.”
A complete version of the audit is expected to be presented to the city’s oversight committee for review next month.
