Huge bombshell on first day of session

SANTA FE (KRQE) - New Mexico has less in its checking account than it thought and the state hasn't been balancing its checkbook for years.
    
New Mexico could have $70 million less than it thought and that number could climb to more than $400 million.
    
That could make it really tough to hammer out a budget.

“The state has not been essentially balancing its checkbook by checking what it has in it's checkbook against what the bank statements say.” LFC Committee Deputy Director, Charles Sallee, said.
    
That means millions of entries for state spending.
    
The problem goes back to when the state switched to the Share System in 2006, new software that was supposed to do its accounting.
    
Instead, the system has caused chronic problems and the Department of Financial Accountability had not been making sure the general ledger was matching the bank account balances of a hundred state agencies.

“The Department of Finance Administration has responsibility for performing this reconciliation, they haven not been doing it and this is the result,” Sallee said.
    
DFA Secretary Tom Clifford said the DFA was "concerned" and that "it is important to stress that no cash is missing and there is no danger that checks issued by the state of New Mexico will bounce." 

“If it goes from $70 million to $460 million…$460 million is dadgum near all of our reserves,” Senator John Arthur Smith said.
     
So what does that mean for the state budget?
    
Legislators will not have as much extra money for things like schools, law enforcement, or raises.
    
There could also be a big fight over how much of the reserve fund they can dip into.

“You have an element out there that's frothing at the mouth to spend more money and there's no more money to spend,” Arthur Smith said.

DFA has a ton of work ahead.
    
They are asking for $10 million just to fix the software issues and millions more to try to pay an accounting firm to go through hundreds of thousands of transactions to figure out why the numbers don't match up.
    
No one is pointing to fraud or embezzlement as the issue, but they will not know for sure until more audits are completed.