Cobre board receives 2023 audit and phase one special audit

By Lynn Janes

The Cobre Consolidated School Board held a regular meeting on August 17, 2026. Board members in attendance included Hector Carrillo, Gabriella Begay, Gilbert Guadiana, Agelina Hardin and David Wilguess. Dr. Verenice Gutierrez, superintendent also attended.

The board approved the agenda.

Public input none currently.

Action items

The board approved minutes from regular board meeting July 20, 2026, and August 5, 2026, special meeting.

The board approved a resolution to determine the necessity for lease purchase of educational technology equipment. Begay said this had been discussed in the finance committee and Kaeley Weimerskirch, bond council representative, had joined online to answer questions. Guadiana wanted to know if it would use the entire bond. Weimerskirch said this would take the entire education technology bond in the amount of $825,000 but does not have anything to do with the GO bond passed in November of 2025 in the amount of $6 million.

The board approved the fiscal year 2023 audit after a presentation from Jaramillo Accounting Group (JAG). Audrey Jaramillo had provided printouts for the board and turned the presentation over to Scott Eliason.

Eliason said fiscal year 2023 has been finished, turned into the state and released by the state auditor a few weeks prior. The opinion will be a disclaimer of opinion. They could not issue an opinion on the financial statements. The report has all the schedules and statements that would be expected. The special audit has been included as required and will be for a few years. Three separate reports have been included, the audit opinion report, federal awards audit and findings report. The findings had been repeated from the 2022 report.

The reason they cannot issue, an opinion has to do with inconsistent financial schedules that had been incomplete or had discrepancies. They could not be reconciled with subsidiary ledgers or documents. They also had outstanding cash transfers in some bank accounts. Eliason continued to explain some of the numbers that could be misunderstood due to all the different funds. The state has requirements that auditors must follow and the information to make the opinion had not been available.

He spoke to procurement, internal controls and a number of other areas. Eliason went into in depth on many items. The general fund and most important had funds they borrowed from restricted funds. The district has 40-50 different funds and said moving forward they might have to separate some out. Six of the funds had exceeded the budget which had been one of the findings. Eliason continued to go through portions of the audit for explanations. Each fund had to have its own balance sheet and income statement.

Phase two of the special audit will still be in process related to capital projects and bonds.

They had done the audit on the federal awards and had been able to issue an unmodified opinion. This audit looks at the compliance of the awards. The district had received almost $4.7 million in federal awards during the 2023 fiscal year.

In the report they address compliance with government auditing standards and it will be a two-part report. It addresses internal controls over financial reporting and then other matters. This part they had nine findings. In the prior year the district had ten that had three resolved. Eliason continued to go over the findings and what needed to be done. They found a lack of timesheets or lack of supervisor signatures to document expenditures. "Some serious work needs to be done." With federal funding an audit statement must be submitted no later than nine months after the fiscal year of the award. It had never been done but they had taken care of it and had signed off on it.

All of the information up to this point had just been the regular audit and had not addressed the special audit. They had found 23 findings in the special audit. A corrective action plan had been put in place as required.

Wilguess asked what his suggestion would be to straighten out the mess. Eliason said they needed as much help as they could find. He understood they have a new CFO (Chief Financial Officer), and he knew of some staff issues that needed to be rebuilt and retrained. Having Vertex Education to help assist in resolving the problems would help. The district had a lot to do and add being two years behind on the audit and soon three years would make it harder. Wilguess added that if he had run his business the way the school had he would have been bankrupt in the second month.

Carrillo spoke to a note on the audit saying there had been potential fraud, embezzlement, larceny, misappropriation and paying for services not rendered. His question to the auditors had to do with if they could provide the documentation so they could proceed forward with this and possibly file charges if the board chooses. Jaramillo said yes absolutely they could. The normal process with special audits they turn them over to the state and they refer to outside agencies such as the New Mexico Department of Justice, attorney general, district attorney, state police or local law enforcement. It could also be a combination of these. The state will be required by statues to refer for criminal violations , of which it appears the district has some. In closed session they will discuss the actions the district will want to look at taking. Jaramillo told the board to touch base with the state auditor to determine if referrals have been or will be made.

Jaramillo said one of the recommendations had been for an internal auditor and the entire payroll process be analyzed. She added that the district has already taken steps to address the problem.

Guadiana had remembered seeing a recommendation of adopting internal controls inhouse and would that be adequate. Jaramillo said they would need to look into it, but this would be a good starting point. Guadiana addressed the repeat findings and if they knew how far back it had gone. Jaramillo said yes and it went back to at least 2018. She added on the positive side, she sees progress and with a strong finance team she said she thought they would be in a better position moving forward with good leadership.

The board approved the fiscal year 2027 final award of the food bridge fund. Gutierrez said this award would be for $10,000 but have been waiting on PED (public education department) final approval. This will be for food not during the school day.

The board discussed the issuance of an RFP (request for proposal) for a food service contractor. Gutierrez had sent an analysis requested by the board at the last meeting. Natalia Brunton, CFO, had done the analysis and she had also provided a summary of findings reports that had a little more description of the financial issues with this fund. They had some question with the findings they wanted the district to answer. With the initial request Gutierrez had to tell them the documentation they asked for did not exist. Their reply had asjed what the district would be doing to correct the irregularities. She provided her response to the board. "We have to be very careful about the transfer of funds and implement internal controls."

Brunton had provided a quick overview of how food service usually functions that included a spreadsheet. A significant portion of the food service funds have been used for staff salaries. She had looked at the standards across the state and nation and recommendations all had been 50-54 percent of the budget should be salaries and benefits. In Cobre's case it has been about 90 percent. They had to transfer funds from the general operations fund to cover the shortage incurred last fiscal year. This fund is a reimbursement fund, and the district receives reimbursements per student meal. Brunton said she would like to have a little more information but has not had access to the number of students that have received meals in the district. She wanted to look deeper into the expenditures of the food service fund.

Brunton had researched the third-party service contractors and how they worked in New Mexico and other states. She had provided this information and sample contracts for the board to review. Begay wanted to know if their food service department had been brought into this conversation. Brunton said she wanted to go that direction but had not had time having to have the analysis ready for the board meeting. She wanted to meet with them on the meal numbers and staffing decisions they have made but she simply had not had time before this board meeting. She also wanted them to have the time to gather the information.

Carrillo wanted to clarify Gutierrez would be asking for an approval without the information being discussed with the food service department head. Gutierrez responded correct. Brunton said they would not be approving any changes, but this fund has the largest gap between what they have been funded and what has been spent. Submitting an RFP will be a lengthy 30-day process that will explore the issue further. Gutierrez added at the last special board meeting they had asked for this information as quickly as possible. "We want to engage in this process in a thoughtful strategic manner. We are not in a rush to issue the RFP. We just want you involved in the entire process." If it needed to come back to the board in September that would be fine and reminded them of the findings and the need for corrective action. One of the recommendations had been to explore an RFP for food service. Gutierrez went over the RFP process and the time it takes.

Guadiana questioned why they didn't have the data Brunton had spoken about. Gutierrez said that would be a good question but not everything had been documented in prior years. Brunton said she had been looking at some of the line items and some of the details had been very vague and no sufficient detail. That will be something in the future that must be done, and they will be training the staff to make specific notations so it can be tracked easier. Gutierrez said they now require itemized purchase orders and gave the example of previously it might say $500 for snacks and now it will need to have an itemized list of those snacks.

Carrillo asked Gutierrez if she had a plan if the board didn't pass the issuance of an RFP. She said at the very least they would be implementing a really tight system of controls. She will be approving the orders every week, to ensure she knows exactly what has been ordered and why. The board tabled this until the new CFO could meet with the nutrition team and involve them in the process.

Carrillo clarified with Gutierrez that nothing would be finalized until spring and not be implemented until the next school year, and she said yes. They would want the contract to follow the fiscal year.

Caesar Alvarez, Cobre High School principal, brought the athletic handbook with recommended changes for the board to review. He went over all the changes the board had requested and their implementation in the handbook. The conversation on these changes went on for some time.

The board approved the application for IDEA B. This had been tabled before, because Begay had questions she wanted addressed. She said those had been addressed and she recommended they approve the application.

The board approved both contracts for transportation with Montoya Transportation and Porter Transportation. Begay said they had reviewed this in the finance committee meeting. Brett Kasten of Porter Transportation had come and answered all their questions. This would be the fortieth year in student transportation for them.

The board approved the budget adjustment request for pupil transportation. Begay said they discussed it in the finance committee.

The board approved the bills for June and July 2026. Some questions had come up and had been answered on expenditures.

The board approved the credit card statements for June and July 2026. Begay said they had discussed them in finance. They had addressed the food delivery and hotel booking charges. Gutierrez will be speaking to the employees and said they needed to be careful of third party charges in these areas. In the past the coaches have had credit cards. Alvarez said they will be collecting those and when they have turned in a purchase order and it has been approved, they will be signed out for that purchase order. Then they will have to bring it back in with the receipt. Wilguess remember in previous years they had people carrying the credit cards and a person working at what at that time had been a Texaco reported an employee using that Cobre card to fill his personal truck. The board discussed other places misuse had happened.

The board approved the fourth quarter financial report.

Gutierrez went over the stipend schedule changes. All had stayed the same and the only one removed would have created a financial violation. Alvarez spoke about the athletic stipends for some time. He recommended that the coaching stipends be returned back to the finance committee for review. He had spoken to a lawyer that works with Title IX and she had some suggestions, and he went over them. This conversation went on for some time and if they should approve as is and make revisions or table until the next meeting. After much debate they approved the non-athletic stipend schedule and tabled the athletic until further review.

The board did the second reading of the policy advisories concerning teacher residency program, cell phone and device uses in school, cardiac response plan (defibrillators) and child abuse/protection. The board approved all except the one pertaining to cell phones and tabled it. Alvarez spoke to the cell phones for some time. The policy had two options for them to choose from and both being very similar. Alvarez went over how the high school handles the use of cell phones and the progression of offenses at length. Snell Middle School simply does not allow them. Gutierrez said they also need to look at the electronic device portion. In the last board meeting she had brought their attention to smart watches and meta glasses. "We are chasing technology because it is not just cell phones you can communicate with." Alvarez suggested they look at the AI policy also. He suggested a committee to look into it and said he already had some staff members that might be interested in helping.

Guadiana addressed how they could enforce the policy. Alvarez said currently they have guidelines they follow but it will be hard. Guitierrez reminded them that this policy will be mandated by the state. The board went over the current policies they have implemented already.

The board approved the policy referring to the activity fund. Gutierrez spoke to the controls that needed to be put on this fund. She and Brunton have been working on this.

New business

The board discussed the Innovations Program and why it had run out of funds and all other issues of the program.

Gutierrez said she had not been present when all of the situations had taken place but Suzanne Chavira, associate superintendent, had a lot of history and Alvarez would be addressing the program moving forward.

Chavira had gone through emails and documents to provide a timeline of the program. Last year the grant had been released in July 2025. This had been later than in previous years when she had been in charge of the grant and received the acceptance in August and knew what they had but this past year they didn't receive that acceptance until November and it had only been partial approval. The district had been told they could start spending the funding but could not request the funding at that time. Final approval did not come until January 2026. Timesheets could not be turned it for them to be paid until that approval. The students had started working in November at the first approval. They also had planned on 25-30 students, but they had more interested and ended up with 50 students, so they ran out of funding sooner. The funding had only run out two weeks early.

Chavira said in the past they had not spent all the funds ($10,000) and lost them, so they wanted to make sure they spent them. She said this year they would not receive notification until late again, but it would be for three years.

Alvarez said at this time they don't know if they will receive the grant because of no notification yet. He went through an explanation of the program and how it could be used for a number of things besides paying salaries to students. It could be used for training, some dual credit classes and a few other things. This year they would have the business store running and would need product to sell. The woodshop will be doing dog houses and already have three done. They will also be producing T-shirts and hats.

Carrillo said the students had a bad experience not being paid for months and he hoped that didn't happen again. Although they didn't receive their pay until January, they had been paid for all the hours in those months they worked. Chavira said they could have waited until January but had been directed to start the program. She had hoped to pay them and just wait for the reimbursement but had been turned down.

The next five items under new business had to do with the resolutions against Guadiana, Carrillo and Begay brought by them on each other. They spent a great deal of time speaking to the resolutions against one another and providing rebuttals for all of them. This has been discussed at many meetings. Carrillo said he had not wanted to engage in this, but legal counsel had recommended it be discussed. He referred to this portion of the meeting as the Jerry Springer Show. He apologized to the auditors that had attended for having to witness the discussion including anyone online.

Gutierrez provided the forensic audit findings as Guadiana had requested. She had used the special audit and letter issued by Public Education Department (PED) to guide a lot of her decisions currently being made. She had also been in the process of putting the special audit on the Cobre website. It had taken a lot of time because she has been doing it in the evenings and weekends. The special audit had 23 findings, and she had made a document that also included the findings from the fiscal year 2023 audit. It will be a tracking document to know what they have done and what still needs to be done and shared it with not only the board but Brunton and other staff members.

The document has been color coded, and she explained the colors. The deadlines had a red color coding and some that went back to 2024. "These systems of control do not exist, and we are in a precarious financial situation. I've been very clear about that. Some of my words have been misconstrued or taken out of context, but I have been very clear. This district is in financial crisis, and we must address this, or we will never get back on solid footing."

Gutierrez and Brunton have been working on the document and now have received a request from Jaramillo Accounting Group for 120 new items for the audits. As soon as she received it, she assigned items to individual staff members. "We are not going to wait." They will have it all uploaded by September 4, 2026. She credited Charlene Fletcher, executive secretary, for having been the first to gather the things needed on her list and thanked her. Gutierrez said unfortunately some of the items they have requested simply did not exist. "I am committed to be fully transparent with the community, so they know we are moving towards being a stronger district operationally, academically and financially." As the document progresses it will be updated on the website.

Carrillo said he had a simple question but a complex answer. Some of the public knows about the financial crisis and some don't. His question asked, "What is the timeline to be back on track?" Gutierrez said when she had entered into negotiations with the board for the superintendent position, she had made a condition for it to be a two-year contract for her to come because at the time she had the tip of the iceberg knowledge of what had been going on in the district. She had revealed more of the iceberg but knew she would find more.

The board had agreed to the two-year contract and it will be the beginning of getting the district on track. Gutierrez thought it would be a good three to five years. She said Brunton, only being newly in the CFO position had done a lot of work. She asked Jaramillo what her assessment would be.

Jaramillo said she has seen with other entities to fully turn something like this around, cleared findings and stability took two to three years. She added it would not take that long to move through the historical audits that they have pending. Jaramillo warned that it would take the contractor and CFO to do this because no one person could do it. Having a contractor with knowledge of New Mexico school government accounting will be critical.

Jaramillo had no knowledge of the sanction letter from PED in April 2026 and asked to be sent a copy. Gutierrez said she has been in communication with PED, and they have been working to not lose seven percent of their funding. If the progress continued, she felt it could be stopped. She had been receiving complaints for pushing so hard to have things progress forward, but if they lose that seven percent, they will only have enough money to run the district for a month. "We should be held accountable for our lack of progress." The seven percent sanction will still be on the table. She has someone at PED helping to try and not have it imposed. More consequences could come for the district, and she will know in a couple weeks.

Guadiana commented that Gutierrez has been a godsend for the district. In one of the first meetings, she had told the board that the district had been breaking state laws and federal laws. She had demonstrated a path forward and he appreciated her and supported her 1000 percent.

Gutierrez thanked him. She added she has a license in four states to be a superintendent and had no intention of losing her license in any of those states. That meant she has to hold the board, herself and the entire district accountable. "I have worked really hard to be a licensed superintendent in four states, and I am not going to jeopardize that." Wilguess had seen her there still working at all hours and weekends. He scolded her and told her to go home. "We have a long road, and you need your rest to keep up the fight." Gutierrez had taken his advice and been energized spending time with monks in the forest. She had taken the day off and fully disconnected.

Finance committee report

Carrillo said they had a very long meeting and discussed a lot of things. He wanted to bring up board policy and concerning the finance committee and audit committee. He read both in regards to the number and makeup of members and wondered how they had ended up with two members of the public for the finance committee. Gaudiana said it had been a past practice for at least thirty years. Carrillo said that the policy does not support that and wanted to know if they should change it and added legal council had asked that they not have any members of the community on the finance committee. Gutierrez strongly recommended they follow legal counsel advice.

Audit committee

Gutierrez said they had been told the fiscal year 2023 audit report had been done and gone to the state auditor.

Board member reports

Wilguess did not have anything to report currently.

Guadiana had made a trip to Albuquerque to do a deposition.

Begay had well wishes for the students and teachers. She saw they had already almost completed their testing.

Harding wanted to echo the well wishes to the students and teachers. She appreciated them for all they do.

Carrillo wanted to welcome the staff and students back and added no matter what people had seen in this meeting they all had one goal and that would be for the students and staff. "Our kids are our main thing." They had worked together to find a good superintendent and leader. He felt they had. He asked Alvarez if he had found a student representative for them. Alvarez had come up with two individuals. Guitierrez said she and Alvarez needed to coordinate how they would work it out but had wanted the students to be settled in the school year first. She said by September they would have it worked out. Carrillo said he felt that they had made an impact previously.

Superintendent report

Gutierrez said they had a lot of fundraisers happening. They had approved fifteen currently. She went over them briefly. She did voice her concern of oversaturation of fundraisers but added the community has supported the student athletes and activities. She would not stand in the way of any and asked the board to support them in any way they could.

Guitierrez had talked with Chavira and Hardin about losing students to online academics and homeschooling. She has a plan to attract those students back. Alvarez said, "There is no reason Cobre High School can't be a destination high school." In March 2026 they had 871 students and as of the previous week they had 913 students which would be an increase of 42 students.

The board went into executive session for the superintendent to update the board on personnel matters.

The board came back into open session

Meeting adjourned.