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External Audit Services FAQs

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The FAQ will open the day after the RFP is issued and will close two days prior to the RFP due date.  To submit your questions, scroll down to the “Ask a question” section, enter your name, email address, and type your question in the “Question” box, enter 2 words in the CAPTCHA box and click “Send my question”.

MFA will make every attempt to answer questions within 2 business days.


Frequently Asked Questions & Answers

1. Q: Why is the New Mexico Mortgage Finance Authority (“MFA”) going out for audit?
1. A: MFA is subject to the NM State Audit Act.  The Audit Act requires that we RFP annually, but encourages up to three year renewals.  The current RFP extensions have expired.

2. Q: Are there notes from the Offerors Conference that we can review?
2. A: Unmodified Opinion for 27 consecutive years – MFA is complex, however high level of knowledgeable and qualified staff.  Deputy Director 10 yrs, Controller 22 yrs, Asst. Controller 21 yrs, Staff of 10: Sr. Accts and Accts more than 10 yr., Acct Clerks 6-10 yrs., one vacancy and one new position

Most recent audit is available on MFA website.  Contract will be for one year, with two one-year extensions at the option of the Board.

Financial Statement Presentation
  • • All info provided through PBCs, including system generated F/S
  • • Auditor prepares Word doc – control and Data Collection Form submission
  • • Don’t want finding that we didn’t prepare F/S – response should address requirements of MFA so you maintain independence and obtain comfort that a finding is not necessary
Footnote 2 – Cash & Investments in accordance with GASB40
  • • PBC provided
  • • SIC maturity and rating breakdowns are not available to MFA, usually provided to auditor through confirmation
  • • No prior year findings
  • • HUD HOME is Type A High-risk program under Uniform Guidance by nature of rotation possibly one more Type A for coverage; most likely only one Type B program
  • • Most federal grants are now under Uniform Guidance, not A-133, except Section 8 and loan guarantee programs
Staff Support
  • • Prepare client schedules (over 100)
  • • How do you analyze and dive the data to minimize staff disruption?

Timeline:  Due to OSA 12/1/19, present to Board 1/2020

3. Q: Is the current auditor permitted to bid?
3. A:  Yes

4. Q: Were there any journal entries discovered by the auditors during the 2018 audit process?
4.A:  No

5. Q: How many auditors and how many days were the auditors in the field for interim and final fieldwork?
5. A:  Four to five auditors were doing fieldwork for 3 weeks at interim and 3 weeks at final.  One auditor continued to work from their office after final fieldwork to get the financials issued.

6. Q: What is the MFA’s preferred timing for the audit?
6. A:  The audit is due to the Office of the State Auditor by 12/1.  Interim is normally in July or August.  Final usually begins the last week of October after we have gotten the September books closed and have one week to prepare PBCs; final fieldwork normally ends two weeks into November.

7. Q: Outside of the audit process, what does the MFA find/define value from its auditors?
7. A:  Consultation regarding upcoming GASB changes; may require presentation to the Board, but usually discussions with Management.  MFA does issue bonds frequently and auditor is referenced in the Official Statements.

8. Q: Are there any anticipated major audit issues identified for 2019?
8. A:  No

9. Q: What part of the audit process would the MFA like to improve over the past audits?
9. A:  Efficiency and Communication

10. Q: What transition issues would the MFA be concerned about if the audit is awarded to new auditors?
10. A:  No issues other than training new auditors on MFA processes.

11. Q:  Have there been any significant changes in key staff in the past year that would affect the 2019 audit?
11. A:  No

12. Q: Are there any significant changes in federal funding anticipated for 2019?
12 .A:  No.  There will probably be one or two more new Type B federal programs.

13. Q: Assuming each bidder’s proposed fees are equal, what is the next most important thing to the MFA?
13. A:  Qualifications, audit approach and capabilities

14. Q: Approximately how much in new debt is New Mexico Mortgage Finance Authority issuing for 2019?
14. A:  Approximately $300 million in single family bond issues and $40-50 million in short term advances

15. Q: Is a third party specialist utilized to calculate the market value of the purchased mortgage servicing rights? What method is used to calculate the fair value?
15. A:  Yes, we use Phoenix Capital Analytic Services.

16. Q: For the approximate $810 million of loans owned by others, does MFA obtain a SOC or USAP over the loan servicing? Does MFA service your own loans receivable?
16. A:  MFA does not obtain a SOC or USAP report for loan servicing. MFA services a portion of our portfolio, including single family whole loans, down payment assistance and multifamily loans. The single family MBS portfolio is subserviced by Idaho Housing Finance Agency.

17. Q: We noted there was no OPEB reported. Was there none or was the amount immaterial?
17. A:  MFA is not subject to OPEB.

18. Q: Has MFA evaluated the potential impact of GASB 84, Fiduciary Activities, could have on escrow deposits/reserves? Will MFA need assistance in evaluating the impact of GASB 84 or other GASB’s?
18. A:  MFA has not yet evaluated the impact of GASB 84. Our practice is to evaluate all new GASBs and document the impact on MFA. We always welcome input from our external auditors on the implementation of newly issued GASBs.

19. Q: Page 11, item 9.c. requires a listing of schedules to be prepared by staffing. How much detail regarding the listing of schedules should be included in the proposal?
19. A:  A list is sufficient. We will discuss details with the successful Offeror prior to preparation.

20. Q: Page 12, item 10 requests a list of individuals in the firm qualified to supervise a GAGAS audit. We currently have more than 40 partners that are qualified to supervise GAGAS audits. Do we need to provide a listing of all the partners throughout the firm?
20. A:  You can provide the list included in the Office of the State Auditor firm profile.


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