The Office of the Inspector General (OIG) of the City of Albuquerque is an independent entity that has the responsibility for promoting accountability, integrity, efficiency, and transparency in the governance of the City of Albuquerque. Through inspections, reviews, and investigations, the OIG identifies systemic corruption vulnerabilities and recommends improvements to reduce the City’s exposure to fraud, waste, and abuse. The Office’s goal is to improve the function of City departments to ensure they are effective and efficient for the constituents of Albuquerque.
According to City Ordinance 2-17-2, the Inspector General’s goals are to:
- Conduct investigations in an efficient, impartial, equitable, and objective manner;
- Prevent and detect fraud, waste, and abuse in city activities including all city contracts and partnerships;
- Deter criminal activity through independence in fact and appearance, investigation and interdiction; and
- Propose ways to increase the city’s legal, fiscal and ethical accountability to insure that tax payers’ dollars are spent in a manner consistent with the highest standards of local governments.
https://www.cabq.gov/inspectorgeneral/our-department
OIG REPORT FILED
On November 24, the City of Albuquerque Office of Inspector General issued a final Investigation Report with the entitled subject matter “Alleged Improper Use of the Child Care Stabilization Grant Funds by Inappropriately Compensating City Employees Through Bonuses.”
On January 2, the investigation report was released and posted.
You can read the entire 24 page Inspector General Report here:
file:///C:/Users/HP/Downloads/23-0005-N_Grant_Bonus__FINAL_12.02.2024%20(2).pdf
OIG CONCLUSIONS
The city of Albuquerque’s Office of Inspector General (OIG) investigation concluded that a group of city employees, including top administrators in Mayor Tim Keller’s Family & Community Services Department, received more than $280,000 in improper bonuses using money intended to sustain “childcare providers” during the COVID pandemic. According to the investigation report, the OIG found “questionable expenditure” of federal grant funds to 27 employees between 2021 and 2023. More than 10 recipients, including top managers, received nearly $20,000 each. The grant money was supposed to assist in keeping child care providers’ doors open during the pandemic. The Family & Community Services Department now operates under the umbrella of the city’s Youth and Family Services and Health, Housing and Homelessness departments.
BONUSES PAID TO KELLER CITY OFFICIALS
The OIG investigation report states in part as follows:
“Twenty-three out of the 27 employees who received premium pay had annual salaries greater than Preschool staff. Five of those salaries were more than double the Preschool staff’s highest paid salary with one almost tripling the salary of the highest-paid Preschool staff.”
In total, $287,972.77 was distributed to 27 city employees, a majority who worked outside the Family and Community Development Department, which oversees childcare in the city. According to the report, pay ranges for preschool are $32,469 to $42,162 annually. The report goes on to say that the pay ranges for the recipients of the “premium payments” range from $32,468.80 to $123,489.60. The bonuses were $3,878.99 to $22,498.03, with the highest payments given to office assistants, fiscal analysts, a fiscal manager, facilities operations coordinator, and a Child & Family Development Division manager.
The OIG investigation revealed $280,000 of federal grant money went to higher-ranking city staff that included the Family and Community Development Department Deputy Director, fiscal manager and the child and family development division manager. Additionally, two fiscal officers, two payroll specialists and seven fiscal analysts received bonuses.
Twenty-three of the 27 employees received a July 2022 bonus of either $8,533 or $3,878, then in December of the same year, 14 employees received bonuses ranging from $5,400 to $13,000. Among its findings, the OIG reported bonuses, called premium payments, of up to that $22,498 were paid to employees who earned $32,469 to $123,490 annually. The highest bonus of $22,498 went to the Child and Family Development division manager. The position made $88,000 annually before the “premium pay.”
WHAT REVEALED DURING OIG INTERVIEWS
The OIG employs investigators who conducted extensive interviews to determine how the federal grant money was used to pay bonuses.
In city employee interviews during the inspector general’s investigation, employees stated the bonuses were for recruitment and retention, and couldn’t give a formula of how they decided to pay each employee or who would get a bonus. During one interview, the OIG asked “if there were others in the management chain who approved the list of disbursements. In response, one top ranking department official said a spreadsheet of proposed bonuses ultimately went to the “11th floor” of City Hall. The 11th floor is the location of Mayor Keller’s office and city’s executive staff including the Chief Administrative Officer (CAO) and Chief Operations Officer (COO).
Asked if anyone considered “that maybe teachers and direct support staff for the centers should have received more than the other support staff”, the unidentified division manager stated no, ‘it did not come up,’ and they “wanted to be consistent across the board.”
The OIG learned in one interview that all payments went through top-ranking directors “and then got signed off by the CAO (chief administrative officer).” But the report did not identify the name of the CAO. The CAO position changed hands in 2022 from Sarita Nair to Lawrence Rael, who retired in 2023.
Another top administrator in the Family & Community Services Department told the OIG that no one raised any red flags on who was to get the bonuses, and that official thought “it was a good opportunity to do something good” for the employees.
That administrator was quoted as saying that officials “thought they were protected with the guidance on allowable expenses and having key City Management overseeing and approving the disbursements.”
SOURCE OF FEDERAL FUNDING USED TO PAY BONUSES
The source of the funding for the bonuses paid came from the federal American Rescue Plan Act of 2021 signed on March 11, 2021, for child care stabilization grants to help give financial relief to child care providers and defray unexpected business costs associated with the pandemic and to help stabilize their operations “so that they may continue to provide care.” The federal funding was administered by the state of New Mexico.
In 2021, the Federal Government signed the American Rescue Plan Act (ARPA) aimed at assisting local governments during the COVID-19 pandemic. The city of Albuquerque applied for funding through a series of 21 grants filed to the ECECD for approval of the funds. The OIG report states that the grants were completed by a division manager on behalf of 21 different site managers.
The funding, per the OIG findings, was meant to be paid out to providers and other teachers as a means of retention and “designed to stabilize existing childcare businesses”. In 2022, then city councilors approved the grants and the funding that was approved by the state.
OIG RECOMMENDATIONS
The OIG report does not explicitly recommend disciplinary action. In its recommendations, the OIG recommended the city should determine if the extra pay should be recouped or if the city’s general fund should be tapped to repay the amount improperly disbursed. However, a Keller Administration city division director was quoted in the OIG report as saying that the understanding was that “all employees who conducted work on behalf of the division” would receive bonuses.
OIG’S OVERSIGHT COMMITTEE DECLINES TO APPROVE INVESTIGATION REPORT
On January 2, 2025 the OIG’s oversight committee took the unusual action of voting not to approve the OIG report released. The Accountability in Government Oversight Committee, which is comprised of community members appointed by the mayor and City Council, met on November 14 to review and consider the investigative report. The committee found the OIG “lacked sufficient jurisdiction under the city’s Inspector General ordinance to investigate one or more of the allegations.” This is simply a false finding in that according to City Ordinance 2-17-2, the Inspector General’s goals includes “to prevent and detect fraud, waste, and abuse in city activities.” The committee voted 5-0 against approval, stating in a “cautionary statement” attached to the investigative report that “readers are advised to review this published report and its content with the understanding that the Committee did not approve this report.”
REFERAL MADE TO U.S. ATTORNEY
City Council President Dan Lewis issued the following statement in response to the OIG report saying this:
My office is referring this investigation to the U.S. Attorney due to allegations of federal crimes involving the abuse, misuse, and theft of federal funds allocated to high-ranking members of the Keller administration. These funds, approved by the Council, were intended exclusively for early childhood programs as outlined in the grant’s description. However, they appear to have been unlawfully redirected as cash bonuses for the Mayor’s staff.
KOAT TV new legal analyst and private defense attorney John Day offered this analysis of the referral to the US Attorney:
“The real problem for the city is whether or not the Department of Justice, whether the U.S government is actually going to look at this because, across the country, there have been some pretty aggressive investigations and prosecutions by the federal government of entities and people who misused COVID funds. … The big problem for the city government could be is if the Department of Justice, if the U.S government, starts an investigation and determines that money was misused, that could be a problem. It’s a tough job being an inspector general. The pushback from the city is pretty intense. They’re denying that anything improper happened. But the investigation by the city’s independent inspector general showed that people got bonuses, city officials got bonuses when the money was supposed to go to the people who are actually doing the work.”
https://www.koat.com/article/mayor-tim-keller-misuse-funds-albuquerque/63334454
KELLER ADMINISTRATION RESPONDS, LASHES OUT
In response to the OIG report, the Keller Administration responded it did not intentionally misuse the federal grant funds and did not have direction from the federal government on where to appropriate the funds.
Associate Chief Administrative Officer Carla Martinez released the following statement:
“These were employees that kept childcare centers open during the COVID crisis, these were not bonuses, and these were not inappropriate. … Once again the OIG is submitting subjective opinions that were unanimously rejected by her own oversight committee comprised of legal and accounting professionals. This grant provided necessary overtime funding for critical early childhood caregiver programs and management during the Covid crisis.”
Alex Bukoski, spokesperson for Mayor Tim Keller’s office, responded to City Council President Dan Lewis:
“Dan’s comments are at best, a grossly inaccurate overreaction; and worst another in a long line of bitter rants against the Administration since losing his own election bid.”
The links to quoted and relied upon news sources are here:
file:///C:/Users/HP/Downloads/23-0005-N_Grant_Bonus__FINAL_12.02.2024%20(2).pdf
https://www.koat.com/article/mayor-tim-keller-misuse-funds-albuquerque/63334454
COMMENTARY AND ANALYSIS
In 2017, Mayor Tim Keller was elected to his first term as Mayor with great bravado as the white knight State Auditor who stopped “waste, fraud and abuse” and held people accountable for government corruption. That all quickly changed once Keller became Mayor.
Simply put, its nothing but absolute “waste, fraud and abuse” and downright corruption that the Keller administration would approve the payment of bonuses to city hall officials of $5,400 to $22,000 using funding from child care stabilization grants intended to give financial relief to child care providers and defray unexpected business costs associated with the pandemic. The Keller Administration excuse that there was no intent to do something wrong and that it did not have direction from the federal government on where to appropriate the funds rings very hollow and is very disingenuous. The Keller Administration made absolutely no effort to seek guidance on what they could do with the funds. The blunt truth is Keller and his executive staff saw a pool of federal money they could divert and give out as bonuses to reward 27 employees to the tune of $280,000.
The OIG’s oversight committee taking the unusual action of voting not to approve the OIG report released is nothing more than a “white wash” of what happened. The committee found the OIG “lacked sufficient jurisdiction under the city’s Inspector General ordinance to investigate one or more of the allegations.” The conclusion is a false finding by the Accountability in Government Oversight Committee that the OIG overstepped its authority. According to City Ordinance 2-17-2, the Inspector General’s goals includes “to prevent and detect fraud, waste, and abuse in city activities.” The OIG was doing its job of identifying “waste, fraud and abuse.” Instead of being alarmed, the committee appointed by the Mayor and the City Council, have elected to essentially condone the nefarious conduct of the Keller Administration instead of demanding accountability and refund of the bonuses.
City Council President Dan Lewis’ referral to the United State Attorney Office is commendable, but is likely a waste of time and will be ignored given that a new US Attorney for NM will be appointed by Trump. The Keller Administration’s nasty little reaction and personal attack against Lewis for the referral to the New Mexico US Attorney came as no surprise given how Keller has already made it known he is seeking a third 4 year term and he wants to avoid any and all controversy and accusations of corruption.
The City Council needs to take immediate and aggressive action on its own and it has the authority to do so. The federal grant funds, were accepted and approved by the Council for use and were intended exclusively for early childhood programs as outlined in the grant’s description. Therefor the city council has the authority to enact a resolution requiring the return of the $280,000 by those who were paid the bonuses. Any thing less would be the city council condoning the Keller Administrations nefarious conduct.