A high-ranking Public Education Department official asked state regulators to determine whether former Española School District business manager Myrna Garcia committed fraud by not informing administrators that two quarters of payroll taxes were not paid, costing the District more than $200,000 in fines and fees.
The mishap involved Garcia’s alleged failure to deposit payroll taxes for the District’s more than 200 employees.
Recently retired Deputy Secretary Paul Aguilar asked New Mexico Auditor Tim Keller to determine whether Garcia may have committed fraud because she allegedly failed to properly communicate the failure to remit the taxes to her supervisor Chief Financial Officer Maria Fildalgo.
According to Aguilar, the late taxes resulted in at least $211,046 in fines and fees for submitting the Sept. 31, 2016 and March 31, 2017 payroll taxes late. If the $73,547 fine the IRS levied against the District for the late payroll taxes from the quarter, ending Dec. 31, 2016, is added, the total fines come to $284,593.
“It was discovered that Garcia has made false statements to the IRS regarding the resolution of the penalties and late fees, representing herself as the party responsible for resolution,” the letter to Keller states. “Fildalgo also indicates that she may have attempted to hide the non-payment by not presenting the information to her supervisor, when she knew, or should have known, such information was required to be reported.”
Aguilar’s letter didn’t mention the $73,547 fine.
The Department’s Budget and Finance Analysis Bureau Director David Craig and Fildalgo refused to answer questions about the late tax payments or why the fine wasn’t included in the letter to the state auditor.
The misrepresentation Aguilar is referring to occurred when Garcia contacted IRS personnel, on March 20, 2017 and April 21, 2017, in an attempt to work out a solution that would involve not having to pay the fines and penalties associated with the errant tax payments.
She attributed the missed tax payments to high turnover in the Business Office and the Department takeover of the Board of Finance.
“The Española Public School District has undergone emergency situations which have resulted in late filings of the September 30, 2016 and December 31, 2016 tax deposits,” Garcia wrote in both letters. “Situations include staff turnover in the business office, to include the Finance Director Jeanette Trujillo, and the Benefits Specialist Minnie Martinez.”
Additionally, Garcia said the takeover meant a loss of access “to bank account, accounting systems and online federal tax filing” and other information she needed to perform her duties.
She requested the IRS waive the payments because not doing so could create harm for the District and its ability to provide instruction to the 3,626 students.
Letter questioned
Garcia maintains the information in the letters was true and that she discussed the matter with former interim superintendent Denise Johnston. However, Johnston maintains she never received the letter, nor discussed the matter with Garcia.
Garcia started in the District’s Business Office as a contractor in early 2016 and was named interim director in March 2016. She replaced the previous director Jeanette Trujillo, when she was placed on paid administrative leave and subsequently terminated.
According to the personnel timeline, only the missed payments from the Sept. 30, 2016 tax period fell under her watch as the business director. The other two missed tax deposits occurred while Fildalgo was the head of the Business Office in December 2016 and March 2017.
While Garcia acknowledges she submitted the tax deposits late for the Sept. 30 quarter, she maintains the deposits were late because she didn’t know they hadn’t been paid until after the Department took over the District’s finances.
“The August to November payments were late,” she said. “I sent them in December, because when I found out, it was around the time PED took over. The payroll taxes were paid through December 2016 before I left for Christmas break.”
Garcia said she is confused by Fildalgo’s assertion that she intentionally submitted the payments late.
“Like I would purposely do such a thing,” she said. “Why would it be fraud? Fraud is deliberate deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.”
She said she met with an auditor’s investigator on Oct. 12 and presented him with documents to “clear her name.”