An audit by the New Mexico Office of the State Auditor accuses Western New Mexico University (WNMU) officials of violating policies and misusing taxpayer funds, following earlier reports of lavish spending by WNMU President Joseph Shepard and his associates.
The audit, released in mid-November, highlights concerns over the misuse of taxpayer funds, including a $25,500 trip to a Ritz-Carlton resort and over $214,000 spent on unauthorized domestic and international travel by Shepard and others.
“University management and the Board failed to uphold their fiduciary responsibilities, by neglecting to adhere to the corresponding elements as established in the University’s policies, procedures, and rules regarding travel, per diem, and procurement,” the audit states.
The audit found that WNMU management and the Board of Regents failed to follow the university's own policies on travel, procurement, and per diem spending. The report also criticized the university’s leadership for wasteful expenditures on luxury travel and personal expenses, some of which violated university rules.
State Auditor Joseph Maestas addressed the findings in a statement included with the audit.
"Effective governance is crucial in setting the tone at the top, embracing accountability and transparency, and ensuring that all employees understand the importance of these controls and adhere to them diligently," Maestas said. "Without strong and committed leadership to reinforce the internal control system, the university remains at significant risk for fraud, waste, and abuse."
Despite these findings, Shepard, his wife Valerie Plame, and other board members have not faced consequences. Shepard, in particular, continues to receive high marks for his performance, including a $50,000 bonus awarded by the Board earlier this year.
While WNMU defends its actions, the financial mismanagement has raised concerns among local residents and state officials.
State agencies, including the New Mexico Ethics Commission and the Attorney General's office, are now investigating the matter further. However, it remains unclear whether criminal charges will be pursued.
In response to the audit, WNMU claims steps have been taken to address the issues.
Board of Regents Chair Dr. Mary Hotvedt issued a statement, shared by WNMU with The New Mexico Sun, acknowledging the seriousness of the findings and emphasizing that WNMU leadership is taking corrective action.
“As Chair of the Western New Mexico University Board of Regents, I appreciate the time and insights from the Office of the State Auditor,” Hotvedt said. “These are serious concerns, which have been addressed by Western New Mexico University leadership. This includes a comprehensive review of cost disparities; updating of University policies to align with applicable state guidelines and regulations; revised travel and procurement procedures, as well as staff training to ensure compliance; and initiating an independent cost-benefit analysis of international initiatives. The University has also engaged an independent auditor to conduct a special audit of the concerns raised. This is ongoing.”
Hotvedt also pointed out that the state auditor had acknowledged WNMU’s efforts to address the concerns.
“We also appreciate that the Office of the State Auditor also acknowledged the hard work of the University, writing ‘The OSA is encouraged that since these concerns were first publicly revealed, WNMU’s governing body and management have taken proactive steps to strengthen the University’s internal control structure as well as engage in an external forensic special audit to further review these and related issues,’” she said.
She reaffirmed the university's commitment to its mission and focus on student and community success.
“This insight from the State Auditor and others, in conjunction with the leadership of our Board of Regents, reinforces Western New Mexico University’s path forward of focusing on student and community success,” she said.
