Audit: Woman stole $292k from schools

GALLINA, N.M. (KRQE) - Investigators uncovered one of the largest embezzlements of public money by one person in NM, when an audit revealed that someone stole nearly $300,000 intended for students in a poor, rural school district.

Gallina's breathtaking views make it an idyllic setting, but the grime of crime has stained the landscape.

Jemez Mountain School Superintendent Adan Delgado claimed the district's business manager has been looting the district accounts.

"It has been very traumatic," Delgado said. "I think about classrooms that could be repainted, I think about doors that could have been replaced, I think about pot holes that could have been fixed in the parking lot."

In early June, Delgado noticed financial discrepancies and dug deeper. What the superintendent found had him on the phone with State Auditor Hector Balderas.

"I put the top auditor on this case; he's never seen anything like this in his 25 year career," Balderas said.

Balderas said his investigator found that business manager Kathy Borrego took $292,399 from two district bank accounts in the last 11 months.

"We believe there were fraudulent balance statements created," Balderas said.

Sources close to the investigation said they suspect most of the money went to casinos. Whether or not the money went to gambling, administrators said the district's 375 school children suffered the biggest loss.

"Devastation over the fact that that money could have been used for a better purpose," Delgado said.

The losses discovered so far all happened in the last year, Balderas said.

However, Borrego has worked for the district for nearly 10 years, so auditors are now looking into whether more money may be missing.

Borrego was fired last week, and the Rio Arriba County Sheriff's Department has started a criminal investigation.