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Riddled with errors, the Albuquerque Public Schools' annual financial report underscores a dire need for stronger business management within the district, auditors and school board members say.

Instability in the Accounting Department was blamed for the district's tardy 2005-06 audit and for accounting mistakes that should not have been made, auditors said in findings presented Monday to the Albuquerque Board of Education.

The annual audit was more than a year late to the state Auditor's Office after a special audit was requested to examine how capital funds were being spent.

The special audit found $292,000 in improper expenditures from a $9.8 million state capital spending bill. To correct the error, the district had to reimburse the HB 33 fund from its operations budget, district officials said.

The district also had to make audit adjustments of $14.6 million to reflect property taxes that were not shown as revenue and purchase orders that were improperly reported as expenditures, officials said.

Corrections totaling $53 million had to be made to the district's 2004-05 financial statement to reflect accurate transactions and adjust the district's net assets, which were overstated.

"The most important thing we've learned out of it is we need to have better accountability from the professionals in charge," board member Marty Esquivel said after a 6-1 vote accepting the audit.

"I don't think the problems are insurmountable nor do they keep me up at night," he said.

"There is some instability in the Accounting Department. With better leadership we can address the problems," he added.

Accounting Department Director Lou Anne Boothe was suspended in late September, and the district is still trying to hire a chief business officer.

No one applied for the chief business officer's job after two advertisements seeking applicants. The job will be advertised again, Deputy Superintendent Tom Savage told the board Monday.

Board members asked Savage to submit a plan to stabilize the financial offices of the district.

"APS needs to get their financial house in order," said Robert Lucero, the board's Audit Committee chairman.

"This has been our worst audit and the most confusion we've ever had. They have to clean house in the financial department."

Lucero said while the audit did not turn up any embezzlement or wrongdoing, "What we're in trouble with is housekeeping. There's a lot of messy accounting that needs to be cleaned up."

Auditors recommended the district hire certified public accountants to put its books in order.

Boothe, the district's only CPA, was suspended after reporting alleged wrongdoing and making allegations that capital funds were being misspent. Her former boss, Chief Business Officer Bill Moffatt, left the district in August after she accused him of sexual harassment.

Boothe has filed a federal lawsuit claiming she was retaliated against for reporting alleged wrongdoing to school board members in an e-mail.

District spokesman Rigo Chavez said Monday that Boothe remains on paid administrative leave while a personnel investigation is conducted.