The state Securities Division is siding with the Bernalillo County treasurer on a question over the legality of some investments.
State auditors last week said the treasurer had violated state law by depositing about $2.4 million in financial institutions outside the county. State law requires that such deposits be made in banks with local branches, auditors said.
Treasurer Manny Ortiz disputed that, and other county treasurers asked the state for clarification.
In a letter this week, Alan R. Wilson, director of the state Securities Division, said his office believes the deposits in question aren’t subject to the geographic limits in state law. That’s because, among other things, they’re more like investments than traditional deposits in a bank, he said.
The certificates of deposit questioned by auditors are “brokered” CDs bought on the secondary market and have a CUSIP identification number, a code used for securities, Wilson said in his letter.
The audit finding on CDs was one of many in a 200-page report released last week. Auditors also questioned the propriety of pay raises to top employees, the treasurer’s compliance with the state Open Meetings Act and a variety of record-keeping practices.
In a written statement Thursday, State Auditor Hector Balderas noted that the Securities Division letter didn’t address other county problems revealed by the state audit.
He encouraged county treasurers across the state to confer with their county commissions to decide how to proceed on certificates of deposit.
As for Bernalillo County, Balderas said: “The audit identified certificates of deposit issued by banks located outside of New Mexico, despite state law’s requirement to keep deposits within county boundaries and certain instances in which local banks offered higher returns for the taxpayer.”
Ortiz and others in his office say they’ve handled county money prudently and in accordance with state law.