The Cebu City Council wants the Financial Management Advisory Committee revived to oversee City Hall’s financial standing.
Councilor Margot Osmeña said that the City Council should also be represented in the Financial Management Advisory Committee (Fimac) even if the appointed representative would be an ally of Mayor Michael Rama.
City Treasurer Ofelia Oliva assured the council that she would be writing Rama on the matter.
Legislators requested for Oliva’s presence in an executive session yesterday morning to discuss the perceived “lack of authority” in placing at least P165 million in city funds in a five-year time deposit with two commercial banks.
The time deposits that Oliva made on Dec. 22, 2010, and Jan. 20, 2011, respectively is giving City Hall a revenue of about P700,000 a month from the interest or a total of P42 million in five years period.
Time deposits were discovered when Oliva appeared before the council in December 2011 to explain the city’s financial standing and justify the release of P10,000 in bonuses.
“It is commendable that these time deposits earn the city P700,000 a month. But the question is, who authorized you to make the time deposits?” said Osmeña.
Oliva said it was former mayor and now south district Rep. Tomas Osmeña who authorized her to place City Hall’s money in the time deposit accounts in July 2009.
Oliva said City Council resolution 03-0785 passed in 2003 allowed Fimac to invest in treasury bills and other government bonds and securities for and in behalf of the city government. Fimac then was also authorized to withdraw, transfer and open time deposits.
When it was still operational, Fimac was headed by former city administrator Juancho Montecillo with former councilor Jocelyn Pesquera as one of its members. It existed until 2009.
Going over City Council records, Councilor Noel Wenceslao said that the grant of authority to negotiate with government depository banks always have an expiry date.
Wenceslao also cited Commission on Audit (COA) circular no. 92-382, which states that “the province, cities and municipalities may deposit with duly authorized depository banks idle funds in the General Fund under time deposit accounts, upon prior authority of the Sanggunian and the approval of the chief executive.”
Oliva said placing available funds on a time deposit or investing these on bonds is an investment strategy that will ensure higher yields in interest rates.
In Oct. 26, 2011, the council authorized acting city treasurer Tessie Camarillo who replaced Oliva, to negotiate with government banks for the opening of time deposits.
The authority that the council granted on Camarillo expired on Dec. 31, 2011.
Shortly after she was again named city treasurer to replace Camarillo, Oliva wrote the council on Feb. 1, 2012, to ask for extension of the city treasurer’s authority to negotiate with government depository banks.