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S&P500
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NASDAQ
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NYSE
11418.887
-12.008
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GOOG
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YHOO
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AAPL
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AMZN
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FB
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OFG
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Fiscal Plan proposes cut of 48 agencies by 2018

By on October 16, 2016

In addition to more school closings, the 10-year Fiscal Plan that Gov. Alejandro Garcia Padilla submitted to the Financial Oversight and Management Board recently calls for the consolidation of the 114 agencies and public corporations into 66 by 2018.

The plan doesn’t say if the cut of 48 entities will be accompanied by layoffs but uses the word “attrition,” instead. The plan also calls for the consolidation of procurements to achieve savings.

Gov. Alejandro García Padilla made his first official appearance before Promesa’s Fiscal Oversight Board on Friday, Oct. 14, 2016. (CB / File)

Gov. Alejandro García Padilla made his first official appearance before Promesa’s Fiscal Oversight Board on Friday, Oct. 14, 2016. (CB / File)

“The Commonwealth can achieve efficiency gains by consolidating overlapping agencies and by further centralizing procurement to capture savings.  Puerto Rico’s government is composed of 114 agencies and public corporations with over 519 local and regional offices throughout the island, creating a highly fragmented structure with redundancies and limited economies of scale,” the plan reads.

In order for the Commonwealth to achieve operational efficiencies, the plan says it must continue implementation of the Government Reorganization and Efficiency Plan (EO 2015-23), so as to consolidate local government offices and increase the use of technology and shared services.

It also says it must redesign governmental structures as proposed by Office of Management and Budget and the University of Puerto Rico’s Public Administration Faculty, which will lead to a consolidation of approximately 48 government entities, generating savings in rent and utilities and facilitating future workforce attrition.

“The Commonwealth can benefit from additional operational efficiencies by continuing efforts to ensure that certain purchases of materials and supplies are managed by a new, modern, procurement system in the Puerto Rico General Services Administration, as well as facilitating the process by which local businesses become vendors of the U.S. General Services Administration. This is estimated to achieve approximately 4% in savings,” the plan says.

Read more: Puerto Rico Government Faces Fiscal Oversight Board

In light of the continued decline in enrollment and school utilization, the plan says the Puerto Rico Department of Education (PRDE) will continue to execute its School Consolidation Plan, which it has been carrying out over the last three years. Some 155 schools have already consolidated with academic performance increasing in these schools.

The consolidation process is based on specific parameters such as academic performance, enrollment, school utilization and distance. As it continues to right-size its resources, “the PRDE will ultimately position itself to deliver higher quality education with better compensated teachers.”

The Commonwealth, the plan states, will complete the remaining phases of the PRDE’s restructuring plan, which requires overhauling management and operations to focus on moving personnel from administrative positions back into school-based positions.

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