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Draft of Puerto Rico’s Fiscal 2014 Statements to be Released this Week

By on February 8, 2016

SAN JUAN — A draft of the commonwealth’s financial statements for fiscal year 2014 will be made public this week, Public Affairs Secretary Jesús Manuel Ortiz told reporters Monday at La Fortaleza.

While due last May, government officials have pointed to a number of reasons for the audited statements’ delayed release, including the commonwealth’s quick-changing fiscal situation, which has prompted the government’s independent auditors, KPMG, to ask for additional projections and disclosures. Moreover, certain commonwealth components have yet to finish their auditing processes, including the Government Development Bank (GDB) and the commonwealth’s largest retirement system.

Ortiz said that as recently as Sunday, KPMG “asked for more documents, a long list of documents,” while noting some of the requested information had to do with liquidity reports for certain public corporations.

On Friday, GDB Chairwoman & President Melba Acosta said during a briefing to Congress staffers that although the commonwealth’s audited financial statements for fiscal 2014 have yet to be delivered, they would only confirm what government officials have been saying all along: the situation is bad.  

“We are not hiding anything,” Acosta noted.

Ortiz said Monday that follow-up meetings held twice a week and led by Chief of Staff Grace Santana continue, while officials expect that a draft of the statements will be publicly released this week.

When asked about if the fiscal 2014 statements would be the last ones to be audited by KPMG, the public affairs secretary said he is in no position to answer that.

“We also have to take into consideration that whichever firm comes in, it would be a more complicated process because it would start from scratch. KPMG already has acquired  knowledge during the process. But this is a determination that hasn’t been made yet, and I’m in no position to answer it,” Ortiz explained.

As part of an ongoing legal case between Puerto Rico and retailer Walmart over a transfer pricing tax, a KPMG representative testified last week in court that the government still owed certain information that was requested as part of the audit, including documents that have not been delivered and others that are still in draft form.

The GDB chief reiterated Friday that the government has provided everything auditors have requested, but “they keep asking for more information,” while noting this is a “high-risk audit,” with multiple layers of reviews.

While the KPMG executive said it would take an additional eight weeks to finish the process once the commonwealth delivers all the necessary documents, Treasury Secretary Juan Zaragoza recently said he believes the audited statements could finally be delivered between “the last week of March and first week of April.” While noting advancements in the auditing process, La Fortaleza has yet to announce a preliminary release date.

Various sectors, including some high-ranking Republican members of Congress, have called for the release of the audited statements in order to have a complete, independent picture of the island’s financials. To that end, Acosta has said, “We have tried to put out as much information as we can so the market understands where we are at.”

Popular Democratic Party President and gubernatorial candidate David Bernier echoed comments monday by lawmakers such as Speaker Perelló demanding the release of the statements.

“The lack of audited financial statements will affect the credibility of the government in its efforts to receive affirmative responses from Congress to address our fiscal crisis and boost our economy. They should put this matter to an end immediately. It is unacceptable and has taken too long,” Bernier said.

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