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Fiscal board: Puerto Rico power, water utility budgets are noncompliant

By on August 13, 2018

SAN JUAN – Puerto Rico’s  Financial Oversight and Management Board sent notices Monday to the island’s public power an water corporations, informing them that their respective budgets are in violation of their respective board-certified fiscal plans.

The board gave the utilities until Wednesday to submit compliant budgets or risk having to put in force the budgets the panel ends up certifying.

The board said it recognizes that the Puerto Rico Electric Power Authority’s (Prepa) management has been discussing its budget’s certification with the board in advance of the Aug. 17 deadline, but said the budget submitted on Aug. 6 was not compliant with the utility’s fiscal plan.

The board said Prepa has inconsistent budgeted expenses as compared with those outlined in the fiscal plan. Specifically, the board said the budget “does not comply with the operating and maintenance labor expenses as laid out in the Oversight Board Prepa Fiscal Plan for salaries and wages, overtime pay, Christmas bonus elimination and the $125 per month per person cap in medical benefit costs.”

The budget also “does not adhere to various required budget milestone guidelines. Certain key documents and data points required for reasonability testing of projections and budget-to-actual reporting are still outstanding,” the board wrote.

Meanwhile, the board told the Puerto Rico Aqueduct and Sewer Authority (Prasa) that its budget “does not include macroeconomic inputs consistent with the New Fiscal Plan for Puerto Rico as certified by the Oversight Board” and “includes Christmas bonus payments to employees.”

The board asked Prasa to submit a breakdown of operating labor and maintenance expenses, including allotted amounts for the Christmas bonus and healthcare insurance contributions, along with any supporting information and documentation.

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