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Puerto Rico board says gov’t failing to fulfill reporting obligations

By on June 20, 2019

The fiscal board’s executive director, Natalie Jaresko; member Ana Matosantos; and Chairman José Carrión (CB file)

Requires budget-to-actual reports by June 30

SAN JUAN — In a letter to Puerto Rico Gov. Ricardo Rosselló published Thursday, the island’s federally established Financial Oversight and Management Board said the commonwealth government failed to comply with the Puerto Rico Oversight, Management, and Economic Stability Act of 2016 (Promesa) because it has yet to submit certain financial and budget reports.

On Dec. 3 the board sent a letter to inform the governor that over several months and across multiple areas, the government had failed to fulfill its obligations and that situation had to be corrected.

Board Executive Director Natalie Jaresko’s letter Thursday says the government did not submit, when due April 15, budget-to-actual reports for the University of Puerto Rico (UPR) and the Highway and Transportation Authority (HTA) for the third quarter of fiscal year 2019, as required by Section 203(a) of Promesa, which seeks to prevent the government from deviating from the certified budget. The letter included templates to make it easier for the government to submit the documentation, which the panel now said must be submitted by June 30.

The board also noted that the government did not submit budget-to-actual reports for Prepa, HTA and UPR for fiscal year 2018 and asked these be submitted by the new June 30 deadline. From now on, the board said, the government will also be required to publish public quarterly Section 203(a) reports one month after they are submitted to the board.

“Moreover, HTA and UPR have never submitted a complete Section 203(a) report. Although we have shared the required reporting template several times with your staff, we are including again with this letter the templates for HTA and UPR as Appendices A and B, respectively. Moreover, although PREPA [Puerto Rico Electric Power Authority] submitted a 203(a) report, it was submitted late,” the letter reads.

In addition, the board asked that third-quarter reports for the commonwealth, Prepa and the Puerto Rico Aqueduct and Sewer Authority (Prasa) be published by June 30; the HTA and UPR’s reports by July 31; and the fourth quarter and annual reports for all by Aug. 15.

Since April 2018, the commonwealth fiscal plan that the board certified has required public reporting of the government’s financial and budgetary data to improve fiscal governance, accountability and internal controls, Jaresko stressed.

“While there has been substantial progress made in terms of reporting, there is a substantial list of reports that (1) are not being submitted to the Oversight Board and/or (2) are not being made public,” she said, including an appendix with a list of the reports.

Besides now requiring the internal and public reporting chain to be restored by June 30, “we will be sending letters to the heads of specific instrumentalities outlining non-compliance with their respective Fiscal Plan reporting requirements,” she said.

Jaresko also said the government has violated Section 204(a) of Promesa, which requires the governor to submit to the board each approved law no later than seven business days after its enactment, along with a cost estimate and certification of compliance or non-compliance. She said the government had not submitted documents for multiple laws enacted in 2018 and 2019.

The letter included a list of 51 laws and 53 joint resolutions approved in 2018, as well as 23 laws and 25 joint resolutions enacted and approved during 2019, for which the board said the governor did not provide the required documentation.

“In order for the Oversight Board to discharge its responsibilities under Promesa, please submit the required documentation by June 30, 2019. We are, as always, available at your convenience to meet and discuss these issues,” Jaresko concluded.

Caribbean Business left the government a request for comment on the letter.

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