Wednesday, November 30, 2022
Home   >   Economy   >   Puerto Rico gov’t identifies over $6B in hundreds of bank accounts

Puerto Rico gov’t identifies over $6B in hundreds of bank accounts

By on December 18, 2017

SAN JUAN — The government of Puerto Rico has preliminarily identified over 800 bank accounts in which it has more than $6.8 billion deposited, according to a report published Monday by the commonwealth’s fiscal agency.

The Financial Advisory & Fiscal Agency Authority (Fafaa) undertook a process to identify exactly how much money the central government and its instrumentalities have. Historically, government liquidity has been measured through the local Treasury Department’s main account, or TSA, which only accounts for almost half of the available cash throughout the central government.

On Monday, the commonwealth’s financial control board also issued a statement announcing it will conduct a forensic investigation “into what it understands is over $6 billion held on deposit in recently-published Government bank accounts.” The fiscal panel created by the federal Promesa law will also discuss at its next public meeting in January where the funds come from, what they are used for and the legal restrictions that may exist in their use.

According to Fafaa’s report, the government has identified more than 800 bank accounts with deposits totaling $6.875 billion by Nov. 30. This includes nearly $1.65 billion in the TSA, $491 million in custody of the local Treasury Department and more than $1.7 billion in over 690 bank accounts corresponding to 63 government entities. The document warns that some of these accounts could include funds related to federal programs and, therefore, could be subject to restrictions in its use.

 

Puerto Rico governor to try to prevent passage of federal tax reform

The $6.785 billion figure, moreover, includes the Electric Power Authority ($598 million); Aqueduct & Sewer Authority ($340 million); Highways & Transportation Authority ($63 million); and the University of Puerto Rico ($320 million). Finally, $905 million correspond to funds under the custody of the Sales Tax Financing Corp. (Cofina) trustee and $813 million in other restricted monies related to the commonwealth’s bankruptcy cases under Title III of Promesa.

“The exercise and the inventory described in this presentation had not been conducted by prior administrations,” the report reads, adding this is the first step of five on the process that seeks to shed light over the true state of the commonwealth’s liquidity.

After having identified and validated the bank accounts, an “independent evaluation” will be carried out on the source of the funds outside the TSA, as well as a legal analysis of any restrictions to which these monies may be subject. Then, it will be determined whether there is any excess cash to then establish a way in which the government could gain access to these funds.

“[Fafaa] will be requesting the assistance and participation of the [fiscal board] and creditor groups in these efforts,” Puerto Rico’s fiscal agent added.

For his part, the fiscal board chairman, José Carrión, said that “for too long, the Commonwealth has sacrificed fundamental best practices in financial reporting.” He added that “full transparency of the financial situation has been impossible to achieve without inordinate time, effort and resources.”

During the past few weeks, both the administration of Gov. Ricardo Rosselló Nevares and the board have warned about the delicate liquidity situation that the government faces, particularly after the passage of Hurricane Maria and a sharp decline in government revenues as a result of the natural disaster.

Fafaa’s report shows that as of Dec. 14, liquidity in the main Treasury account (TSA) totaled $1.542 billion.

No special treatment for Puerto Rico’s industrial base under US tax reform

You must be logged in to post a comment Login