Sunday, November 17, 2019

Zaragoza Accepts Blame For Delay In Audit Of Government Finances

By on February 5, 2016

SAN JUAN — Treasury Secretary Juan Zaragoza admitted Thursday that the reason the accounting firm KPMG has not finished an audit into the government’s finances for 2014 is because the government has failed to give the company all the necessary documents to do so.  

Zaragoza made the admission during questioning in the federal trial involving a lawsuit filed by Walmart challenging the constitutionality of the alternative minimum tax it will pay on goods purchased from foreign affiliates.  The Secretary did not provide explanations for the delay. 

One of the documents the government has not submitted to KPMG is the final version of a “going concern memo,” a document that says that a business or entity has the intention or can continue to operate in the forseeable future.

A KPMG executive testified earlier this week that a draft of the “going concern memo” received in January casted doubt on the government’s ability to operate.

Walmart lawyer, Neal Manne, asked Zaragoza Thursday about a quote from the memo that said “There is significant doubt about Puerto Rico’s ability to continue as a going concern.”

“Do you agree?” Manne asked.  “Yes,” Zaragoza replied.

The memo also said there was substantial doubt the Government Development Bank could continue as a going concern. Zaragoza said that in the event the GDB loses liquidity, he is the one who must ask a court to put the GDB in receivership.  

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