July 28, 2021

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The Board will offer details of the certified budget

The Fiscal Oversight Board (JSF) meets this Wednesday at its second virtual public meeting to release details of the budget that certified this morning for fiscal year 2021 .

The approved budget , which schedules the income and expenses for the transition year for the general elections of next November, was approved at the stroke of midnight while also certifying the fiscal plans of the 10 municipalities that make up the agency's pilot plan to supervise finances of the municipalities and fiscal plans of the Industrial Development Company (Pridco, in English) and the Corporation for the Supervision and Insurance of Cooperatives (Cossec).

Here you can see the meeting of the Fiscal Supervision Board: [19659004] Four years after its creation by the federal Promesa law, and despite the fact that on this occasion the Legislature approved an operational budget similar to that suggested by the JSF in terms monetary, he again imposed his prescription to finance the services provided by the government for the third time.

This is a consolidated and operational budget greater than the budget for fiscal year 2020. In part, the increase in public spending in relation to fiscal year 2020 seeks to counterbalance the impacts caused by the coronavirus and also responds to the increase in federal appropriations as a result of the pandemic. The consolidated budget for the fiscal year that began today is around $ 22.2 billion.

The government has at its disposal about $ 8.9 billion in federal funds or 17% more than in fiscal year 2020. [19659008] Meanwhile, the budget from the General Fund will be around $ 10,045 million, which is an increase of 5% in relation to the expenditure in the previous fiscal year.

With the beginning of the fiscal year and during the past few days, the JSF set the stage to approve the fiscal plans of the main public corporations such as the Electric Power Authority (PREPA) and the Sewer Aqueduct Authority, proposals that incorporate the capital improvement plan, as well as the consequent increase in the rates they will pay subscribers either to cover the impact of the renegotiation with bondholders or to finance permanent improvements.

Three years without financial statements

On the other hand, the JSF seeks to understand what is the response of the government's delay in the publication of financial statements, one of the aspects that prompted the approval of the federal Promesa law and with which it has not yet been complied with.

The government had to publish last year, the consolidated report (CAFR, in English), but said calendar came to nothing, in part, due to the controversies that surrounded the Department of the Treasury and the division of functions of the chief financial officer and the Ministry of Finance that was promoted while Raúl Maldonado was secretary of the government.

At present, the publication of the financial statements would be the responsibility of the CFO, appointment appointed by the current executive director of the Financial Advisory Authority and Fiscal Agency (Aafaf), Omar Marrero.

However, in a recent interview, the Secretary of the Treasury, Francisco Parés Alicea, established that the Central Accounting division attached to that agency ia was waiting for the forensic analysis of the work of the BDO firm and that the JSF entrusted a third party.

The accounting firm was left in the eye of the storm, after its co-founder on the island, Fernando Scherrer, was accused by the federal prosecution of a ruse with the financier Alberto Velázquez Piñol to obtain government contracts for BDO.

The accounting firm had over $ 50 million in contracts with various government agencies.

Last February, the JSF selected UHY Advisors Inc. to scrutinize BDO's work in terms of both audits and consultancy. BDO was an auditor of the Puerto Rico Electric Power Authority (PREPA), the Puerto Rico Highway and Transportation Authority (DTOP), the Teacher Retirement System (SRM), the Puerto Rico Automobile Accident Compensation Administration (ACAA) and the Corporation for Public Broadcasting of Puerto Rico (WIPR).

To date, the JSF has not disclosed the analysis that would have been made of BDO. However, El Nuevo Día learned that forensic analysis of BDO's work has not yielded significant anomalies or findings about the firm's audit duties for the government.

Last year, a The report of the Office of the Inspector General (OIG) concluded that several of the former employees of the accounting firm BDO had received contracts from the Treasury.

Following the accusations against Scherrer, the government canceled the contracts of the accounting firm and audit in the middle of last year.

In an attempt to achieve the publication of the financial statements, the JSF included in the budget economic incentives for employees to comply with the disclosure that is required by the federal Securities Act to entities of government that borrow on the US municipal capital market.

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