Committee releases principles to conduct ‘integral’ public credit audit

Claims effective audit would lead gov’t to ‘not repeat the same mistakes’

By Pedro Correa Henry

Twitter: @pete_r_correa

Special to The Star

On the heels of a joint resolution and two bills filed in the Legislative Assembly to resume the auditing of Puerto Rico’s fiscal debt, the Citizens’ Committee for the Integral Public Credit Audit released on Thursday five principles that it says should guide the pending process and produce results in restructuring of the island’s public credit.

During a press conference held at the Puerto Rico Bar Association in Miramar, the committee, which consists of members from the earlier Committee for the Integral Public Credit Audit created through Act 97-2015 and later repealed by then-Gov. Ricardo Rosselló Nevares through the short-lived Act 22-2017, established regulatory aspects to make the procedure effective enough to resolve the island’s $72.2 billion debt crisis.

Among the regulatory aspects, Citizens’ Committee for the Integral Public Credit Audit Chairman José González Taboada, a certified public accountant, said one of the principles consists of the public credit audit having enough outreach, as the audit should focus on the government’s finances, compliance with judicial requirements and performance. He defined the latter as “why the government issues debts exempt from the U.S. Congress law and the resources provided due to it are used for the people’s benefit.”

“This has been highly questioned as we see how people lack basic services,” the committee chairman said. “We see that services we have such as electricity, water and roads are deficient amid the enormous debt issued.“

“We’re more than aware that we must analyze this deeply, but mostly [we must focus on] the refinancing issued during the 21st century as they have extended the public credit’s lifeline without helping the people,” González Taboada added.

He also said a public credit audit requires “substantial investigative powers” as information from government entities, public officials, and private entities who participated in transactions “are to be examined to conduct an integral audit.”

González Taboada said further that a forensic audit is also important “to see if constitutional and legal provisions were fulfilled and if offenses were committed against Puerto Rico or federal laws when the debt was issued.”

The University of Puerto Rico accounting professor added that he hopes that as a result of an effective audit “the government learns to not repeat the same mistakes.”

“It’s worth nothing coming out of bankruptcy court, it’s worth nothing having access to the stock exchange if the same habits return,” González Taboada said.

Meanwhile, attorney Eva Prados said independence and participatory management is another principle that the public credit audit must accomplish as “any gubernatorial entity that is assigned with the responsibility must have operational, administrative and fiscal independence.”

“This task must also be conducted by people who have independence of judgment and have no conflicts of interest,” Prados said. “It’s not an easy task, because we can’t forget that the earlier debt committees and many government entities are involved in the island’s debt accumulation and structure.”

Moreover, she urged that all meetings and hearings in the course of the public credit audit “must be transparent and should promote enough space for citizen participation and public discussion.”

Trade unionist Roberto Pagán Rodríguez, who chaired the former Committee for the Integral Public Credit Audit, said meanwhile that having enough economic resources to “investigate at least 50 years of governmental transactions” is essential because the public credit audit “requires a full-time team of professionals with the necessary expertise for the assigned task, which requires many hours of document review, interviews, analysis, and report writing.”

“In the earlier committee, $5.8 million was requested to conduct the audit; however, neither the Alejandro García Padilla nor the Ricardo Rosselló administration gave the necessary economic support,” Pagán Rodríguez said. “However, they admitted themselves that there were probable offenses to the island’s Constitution in debt issues, but we could not carry on due to lack of financial aid.”

Constitutional attorney Luis José Torres Asencio said an integral public credit audit “must show an unbreakable commitment to the principles of transparency and access to information, as it is a constitutional right that governs our legal system.”

Torres Asencio pointed out that “audit meetings should be public, hearings should be recorded, broadcast live and released via the internet” to allow citizens to have access to information received about the island’s fiscal debt.