Fiscal board will accept certain budget allocations if restrictive language is removed

By The Star Staff

The federal Financial Oversight and Management Board has found numerous violations to the fiscal plan in the fiscal year (FY) 2022 budget, but noted that it was willing to accept certain budget allocations if the Legislature repealed other changes, including one that would prevent the governor from reprogramming funds.

The Legislature has until today to make the changes, but lawmakers are rejecting them. House Speaker Rafael Hernández Montañez said he was going to engage in a dialogue with the majority about the requested changes.

The oversight board in a letter last week rejected a $22 million increase in funding for optimization and implementation of changes in management of municipal governments, stating that the money should be conditioned on municipalities meeting certain milestones.

“In addition, there is $22 million of unspent municipal voluntary cost share rolled over from FY 2021, for a total of $44 million available to the municipalities,” the oversight board said.

Board members also rejected language that would allow a scholarship fund at the University of Puerto Rico (UPR) to be used to finance the recruitment of researchers, internships, purchase of equipment, materials and the research operations in any units and properties of the UPR, including agricultural experiment stations and the molecular science building. The oversight board said the funding should be used exclusively for need-based scholarships

The board also rejected language that prevents the Office of Management and Budget (OMB), the Fiscal Agency and Financial Advisory Authority (AAFAF by its Spanish initials), or the Treasury Department, as well as the governor, to authorize the reprogramming or extension of appropriations of prior fiscal years without legislative approval. The oversight board wanted language that suspends “all powers of OMB, AAFAF, and the Treasury, including the authorities granted under Act 230-1974, known as the “Puerto Rico Government Accounting Act” (Act 230), to authorize the reprogramming or extension of appropriations of prior fiscal years,” but rejected the prohibition of the executive branch and the legislative intervention.

The oversight board also wanted to take the Legislature out of language requiring the governor to submit quarterly reports to the board.

Among the numerous changes, the oversight board included language so that utility reserve funds held under the custody of the OMB may only be released after the government provides a detailed report to the board on employees transferred to individual agencies from the Puerto Rico Electric Power Authority (PREPA) following the start of the LUMA Energy contract, along with an attendance report for each transferred individual. In addition, agencies that may receive these funds are required to provide to the oversight board a full roster with all active employees. Such a roster must identify any employee transferred from PREPA to the respective agency.

The oversight board, nonetheless, said it would be willing to accept certain budget requests and reallocations of appropriations if the other changes were revised.

The changes the board was willing to accept include incremental budget requests of $4 million for Legislature employee liquidation costs; $1.7 million for FY 2022 Legislature PREPA/Puerto Rico Aqueduct and Sewer Authority (PRASA) expenditures; $3.7 million for prior period Legislature payables to PREPA/PRASA; and $3 milion incremental Legislature FY 2022 payroll, of which $1.5 million is subject to certain reporting requirements.

Other changes the board was willing to accept included certain reallocations of appropriations within the Legislative Assembly, the $700,000 from Unallocated Capital Expenditures to the Musical Arts Corp. for the Symphony Orchestra, the reallocation of $240,000 from Unallocated Capital Expenditures, and a reallocation to the Institute of Statistics for a study impacting the island’s deaf population.

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