OMB opposes proposed federal funds oversight commission
By The Star Staff
Although it recognized the “laudable purpose” of the legislation, the Office of Management and Budget (OMB) opposed a bill Thursday that enhances oversight over the use of federal funds.
OMB officials made their remarks at a House Treasury Committee hearing.
House Bill 1230, authored by Reps. José B. Márquez Reyes and Jesús Santa Rodríguez, would create the Federal Funds Empowerment Law and establish the Federal Funds Empowerment and Oversight Commission that would be attached to the OMB.
The legislation also provides for the creation of the Federal Funds Monitoring and Evaluation System (SMEFF), a cyber portal to manage the processing cycle of applications for federal funds, and the publication of proposals to provide transparency in the use of funds.
“We are aware of the importance of establishing regulations to improve the use and management of federal funds in the government,” OMB adviser Roberto Rivera said. “However, we believe that the main problem is not solved with more regulations, but by strengthening existing structures, providing the necessary tools to our public servants regarding applicable regulations, and executing existing regulations.”
According to the measure’s explanatory memorandum, the OMB has not issued any binding regulations on the use of federal funds and currently, those grants are not subject to the normal budget process despite the various administrative orders promulgated by the agency.
In response to that statement, the agency said it modified its organizational structure this year to include the new Directorate of Federal Grants, whose responsibility is to assist various government agencies and municipalities in managing their federal funds.
Likewise, the agency stated that it was “focused” on strengthening communication channels with entities related to the issue of federal funds, such as the Puerto Rico Federal Affairs Administration in Washington, D.C. and the Puerto Rico Planning Board, to evaluate new proposals.
As for establishing that the Empowerment and Oversight Commission would be in charge of regulating federal funds, the OMB believed that it could be interpreted as an “undue interference” by the state.
The agency considered that such a commission could also entail a challenge of continuity because the appointments of its members are for positions of trust and would be subject to shift changes in the government. Similarly, the legislation provides that one of the members must have five years of experience in managing and fulfilling federal grants.
According to the OMB, the latter regulation could create a conflict of interest since people with experience in the field of federal funds are generally consultants or advisers for federal programs in Puerto Rico.
Puerto Rico has been plagued with cases of corruption but they have involved the use of state funds and not federal funds.