PR delays FY23 audited financial statements for commonwealth, PREPA until early ’26

By THE STAR STAFF

Puerto Rico now expects to release its audited financial statements for fiscal year (FY) 2023 -- covering both the commonwealth and the Puerto Rico Electric Power Authority (PREPA) -- by the third quarter of 2026, according to a notice filed with the Electronic Municipal Market Access (EMMA) system.

The statements, originally scheduled for completion this month, were delayed after PREPA informed the Treasury Department that its FY23 audit will not be finalized until the January-March 2026 period, the Dec. 19 filing said.

Timely publication of audited financial statements is a key requirement under the Puerto Rico Oversight, Management and Economic Stability Act, commonly known as PROMESA, for ending the mandate of the Financial Oversight and Management Board. The delay means Puerto Rico remains out of compliance with that condition.

Although the oversight board said recently it was winding down its supervision of Puerto Rico’s finances, officials have cautioned that, without robust fiscal guardrails, the island risks reverting to the chronic deficits that previously contributed to its financial crisis.

The board has emphasized the need for adopting modified accrual accounting practices to ensure that government spending aligns with revenue. Although Executive Order OE-2025-011 mandates agencies to create responsible budgets and promote fiscal sustainability, progress has been inconsistent. Notably, the government has failed to implement uniform financial reporting standards across all entities, with the latest audited financial statements dating back to fiscal year 2022.

Timely audits are crucial for achieving transparency and regaining access to credit markets, as required by the Puerto Rico Oversight, Management and Economic Stability Act, commonly known as PROMESA, for the conclusion of federal oversight. The Government Accountability Office has pointed out that delays in financial reporting hinder investors’ ability to accurately assess risk. To rebuild confidence, Puerto Rico needs to deliver audited financial statements within six months after the fiscal year ends, address ongoing audit deficiencies, and adhere to municipal market disclosure standards, the Board has said.

Despite Puerto Rico successfully restructuring a significant portion of its $72 billion debt, the oversight board warns that achieving genuine fiscal independence hinges on transparency, accountability and structural balance. The board is advocating for legislative reforms aimed at instituting multi-year financial planning, consensus revenue forecasting, and strict debt management policies. Without those measures, officials warn that Puerto Rico’s hard-earned stability could be jeopardized.