In two letters issued Tuesday, the Fiscal Control Board (FCB) reminded the Rosselló Administration that they have the power to review approved legislation and told the Legislature that they’re not exempt from the requirement to reduce contracting expenditures as much as possible, and as quickly as possible.

With these communications, the governing body of public finances in Puerto Rico created by the PROMESA federal law addresses two issues that have caught the eye in the first month of the Rosselló Administration: the speed with which significant legislation has been passed and the defiant attitude that the New Progressive Party-controlled Legislature has shown in terms of its expenses and the Board’s power to pass judgment on them.

The statements were made in a letter to Elías Sánchez, the appointed representative of Governor Ricardo Rosselló on the Board, and to economist Gustavo Vélez, who had requested by writing the Board’s attention to contract expenditures in the Legislature, which had also been called out by NotiCel. Both were delivered last Thursday but were publicly released yesterday,

The Board reminded Sánchez that PROMESA gives them at least three ways to intervene with government actions before a Fiscal Plan is certified:

(A) section 204 (a) (1) – (2), which requires the Governor to submit new laws within seven days of their approval, with an estimate of their impact on government income and expenditures

B) section 207 that requires the Board’s previous authorization in the issuance of any kind of debt

C) section 303 on debt adjustment

‘In all events, the Oversight Board hopes and desires the Governor will engage with it in a productive working relationship by discussing and analyzing with the Board in advance the implications of new legislation. Enforcement actions under PROMESA should be a last resort and will hopefully be unnecessary. Please advise the Oversight Board promptly if the Governor differs’, said the Board in its letter to Sánchez.

As to Vélez, they underlined in the letter that the Fiscal Plan will include the Legislative Assembly and that PROMESA gives them the power to adopt policies to review government contracting and to make sure they are consistent with the Fiscal Plan.

‘Given that under present conditions very significant reductions in government expenditures are inevitable, we believe that all government entities need to do the utmost to reduce expenses, including those relating to professional service contracts, as soon as possible and as much as possible’, they said.

The FCB is funded by the Government of Puerto Rico and it also faces public and legal demands for disclosure of its budget, contracts and other information about its operations and members.

Letter from the Board to Elías Sánchez Regarding the Application of Section 204 of PROMESA – NotiCel_23069

Letter from the Board to Economist Gustavo Vélez Regarding the Puerto Rico Legislative Assembly – NotiCel_23070