Over the last two years, the Financial Oversight and Management Board for Puerto Rico and the Government of Puerto Rico have worked together to improve the process of recording and compensating government employees for their time worked. Together, we have saved tens of millions of dollars for Puerto Rico taxpayers, and together will continue to make progress.
A critical part of the Oversight Board’s mandate under PROMESA is to foster and institutionalize fiscal responsibility and transparency within the government of Puerto Rico. Fiscal responsibility means ensuring the funding of essential public services, and improving fiscal governance, accountability, and internal controls. In other words, using all available resources effectively and as intended, for the benefit of the people of Puerto Rico.
In late 2020, the Oversight Board became aware of at least $80 million in payments made by the Puerto Rico Department of Education (PRDE) to employees who had resigned, were retired, were deceased, or otherwise not working because PRDE lacked an automated system that ensures only employees who are working get paid. The Oversight Board then began a comprehensive process, at all government agencies, to implement automated time and attendance systems that are linked to payroll.
Now, five agencies have completed the process and dozens more are in various stages of implementation of this project by the Oversight Board and the Financial Advisory and Fiscal Agency Authority. Some of the agencies included are the Department of Health, Department of Labor and Human Resources, Department of Justice, and the Medical Services Administration.
The initiative has saved an estimated $50 million so far. This estimate is based on annualized projections of time-off not registered at the five agencies that have completed the project. Eventually the project will include around 100,000 employees at 86 agencies.
Most government agencies in Puerto Rico have an automated time and attendance system in place, but the link to payroll is often missing.
This link is crucial. When information does not flow from the time and attendance system to payroll, there is no immediate financial consequence to employees who are absent without notice. Even when agencies have policies and manual systems in place, such procedures often create reporting lags that lead to costly errors.
Employees also benefit from a system that automatically provides accurate sick leave and vacation balances. Many agencies were not able to easily deliver this information due to delays and inaccuracies generated by manual processes.
The Oversight Board will continue to work with the Government to complete the implementation of this initiative government-wide by May 2024. The initiative is a major step towards increasing transparency, fiscal responsibility, and accountability.