Oversight Board certifies fiscal year 2027 Commonwealth budget
The Financial Oversight and Management Board for Puerto Rico certified the jointly developed Commonwealth budget for fiscal year 2027, which began on July 1, 2026. This marks another step forward in ensuring that the Government of Puerto Rico meets PROMESA’s mandate for responsible and disciplined fiscal management.
Oversight Board Executive Director Robert F. Mujica, Jr. said, “Many steps need to follow to transform the budget process to ensure Puerto Rico maintains the stability achieved under PROMESA.”
The Puerto Rico Government has made progress towards adopting modified accrual accounting standards as required under PROMESA. But timely audited financial statements remain essential to restoring Puerto Rico’s access to the capital markets — a central purpose of PROMESA and a condition for the Oversight Board’s termination.
More than two-thirds of the Government’s budgeted expenditures in the 2027 budget go to health, education, public safety, housing, and government pensions. But total spending is about the same as the previous fiscal year’s budget, reflecting slowing tax collection and uncertainty around the Government’s future revenues. The budget also prepares Puerto Rico for significant risks ahead, including the continued loss of federal funding and the rising Medicaid costs associated with increases in healthcare provider contracts.
Additionally, as part of the fiscal year-end closeout process, the Oversight Board certified an amended fiscal year 2026 Commonwealth budget that incorporates previously unbudgeted revenues and allocates resources to key fiscal and operational priorities.
This revised budget, however, is certified as a budget developed by the Oversight Board rather than jointly with the Government because the Governor and the Legislative Assembly did not reach a consensus on the conditions governing the disbursement of the proposed appropriation for the municipal road improvement plan and did not agree to the Oversight Board’s proposed alternative framework.
The revised 2026 budget reflects additional funding to strengthen Puerto Rico’s long-term fiscal stability, including increased support for the rate stabilization reserve for the Puerto Rico Electric Power Authority (PREPA), the Department of Education and the Agricultural Enterprises Development Administration’s Coffee Program, which continued to face a structural deficit.
Oversight Board proposes settlement of PREPA debt
The Oversight Board has proposed a settlement to substantially reduce PREPA’s debt, offering non‑settling bondholders $3 billion in cash, new bonds, or a combination of both, as announced on June 1, 2026.
“Puerto Rico must be able to move forward. We urge the non-consenting bondholders to accept the offer and bring PREPA’s bankruptcy to a close,” Oversight Board Executive Director Robert F. Mujica, Jr. said.
“The Oversight Board has moved substantially — through both our Plan of Adjustment and now in mediation — to reach a fair and fiscally-responsible resolution.”
The settlement offer reflects the direction of the U.S. District Court for the District of Puerto Rico, which has jurisdiction over PROMESA, to continue mediation to attempt to reach a consensual agreement to resolve PREPA’s debt crisis.
“This offer represents a serious, good-faith path to conclude this case,” Mujica stated.
Resolving PREPA’s bankruptcy under Title III of PROMESA is an important step toward Puerto Rico’s long-term fiscal recovery, supporting reliable and affordable electricity and creating greater certainty for future investment.
Oversight Board approves OATRH’s Compensation Administration Regulation
For the first time, the Central Government of Puerto Rico has a single, uniform, binding set of rules governing how every compensation decision is made for the roughly 23,000 career and trust employees covered under the Government of Puerto Rico Human Resources Administration and Transformation Act (Act 8-2017).
The Oversight Board has approved a new Compensation Administration Regulation, submitted by the Office of Administration and Transformation of Human Resources (OATRH), which creates a statutory framework for compensation decisions across the Central Government of Puerto Rico.
For decades, government agencies operated under different compensation structures, making it difficult to ensure consistency, competitiveness, and transparency. The new regulation changes that, by aligning compensation decisions with skills, labor market conditions, and fiscal discipline.
Developed through a collaboration between OATRH and the Oversight Board, the regulation helps create the conditions needed to attract and retain talent, support employee development, and strengthen government services for the people of Puerto Rico.
This is an important milestone in the ongoing effort to modernize Puerto Rico’s public sector and build a government that is prepared for the future.
Oversight Board Deputy Executive Director Arnaldo Cruz, Workforce and Education Excellence Director Jesús González, and OATRH Executive Director Facundo Di Mauro Vázquez sat down with El Nuevo Día to explain the new regulation in detail.
Read our blog to learn more.
Institutionalizing fiscal safeguards in Puerto Rico’s budget process
The Puerto Rico Legislative Assembly has approved two significant measures aimed at strengthening the island’s long‑term fiscal governance and improving the management of public resources.
House Bill 1261, which passed unanimously, establishes the Budget Stabilization Reserve Fund under the custody of the Office of Management and Budget (OMB). The measure is designed to reinforce the Government’s financial stability by creating a permanent reserve structure, with specific rules for use and refunding maintenance, accompanied by legislative oversight. The bill also requires the Government to establish a five-year financial plan and to adopt a formal economic outlook and revenue forecast process, essential financial management practices for long-term planning and sustainable fiscal responsibility.
House Bill 1262, also passed unanimously, creates the Puerto Rico Government Public Capital Projects Fund. This new framework seeks to modernize how the Government plans and manages public capital investments by separating long‑term infrastructure projects from recurring operational expenses. It introduces structured planning, project‑specific budgeting, and strengthened controls intended to ensure that capital initiatives meet established standards for scope, cost, and performance.
Approved by the Legislature, these measures are awaiting the Governor’s signature to become law.
Oversight Board welcomes 2026 summer internship participants
Oversight Board Deputy Executive Director Arnaldo Cruz with summer internship participants.
The Oversight Board’s Summer Internship Program launched on June 15, welcoming 13 students from a wide range of academic disciplines for an immersive 8‑week experience. During their first week, interns completed onboarding sessions introducing them to the Oversight Board’s mission, structure, and core initiatives, while also providing opportunities to connect with staff and fellow interns.
Since then, the interns have been actively contributing across multiple workstreams. Their work includes supporting ongoing projects, conducting research, and assisting with initiatives that promote Puerto Rico’s fiscal and economic advancement.
In addition to their daily responsibilities, interns are participating in a series of leadership speaker sessions led by Oversight Board directors and senior leaders including Executive Director Robert F. Mujica, Jr., Deputy Executive Director Arnaldo Cruz, and Workforce and Education Excellence Director Jesús González.
This internship program represents an important investment in developing Puerto Rico’s next generation of talent—equipping students with real‑world tools and experiences that will support their academic and professional growth.
In the news:
June 22 and June 27, 2026
During exclusive interviews with El Nuevo Día and El Vocero, Oversight Board Chair Arthur González, former Chair David Skeel, and Executive Director Robert F. Mujica, Jr. discussed the progress achieved under PROMESA. Both Oversight Board Chairs and Mujica highlighted the steps that need to be taken by the Government going forward.
June 26, 2026
In an interview with El Nuevo Día, Oversight Board Executive Director Robert F. Mujica, Jr. discussed why modified accrual accounting standards are a requirement for the Government’s budget development process under PROMESA. Mujica also outlined how this rule improves the way the Government recognizes expenses, revenues, and obligations.
Stakeholder engagement:
June 4, 2026
Oversight Board Executive Director Robert F. Mujica, Jr. and Deputy Executive Director Arnaldo Cruz participated in the Internal Auditing Forum hosted by the College of Certified Public Accountants of Puerto Rico (CCPA), where they discussed key issues surrounding public procurement. They also discussed the implementation of Act 73-2019 and the new General Services Administration (GSA) procurement regulation, emphasizing the importance of the act and regulation for modernizing procurement processes and promoting greater efficiency, compliance, and integrity across Puerto Rico’s public sector procurement.
From left to right: Oversight Board Deputy Executive Director Arnaldo Cruz, Oversight Board Executive Director Robert F. Mujica, Jr., and CCPA Internal Auditing Committee Chair Harry Santiago Pérez
June 23, 2026
Oversight Board Executive Director Robert F. Mujica, Jr. met with the Puerto Rico Fiscal Agency and Financial Authority’s (AAFAF) summer interns to talk about his professional background and experience and answer questions about the Oversight Board. Mujica discussed the Oversight Board’s role in Puerto Rico’s progress toward fiscal stability, the requirements under PROMESA, and key updates on the advancement of Puerto Rico’s economic recovery.
June 26, 2026
Oversight Board Deputy Executive Director Arnaldo Cruz and Workforce and Education Excellence Director Jesús González joined OATRH Executive Director Facundo Di Mauro Vázquez to deliver a training session for government employees, providing an overview of the Compensation Administration Regulation, its implementation requirements, and its role in advancing Civil Service Reform in Puerto Rico.
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