The Financial Oversight and Management Board for Puerto Rico and the Government of Puerto Rico together completed the largest public sector debt restructuring in U.S. history earlier this year. Still, there are plenty more challenges ahead until Puerto Rico firmly turns the stability and predictability provided by the Commonwealth’s Plan of Adjustment into a real and lasting economic growth.
Now that the dark cloud of uncertainty and fiscal instability is lifted, the Oversight Board’s priority is to work with the government to institutionalize transparency, accountability, and fiscal responsibility. Debt restructuring is not enough to ensure Puerto Rico’s long-term economic sustainability. The only way to succeed is by achieving a fiscally responsible post-bankruptcy government.
To that end, the Oversight Board set the stage for a true and much needed transformation of the way government works through a comprehensive Financial Management Agenda. The implementation of the 12 specific initiatives that encompass the agenda will help improve Puerto Rico’s fiscal stewardship and ensure that the government will never fall back into the old practices of overspending, fiscal mismanagement, inefficiency, and underfunding services and commitments made to the people of Puerto Rico.
In simple words, the agenda aims to institutionalize financial management best practices, provide a clear leadership structure and a capable workforce with competitive salaries, and modern technology that will help improve government and instrumentalities.
One key initiative already underway is the Civil Service Reform to enable the government to retain and hire a high-performing workforce.
The agenda also seeks to help the government to make more effective use of the island’s assets through professional and effective management of resources, and prevent waste, fraud, and abuse. Further, the agenda includes the implementation of a time and attendance system to help ensuring that the government pays only actual employees who show up for work, a procurement reform to get more value for taxpayer dollars, steps to better manage cash, and more.
The initiatives are specifically designed to meet the conditions for the termination of the Oversight Board. The implementation of best practices in the budget process, timely issuance of audited financial statements, effective and efficient management of federal funds, and the implementation of the Debt Management Policy that is part of the debt restructuring plan are necessary conditions to fulfill PROMESA’s dual mandate of fiscal responsibility and access to capital markets.
Successful implementation of the agenda requires a deep-rooted commitment by the Government of Puerto Rico to effective financial management as the foundation for a new Puerto Rico, a Puerto Rico that learns from the mistakes of the past and seizes a better future. The Oversight Board is ready to support these efforts and will continue working with the government to provide opportunity to the people of Puerto Rico.
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