While the Treasury Department is still working on the structure that will eventually help the government to timely comply with the federal regulation on financial disclosures, one thing is certain: in that new structure, the Chief Financial Officer (CFO) of Puerto Rico will report directly to the Governor.
Although the rule of law in Puerto Rico recognizes the figure of the CFO and grants him the ultimate responsibility for carrying and disclosing the state of the government's finances, the Secretary of the Treasury Raúl Maldonado said that the structure recommended by the Oversight Board will allow the CFO to have direct authority over Budget and Finance personnel in all agencies and public corporations.
Last yaer, El Nuevo Día revealed that Maldonado and the Board were negotiating about the need to design a mechanism for Puerto Rico to catch up and comply with the requirement to disclose financial information on a constant basis. Last April, these conversations were reflected in the certified fiscal plan, and now the strategy begins to take shape, said Maldonado.
Puerto Rico has not complied with the timely disclosure of audited financial statements for almost a decade.
According to Maldonado, the development of the administrative structure of the CFO Office is in the hands of Deloitte & Touche and Conway MacKenzie.
"Other offices can be integrated into the Treasury and then eliminated to create the CFO / Treasury Office," says the certified fiscal plan, which states that the Office of Management and Budget (OMB), the Government Development Bank (GDB), the Fiscal Agency and Financial Advisory Authority (FAFAA), the General Services Administration (GSA) and the Office of Administration and Transformation of Human Resources (OATRH, Spanish acronym) may be eliminated.
Among other things, the CFO Office is tasked with producing $ 72 million in savings to the Treasury and reducing the deficit trend in the government’s special collections funds. Under this unit, the government's financial information systems would also be standardized, all treasury functions and cash management would be centralized, and it would have authority over the budget process, audits, personnel administration and even debt issuance.
Maldonado did not offer details about the prospective consolidation of agencies. However, he announced that under the new structure, supervisory tasks will be divided into accounting and treasury topics and by type of government entity, that is to say, agencies and public corporations. Omar González and Fernando Peña, current Accounting and Treasury Assistant Secretaries in the Treasury Department, will be in charge of supervising agencies and corporations in their respective areas.
"The CFO Office will have authority over all finance directors and all agencies heads in all fiscal measures," said Maldonado. "The idea of the Board is that this (non-compliance in the presentation of financial statements) does not happen, that we have a direct point of contact to make requests."
"This has been done by all the jurisdictions that have come out of problems like this one (failure to comply with the federal financial disclosure requirement). It has been a requirement," said Maldonado, pointing out that the structure of the CFO in Puerto Rico will be similar to that in other states and similar to the role played by finance ministers in other countries.
"There should not be a delay like the one we had under the CFO Office," said Maldonado.
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