Review of external contracting expenses undertaken by the Electric Power Authority is an appropriate action that must be replicated in other government agencies, as part of the exercise of balancing public finances and reducing unnecessary expenses.
As a rule, hiring professional services, including consulting, should be addressed based on the value of the contribution. In these times of fiscal limitations, there should be rigor of the contracting party as well as cooperation of the contractor.
It is also important to clarify the role that external advisors of public entities should have.
In PREPA, the Oversight Board identified a $ 24 million contract with requirements that contradicted the public company certified plan, and requested corrections. José Ortiz, PREPA´s CEO, acknowledged that the legal agreement granted the consultant operational faculties that are public officials´ duties, such as, for example, following up on projects of the vital reconstruction agenda.
Ortiz explained that, by eliminating tasks that represented duplication of work, the role of the consultant in the contractor´s financial strategies was clarified. The adjustment resulted in $ 12 million savings that, along with other contracts reviewed, total $ 26 million in savings that the corporation may allocate to other uses.
This should motivate rigorous scrutinizing in other dependencies. There have been duplicated, unnecessary -or due to unfulfilled tasks- expenses in the government for decades.
In 2016, the Office of the Comptroller noted that ten municipalities spent $ 3 million in professional and consulting services for defective or uncompleted works. In 2017, government agencies and public corporations signed contracts totalling almost $ 511 million in consulting, advertising and professional services. One-fifth was allocated to companies working in the public debt restructuring.
It is up to each government office to examine the relevance of hiring professional services. They have a duty to save limited funds and ensure the provision of public services. Avoiding task duplication –that raises questions on the transparency of finance management- is a crucial part of the fiscal adjustment.
There was a call in that direction that came precisely from the District Court that addresses the government bankruptcy case. Recently and regarding the high costs of litigation, Judge Laura Taylor Swain ordered the review of millions of legal services bills. In highlighting that Puerto Rican people are paying the contractors' bills, the judge pleaded for moderation in the use of funds to hire lawyers.
The judge wisely called to replace task duplication with collaboration and proper work distribution. Experts in Public Administration and Economics have suggested the same.
The remark of the judge is a wise one. It is necessary for public entities to cast a critical eye on their contracts and to identify those that really serve the mission of public service. The analysis of the level of complicity of tasks should give way to optimize the performance of employees, in addition to end government resource underutilization and external overcontracting. This is how private contractors will work on those areas that due to their complexity and specialization are out of the public service sphere.
Fiscal discipline lies on the basic criteria of analyzing expenses evolution, eliminating what is not necessary and addressing corrective measures.
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