Although the Government celebrated the preparation, presentation and last certification of the first budget elaborated under the guidelines of the federal law PROMESA, the Fiscal Control Board (FCB) stated within the document the conditions to execute a reduction to the working day to ensure compliance with liquidity and savings measures.

As illustrated in section 21 of the Joint Resolution of Special Appropriations for Fiscal Year 2017-2018, if the Board determines that measures to increase collection or reduction of expenditures do not generate sufficient savings to meetthe Fiscal Planprojected revenues and expenditures, the budget will be amended to reflect a reduction proportional to the working day or a reduction proportional to the Christmas bonus granted to public employees.

Similarly, the provision allows the budget to be amended to include both measures, provided it is equal to the negative variance in charges or expenses. These contingency measures are part of the amendments introduced by the FCB and are the only ones that address the likelihood of a mismatch in income and expenditure projections.

On another hand, if the Government fails to comply with the liquidity and savings measures included in the Certified Tax Plan, the Office of Management and Budget (OGP acronym in spanish) may, with the approval of the FCB, transfer assignments between government agencies, accounts, programsor units from different departments or instrumentalities for the budget to comply with the Fiscal Plan. Although normally the OGP has the power to execute these cash movements, it can now only exercise this function with the Board's endorsement.

Board's Amendment Matches Federal Funds for Entities

Another amendment included by the FCB in the current budget gives the secretary of the Treasury the custody of a fund of $ 11,938,000 from the budget fund for matching of federal contributions. However, they are limited to three dependencies of the state with their respective limits. These are:

Vocational Rehabilitation Administration - $ 4,438,000

Municipalities classified as 'non-entitlements' receiving funds from the Federal Government - $ 5,000,000

Puerto Rico Health Innovation Network, entitled to the Department of Health - $ 2,500,000

The funds may only be disbursed by the Treasury if the official of that department that requests a match from that fund certifies to the FCB the allocation that will receive from the federal Government for the match.

These three entities were subject to cuts within the amended budget and did not receive any budgetary allocation. The Vocational Rehabilitation Administration was supposed to receive $ 108,000, the non-entitlements had $ 5 million allocated by the Legislature and the Puerto Rico Health Innovation Network had $ 2.5 million assigned.