Tim Walberg Presses Expert On Coordination Between Puerto Rico's Government And Financial Board

5 months ago

During a House Natural Resources Committee hearing before the Congressional recess, Rep. Tim Walberg (R-MI) asked Managing Director at the U.S. Government Accountability Office Michelle Sager about coordination between Puerto Rico's government, federal agencies, and their Financial Oversight and Management Board.

Transcript

00:00The gentlewoman's time has expired. At this time, the chair recognizes the

00:03gentleman from Michigan, Mr. Wahlberg, for five minutes. Mr. Wahlberg. Thank you, Mr.

00:08Chairman. Thanks to the panel for being here. Ms. Sager, what challenges, if any,

00:15does GAO face in assessing the reliability of fiscal data and primary

00:20sources in Puerto Rico, given gaps in federal statistics and delays on local

00:25reporting? We, as you saw in GAO's report issued in June 30th of this year and

00:32reported in this testimony, we rely on certified audited financial statements.

00:37To the extent there are delays in those financial statements, that limits the

00:41visibility into what is really happening within Puerto Rico. So to the extent those

00:47can be delivered more quickly, that will increase transparency and visibility into

00:53where the money is going in Puerto Rico. Thank you. Has GAO observed effective

01:00coordination between FOMB, Puerto Rico's government, and federal agencies? And also

01:07where, if any, is there room for improvement? As part of our work, we do

01:13talk to FOMB. We talk to the government within Puerto Rico. We also talk to federal

01:18agency officials. And as is always the case, as we are doing that work, we look to

01:23corroborate the sources to make sure that we have the most factual information

01:27possible to provide to you as our clients. And as we are doing that, we also follow

01:32up with those agencies and provide them with our draft reports for comment to make sure

01:37that the facts that we are delivering are the facts that are accurate. So you do feel

01:42that there's effective coordination? We did not specifically assess the coordination for the

01:48course of this work, but we did work with each of those parties individually. And then as we have

01:53talked about in this hearing, just as part of the process of delivering a balanced budget, the

01:59government and FOMB are working together as you would hope for under the statutory requirements.

02:06Okay. From GAO's perspective, has the oversight board effectively used its authority

02:13to improve fiscal governance across Puerto Rico's public entities? The new accounting system that we

02:21have talked about reflects both the work of FOMB as well as the work of the government. And so that is

02:26forward momentum that is heading in the right direction. And that, of course, as we all talked

02:32about needs to continue for the next four years in order for it to satisfy the statutory requirements.

02:37Okay, thank you. Mr. Mojica, how does the board balance the use of its authority to enforce fiscal

02:48discipline with the autonomy of elected officials, particularly as Puerto Rico prepares for a

02:55transition back to full local control? Yeah, we take that very seriously. And we are we step in when

03:05there is an issue that directly rates the finances and the budget and fiscal responsibility. Promessa

03:12specifically said part of the mandate is to restore fiscal responsibility. So when there are cases where

03:18actions of the government are going to impact the immediate budget or the long-term fiscal stability,

03:24that is where we step in. And we take it very seriously and we deliberate it before we do it. Other

03:29than that, the government makes policy decisions and continues. You know, one of the things that

03:36early GAO report referenced as to one of the reasons that the bankruptcy happened was because of

03:43bad policy decisions of the government of Puerto Rico. And so we focus on those fiscal policy decisions that

03:51affect the budget and we leave everything else to the government. Okay, thank you. Mr. Chairman, I yield back.

Tim Walberg Presses Expert On Coordination Between Puerto Rico's Government And Financial Board

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