Welcome!

News Feed Item

Puerto Rico Fiscal 2014 Year-to-Date Expenses Within Budget and Down 6 Percent from Prior Year Period

Results Driven by Payroll Reduction and Department of Education Measures

SAN JUAN, Puerto Rico, Jan. 8, 2014 /PRNewswire-USNewswire/ -- Today, Carlos D. Rivas, the Director of the Office of Management and Budget of Puerto Rico (OMB), reported that Fiscal Year 2014 expenses for July through November were under budget, driven by a 6 percent decline in year-over-year payroll chargeable to the General Fund of the Commonwealth of Puerto Rico, and the implementation of a fiscal improvement program at the Department of Education. 

"The favorable expenditure results for the first five months of the fiscal year are a testament to this Administration's commitment to fiscal responsibility and discipline," stated Rivas.  "Together with the Puerto Rico Treasury's on-target revenue results, the Commonwealth's Fiscal Year 2014 budget has performed as expected on both sides of the ledger."

Payroll expenses chargeable attributed to the Commonwealth's General Fund for the months of July 2013 through November 2013 totaled $962 million, which is $65 million (or 6 percent) below the same period for the prior fiscal year.  The prior year expense was adjusted downwards by $72 million for this comparison, since the employee Christmas bonuses were paid in November last fiscal year and were paid in December in the current year. OMB estimates that there were 8,300 net fewer employees in Executive Branch agencies directly chargeable to the General Fund in November 2013 as compared to November 2012, with 94 percent of the attrition occurring after the current Administration began in January 2013. 

"The substantial decline in year-over-year General Fund headcount has been achieved without resorting to layoffs or reducing essential services to the population," noted Rivas. "The central agencies of the Commonwealth have demonstrated remarkable fiscal discipline to date in recruiting replacement employees."

With respect to the approved fiscal year 2014 budget, payroll for the first five months was $19 million (or 2 percent) under budget.  The total year-over-year payroll decline does not flow down to a payroll surplus for the period because the current budget had already built in some of the projected attrition. 

"The majority of the increase in the approved General Fund budget corresponds to financial obligations that we already had, such as incremental debt service and retirement contributions, which could not be further postponed," Rivas said. "The General Fund budget increase did not imply a higher net operating cost for the Commonwealth agencies; quite the contrary, it was built upon and required the discipline that we have been exercising over the past year."

Driven by payroll figures, OMB estimates that from July to November, overall General Fund expenses against Fiscal Year 2014 appropriations were lower than the approved balances in the Fiscal Year 2014 budget by approximately $135 million.  "We expect this surplus to narrow very substantially as we continue to issue liquidation payments for retired employees, and register further back-loaded expenses," said Rivas.  "However, we do not presently expect the surplus to fully disappear."  This expectation considers a successful implementation of the fiscal management program at the Department of Education; the availability of carryforward and non-General Fund appropriation balances, particularly at the Department of Education; the utilization of contingency accounts in the General Fund budget, including all or part of the $130 million set-aside for sick and vacation leave liquidation; and continued strict hiring oversight by OMB.

Rivas also highlighted two strategic initiatives on the expense side that are yielding results.  First, the Department of Education, the largest and traditionally the most challenging agency from a budgetary perspective, has embarked on an important fiscal management program, including well-publicized adjustments in security, non-essential services and contracting rates, which OMB expects to materially neutralize any expected overdraft at the agency.  The Department continues to develop further fiscal opportunities in the federal funds utilization, transportation, and real estate areas. 

In addition, the Administration has undertaken important steps to balance the finances of subsidized public corporations.  In December 2013, the Governor presented a legislative measure to merge the Maritime Transit Authority, the Metropolitan Bus Authority and the Integrated Transit Authority (Urban Train) into a single entity with improved cost efficiencies, better governance, and dedicated transitional and recurring funding. In July 2013, the Administration implemented in July a new Third Party Administration model across the island whose cost efficiencies, combined with other cost-cutting and revenue measures, have lowered the forecasted deficit of the Public Health Insurance Administration to less than 2.5 percent of revenues.  The Governor also signed an Executive Order to re-engineer the Medical Services Administration, which provides direct support and shared services to certain public health institutions. 

While these public corporations have the option to fund their expenses with substantial fee income or with their own balance sheet, continued success of these initiatives reduces the need for potential large-scale deficit financings, which have been covered in the past with long term General Fund appropriation debt. 

"Puerto Rico continues to pursue, in a determined fashion, our goal to move all our public entities, whether General Fund agencies or public corporations, away from deficits and towards fiscal sustainability," said Rivas.  

Technical notes
The payroll numbers exclude teachers chargeable to the Schoolwide Department of Education mixed state-federal funding pool, which is not classified as payroll within the accounting system (but rather as a non-distributed appropriation), and whose salaries represent close to 10.5 percent of the General Fund budget.  In addition, the payroll numbers exclude the payroll of autonomous non-Executive Branch entities such as the University of Puerto Rico, the Judicial Branch, and other smaller agencies, who receive fixed monthly wired payments, totaling approximately $1,410 million, or 14.4 percent of the General Fund budget.  The headcount figures do include all full time Executive Branch employees chargeable to the General Fund, including all Department of Education employees.  When estimating mid-year expenditure performance, OMB adjusts for multiple timing factors, including the impact of fiscal year contracting cycle on service expenses and analogous concepts; the availability and utilization pattern of discretionary reserve or contingency accounts; utilization of carryforward special appropriation balances; and ramp-up periods for programmatic appropriations. 

SOURCE Office of Management and Budget of Puerto Rico

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
"Storpool does only block-level storage so we do one thing extremely well. The growth in data is what drives the move to software-defined technologies in general and software-defined storage," explained Boyan Ivanov, CEO and co-founder at StorPool, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
ChatOps is an emerging topic that has led to the wide availability of integrations between group chat and various other tools/platforms. Currently, HipChat is an extremely powerful collaboration platform due to the various ChatOps integrations that are available. However, DevOps automation can involve orchestration and complex workflows. In his session at @DevOpsSummit at 20th Cloud Expo, Himanshu Chhetri, CTO at Addteq, will cover practical examples and use cases such as self-provisioning infra...
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory? In her Day 2 Keynote at @DevOpsSummit at 21st Cloud Expo, Aruna Ravichandran, VP, DevOps Solutions Marketing, CA Technologies, was jo...
As Marc Andreessen says software is eating the world. Everything is rapidly moving toward being software-defined – from our phones and cars through our washing machines to the datacenter. However, there are larger challenges when implementing software defined on a larger scale - when building software defined infrastructure. In his session at 16th Cloud Expo, Boyan Ivanov, CEO of StorPool, provided some practical insights on what, how and why when implementing "software-defined" in the datacent...
Blockchain. A day doesn’t seem to go by without seeing articles and discussions about the technology. According to PwC executive Seamus Cushley, approximately $1.4B has been invested in blockchain just last year. In Gartner’s recent hype cycle for emerging technologies, blockchain is approaching the peak. It is considered by Gartner as one of the ‘Key platform-enabling technologies to track.’ While there is a lot of ‘hype vs reality’ discussions going on, there is no arguing that blockchain is b...
Blockchain is a shared, secure record of exchange that establishes trust, accountability and transparency across business networks. Supported by the Linux Foundation's open source, open-standards based Hyperledger Project, Blockchain has the potential to improve regulatory compliance, reduce cost as well as advance trade. Are you curious about how Blockchain is built for business? In her session at 21st Cloud Expo, René Bostic, Technical VP of the IBM Cloud Unit in North America, discussed the b...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
Is advanced scheduling in Kubernetes achievable?Yes, however, how do you properly accommodate every real-life scenario that a Kubernetes user might encounter? How do you leverage advanced scheduling techniques to shape and describe each scenario in easy-to-use rules and configurations? In his session at @DevOpsSummit at 21st Cloud Expo, Oleg Chunikhin, CTO at Kublr, answered these questions and demonstrated techniques for implementing advanced scheduling. For example, using spot instances and co...
The use of containers by developers -- and now increasingly IT operators -- has grown from infatuation to deep and abiding love. But as with any long-term affair, the honeymoon soon leads to needing to live well together ... and maybe even getting some relationship help along the way. And so it goes with container orchestration and automation solutions, which are rapidly emerging as the means to maintain the bliss between rapid container adoption and broad container use among multiple cloud host...
The cloud era has reached the stage where it is no longer a question of whether a company should migrate, but when. Enterprises have embraced the outsourcing of where their various applications are stored and who manages them, saving significant investment along the way. Plus, the cloud has become a defining competitive edge. Companies that fail to successfully adapt risk failure. The media, of course, continues to extol the virtues of the cloud, including how easy it is to get there. Migrating...
Imagine if you will, a retail floor so densely packed with sensors that they can pick up the movements of insects scurrying across a store aisle. Or a component of a piece of factory equipment so well-instrumented that its digital twin provides resolution down to the micrometer.
The need for greater agility and scalability necessitated the digital transformation in the form of following equation: monolithic to microservices to serverless architecture (FaaS). To keep up with the cut-throat competition, the organisations need to update their technology stack to make software development their differentiating factor. Thus microservices architecture emerged as a potential method to provide development teams with greater flexibility and other advantages, such as the abili...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settle...
Product connectivity goes hand and hand these days with increased use of personal data. New IoT devices are becoming more personalized than ever before. In his session at 22nd Cloud Expo | DXWorld Expo, Nicolas Fierro, CEO of MIMIR Blockchain Solutions, will discuss how in order to protect your data and privacy, IoT applications need to embrace Blockchain technology for a new level of product security never before seen - or needed.