Click here to close now.


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
SYS-CON Events announced today that MobiDev, a software development company, will exhibit at the 17th International Cloud Expo®, which will take place November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software development company with representative offices in Atlanta (US), Sheffield (UK) and Würzburg (Germany); and development centers in Ukraine. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobi...
According to Forrester, public cloud platforms are evolving, blurring the lines between Software as a Service (SaaS), Infrastructure as a Service (IaaS), and Platform as a Service (PaaS) in order to satisfy the needs of enterprises and widen their appeal to developers. In The Forrester Wave™: Enterprise Public Cloud Platforms, Q4 2014, Forrester evaluates the 16 most significant Enterprise Public Cloud Platforms and details how each vendor fulfills the 19 evaluation criteria points.
Today, we are in the middle of a paradigm shift as we move from managing applications on VMs and containers to embracing everything that the cloud and XaaS (Everything as a Service) has to offer. In his session at 17th Cloud Expo, Kevin Hoffman, Advisory Solutions Architect at Pivotal Cloud Foundry, will provide an overview of 12-factor apps and migrating enterprise apps to the cloud. Kevin Hoffman is an Advisory Solutions Architect for Pivotal Cloud Foundry, and has spent the past 20 years b...
Data loss happens, even in the cloud. In fact, if your company has adopted a cloud application in the past three years, data loss has probably happened, whether you know it or not. In his session at 17th Cloud Expo, Bryan Forrester, Senior Vice President of Sales at eFolder, will present how common and costly cloud application data loss is and what measures you can take to protect your organization from data loss.
The broad selection of hardware, the rapid evolution of operating systems and the time-to-market for mobile apps has been so rapid that new challenges for developers and engineers arise every day. Security, testing, hosting, and other metrics have to be considered through the process. In his session at Big Data Expo, Walter Maguire, Chief Field Technologist, HP Big Data Group, at Hewlett-Packard, will discuss the challenges faced by developers and a composite Big Data applications builder, foc...
The cloud has reached mainstream IT. Those 18.7 million data centers out there (server closets to corporate data centers to colocation deployments) are moving to the cloud. In his session at 17th Cloud Expo, Achim Weiss, CEO & co-founder of ProfitBricks, will share how two companies – one in the U.S. and one in Germany – are achieving their goals with cloud infrastructure. More than a case study, he will share the details of how they prioritized their cloud computing infrastructure deployments ...
SYS-CON Events announced today that has been named a "Bronze Sponsor" of SYS-CON's @DevOpsSummit Silicon Valley, which will take place November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. provides open-source software ELK turned into a log analytics platform that is simple, infinitely- scalable, highly available, and secure.
DevOps delivers remarkable results. But does it help all of IT? Can traditional ‘mode 1’ IT benefit as much as innovative ‘mode 2’? How about the rest of your business? Or have you just shifted your bottleneck? And if so, what can you do about it? Improving dev and ops is necessary, but not sufficient. It often just shifts the burden sideways (e.g., to PMs, SQA, InfoSec, DBAs, NOC, etc.), upstream (to the PMO, Controller, Business Liaison, etc.), or downstream (to TechPubs, Service Desk, Traini...
Decisions about budgets and resources are often made without IT even having a seat at the table. As technologist we understand the value of DevOps - but do your business counterparts? If they don't, your DevOps initiatives could lose funding before they start. In her session at DevOps Summit, Jeanne Morain, Strategist / Author at iSpeak Cloud, LLC, will provide insights on how to bridge the gap between business and technology leaders. Attendees will learn prescriptive guidance on balancing wor...
Interested in leveraging automation technologies and a cloud architecture to make developers more productive? Learn how PaaS can benefit your organization to help you streamline your application development, allow you to use existing infrastructure and improve operational efficiencies. Begin charting your path to PaaS with OpenShift Enterprise.
The modern software development landscape consists of best practices and tools that allow teams to deliver software in a near-continuous manner. By adopting a culture of automation, measurement and sharing, the time to ship code has been greatly reduced, allowing for shorter release cycles and quicker feedback from customers and users. Still, with all of these tools and methods, how can teams stay on top of what is taking place across their infrastructure and codebase? Hopping between services a...
SYS-CON Events announced today that Machkey International Company will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Machkey provides advanced connectivity solutions for just about everyone. Businesses or individuals, Machkey is dedicated to provide high-quality and cost-effective products to meet all your needs.
Clutch is now a Docker Authorized Consulting Partner, having completed Docker's certification course on the "Docker Accelerator for CI Engagements." More info about Clutch's success implementing Docker can be found here. Docker is an open platform for developers and system administrators to build, ship and run distributed applications. With Docker, IT organizations shrink application delivery from months to minutes, frictionlessly move workloads between data centers and the cloud and achieve 2...
SYS-CON Events announced today that Interface Masters Technologies, provider of leading network visibility and monitoring solutions, will exhibit at the 17th International CloudExpo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Interface Masters Technologies is a leading provider of high speed networking solutions focused on Gigabit, 10 Gigabit, 40 Gigabit and 100 Gigabit Ethernet network access and connectivity products. For over 20 ye...
As enterprises capture more and more data of all types – structured, semi-structured, and unstructured – data discovery requirements for business intelligence (BI), Big Data, and predictive analytics initiatives grow more complex. A company’s ability to become data-driven and compete on analytics depends on the speed with which it can provision their analytics applications with all relevant information. The task of finding data has traditionally resided with IT, but now organizations increasingl...