The board warns that the Highways and Transportation Authority is in non-compliance – Metro Puerto Rico

Through a letter, the Board of Fiscal Oversight (JSF) requested documentation on the use of funds from the Puerto Rico Highways and Transportation Authority (ACT) after it failed to comply with the agreements of the second revised budget (FY2024).

The budget, which was certified in Section VII on December 8, 2023, refers to funds transferred into the Act and released by the Bank of New York Mellon (BoNY) in accordance with the agency’s Plan of Adjustment (POA).

Pursuant to the concession agreement between ACT and Puerto Rico Tollroads LLC (Transaction P3), these funds were transferred to ACT following the redemption of its outstanding debt on December 14, 2023.

The section provides that the ACT shall notify the Oversight Board in writing within ten (10) days of the specific funds being made available with a proposed plan for their potential use. Furthermore, Section VII requires written authorization from the Oversight Board prior to any expenditure or use of such funds.

The Board requested the following information from Dr. Edwin Gonzalez Montalvo, Director of ACT.

Amount released:

ACT must provide written confirmation of the final amount transferred from BONY’s PoA accounts after loan redemption. This includes details of fees charged by patronage institutions.

Similarly, they will also have to explain how the funds were set aside to comply with the provisions of the second amended budget of the Act for the financial year.

Use of funds:

The Act requires a monthly report specifying details of expenses already incurred and covered with Action Program funds, details of current or future expenses, an updated balance and the income and interest generated in each POA account. Needed

In the letter, the Board acknowledges that ACT has complied with “certain other obligations of the second revised budget”. However, he emphasized that the Act “failed to provide notice of potential uses and a proposed plan, as required in Section VII.”

“The Oversight Board issued follow-up information under Section VI (including confirmation of funds generated from P3 transactions and, if applicable, amounts used to replenish the account for emergencies and force majeure events) and Section VII. requested. In response, HTA informed the Oversight Board that, in order to maximize interest income, funds made available to HTA pursuant to Sections VI and VII were transferred to the same account used to deposit the proceeds of Transaction P3. Was done for. “While the Oversight Board supports the appropriateness of depositing funds into the said account, HTA’s response does not meet the requirements established in Section VII of the Second Amended HTA Budget for Fiscal Year 2024,” the letter reads.

“As reported in the ACT Cash Balance Report dated December 29, 2023, which was submitted to the Oversight Board on January 12, 2024, approximately $101,439,456 was made available to ACT under the Action Program accounts. ACT later confirmed that these Action Program funds are being used for a variety of purposes, including maintaining the liquidity of the ACT and covering toll adaptation expenditures. These expenditures and uses are being made and are being made without the prior written authorization of the Oversight Board. are, as required in Section VII of the Second Amended Act Budget for Fiscal Year 2024,” he said.