Fiscal board admonishes ASES for not making it aware of towns’ debt

By THE STAR STAFF

The Financial Oversight and Management Board has chided Puerto Rico Health Insurance Administrator Edna Marín Ramos for failing to make the federally appointed entity aware of the outstanding debt of many island municipalities with the agency she heads.

The oversight board said it should have been informed of the debt before allowing the disbursement of revenues from the special additional tax to the municipalities so the obligations could be paid off.

“The Financial Oversight and Management Board for Puerto Rico has been made aware of some municipalities’ outstanding obligations with the Puerto Rico Health Insurance Administration (ASES by its Spanish acronym). These outstanding obligations have not been reported to the Oversight Board nor, to our understanding, to the Fiscal Agency and Financial Advisory Authority (AAFAF),” the executive director of the oversight board, Robert Mujica, said in a 27 March letter. “The Oversight Board would like to understand why these debts were not previously reported to AAFAF in prior fiscal years before the disbursement of any Excess Special Additional Tax (Excess CAE) to municipalities.”

Under the Certified 2022 Fiscal Plan for the Municipal Revenue Collections Center (CRIM by its Spanish acronym), outstanding obligations owed to PayGo and

ASES must be prioritized.

“The Oversight Board urges ASES to make the necessary collection efforts and send debt certifications to municipalities that currently have outstanding obligations,” the letter notes.

The oversight board also asked ASES to provide a status report by no later than March 31 detailing all 78 municipalities’ outstanding obligations with ASES and all outstanding payment plan balances. The report must include the original payment plan amount; the payment terms; the scheduled monthly amount; the balance as of Jan. 31, 2023; the date of the last payment made by the municipality or remitted directly by CRIM; and the concept of the debt.

In the past, the central government paid the municipalities’ debt for health care, but now that responsibility has fallen to the towns themselves, most of which are financially ailing. For the fiscal year ended June 30, 2019, ASES reported operating revenues of some $2.8 billion, a decrease of approximately $267.8 million from the prior year. The decrease was mainly due to non-contributions from the municipalities and the decrease in contributions from the commonwealth.