10 towns get failing grades on fiscal performance, ABRE Puerto Rico says
The sixth edition of ABRE Puerto Rico’s Fiscal Health Index revealed that eight municipalities scored an “A” for the handling of their finances, while 10 towns were on the opposite end of the spectrum, with a failing grade.
The index follows 13 indicators based on information derived from the municipality’s audited financial statements to rank them. This year’s survey included 71 municipalities, as eight towns did not provide the information, ABRE said in its report.
“That’s very unfortunate for the residents of these towns who will not be able to rate the state of the finances of their municipality. Logically, one would expect most municipalities to adjust to the new fiscal reality,” ABRE officials said.
The towns that did not reveal their fiscal information were: Arecibo (for the third consecutive year); Añasco; Maricao; Guánica; Santa Isabel (for the fifth consecutive year); Maunabo (second consecutive year) and Vieques (third consecutive year).
The study shows that the best-performing towns in 2019 were: Aibonito; Fajardo; Culebra; Isabela; Naguabo; Aguas Buenas; and Orocovis. On the failing side were: Ceiba; San Lorenzo; Río Grande; Loíza; Lajas; Gurabo; Yauco; Cabo Rojo; Guayanilla; and Patillas.
The latest findings show:
- 45% of the towns had a deficit in their general fund;
- 27% of the municipal governments saw a reduction in their net assets during 2019;
- 17% of the towns had a lower balance in their general fund;
- 37% of the towns have a negative balance in their general fund;
- 41% of the municipal governments receive more than 40% of their income from the central government fund.
“The fiscal health index should be a tool for citizens to evaluate the finances of their municipality and the performance of his mayor,” the nonprofit stated.
“We hope that our index creates awareness, both in citizens and in the state government, and that, at some point, it can serve as a deterrent to the mismanagement of municipal finances,” the organization added.
The nonprofit organization also found that during Fiscal 2019, more than half — or 56% — of the municipalities maintained the same performance grade they had in 2018.
“However, 20 municipalities improved their fiscal situations, while another 20 municipalities deteriorated in comparison to 2018,” the report confirmed.