As bond investors, Congress, Puerto Ricans and American citizens and taxpayers are trying to come to grips with a financial crisis on the island, timely and reliable information on the territory’s finances doesn’t exist.
The latest financial report issued by the Commonwealth covers the fiscal year 2014 (ended June 30, 2014). That is a year that ended almost two years ago.
Not only that, the latest report warns us that the financial statements are unaudited.
This is pretty ugly.
The timeliness of Puerto Rico’s financial reporting has steadily deteriorated since the late 1990s. In hindsight, this was one warning sign.
The chart below shows the number of days it took for Puerto Rico to publish its annual financial report after the June 30 fiscal year-end, from 1999 to 2014. Back in 1999, Puerto Rico was in the ballpark on state and local government timeliness guidelines (180 days).
By 2014, it took about three times as long to get Puerto Rico’s annual financial report. And technically, we really don’t have 2014 results yet either, given that the statements are unaudited.
And it gets worse, when you look at the GDB, Puerto Rico’s Global Development Bank. The latest report available on GDB’s website is for 2013.
Who was minding the store? Which Congressional committees? And, for that matter, how about the Federal Reserve Bank of New York, whose district includes Puerto Rico?
We’ll be taking a closer look.