FOMB says PROMESA has improved Puerto Rico finances but urges reforms before board ends

The House Subcommittee on Indian and Insular Affairs heard testimony that Puerto Rico’s finances have improved under the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), but witnesses and the Financial Oversight and Management Board (FOMB) urged Congress and local leaders to ensure permanent reforms before ending federal oversight.

Robert Mujica, executive director of the Financial Oversight and Management Board for Puerto Rico, told the subcommittee that PROMESA helped reduce Puerto Rico's debt and align spending with revenue but “we are not done,” stressing that termination requires four consecutive balanced budgets under modified accrual standards and restored market access. “Putting in permanent reforms that survive past the board is what would be successful,” Mujica said.

The advisory witness panel placed the progress in context. Michelle Sager, managing director of strategic issues at the U.S. Government Accountability Office, said audited statements show improvement and urged continued focus on financial management fundamentals, noting audited fiscal 2022 statements showed a $1.9 billion governmentwide net surplus and that audited 2023 and 2024 statements were not yet available as of June 30, 2025. Andrew Austin, an economic policy analyst at the Congressional Research Service, described PROMESA’s role in modernizing budgeting practices and noted that federal disaster and pandemic funds have altered fiscal dynamics.

The witnesses and members described several specific reforms and outstanding risks. Mujica and Sager cited steps such as adoption of a debt management policy, establishment of an emergency reserve, implementation (with delays) of an enterprise resource planning system intended to improve reporting, and creation of an Office of the Budget of the Legislative Assembly (OPAL) to inform the legislature on fiscal impacts. Mujica said the board estimates it has saved Puerto Rico tens of billions of dollars through restructurings and spending alignment but warned that the island must institutionalize budgeting, capital planning and financial reporting so the problems do not recur.

Members raised concerns about the board’s costs and longevity during the hearing. Resident Commissioner Hernandez said PROMESA and “la junta” have restricted Puerto Rico’s self‑government and criticized board spending; Mujica responded that, despite costs of the oversight process, the board’s actions have reduced the debt burden and advanced fiscal stability. Witnesses emphasized that statutory criteria in PROMESA — four consecutive balanced budgets under modified accrual standards and restoration of market access — are conditions for board termination, and that certified budgets should be maintained through the fiscal year and verified by audited financial statements.

The hearing also addressed how federal programs intersect with the territory’s fiscal outlook. Witnesses noted that some federal disaster recovery funds remain to be invested, that Medicaid funding and other federal program rules affect long‑term planning, and that population declines and climate risks complicate fiscal recovery.

Looking ahead, witnesses and members urged continued oversight of audit completion, full implementation of financial systems, expanded capital planning, and cooperation between the Puerto Rico government and the FOMB to meet PROMESA’s statutory conditions prior to termination. The subcommittee kept the record open for written questions and directed follow‑up responses by committee deadline.