BY ELECTRONIC MAIL 

June 30, 2022 

The Honorable Pedro Pierluisi Urrutia 

Governor 

Commonwealth of Puerto Rico 

Dear Governor Pierluisi Urrutia: 

Pursuant to a Resolution, a copy of which is attached hereto as Exhibit A (the “Resolution”), 

adopted by the Financial Oversight and Management Board for Puerto Rico (the “Oversight 

Board”), and to Section 202(e)(4) of the Puerto Rico Oversight, Management, and Economic

Stability Act (“PROMESA”), the Oversight Board hereby issues to the Governor this compliance 

certification that the fiscal year 2023 budget for the University of Puerto Rico (“UPR”), attached 

as Exhibit 1 to the Resolution (the “Fiscal Year 2023 Budget for UPR”), is a compliant budget as 

set forth in the Resolution. 

The Oversight Board looks forward to working with you and UPR to fully implement the Fiscal 

Year 2023 Budget for UPR for the benefit of the people of Puerto Rico. 

Sincerely,

David A. Skeel, Jr. 

CC: Hon. Omar Marrero Díaz

Mr. Juan C. Blanco Urrutia 

Dr. Luis A. Ferrao

Members of UPR Board of Directors

Exhibit II Exhibit II

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FINANCIAL OVERSIGHT AND MANAGEMENT OVERSIGHT BOARD FOR 

PUERTO RICO 

June 30, 2022 

RESOLUTION CERTIFYING 2023 BUDGET FOR UPR 

WHEREAS, on June 30, 2016, the federal Puerto Rico Oversight, Management, and 

Economic Stability Act (“PROMESA”) was enacted; and 

WHEREAS, Section 101 of PROMESA created the Financial Oversight and Management Board 

for Puerto Rico (the “Board”); and 

WHEREAS, Section 202(c) of PROMESA establishes a multi-step procedure for the development, 

review, and approval of budgets for covered instrumentalities of the Commonwealth of 

Puerto Rico, such as the University of Puerto Rico (“UPR”), providing that (i) the Governor must 

submit a proposed budget to the Board; (ii) the Board must review the proposed budget and 

determine, in the Board’s sole discretion, either that the proposed budget complies with the 

applicable fiscal plan or that it does not, in which case the Board must issue a notice of 

violation and recommended revisions, giving the Governor an opportunity to correct the 

violations; (iii) the Governor may then submit a revised proposed budget; and (iv) if the Governor 

fails timely to submit a proposed budget that the Board determines in its sole discretion is a 

compliant budget, the Board shall develop and submit to the Governor its own compliant budget; 

and 

WHEREAS, on May 12, 2022, the Governor submitted to the Board a proposed fiscal year 

2023 budget for UPR; and 

WHEREAS, after substantial deliberations, on June 8, 2022, the Board sent to the Governor 

a notice of violation pursuant to Section 202(c)(1)(B) of PROMESA with respect to the 

Governor’s proposed fiscal year 2023 budget for UPR as submitted on May 12, 2022, which 

established a deadline of June 15, 2022 for the submission of a revised proposed fiscal year 

2023 budget for UPR; and 

WHEREAS, subsequent to the notice of violation, the Governor submitted a revised 

proposed fiscal year 2023 budget for UPR; and 

WHEREAS, after substantial deliberations, the Board determined that the Governor’s revised 

proposed fiscal year 2023 budget for UPR does not reflect a compliant budget as required by 

Section 202(c)(2) of PROMESA; and 

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WHEREAS, the Board has developed a revised, compliant fiscal year 2023 budget for UPR for 

submission to the Governor pursuant to Sections 202(c)(2) and 202(e)(4) of PROMESA, 

which budget is attached hereto as Exhibit 1 (the “Compliant 2023 UPR Budget”); 

NOW, THEREFORE, IT IS HEREBY RESOLVED THAT, pursuant to Sections 202(c) and 

202(e)(4) of PROMESA, the Board shall submit to the Governor the Compliant 2023 UPR 

Budget, and such budget shall be (i) deemed to be approved by the Governor, (ii) the 

subject of a compliance certification to be issued by the Board to the Governor, and (iii) in full 

force and effect beginning on July 1, 2022. 

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EXHIBIT 1: UPR FISCAL YEAR 2023 CERTIFIED BUDGET

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Section 1.- The following amounts are presented as the appropriations and the expenses of 

the University of Puerto Rico of Puerto Rico (“UPR”) set forth herein for the fiscal year ending 

June 30, 2023 (“FY2023”): 

In $ Thousands 

Revenues

Central Government Appropriations

TSA General Fund Appropriations

TSA General Fund Appropriations (Net Measures) 441,206 

TSA General Fund Appropriations

 (Conditional upon achievement of milestones) 40,000 

TSA General Fund Appropriations (Joint Resolutions) 30,097 

TSA General Fund Appropriations 511,303 

Other Special Appropriations

Trainings & Technical Services to Government Agencies 10,000 

Services to Department of Education 10,021 

Legislative Scholarships 9,501 

Additional Medical Science- Medical Residents (Custody of OMB) 5,000 

Additional Medical Science- Attending Doctors

(Medical Services Administration of Puerto Rico) 6,900 

Other Special Appropriations 41,422 

Total Central Government Appropriations 552,725 

Operating Revenues

PR Slot Machine Receipts (Ley 36-2005) 72,493 

Undergraduate Tuition 132,286 

Endowment Funds 10,000 

Graduate Tuition 37,961 

Campus-Generated Inflows 182,605 

Other Revenues 2,000 

Total Operating Revenues 437,345 

Other Sources of Revenue

Intra-Government Receipts

Pell & Other Student Aid Grants 55,778 

Federal Research & Investigation Grants 114,235 

Intra-Government Receipts 170,013 

Total Other Sources of Revenues 170,013 

Total Sources of Revenue 1,160,083 

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Expenditures

Operating Expenditures

Payroll & Related Costs

Salaries- Faculty (330,314)

Salaries- Non-Faculty (173,186)

Christmas Bonus (5,700)

Overtime (2,080)

Liquidations (8,384)

Incentives (400)

Medical Plan (54,279)

Social Security Payment (37,413)

State Insurance Fund (7,349)

Unemployment Insurance (580)

Total Payroll & Related Costs (619,685)

Materials & Supplies (32,011)

Purchased Services (22,721)

Federal Grants, Pell & Donations (65,278)

Joint Resolutions (30,097)

Facilities & Payments for Public Services (47,525)

Professional Services (3,346)

Transportation Expenditures (5,500)

Other Operating Expenditures (90,619)

Total Operating Expenditures (916,782)

Other Expenditures:

Capital Expenditures (3,000)

Equipment & Maintenance (43,170)

Pensions Payment (146,900)

Total Other Expenditures (193,070)

Total Expenditures (1,109,852)

Operating Surplus (before Debt Service) 50,231

Contract Debt Service (48,252)

Operating Surplus (after Debt Service) 1,979

Section 2. - No later than 45 days after the closing of each quarter of FY2023, the President 

and the Chief Financial Officer of the UPR shall update the projected net revenues for FY2023 

(the “Quarterly Revision”) and provide notice of the updates to the Governor and the Oversight 

Board. The Quarterly Revision shall project future revenues based on actual revenues and include 

revisions to the assumptions used to generate the net revenue projections. 

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Section 3.- All expenditures authorized in any prior fiscal year are eliminated and no carry 

over of such funds may be used, except: (1) expenditures authorized in FY2022 certified budget 

to carry out permanent expenditures that have been encumbered and accounted for and kept on the 

books, but not exceeding two fiscal years on the books; (2) expenditures in the certified budget for 

equipment with procurement cycles that extend beyond the end of the fiscal year, which were 

encumbered on or before June 30, 2022; and (3) the portion of expenditures authorized for FY2022 

that have been encumbered on or before June 30 of such fiscal year, which shall be kept on the 

books for 60 days after the termination of that fiscal year, and after those 60 days no amount shall 

be drawn against such portion for any reason. This restriction on expenditures authorized in any 

prior fiscal year shall not apply to programs financed in whole or part with federal funds. In 

addition, the foregoing exceptions to the restrictions on expenditures authorized in any prior fiscal 

year are conditioned on the prior written approval of the Oversight Board. 

Section 4.- On or before July 31, 2022, the President, and the Chief Financial Officer of 

UPR shall provide to the Oversight Board a certification indicating the amounts of unused 

appropriations for FY2022, for all items listed in Section 3. If the President and the Chief 

Financial Officer of UPR fail to submit the required certification, the amount of unused funds 

in section 3 above will not carry over from FY2022 to FY2023. 

Section 5.- Authorized amounts of expenditures in this FY2023 budget may only be 

reprogrammed with the prior approval of the Oversight Board. 

Section 6.- The President and the Chief Financial Officer of the UPR shall submit to the 

Oversight Board all reporting requirements set forth on Exhibit 40 of the 2021 UPR Certified 

Fiscal Plan (“Certified Fiscal Plan”) according to the reporting cadence described therein. 

In addition, if the Oversight Board approves a reprogramming pursuant to Section 6, the 

immediately subsequent report by the UPR must illustrate the specific implementation of such 

reprogramming. 

Section 7.- The reports required pursuant to this Oversight Board Resolution are in addition 

to the reports that the UPR must submit to the Oversight Board in accordance with Section 203 of 

PROMESA. 

Section 8.- In conjunction with the reports that the UPR must submit to the Oversight 

Board no later than 15 days after the last day of each quarter of FY2023 pursuant to Section 203 

of PROMESA, the President and the Chief Financial Officer of the UPR shall each certify to the 

Oversight Board that no appropriation of any previous fiscal year (except for the 

appropriations covered by the exceptions in the Section 4 above) has been used to cover any 

expenditure in FY2023 unless authorized in advance by the Oversight Board. 

Section 9.- The President and Chief Financial Officer of the UPR are responsible for not 

spending or encumbering during FY2023 any amount that exceeds the appropriations authorized 

for FY2023. This prohibition applies to every line item set forth in a budget certified by the 

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Oversight Board, including appropriations for payroll and related costs. The President and Chief 

Financial Officer of the UPR shall also certify to the Oversight Board by September 30, 2022, that 

no amount was spent or encumbered that exceeded the appropriations in the certified budget for 

FY2022. 

Section 10.- For the avoidance of doubt, the Oversight Board has an active policy that 

includes review contracts of $2 million or more. The objective of these reviews is, among other 

things, to determine the extent to which the contracts are complaint with the applicable fiscal 

plan(s). 

Section 11.- If any clause, paragraph, subparagraph, sentence, word, letter, article, 

provision, section, subsection, title, chapter, subchapter, heading, or part of this document is 

annulled by an order of a court of competent jurisdiction, such order will not affect, harm, or 

invalidate the remainder of this document. The effect of any such order judgment will be 

limited to the clause, paragraph, subparagraph, sentence, word, letter, article, provision, 

section, subsection, title, chapter, subchapter, heading, or part thereof that has been 

annulled. If the application to a person or circumstance of any clause, paragraph, 

subparagraph, sentence, word, article, provision, section, subsection, title, chapter, subchapter, 

heading, or part of this Resolution is invalidated by an order of a court of competent 

jurisdiction, such order will not affect or invalidate the application of the remainder of this 

Resolution to those persons or circumstances in which it can validly apply. It is the express and 

unequivocal will of UPR that the courts enforce the provisions and the application of this 

Oversight Board Resolution to the greatest extent possible, even if any part is set aside, 

annulled, invalidated, or impaired by an order of a court of competent jurisdiction, or even if its 

application to any person or circumstance is so annulled, invalidated, or impaired. 

Section 12. – Pension Contribution for FY2023 includes a reform in which the defined 

benefit plan is frozen, and a defined contribution plan is implemented. If UPR does not 

implement the freeze, UPR must find an additional $11.9M in savings for FY23. A 

reapportionment request must be submitted to the Oversight Board, which must include notable 

savings in other budgetary lines items to fund the necessary amount while maintaining budget 

compliance. 

Section 13.- This Resolution will be known as “Budget for Fiscal Year 2023 for the 

UPR.” This budget assumes all measures in the Certified Fiscal Plan will be implemented. 

Please be advised that any measures not implemented will increase expenditures and noncompliance with the Certified Fiscal Plan. 

Section 14.- Pursuant to conversations with UPR, the Oversight Board amended 

the following line-items to align with UPR projections: 

• Central Government Appropriations (increasing revenue by $50.9M),

• Campus-Generated inflows (increasing revenue by $3.3M),

• Christmas Bonus (increasing expenditures by $5.7M),

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• Payroll and Related Costs (increasing expenditures by $37.1M)

• Operating Expenditures (increasing expenditures by $23M)

• Other Expenditures (increasing expenditures by $3.7M)

Other minor revenue adjustments that total $2M are reflected in the UPR Certified Budget as 

proposed by UPR. These adjustments produce nominal variations in the projected numbers 

presented in the Certified Fiscal Plan.

Section 15. – The Certified Budget considers that UPR will use Institutional Prior Year 

Funds of $55M1 to cover the Capital Expenditures needs of UPR in FY23. The Certified Budget 

considers an additional $3M to compensate increase in project costs due to inflation increase.

Section 16. – The Oversight Board believes that to ensure fiscal responsibility and the 

long-term sustainability of the institution, the UPR administration and UPR Governing Board must 

decide to implement revenue and expenditure measures, such as the increase of graduate tuition

and the pension plan freeze. 

Section 17. – The Certified Budget includes $40M under TSA General Fund 

Appropriations (Conditional upon achievement of milestones) that will be conditional to UPR 

completing the following milestones:

1. $20 million subject to the following Pension Reform milestones:

a. Execute contract of Defined Contribution plan with service providers.

b. Closing the Defined Benefit plan and implementation of a new Defined

Contribution plan.

2. $20 million subject to the following Administrative Transformation milestones,

regarding the Pilot Program (Aguadilla, Arecibo, and Utuado campuses):

a. UPR Central Administration’s Budget Office to certify the budgetary

transfers between campuses, based on transferred, permanent-shared

services participants and consolidated offices.

b. Certify and execute the required transfers to achieve objectives defined in

the “Exhibit I - UPR - Pilot Program - Master Summary - Unit Visit

021622” from 2022 104 data submission.

c. Certify and execute permanent shared-services participants to achieve

objectives defined in the “Exhibit I - UPR - Pilot Program - Master

Summary - Unit Visit 021622” from 2022 104 data submission.

d. Certify and execute consolidation of offices to achieve objectives defined

in the “Exhibit I - UPR - Pilot Program - Master Summary - Unit Visit

021622” from 2022 104 data submission.

e. Submit a monthly implementation report with detailed progress on KPIs by

campus: transfers, shared-services participants, and consolidation of

offices.

1 Information from UPR’s submitted response during May 5, 2022 to FOMB – Letter – UPR- 104 Information 

Request – April 22, 2022.

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After milestones are completed, the funds held under the custody of the Office of Management 

and Budget (“OMB”) will be released after a formal reapportionment is submitted by 

the University of Puerto Rico, reviewed, and approved by OMB, and submitted to the Oversight 

Board for review; once approving, the Oversight Board provides its authorization to release such 

funding. The Oversight Board reinforces that the $40M appropriation might not be used to cover 

expenses that are non-compliant with the Certified Budget. Additionally, the funding 

related to first milestone achieved must be dedicated towards the accreditation needs. 

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