--- kind: "section" citation: "48 U.S.C. § 2143" title: "48" title_heading: "Territories and Insular Possessions" number: "2143" heading: "Effect of finding of noncompliance with Budget" release: "119-102" date: "2026-07-12" url: "https://uscodex.org/usc/48/2143" units: - "Chapter 20 — Puerto Rico Oversight, Management, and Economic Stability" - "Subchapter II — Responsibilities of Oversight Board" --- # §2143. Effect of finding of noncompliance with Budget - (a) **Submission of reports—** Not later than 15 days after the last day of each quarter of a fiscal year (beginning with the fiscal year determined by the [Oversight Board](/usc/48/2104.md?p=17)), the [Governor](/usc/48/2104.md?p=12) shall submit to the [Oversight Board](/usc/48/2104.md?p=17) a report, in such form as the [Oversight Board](/usc/48/2104.md?p=17) may require, describing— - (1) the actual cash revenues, cash expenditures, and cash flows of the [territorial government](/usc/48/2104.md?p=18) for the preceding quarter, as compared to the projected revenues, expenditures, and cash flows contained in the certified [Budget](/usc/48/2104.md?p=4) for such preceding quarter; and - (2) any other information requested by the [Oversight Board](/usc/48/2104.md?p=17), which may include a balance sheet or a requirement that the [Governor](/usc/48/2104.md?p=12) provide information for each [covered territorial instrumentality](/usc/48/2104.md?p=7) separately. - (b) **Initial action by Oversight Board—** - (1) **In general—** If the [Oversight Board](/usc/48/2104.md?p=17) determines, based on reports submitted by the [Governor](/usc/48/2104.md?p=12) under [subsection (a)](#a), independent audits, or such other information as the [Oversight Board](/usc/48/2104.md?p=17) may obtain, that the actual quarterly revenues, expenditures, or cash flows of the [territorial government](/usc/48/2104.md?p=18) are not consistent with the projected revenues, expenditures, or cash flows set forth in the certified [Budget](/usc/48/2104.md?p=4) for such quarter, the [Oversight Board](/usc/48/2104.md?p=17) shall— - (A) require the [territorial government](/usc/48/2104.md?p=18) to provide such additional information as the [Oversight Board](/usc/48/2104.md?p=17) determines to be necessary to explain the inconsistency; and - (B) if the additional information provided under [subparagraph (A)](#b-1-A) does not provide an explanation for the inconsistency that the [Oversight Board](/usc/48/2104.md?p=17) finds reasonable and appropriate, advise the [territorial government](/usc/48/2104.md?p=18) to correct the inconsistency by implementing remedial action. - (2) **Deadlines—** The [Oversight Board](/usc/48/2104.md?p=17) shall establish the deadlines by which the [territorial government](/usc/48/2104.md?p=18) shall meet the requirements of subparagraphs [(A)](#b-1-A) and [(B)](#b-1-B) of paragraph (1). - (c) **Certification—** - (1) **Inconsistency—** If the [territorial government](/usc/48/2104.md?p=18) fails to provide additional information under [subsection (b)(1)(A)](#b-1-A), or fails to correct an inconsistency under [subsection (b)(1)(B)](#b-1-B), prior to the applicable deadline under [subsection (b)(2)](#b-2), the [Oversight Board](/usc/48/2104.md?p=17) shall certify to the President, the House of Representatives Committee on Natural Resources, the Senate Committee on Energy and Natural Resources, the [Governor](/usc/48/2104.md?p=12), and the [Legislature](/usc/48/2104.md?p=15) that the [territorial government](/usc/48/2104.md?p=18) is inconsistent with the applicable certified [Budget](/usc/48/2104.md?p=4), and shall describe the nature and amount of the inconsistency. - (2) **Correction—** If the [Oversight Board](/usc/48/2104.md?p=17) determines that the [territorial government](/usc/48/2104.md?p=18) has initiated such measures as the [Oversight Board](/usc/48/2104.md?p=17) considers sufficient to correct an inconsistency certified under [paragraph (1)](#c-1), the [Oversight Board](/usc/48/2104.md?p=17) shall certify the correction to the President, the House of Representatives Committee on Natural Resources, the Senate Committee on Energy and Natural Resources, the [Governor](/usc/48/2104.md?p=12), and the [Legislature](/usc/48/2104.md?p=15). - (d) **Budget reductions by Oversight Board—** If the [Oversight Board](/usc/48/2104.md?p=17) determines that the [Governor](/usc/48/2104.md?p=12), in the case of any then-applicable certified [Instrumentality Budgets](/usc/48/2104.md?p=13), and the [Governor](/usc/48/2104.md?p=12) and the [Legislature](/usc/48/2104.md?p=15), in the case of the then-applicable certified [Territory Budget](/usc/48/2104.md?p=21), have failed to correct an inconsistency identified by the [Oversight Board](/usc/48/2104.md?p=17) under [subsection (c)](#c), the [Oversight Board](/usc/48/2104.md?p=17) shall— - (1) with respect to the [territorial government](/usc/48/2104.md?p=18), other than [covered territorial instrumentalities](/usc/48/2104.md?p=7), make appropriate reductions in nondebt expenditures to ensure that the actual quarterly revenues and expenditures for the [territorial government](/usc/48/2104.md?p=18) are in compliance with the applicable certified [Territory Budget](/usc/48/2104.md?p=21) or, in the case of the fiscal year in which the [Oversight Board](/usc/48/2104.md?p=17) is established, the [budget](/usc/48/2104.md?p=4) adopted by the [Governor](/usc/48/2104.md?p=12) and the [Legislature](/usc/48/2104.md?p=15); and - (2) with respect to [covered territorial instrumentalities](/usc/48/2104.md?p=7) at the sole discretion of the [Oversight Board](/usc/48/2104.md?p=17)— - (A) make reductions in nondebt expenditures to ensure that the actual quarterly revenues and expenses for the [covered territorial instrumentality](/usc/48/2104.md?p=7) are in compliance with the applicable certified [Budget](/usc/48/2104.md?p=4) or, in the case of the fiscal year in which the [Oversight Board](/usc/48/2104.md?p=17) is established, the [budget](/usc/48/2104.md?p=4) adopted by the [Governor](/usc/48/2104.md?p=12) and the [Legislature](/usc/48/2104.md?p=15) or the [covered territorial instrumentality](/usc/48/2104.md?p=7), as applicable; or - (B) - (i) institute automatic hiring freezes at the [covered territorial instrumentality](/usc/48/2104.md?p=7); and - (ii) prohibit the [covered territorial instrumentality](/usc/48/2104.md?p=7) from entering into any contract or engaging in any financial or other transactions, unless the contract or transaction was previously approved by the [Oversight Board](/usc/48/2104.md?p=17). - (e) **Termination of Budget reductions—** The [Oversight Board](/usc/48/2104.md?p=17) shall cancel the reductions, hiring freezes, or prohibition on contracts and financial transactions under [subsection (d)](#d) if the [Oversight Board](/usc/48/2104.md?p=17) determines that the [territorial government](/usc/48/2104.md?p=18) or [covered territorial instrumentality](/usc/48/2104.md?p=7), as applicable, has initiated appropriate measures to reduce expenditures or increase revenues to ensure that the [territorial government](/usc/48/2104.md?p=18) or [covered territorial instrumentality](/usc/48/2104.md?p=7) is in compliance with the applicable certified [Budget](/usc/48/2104.md?p=4) or, in the case of the fiscal year in which the [Oversight Board](/usc/48/2104.md?p=17) is established, the [budget](/usc/48/2104.md?p=4) adopted by the [Governor](/usc/48/2104.md?p=12) and the [Legislature](/usc/48/2104.md?p=15). ## Source credit (Pub. L. 114–187, title II, § 203, June 30, 2016, 130 Stat. 568.)