48 U.S.C. § 2143 — Effect of finding of noncompliance with Budget

(a) Submission of reports. No later than 15 days after each fiscal-year quarter ends, beginning with the fiscal year the Oversight Board^* determines, the Governor^* must give the Board a report in the form the Board requires. The report must describe—

(1) the territorial government’s actual cash revenues, cash expenditures, and cash flows for the preceding quarter, compared with the projected figures in the certified Budget^* for that quarter; and

(2) any other information the Board requests. This may include a balance sheet or a requirement that the Governor report separately for each covered territorial instrumentality^*.

(b) Initial action by Oversight Board.

(1) In general. If, based on the Governor’s reports, independent audits, or other information it obtains, the Board finds that actual quarterly revenues, expenditures, or cash flows are not consistent with the certified Budget’s projections for that quarter, the Board must—

(A) require the territorial government^* to provide information the Board considers necessary to explain the inconsistency; and

(B) if that information does not give an explanation the Board finds reasonable and appropriate, advise the territorial government to correct the inconsistency through remedial action.

(2) Deadlines. The Board must set deadlines for the territorial government to meet subparagraphs (A) and (B) of paragraph (1).

(c) Certification.

(1) Inconsistency. If the territorial government does not provide the additional information required by subsection (b)(1)(A), or does not correct the inconsistency under subsection (b)(1)(B), before the applicable deadline, the Board must certify to the President, the House Committee on Natural Resources, the Senate Committee on Energy and Natural Resources, the Governor, and the Legislature^* that the government is inconsistent with the applicable certified Budget. The Board must describe the inconsistency’s nature and amount.

(2) Correction. If the Board finds that the territorial government has begun measures the Board considers sufficient to correct an inconsistency certified under paragraph (1), the Board must certify the correction to the same President, committees, Governor, and Legislature.

(d) Budget reductions by Oversight Board. If the Board finds that the Governor has failed to correct an inconsistency involving applicable certified Instrumentality Budgets, or that the Governor and Legislature have failed to correct one involving the applicable certified Territory Budget^*, the Board must—

(1) for the territorial government other than covered territorial instrumentalities, make appropriate reductions in nondebt expenditures so actual quarterly revenues and expenditures comply with the applicable certified Territory^* Budget. For the fiscal year in which the Board is established, the comparison is instead with the budget adopted by the Governor and Legislature; and

(2) for covered territorial instrumentalities, at the Board’s sole discretion, either—

(A) reduce nondebt expenditures so actual quarterly revenues and expenses comply with the applicable certified Budget. For the Board’s establishment fiscal year, the comparison is with the budget adopted by the Governor and Legislature or by the covered instrumentality, as applicable; or

(B)(i) impose automatic hiring freezes at the covered instrumentality; and

(ii) prohibit it from entering a contract or engaging in a financial or other transaction unless the Board previously approved the contract or transaction.

(e) Termination of Budget reductions. The Board must cancel the reductions, hiring freezes, or contract and transaction prohibitions under subsection (d) if it finds that the territorial government or covered territorial instrumentality^*, as applicable, has begun appropriate measures to reduce expenditures or increase revenues so that it complies with the applicable certified Budget. For the fiscal year in which the Board is established, the comparison is instead with the budget adopted by the Governor and Legislature. This section does not define “territorial government,” “certified Budget,” “Instrumentality Budget^*,” “Territory Budget,” “covered territorial instrumentality,” “nondebt expenditures,” or “cash flows.”