This page intentionally left blank. HOUSE OF REPRESENTATIVES OF THE COMMONWEALTH OF PUERTO RICO COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 PREPARED BY: OFFICE OF FINANCE AND BUDGET This page intentionally left blank. COMPREHENSIVE ANNUAL FINANCIAL REPORT HOUSE OF REPRESENTATIVES TABLE OF CONTENTS OF THE COMMONWEALTH OF PUERTO RICO FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Page INTRODUCTORY SECTION (UNAUDITED) Letter of Transmittal ........................................................................................................................................... 2- 30 List of Representatives – By District .................................................................................................................. 31- 33 List of Representatives – At Large ..................................................................................................................... 34 List of Administrative Staff .................................................................................................................................. 35 Permanent Committees ..................................................................................................................................... 36 House of Representatives Legislative Organization Chart ................................................................................. 37 Administrative Organization Chart ..................................................................................................................... 38 FINANCIAL SECTION Independent Auditor’s Report ............................................................................................................................ 40- 42 Required Supplementary Information – Management’s Discussion and Analysis (Unaudited) .......................... 44- 53 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position ........................................................................................................................... 55- 56 Statement of Activities ................................................................................................................................ 57 Fund Financial Statement: Balance Sheet – Governmental Funds ....................................................................................................... 58 Reconciliation of the Balance Sheet – Governmental Funds to the Government-wide Statement of Net Position ................................................................................ 59 Statement of Revenues, EXpenditures and Changes in Fund Balance – Governmental Funds ................. 60 Reconciliation of the Statement of Revenues, EXpenditures and Changes in Fund Balance – Governmental Fund to the Government-wide Statements of Activities ................................................... 61 Notes to the Basic Financial Statements ................................................................................................... 62-128 i COMPREHENSIVE ANNUAL FINANCIAL REPORT HOUSE OF REPRESENTATIVES TABLE OF CONTENTS OF THE COMMONWEALTH OF PUERTO RICO FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Page REQUIRED SUPPLEMENTARY INFORMATION SECTION Required Supplementary Information: (Unaudited) Schedule of Revenues and EXpenditures – Budget to Actual – General Fund .............................................. 130 Notes to Schedule of Revenues and Expenditures – Budget to Actual – General Fund ................................ 131 Employees’ Retirement System of the Government of the Commonwealth of Puerto Rico – Schedule of Proportionate Share of the Net Pension Liability .................................................................... 132 Employees’ Retirement System of the Government of the Commonwealth of Puerto Rico – Schedule of Contributions to the Employees’ Retirement Systems ............................................................ 133 Notes to Required Supplementary Information ............................................................................................... 134 Independent Auditor’s Report on Internal Control over Financial Reporting on Compliance and Matters based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards .................................................................................................................... 135-136 STATISTICAL SECTION (UNAUDITED) Introduction ...................................................................................................................................................... 138 Net Position Trends By Component For The Last Ten Fiscal Years .................................................................. 139 Net Position Changes For The Last Ten Fiscal Years ....................................................................................... 140 Fund Balance For The Last Ten Fiscal Years .................................................................................................... 141 Changes in Fund Balance For The Last Ten Fiscal Years ................................................................................. 142 Capital Assets For The Last Ten Fiscal Years ................................................................................................... 143 Long-Term Liabilities For The Last Ten Fiscal Years ......................................................................................... 144 Debt Capacity For The Last Ten Fiscal Years ................................................................................................... 145 Revenue Capacity For The Last Ten Fiscal Years ............................................................................................. 146 Demographic and Economic Indicators of the Commonwealth of Puerto Rico For The Last Ten Fiscal Years .............................................................................................. 147 Operating Indicators For The Last Ten Fiscal Years .......................................................................................... 148 ii / This page intentionally left blank. June 28, 2019 The Honorable Governor of Puerto Rico The Honorable Members of the House of Representatives Citizens of Puerto Rico The Comprehensive Annual Financial Report (CAFR) of the House of Representatives of the Commonwealth of Puerto Rico (hereinafter referred to as the “House of Representatives”) for the fiscal year ended June 30, 2017, is submitted herewith. The responsibility for both accuracy of the presented data and completeness and fairness of presentation, including all disclosures, rests with management. To the best of our knowledge and belief, the presented data is accurate in all material respects and is reported in a manner that fairly represents the financial position, and the result of the financial activities of the House of Representatives. The Commonwealth’s laws require financial statements to conform to generally accepted accounting principles in the United States of America (GAAP), as applicable to governmental entities, and the applicable pronouncements issued by the Governmental Accounting Standard Board (GASB). The CAFR is presented in three sections. The Introductory Section includes this transmittal letter, general information about the House of Representatives, an organizational chart, and a list of the Representatives and Standing Committees. The Financial Section includes the independent auditors’ report, management discussion and analysis (MD&A), audited government-wide and fund financial statements and related notes, and required supplementary information. The Statistical Section contains selected unaudited financial, economic and demographic data on a multiyear basis. GAAP require management to provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of the MD&A. This letter of transmittal is designed to complement the MD&A and should be read in conjunction therewith. The MD&A for the House of Representatives can be found immediately after the independent auditor’s report. The Capitol, PO Box 90122228 San Juan, PR 00902-2228 787-721-6040 PROFILE OF THE HOUSE OF REPRESENTATIVES The House of Representatives is the oldest legislative body of Puerto Rico – a territory of the United States of America – whose residents are citizens of said Nation since 1917. To understand, from a fair standpoint, the origins of Puerto Rico’s parliamentary system, which begins with the establishment of the House of Representatives in 1898, it is necessary to present at least a synopsis of the beginning and development of the people of Puerto Rico, generally, and the Legislative Power, specifically. The Autonomic Charter of 1897 authorized the formation of an autonomous government for Puerto Rico where the governor was designated by the King of Spain and served as the lawful representative thereof. The Charter also provided for an Insular Parliament composed of 2 bodies with equal powers, to wit, a House of Representatives and an Administration Council, and an Autonomous Cabinet, designated on February 10, 1898, by Governor Manuel Macías. The House, which was composed of 32 members, was elected by the people of Puerto Rico, while the Council was divided into 8 members elected locally (by a convention of delegates) and 7 members appointed by the Governor on behalf of the King. The Island must also elect 16 Representatives and 5 Senators who shall represent it at the Spanish Courts. For purposes