The Brazilian state of Rio de Janeiro has declared a financial "calamity," and acknowledged problems in "honouring commitments" of the Olympic Games scheduled to begin August 5.
The declaration published in the Official Gazette Friday said the country's second wealthiest state faces "a grave economic crisis" attributed to a sharp falloff in tax revenues.
The crisis "is impeding the state from honouring its commitments in hosting the 2016 Olympic Games and Paralympic Games," interim governor Francisco Dornelles acknowledged.
The official decree will allow the state government to adopt extraordinary measures in order to provide the necessary public services and cover the costs.
It warned that not doing so could risk "the total collapse of public security, health, education, transportation and care of the environment."
A decree of "public calamity" provides a "blank check" for regional authorities to draw emergency loans from the central government without approval by the National Assembly, according to Luiz Paulo, president of the state legislature's revenue commission.
"The state will be able to access resources from the central government or private banks regardless of its debt limits," Paulo was quoted as saying by Rio newspaper Extra.
"It's a blank check for three months."
The latest crisis comes on top of various problems that have plagued preparations for the first Olympic Games ever to be held in South America.
There are growing concerns over public safety, with rising rates of robberies and shootouts between criminal gangs and police on the streets. An epidemic of the Zika virus, and contamination of public water supplies, are not expected to be resolved in time for the Games, either.
The state has delayed some pension and salary payments since late last year, also closing schools and medical facilities that lacked vital supplies.