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Freshwater is essential to human communities and stream ecosystems, and governments strive to manage water to meet the needs of both people and ecosystems. Balancing competing water demands is challenging, as freshwater resources are limited and their availability varies through time and space. One approach to maintain this balance is to legally mandate that a specified amount of stream flow be maintained for stream ecosystems, known as an environmental flow. But laws and regulations do not necessarily reflect what happens in practice, potentially to the detriment of communities and natural systems. Through a case study of Puerto Rico, we investigated whether water management in practice matches legislative mandates and explored potential mismatch drivers. We focused on two governance targets—equitable allocation and water use efficiency—and assessed whether they are enshrined in the law (de jure) and how they manifest in practice (de facto). We also explored agency accountability through identifying agency structure and whether consequences are enforced for failing to carry out responsibilities. Our results indicate there are mismatches between how freshwater is governed by law and what occurs in practice. This study suggests that agency accountability may be necessary to consider when developing environmental flow legislation that will effectively achieve ecological outcomes.