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DIGEST OF FISCAL YEAR 1979 PUBLICATIONS REPORTS

REVIEW OF CURRENT POLICY FOR RETIRING AND REPLACING GENERAL PURPOSE MOTOR

As a part of an on-going review of the management of large motor vehicle fleets in District Government, we examined the effectiveness of the District's policy for retirement and replacement of its vehicle fleet. For the purposes of this study, we examined maintenance and replacement records for general purpose vehicles operated by the Department of Environmental Services. DES accounts for twenty-five percent of all District-owned vehicles. We examined the findings of the audit from two positions: 1) would it be less expensive to replace vehicles after fewer years of service than current policy dictates? and 2) would it be more cost effective for the District to lease general purpose vehicles instead of purchasing and maintaining them?

Motor vehicle replacement policies are dictated by the Materiel Management Manual of the Department of General Services. That manual establishes six years, or 72,000 miles as replacement criteria, whichever comes first. We found that forty-eight percent of the general purposes vehicles operated by DES were obsolete according to the Manual's standards, with some in use ten years after purchase.

We found that the cost of maintaining a vehicle after its fourth year of use is so great that if the vehicle is used and maintained for eight years, the additional cost of maintenance after the fourth year is greater than the purchase price of a new vehicle.

With regard to the leasing of general purpose vehicles, we requested a quotation from AVIS Corporation for a fleet of sedans similar to those operated by DES. The price quoted by AVIS for leasing vehicles (which includes maintenance cost) is competitive with just the maintenance costs on District vehicles which are operated for eight years. Leasing would have other subsidiary benefits: delivery of vehicles could be made through a District dealer; maintenance could be done at local minority-owned shops; and there would not be a large initial outlay for purchase of the vehicles.

We recommended that should the District decide to continue to purchase and maintain its own general purpose vehicles, that it operate them for no more than four years. For the greatest cost benefit, we recommended that the District consider leasing vehicles from commercial

sources.

PAYROLL VERIFICATION: D.C. Department of Labor

February 20, 1979

At the time this audit was undertaken, the District was in the

process of developing the Financial Management System which would computerize all District financial transactions. We undertook this audit to determine

if existing payroll data was accurate enough to be directly entered into

the new automated system; and to demonstrate an audit technique for maintaining payroll integrity which we believed should be used regularly in the District Government.

The employees of this Office personally distributed paychecks to some 700 employees of the D.C. Department of Labor. Each employee was required to verify his identity, and payroll records were also compared for accuracy of Social Security number and address. We also evaluated the procedures used by the Department for payroll distribution.

Surprise payroll verification is recommended by the United States General Accounting Office.

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We found no evidence of fraud or abuse of the payroll system in the Department. However, we did find that: 18% of the employees' records contained informational errors; location of employees according to organizational code and their actual physical location in the agency did not match in a large number of cases; that poor record keeping on the part of the D.C. Accounting Office resulted in the production of time and attendance records for former employees which, if properly filled out could result in the issuance of paychecks; and over reliance on one person to handle all payroll activities for the Department. Pay slips indicating zero pay for employees no longer with the Department were also being issued by the D.C. Accounting Office, accounting for 209 blank pay slips.

We found that the state of present payroll data was such that it could not be entered into the new FMS system without substantial editing. Most importantly, we found that a very serious potential for abuse existed because D. C. Accounting continued to issue blank pay slips and time and attendance records for employees who had been removed from Departmental employment. We also were concerned that so much of the payroll control rested with one person.

We recommended that the payroll system stop printing time and attendance sheets for employees receiving no pay during an entire pay period; that there be better record keeping of receipt of time and attendance sheets; that there be better supervision of payroll distribution; that surprise payroll verification be performed regularly; and that payroll data be verified before it is entered into the new financial system.

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ANNUAL REPORT ON DEPOSITORY ACTIVITIES, FY 1978

February 22, 1979

D.C. Law 2-32, The District of Columbia Depository Act of 1977 requires the submission of an annual report by the Auditor. The Act was devised to strengthen local financial institutions so as to ultimately benefit District residents who have not traditionally had access to conventional credit sources, and to stimulate the District economy. The report for Fiscal Year 1978 considered the consumer impact of the Act in terms of strengthening District financial institutions, with particular regard to those meeting the social criteria set forth in the Act.

The Auditor concluded that the first year of operations under the Act had been technically successful, and was beneficial in strengthening local financial institutions. A serious attempt was made to give fair share of demand deposits to set-aside institutions, but it is too early to assess spin-off benefits to consumers. The Auditor found the rating process for financial institutions to be cumbersome, and recommended simplifying the process. He found it discouraging that there was an overall lack of interest shown by District banks in participating in other District financial activities, such as sale of license plate stickers. He recommended that consideration be given to providing incentives which will expand the services offered by banks to District citizens.

ANNUAL REPORT OF THE ADVISORY NEIGHBORHOOD COMMISSIONS

March 30, 1979

As noted in the introductory remarks to the Annual Report of the Office of the District of Columbia Auditor, this Office has certain auditing functions assigned by law with regard to the operation of the Advisory Neighborhood Commissions. As a result of the ongoing fiscal reviews of the Commissions, this annual report on their funding and spending patterns was prepared.

This second annual report of the ANC's showed that funding for the second year was $500,000, which was $250,000 less than FY 1977 funding. This reduction resulted from the withholding of funds to certain ANC's by the District's Office of Budget and Management Systems because the ANC's had substantial cash balances. Some ANC's spent so little that funds were withheld and permanently lost to the ANC. Funds were also not speedily received. We found that $113,500 of funds were not received by eligible ANC's until FY 1979. Although there was a substantial decrease in funds received, expenditures actually increased by one-third because so many ANC's had large cash balances at hand at the beginning of the Fiscal Year.*

We found that the expenditures made by many ANC's were valuable to the community; impressive in their impact; and represent real grass roots budgeting. Twenty-two commissions gave financial support to other community organizations, with one-third going to school and after school activities. Double support was provided when funds were used to pay salaries that resulted in augmented District programs. By supporting programs important to the community, ANC's are able to provide real "grass roots" pressure on the actual budget process by making their needs known.

We recommended that the funding for ANC's be increased not in actual dollars, but rather in transferable budget authority which would result in increased community services, and direct community involvement in the setting of funding priorities.

ENFORCEMENT OF HEALTH AND SAFETY STANDARDS IN RESIDENTIAL FACILITIES FUNDED
UNDER CONTRACT BY THE DISTRICT OF COLUMBIA GOVERNMENT
May 1, 1979

The second in a series of reports dealing with health and safety in District funded facilities, this audit reviewed compliance with health

*

A further report was issued February 11, 1980 which indicates improvein this area.