OPINIONS OF THE DISTRICT OF COLUMBIA AUDITOR

CHANGE IN TAX ON LEASED VEHICLES

November 1, 1978

At the request of then Councilmember Marion Barry, Chairman of the Council Committee on Finance and Revenue, the Auditor examined the revenue impact resulting from a change in the taxation on long term leased vehicles from the current $5 titling excise tax plus a 5% sales tax on lease payments to a single 8% sales tax on lease transactions. The Auditor concluded that the two systems would yield substantially equal tax revenues.

REORGANIZATION OF DISTRICT OPERATIONS - November 9, 1978

The Auditor proposed to Mayor-elect Marion Barry two bases for considering possible agency reorganization. The first would be to place major administration support functions in specialized agencies; the second is to strengthen institutional checks and balances.

The Auditor suggested that three major administrative support functions which have proved to be particular problems in the past be placed in different agencies: the water system in a revenue collection agency; vital statistics in a record retention office, such as Recorder of Deeds; and condominium control in the Securities Division of the Public Service Commission. The second base for reorganization would be improvement of institutional checks and balances by taking audit, revenue projection, etc. out of agencies which have directly related programs.

FULL SERVICE AND MAINTENANCE CONTRACT FOR ELEVATORS

November 28, 1978 The Auditor reviewed this newly established contract to be used by the Department of Housing and Community Development. He found that pricing provisions included in the contract were not in compliance with Federal Law and the District Materiel Management Manual, and that decision of the Comptroller General of the U.S. had held such terms void. He suggested corrective measures.

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D.C. GENERAL HOSPITAL FINANCIAL TRANSITION FROM A DISTRICT AGENCY TO A

SEMI-INDEPENDENT SELF-FUNDING ENTITY

February 6, 1979

The Auditor was of the opinion that receipts for hospital services were to be held by the hospital for its own use, and appropriations would be limited to the net difference between hospital receipts and - costs.

The Auditor stated that the Department of Human Resources, which formerly administered the hospital, did not have the right to retain Medicaid payments for FY 1978 services that were not received until FY 1979. He stated that it was his opinion that DHR's interpretation was contrary to the law.

The Auditor concluded that the Hospital Commission statute and the FY 1979 budget required payment by the Medicaid Trust Fund for all Medicaid billings of the Hospital in FY 1979 regardless of when services were rendered. He also concluded that treatment of patients in FY 1978 was not in accord with the intent of the Hospital Commission Act. Receipts for 1978 were placed in the General Fund rather than deposited to the Hospital. These funds should be transferred to the Hospital. OBLIGATIONS OF ADVISORY NEIGHBORHOOD COMMISSION 2C

February 9, 1979

The Assistant City Administrator for Budget and Resource Development requested the opinion of the Auditor with regard to obligated, but unexpended, balances of the Commission. It was the opinion of the Auditor that there is no precise definition of "obligation" to apply to ANC's and that the traditional definition requiring a binding legal commitment to pay is, in his opinion, too stringent for application to Commissions. It was his opinion that the Commission's funds should be considered obligated in a particular fiscal year even if unexpended at the end of the fiscal year. If there is a specific program commitment recorded in

cost, payable by the District.

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The District pays for the burial not only of indigents without families, but also those whose families cannot afford burial and residents of District institutions without families.

The present contract was held by a white-owned firm. The previous contractor was a black-owned firm. The Committee on Human Resources was considering a bill that would allow families to choose a funeral home of their choice, selected from a list approved by the Mayor, and a higher fee would be paid. Control of price, the Auditor stated, is especially important to protect the family at a time of great grief and potential exploitation. Establishment of a list would be beneficial to the many minority-owned firms in the District. The Auditor pointed out that it would be necessary for the District to maintain a contract with one funeral director to take care of burials of those for whom there is no family or friends.

Our estimation of DHR's contract monitoring schedule found it to be focused too much on the relationship between the funeral home and the deceased's family, and failed to act on the actual provision of services. The Auditor recommended that administration of the program be shifted

from the Comptroller's Office in DHR to the Payments Assistance Administration. APPLICATION OF DISTRICT SALES TAX TO SALES BY SEMI-PUBLIC INSTITUTIONS September 26, 1979

The D.C. Code exempts sales of newspapers and publications of semipublic institutions from the District's sales tax. We identified nine semi-public institutions in the District which make substantial sales of publications, such as the National Geographic Society, the Capitol Historical Society, and the Urban Institute. A check of the nine found that none of them charged District sales tax on their publication sales. We estimated that the nine had combined sales of $8 million which would produce revenues of $400,000 were it not for the exemption.

Additionally, some of these organizations have interpreted the law to apply the exemption to all sales. The General Accounting Office in 1978 cited the Capitol Historical Society, Inc. for failure to collect and pay sales tax to the District of approximately $55,000 for medals, jewelry and film for which they did not receive a sales tax exemption. While all nine organizations are worthwhile, the Auditor is of the opinion that they are national in scope, and do not have enough of local benefit to justify a subsidy through sales tax exemption. Other states do not provide such subsidies to these organizations. The Auditor recommended that the District consider removing the sales tax exemption

on publications.

FORMULATION OF ELECTION PROCEDURES - October 30, 1978

This letter report cited the Office's offer of assistance to the Board of Elections and Ethics in formulating election procedures. This involved preparation of recommendations and forms to improve ballot accountability. The proposals were submitted; personnel from this Office were volunteered to assist in training workers; and forms were proposed. The Board did not respond to the proposal.

The D. C. Register (25 D. C. Register 3816-24) of October 25, 1978, published proposed regulations for ballot security accountability. While an improvement, the Auditor did not believe that they provided the level of ballot accountability that is required. The proposed regulations account for ballots only after the polls have closed; there is no accountability for the ballots cast in the morning and afternoon boxes. Our recommendations provided specific accountability at all stages of balloting.

The letter report was issued to indicate the concern of the Office

and our continued availability.

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the Commission minutes and confirmed by partial actual expenditures

prior to the end of the year, and program is concluded within a reason

able time before the end of the fiscal year, the funds would be obligated. COMPLIANCE OF MAYOR'S ORDERS 79-4 THROUGH 79-14 AND THE FY 1980

CONGRESSIONAL BUDGET SUBMISSION WITH THE DISTRICT CHARTER

February 9, 1979

Chairman Arrington Dixon of the Council of the District of Columbia requested the Auditor's opinions on the above matter.

The Auditor was of the opinion that the Mayor's Orders, which made changes in the organization of the District Government, do not comply with Charter provisions, since no reorganization plans have been submitted to the Council. It was the opinion of the Auditor that the Orders must be considered as reorganizations, and would not be effective until presented to the Council or the Council establishes the offices.

With regard to the Congressional Budget Submission, the Auditor was of the opinion that changes made in the budget by the Mayor which were not approved by the Council could not be properly submitted to the

President.

The Auditor concluded that the Council consider the budget amendments made by the Mayor and the underlying reorganizations and, if acceptable, propose adoption of conforming legislation.

ADDITIONAL COMMENTS CONCERNING REORGANIZATIONS

March 1, 1979

Following on his opinion and conclusions with regard to the Mayor's reorganizations and budget actions addressed to Chairman Dixon or

February 9, 1979, the Auditor stated his opinion that lack of definition

in the area of reorganization will cause continued unnecessary misunderstandings and controversies.