Human Resources gives the highest priority to the procurement requests from Forest Haven. During the latter part of Fiscal Year 1979, DHR has been forced to place a freeze on most hiring and procurement. As the highest priority, Forest Haven is exempt from this freeze.

- The Department of Human Resources has done a number of analyses of overtime expenditures at Forest Haven. The inefficient use of overtime and the number of fulltime positions for which these funds would pay has been noted. However, the personnel base for Forest Haven has never been adequate to meet the day to day needs of residents within a 24 hour institutional setting. This has meant that normal operational strategy must utilize overtime in the Residential Services, Medicaid Services and Community Services Divisions. Our recent efforts to improve the staffing pattern in the Medicaid Services Division has resulted in what we expect to be only a temporary increase in overtime. As we realize the benefits of our recruitment efforts, the need for this overtime will diminish. However, because of the poor staff to resident ratio in the Residential Services and Community Services Divisions, overtime is crucial for providing minimal safe coverage for the residents. Overtime in all units is continually monitored and cases of abuse are dealt with promptly.

The District of Columbia's 1980 budget requested 99 temporary positions to assist in reducing the significant overtime problem. The House Appropri

ations Committee on the District of Columbia voted to reduce this request to 43 positions. In its deliberations, the Senate Appropriations Committee on D.C. agreed with the House Committee on the reduction of these positions. We will not know the outcome of these actions until the final budget is approved by the Congress.

Another factor impacting on the use of overtime is the need to provide staff to group homes in the community. During this fiscal year, we have al

GAO REPORT

- We feel that the utilization of both temporary and part-time employees will not adequately resolve the overtime problem. The only resolution rests with the addition of permanent full-time employees for all shifts.

ready placed forty (40) of the sixty (60) residents required under the U.S. District Court Decree without the allocation of any additional resources specifically designed for this function.

- In recent months the Director, Department of Human Resources, has become increasingly concerned over the inordinate delay in executing adverse personnel actions for Forest Haven personnel. Without violating the rights and privileges of any of these employees, he has taken steps to insure that these actions will be handled in a timely manner which will certify that administrative actions at the institution will be fully supported without denial of any rights vested in the employees.

The transportation problems at Forest Haven have been substantially resolved. A number of vehicles have been purchased since the time of this report, specifically vehicles capable of carrying wheelchairs. At the present time, there are 8 (42 passenger) buses, 16 (10-12 passenger) carryalls and one ambulance. One bus is equipped to carry 8 wheelchair patients and 10 passengers; additionally, 2 liftgates carryalls are equipped to carry 4 wheelchair patients each. Forest Haven has ordered one more lift-gate carryall, and it plans to convert one bus for wheelchair use. Our problem now is the lack of drivers to operate the vehicles so that patients may reach educational and vocational facilities. It is estimated that at least six additional drivers are needed. Recruit actions have been initiated for two of the six drivers:

GAO REPORT

tages within the Medicaid Services Division.

- These inspections include all program activities, staffing, life-safety and environmental conditions.

- It should be noted that all buildings and facilities at Forest Haven have been subject to annual inspections by such agencies as the D.C. Fire Department and the Department of Environmental Services. The problem has been that violations were cited and left uncorrected. The Mayor has ordered that this practice cease. All buildings owned and operated by the D.C. Government will meet all code requirements necessary for a valid occupancy permit. In the case of Forest Haven, we have instituted an ongoing process of identifying and correcting code violations. To this end, we are using the full resources of the Department of Human Resources.

- The major area of non-compliance with Medicaid deficiencies falls into the following categories: staffing, lifesafety and environmental deficiencies, and medical services.

In the area of staffing, as we have indicated in 2. above, a massive campaign was launched to fill the approximately 100 vacancies at the institution. The major portion of these vacancies is in the direct care area. Filling of these vacancies will correct the problem of direct care patient to staff ratios, as well as the problem of deficiencies in the Licensed Practical Nursing area. In filling the 100 vacant positions, staffing in the Medicaid Program will be in minimum compliance with Medicaid standards.

Plans continue with regard to the renovations of suitable space for the Forest Haven pharmacy. In the meantime, the Clinical Pharmacists are moving rapidly to implement a modified unit-dose system for individualized medication prescriptions. Additionally, Forest Haven has moved to have all medications administered by licensed

personnel. While the Licensed Practical Nurses and Registered Nurses are in short supply, there is full coverage for the administration of medication in the four cottages in the Medicaid Division. In accomplishing this coverage, Forest Haven has utilized contract licensed personnel. As indicated earlier, the filling of the approximately 100 positions will substantially alleviate the nursing shortage. Another shortage is in the area of professional services, e.g., dieticians, psychologists, physical therapists and occupational therapists. These are hard to fill, scarce skill categories. In particular, vacancies for physical therapists and occupational therapists have existed for some time. Professionals in these two areas are in short supply. We should be able to fill the other positions in the recruitment process now underway.

- Of the life-safety code, sixteen deficiencies were identified as being crucial problems. Nine of the sixteen have been corrected, and work to corrected the remaining seven requires major structural renovations. We anticipate work on these remaining items to commerce on September 10, 1979, on a capital outlay project.

This will complete all outstanding deficiencies identified in the four Medicaid cottages.

- The provision of adequate medical services at Forest Haven is hampered by several factors. One has been mentioned briefly before with regard to the recruitment of professional people to service in this remote and difficult setting. Further, the remoteness of Forest Haven from the major medical services in the City, e.g., D.C. General Hospital in particular, makes it difficult to secure adequate medical care for acutely ill persons at Forest Haven. At the present time, we are investigating the possibility of securing medical services from a general, medical/surgical hospital in Laurel, Maryland. Additionally, we have recently expanded our medical services

GAO REPORT

capability through contracts with the Georgetown Hospital, Mt. Vernon Rehabilitation Hospital and the Childrens National Medical Center. We are recruiting to fill two physicians positions.

- The food service operation at Forest Haven has undergone complete renovation. The kitchen has been completely renovated and new equipment installed. In addition, storage facilities have been renovated. This has resulted in the facility being in full compliance for food preparation and service.

- The laundry will undergo a complete renovation as a capital outlay project. Following several delays, work is now scheduled to begin on this project September 1, 1979. Anticipated completion is June 1, 1980.

- Maintenance is a continuing problem because of the lack of available money allocated to the Facilities Maintenance Operations Division.

The Mayor has requested the Director, Department of Human Resources, to give him a plan which will indicate how this problem can be addressed on a more permanent basis. It has already been determined that a minimum of 35 positions will be required.

In the last three years, considerable improvements have been made in this area as a result of redirecting staff to deal with the many maintenance problems at Forest Haven on a priority basis. In addition to reassigning staff, it is clear to the permanent maintenance staff that Forest Haven will always receive priority treatment from the Department of Human Resources, even in preventive maintenance activities.

- The specific citations by the Environmental Health Services have been corrected. Forest Haven maintains an ongoing program for the detection and correction of recurring environmental deficiencies.

Forest Haven was surveyed by the Department of Environmental Services

on March 14, 15 and 16, 1979, and a "tremendous improvement" was expressed by the inspection team. All violations cited during the above mentioned survey have been corrected.

OFFICE OF BUDGET AND RESOURCE DEVELOPMENT

Observations on the District of Columbia's Municipal Bond Program, April 17, 1979.

Recommendation

GAO recommended that the City Administrator direct OBMS to adopt formal detailed procedures for the issuance of municipal bonds before reinstituting the bond program.

Status

Since February 28, 1979, the District has been conducting a careful and deliberate selection process for a financial advisor for the issuance of municipal debt. The firm sought to serve in this capacity is expected to offer substantial resources and expertise in municipal debt management, as well as in financial markets. It has been clearly indicated to the candidates in this process that the District anticipates substantial debt management foundation-building efforts to be undertaken by the financial advisor in conjunction with District staff and bond counsel. Such undertakings will involve, among other activities: formulation of comprehensive debt policies and explicit procedures derived therefrom; refinement of the capital programming process to ensure an effective mating with debt management; analysis of existing capital structure, debt capacity, and financial environment; and, ultimately, formulation of the first stage of a comprehensive debt issuance program, encompassing long- and short-term general obligation and revenue debt.

It is our view that any debt issues bearing the District's name, whether direct obligations or not, will influence the general market perception and acceptance of the District as a municipal bond

GAO REPORT

issuer. The attempt will be made to ensure to the fullest extent that the initial sequence of bond issues will both provide for the immediate funding purposes and contribute to the overall strength of the District as a credit-worthy municipal issuer. Although the District Offices of Financial Management and Budget and Resource Development will serve as core debt management staff, ultimate suport of the debt issuance process will systematically cross organizational lines.

Recommendation

GAO recommended that the City Administrator highlight the City issues and communicate priorities to each agency before the annual planning cycle, so the agency head can specifically plan projects to meet these priorities as well as projects they consider necessary to support their programs. The responsible reviewing organizations should use these priorities in addition to other criteria they use, to decide whether to recommend projects for approval and funding.

Status

It should be noted that the District's maintenance of an ongoing annual capital improvement programming process, with a multiyear planning horizon and formal centralized review, constitutes a mechanism at least equal to that to many municipal debt issuers with quality credit ratings.

The District capital improvement process strives to balance the potential benefits of executive direction and agency initiative. However, there is room for improvement in this area.

Under the new administration, the District Government has begun to develop a general plan which will reflect policy direction and District-wide goals and priorities. Future capital improvements projects generated from within the District government will be consistent with the established general plan. The District-wide priorities which will determine the time frame in which projects are to be initiated will be communicated to 20 each agency.

Status

It is the District's goal to ensure that all project justifications and scope of work provide enough information to evaluate the need for the projects and to estimate cost. Many of the concerns expressed by GAO are addressed in the budget instructions transmitted to agencies. However, rigorous bounding of project scopes and estimating of costs have not always been achieved in the past. To an extent, this has been a function of the method of funding and the associated capital reprogramming flexibility. Capital improvement programming procedures will be examined for improvement in the course of debt procedure development.

The GAO report criticized several projects which grossly exceeded initial cost estimates. Prior to the enactment of the Home Rule Act the procedure established for requesting project funding from the Congress was one of incremental funding. It was recognized by all parties that planning adjustments were to be made. These adjustments often resulted in project costs exceeding the first estimate. However, it should be noted that when such adjustments were made, they were made in the budget process ensuring that the project's ultimate cost were known to everyone. The Shaw Branch Library is an example of the incremental funding approach.

None of the four situations identified on page 17 of the Report as potential mismatches between project cost and budgetary/

funding authorization are insurmountable. Of course, since such situations reduce the efficiency of the debt issuance process, procedures will be developed with a view toward minimizing the likelihood of their occurrence. Also, many projects will be of a magnitude that will require or make expedient a stage-wide issuance of the total bond authorization, thus allowing closer targeting of actual funding to final project cost.

Any increase in a project budget will be requested through a Congressional budget submission, since Congressional budget approval controls the total cost of a project.

Recommendation

GAO recommended that the City Administrator refine and clarify the criteria for determining when betterments and improvements are to be considered as capital items and thus eligible for bond financing to minimize subjective interpretations. The criteria established should be consistent with the Home Rule Act, the District's Accounting Principles and Standards and take into account the other criteria cited in this report. All items currently in the capital budget that do not meet refined and clarified criteria should be removed from the capital budget. GAO also recommended that Group I and Group II equipment classifications be eliminated. The items previously classified as Group I and Group II should be required to meet the criteria for permanent improvements before they are included in the capital budget.

Status

The District Government clearly has no intention of financing operating expenses in the capital budget. The capital budget instructions in this area generally follow accepted accounting principles in that improvements to be included must have an estimated useful life for at least the period of financing and result in increasing the value of the property.

As evidenced by the numerous references in the Report, there are differing definitions of what constitutes a capital improve

ment. The project items listed on pages 22 and 23, for the most part, coincide with a number of those definitions. Such projects have extended useful lives and would meet generally accepted definitions for capital assets. The classification of a $1.6 million heating system replacement (referred to in the Report) which has a useful life of about 20 years as an operating budget item is inconsistent with any definition of a capital asset.

Within the scope of anticipated refinements to the capital improvement programming process, the District will ensure the inclusion of equipment, such as items permanently connected and designed as an integral part of the building (Group I), and of items permanently connected to building services or structure itself (Group II) only as provided for in the Home Rule Act P.L. 93-198 as amended.

Recommendation

GAO REPORT

GAO recommended that the City Administrator develop procedures for preparing accurate (water and sewer service revenue) estimates. The estimates should be reviewed and approved before they are finalized in financial reports.

Status

The Report notes that problems in the billing system have made it difficult to estimate water and sewer service revenue. The new system being developed will encompass computer-based consumption data management, billing, and revenue estimating capabilities. It will provide accurate revenue accruals and minimize erroneous bills.

The Office of Budget and Resource Development has recently instituted procedures for thorough budgetary review of revenue estimates, including those for water and sewer service, as a part of the budget preparation process.

Budgeted water and sewer revenue, on an aggregate basis, is reported retrospec tively in comparison to actual revenue in the District's Annual Financial Report, however, insofar as this is an historical budget item, no additional review prior to publication of this document is anticipated. 21