Self-Insurance

The District is not insured for most risks.

Uninsured casualty losses are reflected when a determinable loss has been incurred. No significant losses occurred in 1979.

Urban Renewal Program

The District's urban renewal program began in the 1940's and expenditures have totalled over $500 million through September 30, 1979. Funding has been provided through U.S. Department of Housing and Urban Development grants, program income, land sales proceeds and debt issued in the name of the Redevelopment Land Agency, which is repayable solely from future HUD grants. HUD is in the process of extending final close-out grants for this program on the basis of estimated future costs, less estimated proceeds on sale of District-owned land in the redevelopment areas. Estimated costs to complete the various projects at September 30, 1979, are $45 million, net of estimated land proceeds of $10 million. Development and land disposition are expected to continue through 1985 and the District will assume financial responsibility for completing the development within the cost estimates and disposing of the land for the estimated amounts. Accordingly, any adverse results in this program may require the District to provide future funds.

Grant Disallowances

The District's Federal grants are subject to audit by the Federal government. Such audits could lead to requests for reimbursements for expenditures not meeting grant requirements. In the past, the District has not refunded significant amounts upon audit. As of September 30, 1979, the District has reviewed its open grants for potentially unallowable expenditures, and, in the opinion of management, adequate reserves for potential grant disallowances have been provided.

(11) EVENTS SUBSEQUENT TO DATE OF AUDITORS' REPORT CASH FLOW

At September 30, 1979, the District's net cash and investments was $138
million. At January 31, 1980, net cash and investments was reduced to
approximately $29 million. District management advises that this reduction
is the result of normal seasonal fluctuations, plus recent refunds required
on the accelerated commercial real estate receipts and decreased grant
reimbursements caused by delays of billing information during implementation
of new systems since September 30, 1979. District management is in process
of implementing procedures and programs to assure that cash flow will be
adequate to meet District needs during fiscal 1980.

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$(284,381) $34,891

DISTRICT OF COLUMBIA

$73,784

(32,945)

(128,072) (180,049)

$86,043

The accompanying Summary of Major Accounting Principles, Notes to Financial Statements and Exhibit IV are an integral part of this financial statement.

Exhibit III

(572,919)

(30,567)

$1,696,760 $(2,741,792) 3(1,043,032)