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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

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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 AC'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

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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 reasonable 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.

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Noting the lack of time to consider and adopt reorganization

procedures, the Auditor stated his opinion that the Council, in con

sultation with the Mayor, set a specific date to begin consideration of

these issues.

REAL ESTATE TAX PRACTICES March 29, 1979

The Auditor expressed his opinion to Chairman John Wilson of the Council Committee on Finance and Revenue that the Real Property Tax Rate Act for Tax Year 1979, which established separate tax rates for less than five-family residential properties and other properties has resulted in a situation in which a differential rate will be applied which was probably not intended by the Council.

A number of single family homes in the District are built across property lines. A number of home owners also own the vacant lots adjacent to their homes. These vacant lots are taxed at a higher rate than the lot on which the house is built, even though it is used as a yard and may not have street access. The Auditor was of the opinion that the higher rate should not be applied to vacant properties in residential neighbornoods. The lot lines exist only on paper and do not alter use of property. And because of its location in a residential neighborhood, it cannot be used for commercial purposes. The Auditor submitted draft legislation for inclusion in the 1980 tax rate act. TIME REQUIREMENTS FOR COUNCIL ACTION ON THE MAYOR'S BUDGET SUBMISSION

April 11, 1979

Council Chairman Dixon requested the Auditor's opinion as to whether or not the 50 day requirement for Council action on the Mayor's budget submission also applied to budget and supplemental budget acts. The Auditor was of the opinion that it did not.

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The 50 day requirement was added at the very end of Congressional

consideration of the Self-Government and Governmental Reorganization Act. It did not appear in either the Senate or House passed bills and amendments. The 50 day provision was added by the joint conference committee.

The Auditor interpreted the committee deliberations to mean that the 50 days applies only to the budget, and not supplemental budgets. Discussion of supplemental budget omits the 50 day requirements. The Auditor was of the opinion that there are no time limitations on Council consideration of budget supplements or amendments.

EQUITABLE ADJUSTMENT TRANSPORTATION MANAGEMENT, INC.

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April 18, 1979

At the request of John Brophy, Chief of the Parking Division of the Department of Transportation, the Auditor reviewed the statement of operation prepared by Transportation Management, Inc. in support of their request for an equitable adjustment of their contract with the Department. Assuming the validity of the data, the allocation of expenses appeared to be reasonable. However, certain adjustments should be made to fairly state projected operations.

The Auditor stated that equitable adjustments should be made to absorb loses suffered because of the lower number of tows than estimated. The Auditor also expressed his opinion that interest costs should not be included in computation of the adjustment.

BUDGET PROCESS FOR PLANNING PAY INCREASES - May 31, 1979

The Auditor wrote to Chairman Charles Wilson of the D. C. Subcommittee on Appropriations, of the U.S. House of Representatives to express his concern about the District's budget process for planning pay increases. In the past, pay increases were not anticipated in District budgets, but rather, positions were kept unfilled to provide increased funds for filled positions. These practices made the budget documents deceptive.

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