D.C. Moves to Control Spending
Saturday, January 7, 2006
D.C. Mayor Anthony A. Williams and top city officials said yesterday that the District is taking steps to tighten controls on spending for government travel, sole-source contracts and highly paid consultants, a move expected to save millions of taxpayer dollars.
During a hearing before the D.C. Council's Committee on Government Operations, officials acknowledged that there are problems in the city's contracting office, but the mayor testified that the agency is not "hemorrhaging" money and that there is no evidence of financial misconduct by District employees.
"While I cannot testify here today that there are no problems with the contracting and procurement system, I can state with certainty that the Office of Contracting and Procurement is working every day . . . to fix any problems that are found to exist," Williams (D) said. He added later: "Is there a fire there? Yes, there is a fire. But is it an uncontrolled fire? No."
The mayor's remarks were made during the third hearing held by council member Vincent B. Orange Sr. (D-Ward 5), the committee chairman, since The Washington Post reported in November that hundreds of millions of dollars were spent annually in violation of laws and policies intended to avoid waste and fraud. Orange had threatened to subpoena Williams if he did not agree to testify.
Orange said yesterday that after meeting with Chief Financial Officer Natwar M. Gandhi and reviewing an analysis of spending practices, he concluded that the problems are not as severe as reported.
"Clearly there is no evidence of government waste, fraud and abuse," Orange said and added that the procurement issues raised in the news articles in November were outdated and had been corrected. The executive branch appears to be "on top of the entire issue, although we still have a long way to go."
Yet, as the city officials testified that the problems were not pervasive, they announced that they were proposing reforms that include a travel policy and the elimination of 40 consulting jobs.
The Post reported last week that the city spends $5.5 million a year on out-of-town travel and that employees often fail to account for cash advances. The contracting office administers the city's travel credit cards.
City Administrator Robert C. Bobb said that the government will eliminate cash travel advances and require employees to use travel credit cards and follow federal guidelines for food and hotel allowances.
Using the credit cards would enable city officials to better monitor travel expenditures, Bobb said. Cardholders would be retrained and each agency would have a team to oversee the charges, randomly review spending and report irregularities.
Herbert R. Tillery, interim director of the city's contracting office, said all no-bid contracts have been reviewed since a Post investigation concluded that the city spends about $200 million a year without competition. The city's review found no laws broken, he said, but money "probably, maybe" could have been saved by competition. Tillery said he has directed the agency to increase the number of contracts for which the city seeks competitive bids.
Tillery also said 40 consulting positions in the technology office will be replaced by city posts. Taking into account salary and benefits, the change is expected to save the city $2.7 million a year, city records show. The change will effect network management, e-mail, data center and telecommunications jobs. Documentation filed Dec. 22 to seek council approval said the change would improve accountability and city services.
Orange suggested that the savings indicate that the District might have been paying consultants too much in the past.
Gandhi testified about payments called direct vouchers, which the news reports said were used to circumvent contracting laws. Gandhi said he had analyzed the city's direct voucher spending and found "all payments are appropriate, correct and legal."
Direct vouchers are payments without contracts, and city rules say they can be used for workers compensation payments, court-ordered judgments, settlements and other uses.
Gandhi said $229 million was paid last year in direct vouchers for uses outside the allowed uses. All but $4 million of that spending was within "the intent" of the city rules and paid for legitimate goods and services, he said. Gandhi said his office put new controls in place this year to prevent improper use of direct vouchers