D.C. Audit Finds Phones Off the Hook
By Eric Lipton
The District is paying $1.8 million a year for more than 9,000 telephone lines that either are not being used or were somehow assigned to users outside city government, including a liquor store and a military base, according to a new report by the D.C. inspector general.
"I've seen it all," said Inspector General E. Barrett Prettyman Jr., who has spent 13 months tracking down waste and fraud in the city government. "But I was surprised and chagrined at this one. It is a complete and total waste."
The reason for the wasted spending, auditors in his office said, is simple: poor management. Besides the money being wasted on more than one-third of the city government's 25,000 phone lines, Prettyman's office found that the District last year spent $173,000 more than it needed to on long-distance service, and $781,000 in payments to Bell Atlantic to cover a tax from which the city is exempt.
"It's indicative of what has been going on in the District for a long time," said Rep. Thomas M. Davis III (R-Va.), chairman of the House Government Oversight subcommittee on the District. "But there is no point in assessing blame. We need to move forward."
Top officials in the city's technology office vowed yesterday to do just that, saying that by July the city will have identified and disconnected the estimated 9,000 unused or mis-assigned telephone lines.
"We concur with everything in the inspector general's report," said Ted Stepney, chief of staff for the District's chief technology officer. "We had no idea of the extent of the problem."
The inspector general's report does not single out any city administrators for criticism. The problem, the audit says, was a general lack of concern about the $22 million a year the city spends on telephone service.
Until recently, no one was assigned to ensure that telephone service was canceled if an agency moved out of an office or reduced its staff, the report says.
At D.C. Village in Southeast Washington, for example, auditors found that the city has paid Bell Atlantic for 142 phone lines, costing more than $5,400 a month. Yet the city-run nursing home for the elderly, mentally ill and retarded closed in June 1996, after years of complaints about inadequate staffing, mistakes in administering medication, cockroaches and asbestos contamination.
When auditors visited the site – which is still sometimes used as a shelter for the homeless – they found only 18 of the 142 telephone lines in service. Only half of the 18 were being used by the Department of Human Services, which was responsible for monitoring all of the 142 telephone lines.
In reviewing the District's 25,000 telephone lines, auditors also found phones that belonged to private companies and other entities, including a liquor store, a military base security force and a broadcasting company. Prettyman yesterday declined to identify them, saying he had no idea how they ended up with city-paid telephones or how many others are out there.
"What is clear is that the problem is widespread and not connected to any one particular kind of user," he said.
The $173,000 in unnecessary long-distance charges occurred because the city failed to take the opportunity to convert about 20 percent of its telephones to a federal long-distance service offering a discounted 7-cents-a-minute rate.
The city had ordered all of its agencies to switch to the program by 1995, but auditors found that several big operations – including the University of the District of Columbia, the city court system, D.C. General Hospital and St. Elizabeths Hospital – did not do so. As a result, the city paid as much as $18,936 a month more than necessary for about 57,000 long-distance calls made from October 1997 to September 1998, the audit says.
The $781,000 in unnecessary payments to Bell Atlantic were made for a gross sales receipts tax, from which the city is exempt. The telephone company collects the money on behalf of the District, so auditors believe that ultimately the city did not lose these funds.
But Assistant Inspector General John N. Balakos said he and his staff could not determine for sure whether all that money actually was paid back to the city. Even if it was, he said, the temporary transfer tied up city funds that could have been spent on city services.
Stepney, of the District's technology office, said that the city is installing 23,000 new phones as part of an effort to modernize its telecommunications equipment, and that workers are ensuring that all lines are being used and are properly assigned. The city now has taken steps to ensure it no longer pays the gross sales receipt tax and is transferring all of the remaining telephone lines to the discounted long-distance service, officials said.
Auditors noted that they did not find evidence of abuse or fraud by city employees, although officials added that they did not do a detailed review of long-distance calls by city staff members to determine whether all the calls were justified.
D.C. Council member Jim Graham (D-Ward 1) called the report "the type of thing that makes us all want to weep with outrage. I have countless projects that we're scraping dollars up for, [and] whenever I hear about waste such as this, it just outrages me. But now we know, so we can take the steps to correct it."
Staff writer Vanessa Williams contributed to this report.
© Copyright 1999 The Washington Post Company