Report Faults D.C. Spending
By David A. Vise
Millions of dollars earmarked for productivity improvements and management reforms in the District government instead have been used to pay routine agency expenses, including renovating bathrooms, according to a report to be submitted to the D.C. Council today.
The council's Committee on Government Operations, headed by Kathy Patterson (D-Ward 3), has concluded that reform efforts directed by Chief Management Officer Camille C. Barnett and the D.C. financial control board have been "uneven and erratic." Less than one-fourth of the $92.1 million available to the Department of Employment Services and other agencies under the committee's jurisdiction was spent in fiscal 1998, making noticeable changes hard to find and underscoring the slow pace of progress, the study said.
While failing to implement various career and work-force training initiatives, the employment agency spent $30,000 to renovate two bathrooms in its 500 C St. NW headquarters, an expenditure the committee concluded was "wasteful" since the District plans to move out of the building in the coming year.
"If you look at the process set in motion by the control board a year ago, I think that the management reform process is seriously flawed," Patterson said yesterday. "These are the types of spending practices that precipitated the District's financial crisis."
Rep. James P. Moran Jr. (D-Va.), the ranking Democrat on the House Appropriations subcommittee on the District, said he was dismayed by the council committee's findings.
"It's really unacceptable, what this report shows," Moran said.
The stinging criticism of the city's management overhaul effort comes as the control board and Mayor-elect Anthony A. Williams (D) continue discussing how much authority the panel will delegate to him when he is sworn in Jan. 2. Williams, who has pledged to clean up streets and graffiti and produce other visible signs of improvement within six months of taking office, wants the board to put him in charge of virtually all of the city's major agencies and operations.
The council report found that about two-thirds of the total $87.6 million in management reform funds spent during fiscal 1998, which ended Sept. 30, went to areas outside the scope of the original plans, reflecting a lack of focus and the diversion of resources. Most of that money was used to close a budget deficit at D.C. public schools, the study said, and to pay for unbudgeted expenses in the city's office of corporation counsel, including salaries, fax machines, two cars and a legal settlement fund.
John W. Hill Jr., executive director of the control board, said money used to pay for agency expenses came out of the city's budget surplus, not from management reform dollars. He also said that Congress gave the control board the flexibility to use surplus funds to pay for productivity improvements throughout the city government, including in the public schools and the corporation counsel's office.
"We were very careful to make sure we were funding specific productivity improvements," Hill said. Patterson "is making misstatements if she is saying we diverted management reform dollars. We used surplus funds. We did not divert money from management reform efforts for schools."
Despite that disagreement, Hill said the presidentially appointed control board "encourages this type of review and oversight by the council. We will review the report and make any necessary corrections."
Hill said the control board concurs with the report's conclusion that the District failed to spend money on important capital projects rapidly enough. He emphasized that the money that was unspent can be carried over and used during the current fiscal year.
"We certainly would have liked for the money to have been spent faster," Hill said, "but we didn't want to spend the money for the purpose of just spending money. There had to be contracts in place, and we had to be ready to go forward with it. They were not ready."
The report said the city still has not replaced faulty computer systems in the Department of Motor Vehicles and the Department of Consumer and Regulatory Affairs, which issues building permits and other licenses. Of $64.8 million budgeted for information technology reforms in fiscal 1998, only $5 million was spent.
"The District has lost an opportunity to make immediate and much-needed improvements," the report said. "The committee is dismayed that no management reform funds were spent on either project."
The report said Barnett needs to work directly with agency heads, rather than having them report to various assistants, who in turn report to her. It also said the chief management officer relied for too long on consultants and other part-timers, causing instability and fragmentation in the chain of command.
Barnett said yesterday that she needed outside help to initiate the management reform process, which is "on track and producing good results." She also took issue with the committee's critique of her office's structure, saying it was "typical" to have department heads report through others to the chief management officer.
"I have a lot of direct contact with agency heads," Barnett said, "and I think it is working well."
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