The D.C. Board of Education yesterday voted unanimously to take legal action against the city to prevent the loss of $16 million in funds because of a change in the city's purchasing procedures.

The policy change, implemented last spring, will no longer allow city agencies and departments to carry financial obligations from one fiscal year to the next.

Capital improvement projects are not affected by the policy change.

For the school system, it means the loss of $7.2 million from this year's budget for goods ordered last year, but received this year, and an anticipated $9 million hole in next year's budget for orders made this year, but not yet delivered.

Board vice president Nate Bush (Ward 7) called the situation "unreasonable," even though city officials say the policy applies to all city agencies. On Bush's motion at a special meeting of the board yesterday, the board voted to take "appropriate legal action" in an attempt to keep the funds.

That action could take the form of an attempt to gain a temporary restraining order or a preliminary injunction against the city, said school officials. City officials could not be reached for comment yesterday.

"We have spent a lot of time making this budget process as good as possible. The mayor's action makes this a farce," said board president the Rev. David Eaton (At-large). The full board met with the mayor early yesterday, but without apparent success.

The board will conduct a press conference today on the matter and school system administrators have prepared a report of what programs will be affected by the policy change.

In the report, school officials say, for example, that $857,677.50 earmarked in the current fiscal year for computer equipment will have to come out of the fiscal 1984 budget. That equipment includes an automated record keeping system, software for computer literacy labs and computers for 35 school sites.

The report went on to state that the system's career development schools would be affected because "it would be impossible for the school system to identify funds to pay for equipment that is already arriving."

City officials have adopted the argument that they have a sizeable deficit to reduce and that one way of doing it is to take back unspent funds at the end of the fiscal year, even if that money had been approved and obligated to pay for goods that year.

In the past, goods received in the fiscal year that followed the one in which they were ordered were paid for out of the city's general fund, but that practice has been stopped.

"We have been budgeting on an obligation basis rather than an expenditure basis and we are going to an expenditure basis," city budget director Betsy Reveal said this week.

School officials argue that they were not told they would be included in the new policy, even though a city-wide memorandum outlined the policy last March. They also said they shouldn't be treated like any other city agency because their mission is education.

"There was no intention to negotiate with us," said board member Eugene Kinlow (At-Large), who made a successful motion directing the board to hire a law firm to help in the dispute.

Part of the school board's belief that the city can be successfully enjoined from taking the money stems from a successful lawsuit filed by the school board in 1976 against then mayor Walter Washington over a $1.8 million job freeze. D.C. School Board Votes To Fight New City Purchasing Policy By Ronald D. White Washington Post Staff Writer

The D.C. Board of Education yesterday voted unanimously to take legal action against the city to prevent the loss of $16 million in funds because of a change in the city's purchasing procedures.

The policy change, implemented last spring, will no longer allow city agencies and departments to carry financial obligations from one fiscal year to the next.

Capital improvement projects are not affected by the policy change.

For the school system, it means the loss of $7.2 million from this year's budget for goods ordered last year, but received this year, and an anticipated $9 million hole in next year's budget for orders made this year, but not yet delivered.

Board vice president Nate Bush (Ward 7) called the situation "unreasonable," even though city officials say the policy applies to all city agencies. On Bush's motion at a special meeting of the board yesterday, the board voted to take "appropriate legal action" in an attempt to keep the funds.

That action could take the form of an attempt to gain a temporary restraining order or a preliminary injunction against the city, said school officials. City officials could not be reached for comment yesterday.

"We have spent a lot of time making this budget process as good as possible. The mayor's action makes this a farce," said board president the Rev. David Eaton (At-large). The full board met with the mayor early yesterday, but without apparent success.

The board will conduct a press conference today on the matter and school system administrators have prepared a report of what programs will be affected by the policy change.

In the report, school officials say, for example, that $857,677.50 earmarked in the current fiscal year for computer equipment will have to come out of the fiscal 1984 budget. That equipment includes an automated record keeping system, software for computer literacy labs and computers for 35 school sites.

The report went on to state that the system's career development schools would be affected because "it would be impossible for the school system to identify funds to pay for equipment that is already arriving."

City officials have adopted the argument that they have a sizeable deficit to reduce and that one way of doing it is to take back unspent funds at the end of the fiscal year, even if that money had been approved and obligated to pay for goods that year.

In the past, goods received in the fiscal year that followed the one in which they were ordered were paid for out of the city's general fund, but that practice has been stopped.

"We have been budgeting on an obligation basis rather than an expenditure basis and we are going to an expenditure basis," city budget director Betsy Reveal said this week.

School officials argue that they were not told they would be included in the new policy, even though a city-wide memorandum outlined the policy last March. They also said they shouldn't be treated like any other city agency because their mission is education.

"There was no intention to negotiate with us," said board member Eugene Kinlow (At-Large), who made a successful motion directing the board to hire a law firm to help in the dispute.

Part of the school board's belief that the city can be successfully enjoined from taking the money stems from a successful lawsuit filed by the school board in 1976 against then mayor Walter Washington over a $1.8 million job freeze.