THE "Cherry Blossom" sailed off into the twilight Friday night with Mayor Marion Barry and his private guests, but the controversy surrounding the event was not stilled. Earlier this month, the mayor canceled a related event known as Riverfest, the city's largest summer celebration, supposedly because of the District's severe financial troubles. But Friday's $17,000 riverboat cruise, paid for through the D.C. Treasury, was never canceled, as it should have been. The passenger list seems to have included many city workers and some members of the mayor's Youth Leadership Institute.

Several D.C. Council members who unsuccessfully implored the mayor to beach the cruise rightly termed it an example of "mixed-up" municipal priorities and as an act casting a poor impression of the city's fiscal judgment. City officials said they couldn't get out of the contract, but all properly written D.C. contracts have a clause allowing the government to break them if that is in the city's best interest.

The cruise was paid for out of a government fund, the existence of which was largely unknown to many of the city's highest elected officials. The fund amounted to more than $100,000 from private donations and vendor fees from past Riverfests. Council member John Wilson says that funds established without council approval are illegal. Council member Frank Smith Jr. asks who authorized the cruise spending, why wasn't the council told about the fund's existence and what has this fund been used for in the past.

Mayor Barry says the council knew about the Riverfest fund. But City Auditor Otis Troupe said he has made several inquiries to Barry officials about the existence of special funds. Mr. Troupe says he never received any information and that "the executive has on several occasions specifically denied the existence of such funds." Mayor Barry tried to diffuse the controversy by using the rest of the Riverfest fund to open seven public pools ahead of schedule. Frankly, all of the money should have be used for that purpose.

A shrewd mayor would realize that such lack of candor and judgment weakens any argument that the local administration is run by good fiscal managers, that tax increases are needed to maintain vital city services and that the District deserves a higher federal payment. But fortunately, largely because of the D.C. Council's criticism, the citizens of the District will get some benefit from the rest of this shadowy fund.