The District’s largest health-care contractor had about $4 million in questionable financial transactions last year that went unreported to regulators until recently, District officials said Thursday.

The disclosures concerning Char­tered Health Plan were made at a D.C. Council hearing on the city’s recent takeover of the company, which billed the District $358 million last year to manage the care of about 110,000 low-income residents. Chartered is owned by Jeffrey E. Thompson, a businessman who has been implicated in financing a “shadow campaign” for Mayor Vincent C. Gray (D) and is the subject of a federal campaign finance investigation

Wayne Turnage, director of the Department of Health Care Finance, said Chartered executives told him at a meeting this month that the company had booked $3 million in “unsourced” receivables while transferring about $1 million out of the company.

“The benign interpretation would be that somebody recorded $3 million in revenue but . . . neglected to indicate the source of the revenues,” Turnage said. “A malignant interpretation would be that somebody recorded $3 million . . . to overstate revenues because they had no source.”

The destination of the missing $1 million was unclear. Executives with Chartered “simply said a million dollars was moved out of the company without approval” from regulators, Turnage said.

Brendan V. Sullivan Jr., Thompson’s attorney, has declined to comment, citing a policy of not discussing ongoing investigations.

D.C. Insurance Commissioner William P. White, who now controls the company, said an audit is underway and is expected to be completed “in very, very short order” — perhaps by month’s end.

Even without the financial irregularities, he said, the company’s financial condition was perilous enough that regulators began keeping close tabs on it in the spring. Financial statements submitted to regulators show that Chartered’s assets dipped dramatically after a $15 million operating loss in 2011, falling to $1.4 million from $17 million the previous year and triggering concerns about the company’s financial health.

But Chartered, which is paid a monthly per-member fee to manage enrollees and reimburse their caregivers, remains the dominant player in the market, with a relatively extensive provider network and a well-known name among residents.

Turnage said Chartered is free to bid on a new contract while it is under city control. But he said he would not award a contract to a firm in that state. “They would have to come out of receivership to win the award,” he said.

That led to pointed questions about whether it was feasible for the company to be sold in time to potentially win a new contract. Turnage said he hoped to make awards shortly after the new year.

Council member Yvette M. Alexander (D-Ward 7) pushed White to complete the audit quickly.

“It seems like that’s preventing the sale of Chartered Health Plan,” she said. “There’s no company that wants to buy another company without knowing their financial status, and there’s no financial status without the audit.”

Alexander and Marion Barry (D-Ward 8) expressed concerns about Chartered’s 160 employees.

But White said there was a “good bit of interest in the company at this point.” He said that AmeriHealth Mercy, a Pennsylvania company that had explored a purchase earlier this year, could still be a buyer.

White hinted that Thompson and AmeriHealth Mercy had been unable to agree on a price. At the hearing, council member David A. Catania (I-At Large) said he had been told that Thompson was seeking “tens of millions of dollars” for the company. White did not disagree: “I have heard he wanted more than someone thought it was worth.” 

The city will hire an investment banker to independently assess the company’s value and evaluate any purchase offers it might receive, White said.

Given the scale of the financial irregularities and the company’s dwindling assets, Chartered could be worthless, Catania suggested. “If that $3 million . . . is fictitious money, then there is no money,” he said to White. “It’s upside down.”

“It’s upside down,” White said.