[House Report 106-663]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     106-663

======================================================================



 
      DISTRICT OF COLUMBIA RECEIVERSHIP ACCOUNTABILITY ACT OF 2000

                                _______
                                

 June 12, 2000.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Burton of Indiana, from the Committee on Government Reform, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 3995]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Government Reform, to whom was referred the 
bill (H.R. 3995) to establish procedures governing the 
responsibilities of court-appointed receivers who administer 
departments, offices, and agencies of the District of Columbia 
government, having considered the same, report favorably 
thereon with an amendment and recommend that the bill as 
amended do pass.

                                CONTENTS

                                                                   Page

  I. Summary of Legislation...........................................3
 II. Background and Need for the Legislation..........................3
III. Legislative Hearings and Committee Actions.......................4
 IV. Committee Hearings and Written Testimony.........................4
  V. Explanation of the Bill..........................................4
 VI. Compliance with Rule XI..........................................5
VII. Budget Analysis and Projections..................................5
VIII.Cost Estimate of the Congressional Budget Office.................5

 IX. Specific Constitutional Authority for this Legislation...........6
  X. Committee Recommendations........................................6
 XI. Unfunded Mandates Reform Act; Public Law 104-4, Sec. 423.........7
XII. Federal Advisory Committee Act (5 U.S.C. App.) Section 5(b)......7
XIII.Changes in Existing Law..........................................7


    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``District of Columbia Receivership 
Accountability Act of 2000''.

SEC. 2. SPECIAL RULES APPLICABLE TO RECEIVERS WITH RESPONSIBILITIES 
                    OVER DISTRICT OF COLUMBIA GOVERNMENT.

  (a) In General.--Each District of Columbia receiver shall be subject 
to the requirements described in section 3.
  (b) District of Columbia Receiver Defined.--In this Act, a ``District 
of Columbia receiver'' is any receiver or other official who is first 
appointed by the United States District Court for the District of 
Columbia or the Superior Court of the District of Columbia during 1995 
or any succeeding year to administer any department, agency, or office 
of the government of the District of Columbia.

SEC. 3. REQUIREMENTS DESCRIBED.

  (a) Promoting Financial Stability and Management Efficiency.--Each 
District of Columbia receiver who is responsible for the administration 
of a department, agency, or office of the government of the District of 
Columbia shall carry out the administration of such department, agency, 
or office through practices which promote the financial stability and 
management efficiency of the government of the District of Columbia.
  (b) Cost Control.--Each District of Columbia receiver who is 
responsible for the administration of a department, agency, or office 
of the government of the District of Columbia shall ensure that the 
costs incurred in the administration of such department, agency, or 
office (including personnel costs of the receiver) are consistent with 
applicable regional and national standards.
  (c) Use of Practices to Promote Efficient and Cost-Effective 
Administration.--Each District of Columbia receiver who is responsible 
for the administration of a department, agency, or office of the 
government of the District of Columbia shall carry out the 
administration of such department, agency, or office through the 
application of generally accepted accounting principles and generally 
accepted fiscal management practices.
  (d) Preparation and Submission of Budget.--
          (1) Consultation with mayor and chief financial officer.--In 
        preparing the annual budget for a fiscal year for the 
        department, agency, or office of the government of the District 
        of Columbia administered by the receiver, each District of 
        Columbia receiver shall consult with the Mayor and Chief 
        Financial Officer of the District of Columbia.
          (2) Submission of estimates.--After the consultation required 
        under paragraph (1), the receiver shall prepare and submit to 
        the Mayor, for inclusion in the annual budget of the District 
        of Columbia for the year, the receiver's estimates of the 
        expenditures and appropriations necessary for the maintenance 
        and operation of the department, agency, or office for the 
        year.
          (3) Treatment by mayor and council.--The estimates submitted 
        under paragraph (2) shall be forwarded by the Mayor to the 
        Council for its action pursuant to sections 446 and 603(c) of 
        the District of Columbia Home Rule Act, without revision but 
        subject to the Mayor's recommendations. Notwithstanding any 
        provision of the District of Columbia Home Rule Act, the 
        Council may comment or make recommendations concerning such 
        estimates but shall have no authority under such Act to revise 
        such estimates.
          (4) Exceptions.--This subsection shall not apply with respect 
        to--
                  (A) any department, agency, or office of the 
                government of the District of Columbia administered by 
                a District of Columbia receiver for which, under the 
                terms of the receiver's appointment by the court 
                involved, the Mayor and the Council may revise the 
                annual budget; or
                  (B) the District of Columbia Housing Authority 
                receiver appointed during 1995.
          (5) Effective date.--This subsection shall apply with respect 
        to fiscal year 2001 and each succeeding fiscal year.
  (e) Annual Fiscal, Management, and Program Audit.--
          (1) In general.--An annual fiscal, management, and program 
        audit of each department, agency, or office of the government 
        of the District of Columbia administered by a District of 
        Columbia receiver shall be conducted by an independent auditor 
        selected jointly by the receiver involved (or the receiver's 
        designee) and the Mayor (or the Mayor's designee), and each 
        District of Columbia receiver shall provide the auditor with 
        such information and assistance as the auditor may require to 
        conduct such audit.
          (2) Exceptions.--Paragraph (1) shall not apply with respect 
        to--
                  (A) any department, agency, or office of the 
                government of the District of Columbia administered by 
                a District of Columbia receiver for which, under the 
                terms of the receiver's appointment by the court 
                involved, audits are conducted by an auditor selected 
                jointly by the parties to the action under which the 
                receiver was appointed; or
                  (B) the District of Columbia Housing Authority 
                receiver appointed during 1995.
  (f) Procurement.--
          (1) In general.--In carrying out procurement on behalf of the 
        department, agency, or office of the government of the District 
        of Columbia administered by the receiver, each District of 
        Columbia receiver--
                  (A) shall obtain full and open competition through 
                the use of competitive procedures; and
                  (B) shall use the competitive procedure or 
                combination of competitive procedures which is best 
                suited under the circumstances of the procurement.
          (2) Exceptions.--
                  (A) Alternative methods for certain procurement.--
                Notwithstanding paragraph (1), a District of Columbia 
                receiver may use alternative methods to carry out 
                procurement if--
                          (i) the amount involved is nominal;
                          (ii) the public exigencies require the 
                        immediate delivery of the articles or 
                        performance of the service involved;
                          (iii) the receiver certifies that only one 
                        source of supply is available; or
                          (iv) the services involved are required to be 
                        performed by the contractor in person and are 
                        of a technical and professional nature or are 
                        performed under the receiver's supervision and 
                        paid for on a time basis.
                  (B) Housing authority.--Paragraph (1) shall not apply 
                with respect to the District of Columbia Housing 
                Authority receiver appointed during 1995.

SEC. 4. CLARIFICATION OF APPLICABILITY OF ANTI-DEFICIENCY ACT.

  Nothing in subchapter III of chapter 13 of title 31, United States 
Code may be construed to waive the application of the provisions of 
such subchapter which apply to officers or employees of the District of 
Columbia government to any District of Columbia receiver.

                    I. SHORT SUMMARY OF LEGISLATION

    H.R. 3995 directly addresses concerns about the District of 
Columbia's receivership programs and the accountability of the 
receivers. This legislation will promote the financial 
stability and efficient management of the District government.

              II. BACKGROUND AND NEED FOR THE LEGISLATION

    The District of Columbia has had four agencies placed in 
court-appointed receivership. Only one agency, the D.C. Housing 
Authority, has successfully emerged from receivership in stable 
financial and managerial condition. The remaining agencies, 
Child and Family Services, the Commission on Mental Health 
Services, and the Corrections Medical Services in the D.C. 
Jail, continue to languish in receivership since their are no 
mechanisms in place to ensure financial and management 
accountability.
    H.R. 3995 requires court-appointed District of Columbia 
receivers to ensure that the costs incurred in administering 
the agency under receivership are consistent with regional and 
national standards. Under this legislation, the receiver must 
use the best means available to promote financial stability and 
sound management practices within the agency. The receiver must 
consult with the Mayor and the Chief Financial Officer of D.C. 
when preparing the annual budget. Estimates of expenditures and 
appropriations for the operations of the agency must be 
submitted to the Mayor for inclusion in the city's annual 
budget. The legislation also requires an independent auditor to 
conduct annual fiscal and management audits of the agency. 
Nothing in this bill is intended to impede a D.C. receiver's 
mandate to remedy constitutional violations.

            III. LEGISLATIVE HEARINGS AND COMMITTEE ACTIONS

    Delegate Eleanor Holmes Norton introduced the legislation 
on March 15, 2000, and it was referred to the House Committee 
on Government Reform. On March 28, 2000, it was referred to the 
Subcommittee on the District of Columbia. The Subcommittee 
marked up the bill at the Child and Family Services 
Receivership hearing on May 5, 2000. The Subcommittee approved 
an amendment offered by Mrs. Norton which requires the use of 
generally accepted accounting principles, fiscal management 
practices, and an annual fiscal and management review conducted 
by an independent auditor. In addition the amendment requires 
that the procurement process is competitive unless one of the 
newly added exceptions is met. The amendment also clarifies the 
applicability of the Anti-deficiency Act. The Subcommittee 
approved the bill as amended by voice vote on May 5, 2000, and 
forwarded it to the Committee on Government Reform.

              IV. COMMITTEE HEARINGS AND WRITTEN TESTIMONY

    The District of Columbia Subcommittee is in the process of 
holding hearings regarding the status of the three remaining 
agencies in receivership, Child and Family Services, the 
Commission on Mental Health Services, and Corrections Medical 
Services in the D.C. Jail, in an effort to assess the successes 
and failures of their respective receivers. On May 5, 2000, the 
Subcommittee held a hearing about the Child and Family Services 
receivership. Hearings concerning the other receiverships will 
be held before the August 2000 recess.

                       V. EXPLANATION OF THE BILL

Section 1

    Section 1 provides the bill's short title, ``District of 
Columbia Receivership Accountability Act of 2000.''

Section 2

    Section 2 provides a definition of a ``District of Columbia 
Receiver.'' It indicates that all D.C. receivers are subject to 
the requirements of Section 3.

Section 3

    Section 3 requires that D.C. receivers use administration 
practices which promote financial stability and management 
efficiency, while ensuring that the costs incurred by the 
agency, department, or office under receivership are consistent 
with applicable regional and national standards. The receivers 
are also required to use generally accepted accounting 
principles and fiscal management practices to promote 
efficiency and cost-effectiveness.
    Effective in fiscal year 2001, D.C. receivers are required 
to consult with the Mayor and the Chief Financial Officer when 
preparing a budget for the agency, department, or office under 
receivership. The receiver then submits a budget to the Mayor 
who forwards it to the City Council pursuant to sections 446 
and 603(c) of the District of Columbia Home Rule Act. The Mayor 
and Council are permitted to make recommendations, but not 
revisions. This budgetary requirement is effective unless the 
terms of the D.C. receiver's appointment permit revisions by 
the Mayor and the Council.
    This section also requires that the D.C. receiver and the 
Mayor jointly choose an independent auditor to conduct an 
annual fiscal and management audit, unless the terms of the 
receiver's appointment permit the parties to the court action 
to select the auditor.
    Section 3 requires the use of competitive procedures 
considered the best suited to the circumstances in order to 
attain a full and open competitive procurement process. 
Alternative methods would need to be used if the amount of 
money involved in the procurement is nominal, the public need 
is urgent, the receiver certifies that only one supplier is 
available, or the required services are technical and 
professional and are performed by the contractor in person, or, 
the services are performed under the D.C. receiver's 
supervision and are compensated based on the period of time 
worked.

Section 4

    Section 4 clarifies that the provisions of subchapter III 
of chapter 13 of title 31, United States Code apply to District 
of Columbia receivers.

                      VI. COMPLIANCE WITH RULE XI

    Pursuant to rule XI, clause 2(1)(3)(A) of the Rules of the 
House of Representatives, under the authority of rule X, clause 
2(b)(1) and clause 3(f), the results and findings from 
Committee oversight activities are incorporated in the bill and 
this report.

                  VII. BUDGET ANALYSIS AND PROJECTIONS

    The budget analysis and projections required by section 
308(a) of the Congressional Budget Act of 1974 are contained in 
the estimate of the Congressional Budget Office.

         VIII. COST ESTIMATE OF THE CONGRESSIONAL BUDGET OFFICE

    H.R. 3995 would require agencies of the District of 
Columbia that are in receivership to follow certain budgeting, 
management, and procurement practices. Currently, four District 
agencies--Child and Family Services, the Commission on Mental 
Health Services, the Corrections Medical Receiver for the 
District of Columbia Jail, and the District of Columbia Housing 
Authority--are administered by court-appointed receivers. 
Because the bill would apply only to agencies of the District 
of Columbia, CBO estimates that enacting H.R. 3995 would have 
no impact on the federal budget. The bill would not affect 
direct spending or receipts, so pay-as-you-go procedures would 
not apply.
    H.R. 3995 contains an intergovernmental mandate because it 
effectively would require the departments within the District 
of Columbia that are currently administered by a court-
appointed receiver to adopt certain management practices to 
improve their financial stability. CBO estimates that the cost 
of complying with this mandate would be minimal, and thus would 
not exceed the threshold established in the Unfunded Mandates 
Reform Act ($55 million in 2000, adjusted annually for 
inflation). The bill contains no private-sector mandates as 
defined in that act.

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 31, 2000.
Hon. Dan Burton,
Chairman, Committee on Government Reform,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3995, the District 
of Columbia Receivership Accountability Act of 2000.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are John R. 
Righter (for federal costs), and Susan Sieg Tompkins (for the 
state and local impact).
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 3995--District of Columbia Receivership Accountability Act of 2000

    H.R. 3995 would require agencies of the District of 
Columbia that are in receivership to follow certain budgeting, 
management, and procurement practices. Currently, four District 
agencies--Child and Family Services, the Commission on Mental 
Health Services, the Corrections Medical Receiver for the 
District of Columbia Jail, and the District of Columbia Housing 
Authority--are administered by court-appointed receivers. 
Because the bill would apply only to agencies of the District 
of Columbia, CBO estimates that enacting H.R. 3995 would have 
no impact on the federal budget. The bill would not affect 
direct spending or receipts, so pay-as-you-go procedures would 
not apply.
    H.R. 3995 contains an intergovernmental mandate because it 
effectively would require the departments within the District 
of Columbia that are currently administered by a court-
appointed receiver to adopt certain management practices to 
improve their minimal, and thus would not exceed the threshold 
established in the Unfunded Mandates Reform Act ($55 million in 
2000, adjusted annually for inflation). The bill contains no 
private-sector mandates as defined in that act.
    The CBO staff contacts are John R. Righter (for federal 
costs), and Susan Sieg Tompkins (for the state and local 
impact). This estimate was approved by Peter H. Fontaine, 
Deputy Assistant Director for Budget Analysis.

       IX. SPECIFIC CONSTITUTIONAL AUTHORITY FOR THIS LEGISLATION

    Clauses 1 and 18 of Article I, Sec. 8 of the Constitution 
grant Congress the power to enact this law.

                      X. COMMITTEE RECOMMENDATIONS

    On May 18, 2000, a quorum being present, the Committee 
ordered the bill, as amended, favorably reported.

Committee on Government Reform--106th Congress--Rollcall

    Date: May 18, 2000.
    Final Passage of H.R. 3995, as amended.
    Offered by: Hon. Dan Burton offered an amendment in the 
nature of a substitute.
    Adopted by voice vote.

     XI. UNFUNDED MANDATES REFORM ACT; PUBLIC LAW 104-4, SECT. 423

    H.R. 3995 contains an intergovernmental mandate but would 
not exceed the threshold established in the Unfunded Mandates 
Reform Act ($55 million in 2000, adjusted annually for 
inflation).

    XII. FEDERAL ADVISORY COMMITTEE ACT (5 U.S.C. App.) Section 5(b)

    The Committee finds that H.R. 3995 does not establish or 
authorize establishment of an advisory committee within the 
definition of 5 U.S.C. App., Section 5(b).

                     XIII. CHANGES IN EXISTING LAW

    H.R. 3995 does not change existing law.

                                
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