District of Columbia: Improved Financial Information and Controls Are
Essential to Address the Financial Crisis (Testimony, 06/21/95,
GAO/T-AIMD-95-176).

The District of Columbia lacks the most basic financial data, including
the status of its funds, the amounts owed, and the balance of cash.  As
a result, District managers do not have fundamental financial
information necessary to help control costs and to estimate budget and
cash needs. Although financial circumstances remain the same, spending
and cash projections have varied widely, causing GAO to question the
validity of the estimates, particularly the mayor's $3.89 billion
spending projection in February 1995.  During a six-month period,
District expenditure projections for fiscal year 1995 have ranged from
$3.25 billion to $3.89 billion and year-end cash balance projections
have ranged from a positive balance of $50 million to a negative balance
of $350 million.  Such wide fluctuations make it difficult, if not
impossible, to determine the District's true financial condition.  This
testimony focuses on the following four areas: the District's changing
expenditure and cash projections for fiscal year 1995, the status of the
District's request for borrowings from the U.S. Treasury, the status of
the District's management initiatives to reduce spending, and the
District's serious financial information and control weaknesses.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-AIMD-95-176
     TITLE:  District of Columbia: Improved Financial Information and 
             Controls Are Essential to Address the Financial
             Crisis
      DATE:  06/21/95
   SUBJECT:  Financial management
             Financial management systems
             Internal controls
             Budget cuts
             Accounting procedures
             Municipal governments
             Financial records
             Data integrity
             Budget outlays
             Future budget projections
IDENTIFIER:  DC Financial Management System
             Financial Responsibility and Management Assistance Act of 
             1995
             District of Columbia
             
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