District of Columbia Public Schools: Status of Fiscal Year 1998 Roof
Projects (Testimony, 06/24/98, GAO/T-AIMD-98-219).

Pursuant to a congressional request, GAO discussed the District of
Columbia Public Schools' (DCPS) roof replacement work for fiscal year
(FY) 1998, focusing on: (1) the availability of funds to pay for roof
repairs; (2) the current status of the roof repair process; (3) the
estimated cost of the roof repairs; and (4) additional capital
improvements in FY 1999 and beyond.

GAO noted that: (1) at least $84 million is designated for roofing and
other capital improvement work during FY 1998; (2) sufficient funding
was available to enable DCPS to get an early start on the FY 1998 roof
repairs; (3) DCPS planned to perform roof replacements at 40 schools in
FY 1998; (4) DCPS records show that 38 schools will have roof
replacement work in FY 1998, including 5 schools that were completed in
the fall of 1997; (5) for the remaining 33 schools, DCPS will contract
for roof work at 25 schools; (6) according to DCPS officials, the former
Chief Operating Officer arranged to have the General Services
Administration (GSA) handle the contracting details for the work at the
remaining 8 D.C. schools; (7) DCPS awarded seven contracts, covering 23
of the 25 school roof projects for which it is handling the contract
details; (8) the total amount of the DCPS contracts awarded was $11.6
million, all to firms from the Washington, D.C. metropolitan area; (9)
the former DCPS Chief Executive Officer hired the Army Corps of
Engineers to provide capital projects management assistance to DCPS for
FY 1998; (10) as capital project manager, the Army Corps of Engineers
will be on site and will be providing the superintendent of schools with
weekly progress reports on the ongoing renovation work at the D.C.
public schools; (11) DCPS' FY 1998 roof replacement costs are expected
to be about $34 million; (12) the budgeted amount includes $28.4 million
for construction contracts and about $5.8 million for design work,
contract management fees charged by GSA and the Army Corps of Engineers,
DCPS salaries, and an 8-percent contingency factor; (13) the FY 1999 to
FY 2004 Capital Improvement Plan (CIP) and FY 1999 Capital Budget that
the District submitted to Congress on June 1, 1998, included a 6-year
total of $343.5 million in capital improvement expenditures for D.C.
schools; (14) about $97 million in capital improvement expenditures is
planned for FY 1999; and (15) the CIP indicates that DCPS will spend
about $27 million on school roof replacements during the 6-year period,
with about $14 million designated for roof replacements during FY 1999.

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

 REPORTNUM:  T-AIMD-98-219
     TITLE:  District of Columbia Public Schools: Status of Fiscal Year 
             1998 Roof Projects
      DATE:  06/24/98
   SUBJECT:  Public schools
             Educational facilities
             Repair costs
             Facility repairs
             Facility maintenance
             Future budget projections
             Building codes
             Funds management
             Construction contracts
IDENTIFIER:  DCPS Capital Improvement Program
             District of Columbia
             
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Cover
================================================================ COVER


Before the Subcommittee on the District of Columbia, Committee on
Appropriations, House of Representatives

For Release on Delivery
Expected at
9 a.m.
Wednesday,
June 24, 1998

DISTRICT OF COLUMBIA PUBLIC
SCHOOLS - STATUS OF FISCAL YEAR
1998 ROOF PROJECTS

Statement of Gloria L.  Jarmon
Director, Health, Education, and Human Services Accounting
and Financial Management Issue
Accounting and Information Management Division

GAO/T-AIMD-98-219

GAO/AIMD-98-219T


(916255)


Abbreviations
=============================================================== ABBREV

  DCPS - x
  GSA - x
  FAR - x
  CIP - x

============================================================ Chapter 0

Mr.  Chairman and Members of the Subcommittee: 

We are pleased to be here today to update you on the District of
Columbia Public Schools' (DCPS) roof replacement work for fiscal year
1998.  On June 17, 1998, your office indicated that the Subcommittee
had received information that questioned DCPS' ability to complete
the roof repairs without delaying the opening of schools in September
1998.  In response to your specific questions, my statement today
covers four points: 

  -- the availability of funds to pay for roof repairs,

  -- the current status of the roof repair process,

  -- the estimated cost of the roof repairs, and

  -- additional capital improvements in fiscal year 1999 and beyond. 


   BACKGROUND
---------------------------------------------------------- Chapter 0:1

In fiscal year 1997, roof repairs were done at 61 District of
Columbia schools, with the General Services Administration (GSA)
managing the work at 10 schools and DCPS at 51.  DCPS records show
that as of February 4, 1998, the total cost of the fiscal year 1997
roof repair projects, including change orders and consulting fees,
was about $37 million.  At that time, the DCPS capital improvement
program budget indicated that about $35 million was expected to be
spent on 40 school roof projects in fiscal year 1998. 

To determine the status of the District's fiscal year 1998 school
roof projects, we obtained and reviewed pertinent documents provided
by DCPS, the Financial Responsibility and Management Assistance
Authority (Authority), and the Army Corps of Engineers.  We
interviewed (1) DCPS officials responsible for the capital
improvement program, (2) Army Corps of Engineers officials who were
hired by DCPS to manage the District's 1998 capital improvement
program, (3) GSA officials who are managing the roof replacement
contracts for 8 District schools, and (4) an official from the 21st
Century School Fund to obtain information on the current roof
projects. 

We did not evaluate the contractor proposals to ascertain which
proposals would result in the least cost to the District. 
Furthermore, we did not audit the cost estimates for reasonableness. 
Accordingly, we do not express an opinion or any other form of
assurance on the procurement process or the cost estimates.  We
conducted our work in June 1998. 


   AVAILABILITY OF FUNDS
---------------------------------------------------------- Chapter 0:2

As indicated in table 1, at least $84 million is designated for
roofing and other capital improvement work during fiscal year 1998. 
As discussed in our March 1998 report,\1

sufficient funding was available to enable DCPS to get an early start
on the fiscal year 1998 roof repairs.  In September 1997, the
Authority received about $36.8 million from the sale of Student Loan
Marketing Association (Sallie Mae) stock warrants.  The Authority
received an additional $5 million in Sallie Mae funds in October 1997
to satisfy fiscal year 1998 capital program needs.  Bond proceeds of
$40 million became available in April 1998, and an additional $2.3
million in revenue generated from the sale of schools was available
by May 1998. 



                                Table 1
                
                  Funds Available for Fiscal Year 1998
                         DCPS Capital Projects

                         (Dollars in millions)

Date Funds Available            Source of Funds                 Amount
------------------------------  ------------------------------  ------
September 1997                  Sallie Mae                       $36.8
October 1997                    Sallie Mae                         5.0
April 1998                      Bond Proceeds                     40.0
May 1998                        Revenue from School Sales          2.3
======================================================================
Total                                                            $84.1
----------------------------------------------------------------------
About $6.4 million had been spent by June 11, 1998.  This included 5
school roofing projects, at a cost of $4.1 million completed by
November 1997, and $2.3 million for other capital improvement
projects. 


--------------------
\1 District of Columbia Public Schools:  Availability of Funds and
the Cost of the Fiscal Year 1997 Roof Projects (GAO/AIMD-98-82, March
9, 1998). 


   CURRENT STATUS OF ROOF
   REPLACEMENT PROJECTS
---------------------------------------------------------- Chapter 0:3

Our March report indicated that DCPS planned to perform roof
replacements at 40 schools in fiscal year 1998.  Currently, DCPS
records show that 38 schools will have roof replacement work in
fiscal year 1998, including the 5 schools that were completed in the
fall of 1997.  Regarding the 2 schools for which work was planned and
subsequently canceled, the funds intended for roof replacement at one
school were redirected to securing the school's structure after
recent fires, and DCPS subsequently determined that the other school
did not need a new roof at this time. 

For the remaining 33 schools, DCPS will contract for roof work at 25
schools.  According to DCPS officials, the former Chief Operating
Officer arranged to have GSA handle the contracting details for the
work at the remaining 8 D.C.  schools. 

Due to weaknesses in procurement procedures and internal controls
identified in a fiscal year 1997 performance audit,\2 DCPS officials
stated that they decided to follow the Federal Acquisition
Regulations (FAR).  Last week, DCPS awarded seven contracts, covering
23 of the 25 school roof projects for which it is handling the
contract details.  The total amount of the DCPS contracts awarded was
$11.6 million, all to firms from the Washington, D.C., metropolitan
area.  DCPS officials told us that they expect an additional contract
for the two remaining projects to be awarded shortly.  DCPS officials
told us that they had hoped to be further along in their contracting
and construction activities at this time.  DCPS officials expect that
the projects they are managing will be substantially complete by
August 15, 1998, in time for the September 1, 1998, school opening. 
GSA is currently negotiating school roof replacement contracts for
the remaining 8 D.C.  schools with its preapproved contractors and
has a goal of completing the roof work by September 1, 1998. 

The former DCPS Chief Executive Officer hired the U.S.  Army Corps of
Engineers to provide capital projects management assistance to DCPS
for fiscal year 1998.  As capital project manager, the Army Corps of
Engineers will be on site and will be providing the superintendent of
schools with weekly progress reports on the ongoing renovation work
at the D.C.  public schools, including the status of roofing
projects.  DCPS officials provided copies of several other management
reports that they intend to prepare and use to ensure that the
capital projects are on track, including a Capital Improvements and
Assets Weekly Summary and a Tracking of FY98 Capital Program
Obligation and Execution Status Report. 


--------------------
\2 The audit report District of Columbia Public Schools Performance
Audit:  Fiscal Year 1997 Capital Improvement Program Procurement
Process was issued on January 12, 1998 by Cotton & Company, LLP. 


   COST OF ROOF REPAIRS
---------------------------------------------------------- Chapter 0:4

According to DCPS' June 12, 1998 Breakout of FY98 Capital Program by
Subproject and by Ward management report, DCPS' fiscal year 1998 roof
replacement costs are expected to be about $34 million.  The budgeted
amount includes $28.4 million for construction contracts and about
$5.8 million for design work, contract management fees charged by GSA
and the Army Corps of Engineers, DCPS salaries, and an 8 percent
contingency factor.  According to DCPS officials, the roofing
projects are very similar to those completed in fiscal year 1997,
which included an extensive amount of work to ensure that facilities
were structurally sound and watertight. 


   FUTURE CAPITAL IMPROVEMENTS
---------------------------------------------------------- Chapter 0:5

The FY 1999 to FY 2004 Capital Improvement Plan and FY 1999 Capital
Budget (CIP) that the District submitted to the Congress on June 1,
1998, includes a 6-year total of $343.5 million in capital
improvement expenditures for D.C.  schools.  About $97 million in
capital improvement expenditures is planned for fiscal year 1999. 
The CIP indicates that DCPS will spend about $27 million on school
roof replacements during the 6-year period, with about $14 million
designated for roof replacements during fiscal year 1999. 


-------------------------------------------------------- Chapter 0:5.1

Mr.  Chairman, this concludes my statement.  I will be happy to
answer any questions that you or Members of the Subcommittee may
have. 


*** End of document. ***