oversight

District of Columbia: Inspector General Independence as Compared to Federal Agencies and Acquisition of a New Financial Management System

Published by the Government Accountability Office on 1997-10-31.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Accounting and Information
      Management Division

      B-278494


      October 31, 1997

      The Honorable Charles H. Taylor
      Chairman, Subcommittee on the
        District of Columbia
      Committee on Appropriations
      House of Representatives

      Subject:   District of Columbia: Insnector General Indenendence as Comnared
                 to Federal Agencies and Acauisition of a New Financial Management
                 Svstem

      Dear Mr. Chairman:

      On October 14, 1997, you requested that we provide our views on two issues
      addressed by the District of Columbia Appropriations Bill for fiscal year 1998,
      as passed by the House of Representatives. These issues relate to the District’s
      Inspector General (IG) and the acquisition of a new financial management
      system. Specifically, you asked us to provide information on (1) how
      independence is addressed in current law for federal IGs compared to the
      District of Columbia IG, as well as responsibilities for arran~tig for financial
      audits of the financial statements for their respective organizations and
      (2) whether the District’s Chief Financial Officer and the District of Columbia
      Financial Responsibility and Management Assistance Authority (commonly
      referred to as the Control Board) have developed a concept of operations, a
      requirements definition, and an analysis of alternatives-the three fundamental
      building blocks of a successful systems acquisition-in determining the District’s
      needs for a new financial management system.

      INDEPENDENCE AND CONTRACTING
      RESPONSIBILITIES OF IGS

      The Inspector General Act of 1978 (IG Act), Public Law 95-452 as amended,
      established Inspector General offices in federal departments and agencies to
      create independent and objective units responsible for (1) conducting and
      supervising audits and investigations, (2) providing leadership and coordination
      and recommending policies to promote economy, efficiency, and effectiveness,
      and (3) detecting and preventing fraud and abuse in their agencies’ programs

                    GAO/AI&ID-98-27R    District’s IG and Financial Management System
B-278494


and operations. The IG Act identifies 26 federal establishments that are to have
an IG appointed by the President with Senate confirmation and 30 designated
federal entities that are to have an IG appointed by their agency heads.

Indenendence

The federal IG Act contains various provisions that are intended to provide the
IGs with the independence required to keep their agency heads, and the
Congress informed about problems -and deficiencies relating to the
administration of programs. These provisions include the IG’s authority to
obtain access to records and information, to require by subpoena the
production of documents, to have direct and prompt access to the agency head,
and to select and appoint officers and employees as necessary.

Additional provisions authorize federal IGs to report violations of criminal law
to the Attorney General without prior notice to any agency officials and prohibit
the transfer of program duties to the IG. Also, while agency heads may provide
general supervision of the IGs, they are not allowed to prevent or prohibit the
IGs from initiating, carrying out, or completing any audit or investigation. In
addition, the IGs are required to prepare semiannual reports summarizing their
activities that are transmitted unaltered by their agency heads to congressional
committees.

The IG Act appointment and removal provisions are crucial elements affecting
the independence of the IGs. For the presidentially appointed IGs, the act
states that the appointments are to be made without regard to political
affiliation and solely on the basis of integrity and demonstrated ability in
accounting, auditing, financial analysis, law, management analysis, public
administration, or investigations. For the IGs appointed by the head of a
designated federal entity, the IG Act states that the appointment shall be in
accordance with the laws and regulations governing appointments in the entity.
The IG Act does not specify a term or length of service for the IGs, and those
who appoint the IGs are authorized to remove them. However, the reasons for
removing an IG must be communicated to both houses of the Congress.

The District of Columbia IG was statutorily established by the District of
Columbia Procurement Practices Act of 1985, as amended, which has provisions
regarding IG independence that are similar to those in the IG Act for federal
IGs. These include the District IG’s authority to obtain access to records and
information, to issue subpoenas, and to report violations of criminal law to the
Attorney General. The District Act does not require a semiannual report, but
rather the IG is required to make available to the public an annual report on the
operational audit of procurement activities. Also, the IG is required to transmit
to the District Council the reviews and investigations that are requested by the
Control Board. Unlike the IG Act, the District Act does not have provisions


2              GAOIAIMD-9%27R     District’s IG and Financial Management System
B-278494


regarding the selection and appointment of officers and employees, general
supervision, direct access to top officials, or a prohibition on the transfer of
program duties to the IG.

The District Act does have appointment and removal provisions that address
si,@ficant aspects of independence. As with the presidentially appointed IGs,
the District IG’s appointment is without regard to political affiliation and solely
on the basis of integrity and demonstrated ability in accounting, auditing,
financial management analysis, public administration, or investigations. The act
states that the District IG is appointed to a 6-year term and can be removed
only for cause. In a control yearl, the IG is appointed by the Mayor with the
approval of the Control Board, and can be removed by the Control Board or by
the Mayor with the Control Board’s approval In a non-control year, the IG is
appointed by the Mayor, with ,the advice and consent of the Council, and may
be removed by the Mayor.

Section 154(b) of H.R. 2607 would amend the provision in the D.C. Code for
removing the District IG. If enacted, section 154(b) would require that before
removing the IG, the Control Board or the Mayor (whichever is applicable)
consult with Congress, including at a minimum providing a written statement to
specified congressional committees explaining the circumstances involved. Like
the IG Act, section 154(b) would require that an official removing the District IG
explain the reason for the removal to the Congress. Unlike the IG Act, section
154(b) would require that the explanation be provided to the Congress before,
rather than after, the removal.

Arranging for Financial Audits

IGs in agencies subject to the Chief Financial Officers Act of 1990 (CFO Act),
Public Law 101-576, are responsible for the audits of their agencies’ financial
statements. In fullWing their audit requirements, the IGs have used work
performed by their own staff and/or contracts they have entered into with other
auditors. The IGs are authorized by the IG Act to (1) enter into contracts and
other arrangements for audits, studies, analyses, and other services with public
agencies and private persons and (2) make such payments as necessary. This
activity, however, still relies upon agency contract specialists who are
responsible for ensuring that solicitation documents, contracts, and contract
modifications are prepared in accordance with federal acquisition regulations.




‘A “control year” is determined by the Control Board based on statutory criteria
relating to the financial condition of the District, including for example, the
need to borrow from the Treasury or the District’s failure to make various types
of required payments. ..

3            GAO/AIMD-98-27R      District’s IG and Financial Management System
B-278494


Current District law states that the District IG shall enter into a contract with
an auditor who is not an officer or employee of the IG’s office to (1) audit the
District’s financial statements and report on the activities of the District
government and (2) audit the Control Board’s certification regarding the
District’s financial plan and budget? This is consistent with the option for IGs
to enter into contracts for financial statement audits in the executive branch of
the federal government, as stated above. Current District law, however, also
provides that in a control year, the Control Board may require that District
contracts be approved by the Control Board before they are effective.3 The
federal government does not have an entity similar to the Control Board which
has broad and unique authorities with regard to the management of the District
which stems from the District’s financial crisis.

Section 154(a)(l) of the House-passed appropriation bill for the District would
prohibit funds fi-om being used for the financial statement audit unless the
coritract for the audit was entered into by the District IG.

ACQUISlTION OF A NEW FINANCIAL
MANAGEMENT SYSTEM

In July 1997, we reported” on the status of the District’s progress in acquiring a
new financial management system. We concluded that the District needed to
systematically identify and evaluate its organizational needs and lay out a
disciplined acquisition process to reduce the risk associated with a new
financial management system. We reported that a structured “building block”
approach is fundamental to systems acquisition. Three building blocks, done
early in the project, are especially important: a concept of operations, a
requirements de&&ion, and an analysis of alternatives to meet the defined
requirements. These must be done well for the acquisition to succeed in
meeting the organization’s needs. II-I addition, we reported that the District was
aware of the need to do more detailed work in these three areas and planned to
hire a contractor to assist in this effort.

As you requested, we have begun work to determine whether the District has a
disciplined process in place for acquiring a new financial management system
that addresses the concerns we raised in our July 1997 report. On October 16,
1997,4 weeks from our initial request for documents, the District made
available detailed records, including procurement documents. We are reviewing


‘D.C. Code Ann. Section 1-1182.8 (a) (4).

3Section 203 of Public Law 104-8, District of Columbia Financial Responsibility
and Management Assistance Act of 1995.

4District’s Financial Management Svstem (GAO/AIMD-97-lOlR,      July 9, 1997).

4             GAO/AIMD-98-27R      District’s IG and Financial Management System
B-278494


and analyzing this information as part of our analysis of the District’s approach
to acquiring a new financial management system, and we will report to you
when our review is completed.

The following sections discuss our preliminary observations on the status of the
three fundamental building blocks in the District’s effort to acquire a new
financial management system.

Concept of Onerations

The concept of operations provided to us on October 16, 1997, does not show
how the various components of the District’s financial management systems will
interact, the information flows, or the operations that must be performed and
how these operations will be carried out. For example, the District has key
underlying feeder systems that provide the core system with accounting,
program, and performance information on various operational units’ activities.
The concept of operations does not clearly describe the functional information
needed for each of these feeder systems nor is this information defined in the
documents we have received to date. The District identified 11 major feeder
systems that will be incorporated into the new financial management system.
However, according to the District’s Project Management Plan, the feeder
systems and the information that will be provided by these feeder systems will
not be defined until December 1997. In addition, the automated interfaces for
these feeder systems are scheduled for completion and related testing by July 1,
1998; and full system implementation is scheduled for September 30, 1998.

Reauirements Definition

A requirements definition builds on the concept of operations. According to the
project plan, provided to us on October 16, 1997, requirements have been
developed and will be confirmed for the new financial management system
between September 1997 and December 1997. We have not yet completed the
work necessary to assess the process used by the District in defining its
requirements. Therefore, we are as yet unable to determine whether the
District’s requirements are complete enough to enable the District to fulfill its
financial management and reporting needs. However, if the District has
adequately defined its requirements, as called for in our July letter, it will
reduce the risks associated with this acquisition effort.

Alternatives Analvsis

On September 4, 1997, the District awarded a contract to acquire a new
financial management system without developing an adequate alternatives
analysis. As noted earlier, requirements cannot be properly defined without
first having a sound concept of operations. Likewise, alternatives cannot be


5             GAO/AIMD-98-27R    District’s IG and Financial Management System
B-278494


assessed without a clear definition of the requirements that the new system is
supposed to satisfy. Since the District has not fully developed a concept of
operations and its requirements definition is incomplete, the District is unable
to determine whether its current approach is the best method to meet its
financial management system needs or whether other approaches, such as
upgrading its current financial management system or internally developing a
new system, would have been better.

PROJECT TRvIE FRAMES

According to a District official, the District expects the new system to be fully
operational by October 1998. This time frame appears to be ambitious because
(1) the District’s financial management structure is very complex and may
require a longer period of time to successfully implement the new system in
each of the major components and agencies and (2) the requirements for
several key functions, such as the feeder systems, have yet to be identified and
confirmed. As we discussed in our July 1997 letter, the District runs the risk of
being driven by its ambitious acquisition schedule and not allowing time to
develop the kind of quality analysis that it must have in order to manage this
important project, which is critical to improving the District’s financial
management.

OBJECTIVES, SCOPE. AND METHODOLOGY

Our objectives were to (1) provide information on the District IG’s
independence and contracting responsibilities compared to federal IGs and
(2) determine whether the District has implemented a disciplined process to
acquire a new financial management system. We reviewed and analyzed
provisions of the Inspector General Act of 1978 (IG Act), Public Law 95452, as
amended, the District of Columbia F’inancial Responsibility and Management
Assistance Act of 1995, the District of Columbia Procurement Practices Act of
 1985, as amended, and the District of Columbia Appropriations Bill for fiscal
year 1998. In addition, we analyzed information, such as the District’s concept
of operations and project plans, provided on the District’s financial management
system acquisition process. We interviewed District officials responsible for the
acquisition of the new financial management system. We conducted our work
 in October 1997 in accordance with generally accepted government auditing
 standards.

DISTRICT’S COMMENTS AND OUR EVALUATION

We requested comments on a draft of this letter from the Chairman, District of
Columbia Financial Responsibility and Management Assistance Authority, the
District’s Chief Financial Officer, and the District’s Interim Inspector General.



6             GAO/AI&ID-98-27R District’s IG and Financial Management System
B-278494


They provided us with comments that are reprinted in enclosures I, II, and III,
respectively.

In commenting on a draft of this report, the Executive Director of the District
of Columbia Financial Responsibility and Management Assistance Authority
discussed the role of the contractor hired to assist the District in managing the
acquisition of a new financial management system. He agreed that the project
timeframes are ambitious but said they are achievable. Regarding matters
dealing with the District Inspector General, he cited committee report language
expressing strong intent that the authority function and operate in an
independent oversight capacity. In this context, the Executive Director offered
some observations regarding provisions of the proposed bill relating to the
District’s IG (H-R. 2607).

The District’s CFO provided similar observations regarding the financial
management system. In addition to the project management contractor referred
to by the Executive Director, the CFO pointed out that a second contractor,
from whom the commercial off-the-shelf package was purchased, will work to
implement the package which has been previously implemented in over 160
state, local, and county governments.

Both the Executive Director and CFO pointed out that we participated in
meetings to discuss issues relating to the financial management system project.
We attended these meetings at the request of the House Appropriations
 Committee staff, at which time we provided our views on the District’s efforts
to acquire a new financial management system. Those views are reflected in
our July 1997 report and form the basis for our continuing concerns expressed
in this letter. Based on information recently provided to us, we are currently
reviewing and analyzing the District’s acquisition process for acquiring a new
financial management system. As this work unfolds, we wiIl be in a position to
assess whether the District has adequately achieved the objectives of the three
building blocks cited in this report and whether the District has a disciplined
acquisition process. Although the District has brought on contractual support,
it is incumbent on the District to ensure that its financial management and
reporting needs are met in a cost-effective and timely manner.

In commenting on a draft of this report, the Interim Inspector General said that
our findings with respect to the District’s financial management system were
consistent with those of a March 1997 OIG report and that the unresolved
system development and acquisition wealmesses should be resolved before
moving forward. Further, the Interim IG offered some observations regarding
the independence of the IG’s office.




             GAO/AIMD-98-27R     District’s IG and Financial Management System
B-278494


We are sending copies of this letter to the Ranking Minority Member of your
subcommittee and the Chairmen and Ranking Minority Members of the
Subcommittee on Oversight of Government Management, Restructuring and the
District of Columbia, the Senate Committee on Governmental Affairs, and the
Subcommittee on the District of Columbia, House Committee on Government
Reform and Oversight. We are also sending copies to the Chairman of the
District of Columbia F’inancial Responsibility and Management Assistance
Authority, the District’s Chief F’inancial Officer, and the District’s Interim
Inspector General. If you need further information, please contact me at
(202) 5124476.

Sincerely yours,




Gloria L. Jarmon
Director, Civil Audits

Enclosures - 3




                 GAO/AIMD-98-27R   District’s IG and Financial Management System
ENCLOSURE I                                                                                                       ENCLOSURE I

                COMMENTS FROM THE DISTRICT OF COLUMBIA
                     FINANCIAL RESPONSIBILITY AND
                   MANAGEMENT ASSISTANCE AUTHORITY



                                  DistriccofColumbiaFinsncialResponsibility
                                      andManagementAssistanceAuthority
                                                 Washington,D.C.

                                                     October 30,1997

              Mr. Gene L. Dodam
              Assistant Comptroller General
              Accounting and Information Division
              U.S. General Accounting Office
              Washington, D.C. 20548

              Dear Mr. Dodaro:

                      The District of Columbia Financial Responsibility and Management Assistance
              Authority (“Authority”) has reviewed the draft report entitled “District of Columbia:
              Inspector General Independence as Compared to Federal Agencies and Acquisition of a
              New Financial Management System” (GAO/AIMD-98-xX, October 28,1997). We have
              several cdncems about this draft report, pertaining to the issues of the independence of
              the Inspector General for the District, the contracting authority of the Inspector General
              for the District, and the acquisition of a new Financial Management System (‘TMS”).

                       The draft report compares the Inspector General for the District with Inspectors
              General in federal departments and agencies. In establishing the Authority, -Congress
              created an independent entity. Report 104-96 of the House Committee on Government
              Reform and Oversight states, “ it is the Committee’s strong intent that the Authority shall
              function and operate in an independent oversight capacity.” Congress requires the
              Authority to approve the appointment and removal of the Inspector General for the
              District. H.R 2607 would amend the DC. Code, to require that before removing the
              Inspector General, the Authority, or the Mayor must consult with Congress. This
              consultation would include a written statement to congressional committees explaining
              the reasons for removal. By in large, Congress is advised of the removal of federal
              Inspectors General after the action for removal has been taken.

                      In addition, H. R. 2607 proposes that funds can only be used for the financial
              statement audit, if tbe contract for the audit is entered into by the Inspector General for
              the District. The Authority is responsible for reviewing the District’s contracts. Imposing
              umque restrictions on the financial statement audit contract would be inconsistent with
              the role of the Authority, and contrary to tbe intent of Congress.

                     The draft report discusses the process used to acquire a new FMS. This is a
              matter that was reviewed by the Steering Committee. The members of the Steering
              Committee are the General Accounting Office, the Authority, the Chief Financial Officer
              for the District, Congressional staff members, representatives of the Office of
              Management and Budget, and the Inspector General for the District. Specifically, the
              report expresses concern over the concept of operations provided by the District. The
              concept of operations is based on the assumption that in a new Financial Management
              System, the financial timctions will be available in the central system, eliminating



                    One Thomas Circle. N.W.   .   Suite 900   *   Washington.   D.C. 20005   *   (202) 504-3400




9                      GAO/AIMD-9%27R                         District’s IG and Financial Management System
ENCLOSURE1                                                                                                   ENCLOSURE1




             similar operations in the current feeder systems. The integration of these systems
             continues to be refined throughout the implementation of the new FMS.

                     The Steering Committee agreed to enter a contract for project management team
             assistance. The contractor assisted in the definition of the requirements and will
             continue to provide assistance throughout the development and implementation of the
             new FMS. While the Arthur Anderson market study of available applications addressed
             alternatives available for a system sohrtion, the request for proposals was structured to
             include the possibility of outsourcing, implementing a new system, or upgrading the
             existing system. After an extensive analysis of the proposals, the current contract was
             awarded for a system solution. It is interesting to note, that the contfactor responsible for
             implementing the current FMS, did not submit a proposal.

                     The timeframes for this project are ambitious, but achievable. Considering the
             year 2000 computer problem facing the District, the Authority must aggressively
             implement a solution. We will continue to monitor this project to be certain that the
             District will have the quality financial data that is essential to the effective management
             of the District’s operations.

                       We hope that these comments will be of assistance in the preparation of the final
             report.


                                                    Sincerelv.




                                                    John W. Hill, Jr.
                                                    Executive Director




10                         GAO/AIMD-9%27R District’s IG and F3nancia.l Management System
ENCLOSURE II                                                                                                           ENCLOSURE II

                       COMMENTS FROM THE DISTRICT OF COLUMBIA’S
                               CHIEF FINANCIAL OFFICER



                                      GOVERNMENT               OF THE DISTRICT OF COLUMBIA
                                                              CXef Financial Officer


          Anthony A. Williams

                   October 30,1997

                   Mr. Gene Dodaro, Assistant Comptroller General
                   U.S. General Accounting Office
                   441 G Street, N.W.
                   Washington, D.C. 20548

                   Dear Mr. Dodaro:

                   Thank you for the oppommiv to comment on your draft report, District of Columbia: Inspector
                   General Independence as Compared to Federal Agencies and Acquisition of a New Financial
                   Management system.

                   As you know, the District has worked with the Financial Authority, staff from your office, the
                   Office of Management and Budget, numerous private companies and the staff of the House
                   Appropriations Committee to make recommendations for how the District should assessthe need
                   for a new Fmancial Management System (FM’S). The primary decisions of that committee included
                   the need to consider not only replacing or improving the old system, but also to work toward a
                   systemssolution that includes a range of outsourcing alternatives. The participants agreedthat both
                   a short-term and long-term commercial off-the-shelf solution proposed have cost, resource and
                   timing ramific$ons.    The public and private sector participants have praised the disciplined
                   approach we have taken to the acquisition process.

               Based on the recommendations of that committee, we sought solicitations to acquire a system that
               addressesall of the concerns of the committee. This solicitation allowed the market to offer the
               option to enhance the functionality and usability of the existing FMS. Neither AMS, the vendor for
               the current system or any other contractor submitted a proposal for this option. It is not technically
               feasible to “update” the system to anything resembling Nrrenr state-of-the-art technology. In order
               to achieve state-of-the-art technology, the existing system must be completely replaced. This is
               supported by the study conducted for the Office of the Chief Financial Officer, Chief Financial
               Officer by Arthur Andersen in October 1996.

               The FMS project team is using the James Ma& & Co. (JM &Co.) family of enterprise engineering
               for project planning and quality assuranceof the FMS acquisition. It is our understanding that your
               staff has been trained in many of these methods. The JM & Co, processesspecify the following
               steps,which we have used:

               l      High level strategy planning;
               l      Early demonstration whether to upgrade, develop from scratch, or implement a package;
               l      High level requirements analysisprior to implementing the package;
               l      Application package selection, and;
               l      Application package implementation.
                        4414thSket.   N.W.,   Suite llSON,   Washington,   D.C. 20001   202/727-2476   www.dccfo.com




11                                GAO/AIMD-98-27R                          District’s IG and Financial Management System
ENCLOSURE II                                                                                                 ENCLOSUREII



           Letter to Gene Dodaro
           October 30,1997
           Page Two

           WA regard to upgrading the system,the request for proposal @FL’) issued in June listed enhancing
           the funaionality and usability of the existing F&is as a bid alternative. Of the 43 vendors who
           received an RFl?, including the original provider of the currently existing FMS, none of them chose
           to bid on this akemative.

           We are confident that the solution bid awarded for FMS will be successful. The vendor has
           implemented their commercial off-the-shelf (COTS) package at over 160 state, local, and county
           governments. The task structure is consistent w-41 Jh4 & Co.‘s processesfor implementation. We
           hope this information helps to clari$ your understanding of the process for reviewing FMS and we
           look forward to continuing to work with you aswe addressthe financial system infmstmctore of the
           District.
                         ,
           Sincerely,



               &nhonyA. W&ants
               Chief Financial Officer




 12                            GAO/AIMD-98-2’7R District’s IG and Financial Management System
ENCLOSURE III                                                                                                         ENCLOSURE III

                  COMMENTS FROM THE DISTRICT OF COLUMBIA’S
                        OFFICE OF INSPECTOR GENERAL



                                     GOVERNMENT         OF THE DISTRICT OF COLUMBIA
                                                             ***
                OFFKE OFTHE   INSPECTOR GENERAL               =                            7 I 7 ,4TH STREET. N.W., 5TH FL.
                                                                                              WASHINGTON,     D.C. 20005
                                                                                                     ,202, 727-2540

                                                           October 29,1997



                Mr. Gene L. Dodaro, Assistant Comptroller General
                U.S. General Accounting Office
                Room 5061
                441 G Skeet, N.W
                Washington, D.C. 20548


                Re: Comrnen‘tson the GAO Draft Report, District of Columbia: Inspector General
                    Independence as Compared to Federal Agencies and Acquisition of a New Financial
                    Management System

                Dear Mr. Dodaro:

                I have reviewed the entire subject report and appreciate the opportunity to provide comments. It
                is imperative that the Office of the Inspector General (OIG) be independent in order to carry out
                its responsibility.

                We fully support the proposed changesrelating to the District of Columbia Offtce of the
                Inspector General (DCOIG) in H.R. 2607. Recent interaction with the Authority has indicated
                the need for clarification regarding the independence of this office in discharging its statutory
                duties. Three areas in which independence should be addressed and clarified are:

                                 l   The National Capitol Revitalization and Self-Government Improvement Act
                                     of 1997 provides that the supervision and control of nine major D.C.
                                     executive agenciesis the sole responsibility of the Authority, and that the
                                     heads of those agencies report only to the Authority. The question arises as to
                                     what degree the Authority can prevent, prohibit, or impede any OIG audit,
                                     review or investigation relating to those agencies; this question is also
                                     applicable to other agencies, as the Authority’s view appears to be that they
                                     have oversight over & District government entities, including OIG;

                                 0   Given the Authority’s responsibility to review and approve District
                                     government contracts during a control year, including contracts entered into
                                     by the OIG, clarification is needed as to whether the Authority may rightfully
                                     disapprove contracts submitted by OIG. This is particularIy critical as it
                                     relates to contracting for the city’s annual audit and certification audits
                                     relating to short-term borrowing Tom the U.S. Treasury, as well as audits of
                                     other District agenciesand operations under the Authority’s control.




13                        GAO/AIMD-9&27R                     District’s IG and Financial Management System
ENCLOSURE III                                                                                                      ENCLOSURE III


            Mr.GeneDodam
            October29,1997
            Page2




                             l    While current law prevents the Mayor or D.C. Council from actually effecting
                                  changes in the OIG’s budget, the Authority has no such restrictions. It is our
                                  belief that a check and balance system is needed to prevent the arbitrary
                                  reduction of OliG’s budget request/authorizations by the Authority.

            We agree that the apparent unresolved deficiencies noted in your report pertaining to the
            Financial Management System (FMS) should be satisfied before moving forward. This is
            consistent with the OIG report, Review of Capabilities Assessment of The Financial
            Management System issued March 18,1997. Also, we agree that the project timeframes appear
            to be ambitious for such a large magnitude of effort.

            Should you have any questions regarclmgthese comments or need additional information, please
            contact me or the Deputy Inspector General, Thomas Brown at the number above.




            /&/dd
            Robert L. Thomas
            interim Inspector General




(916242)


14                               GAO/AIMD-98-27R               District’s IG and F3nancia.I Management System
Ordering    Information

The first copy of each GAO report and testimony is free.
Additional  copies are $2 each. Orders should be sent to the
following address, accompanied by a check or money order
made out to the Superintendent    of Documents, when
necessary. VISA and Mastercard     credit cards are accepted, also.
Orders for 100 or more copies to be mailed to a single address
are discounted 25 percent.

Orders by mail:

U.S. General Accounting    Office
P.O. Box 37050
Washington, DC 20013

or visit:

Room 1100
700 4th St. NW (corner of 4th and G Sts. NW)
U.S. General Accounting Office
Washington, DC

Orders may also be placed by calling (202) 512-6000
or by using fax number (202) 512-6061, or TDD (202) 512-2537.

Each day, GAO issues a list of newly available reports and
testimony.   To receive facsimile copies of the daily list or any
list from the past 30 days, please call (202) 512-6000 using a
touchtone phone. A recorded menu wiII provide information         on
how to obtain these lists.

For information on how to access GAO reports on the INTERNET,
send an e-mail message with “info” in the body to:

infoQwww.gao.gov

or visit GAO’s World Wide Web Home Page at:

http://www.gao.gov
United States
General Accounting  Office                 Suk Rate
Washington, D.C. 20548-0001          Postage & Fees Paid
                                              GAO
                                       Permit No. GlOO
Official   Business
Penalty    for Private   Use $300

Address    Correction    Requested