The District’s outside auditor has asked for more time to perform its annual review of the city’s fiscal 2007 finances, another consequence of the massive tax scandal.
BDO Seidman will need until the end of March to finish D.C.’s Comprehensive Annual Financial Report, a critical analysis of the city’s financial books. The request for 60 extra days comes as federal authorities continue to investigate unprecedented theft within the Office of Tax and Revenue totaling $20 million or more.
“I believe this is a reasonable request, consistent with auditing standards that provide guidance when there is detection of fraud,” D.C. Chief Financial Officer Natwar Gandhi said in a statement.
Gandhi has made a point in recent years of touting the timely release of the CAFR audit. The CFO’s Web site notes that the CAFR “must be issued by February 1 following the end of a fiscal year.”
“I have the greatest respect for Nat Gandhi, but that’s a big deal,” said Councilman Phil Mendelson. “The CAFR cannot be late. I don’t know how Wall Street will react. That’s a big deal, and it’s disturbing.”
In February 2000, eight members of the D.C. Council called for former CFO Valerie Holt‘s resignation after the fiscal 1999 CAFR came in late. Among them were Mendelson and Jack Evans, the current finance and revenue committee chairman.
A statement issued by BDO chalked up the delay “to the ongoing investigation.” Gandhi’s office said the late release is “not likely to change” the fiscal 2007 final numbers, nor will it affect the District’s Wall Street standing or credit ratings.
Mary Levy, a budget analyst with the Washington Lawyers’ Committee, said the delayed audit could affect reform plans in the D.C. Public Schools. The council this week devoted $81 million of an estimated $100 million fiscal 2007 surplus on the schools, but the dollars cannot be allocated until the CAFR is released.
A March 31 release also could snarl the fiscal 2009 budget process.
BDO’s contract runs through the Office of the Inspector General.
