Mayor Adrian Fenty¹s proposed unfunded directive that District agencies pay for personnel and procurement services out of pocket will leave departments holding the bag and the fiscal 2008 budget at least $30 million in the red, the chairman of the D.C. Council said Tuesday.
“Dr. Gandhi, you are the one person who we look to as the independent CFO to certify whether or not we have a balanced budget,” Council Chair Vincent Gray wrote Tuesday in a letter to Chief Financial Officer Natwar Gandhi. “I know this budget is not balanced at the present time.”
The mayor’s 2008 spending plan suggests that agencies pay for their own hiring and purchasing needs.
But the budget does not provide any additional revenue to help departments fill the gap.
The cost is estimated between $22 million and $30 million, which would fund the Department of Human Resources and Office of Contracting and Procurement — two agencies that had long been subsidized through the general fund.
In a letter the CFO prepared in response to Gray late Tuesday, Gandhi said, “Please be assured that I will require detailed, realistic plans from the Mayor regarding the level of fees to be paid by each agency and how each agency’s budget will be adjusted to accommodate the fee.
“If I am unable to certify that the contemplated actions, if implemented, maintain a balanced budget, I will immediately inform you.”
People use procurement and human resources “as if there’s no cost to the government,” Fenty said last week. The change should improve accountability and efficiency.
Executive branch agencies, the mayor said, must find the savings within their budgets to cover the costs.
“The definition of a management team that spends its money better is one that can provide the same services for less,” Fenty said Tuesday.
“So what we’re saying to the council is we’re going to be able to provide the same services more efficiently for less.”
But for Gandhi to certify Fenty’s budget as balanced, Gray said, flies in the face of his previous statements.
In May 2004, in a letter to then-Council Chair Linda Cropp, Gandhi wrote that a proposal to reduce the fiscal 2005 budget was not accompanied by “specific, detailed organizational or program budgets being cut.”
Therefore, Gandhi wrote, “I cannot calculate the fiscal impact of these actions and as a consequence cannot certify that these actions, if taken maintain a balanced budget and five-year plan.”
The past and present situations have obvious similarities, Gray wrote in his memo to Gandhi.
“I don’t believe the executive branch agencies have the ability to absorb the functions of the Office of Contracting and Procurement and the Office of Personnel out of their existing budgets,” the chairman wrote.
“And if they do, then the Mayor needs to identify what programs and services will be reduced to fund contracting, procurement and personnel services,” Gray wrote.
Gandhi said Monday that Fenty’s $9 billion budget proposal is balanced as long as the council doesn’t strip out the proposed funding mechanisms.
“According to the chief financial officer, the budget is balanced and I agree with the chief financial officer,” Fenty said.
Some of Mayor Fenty’s comments on the unfunded proposal to have D.C. government agencies pay for personnel and purchasing out of their budgets.
» “We want to see a lot more accountability and a lot more acknowledgment by government agencies about what they are and are not having the procurement office and the human resources office do.”
» “We think it’ll add efficiency, accountability, transparency toward how procurement and human resources work.”
» “Both procurement and personnel would be funded by intradistrict assessments on each agency based on the amount of support services consumed. Personnel would be assessed on a per-full-time employee basis and procurement on a percentage on overall contractual spending.”
» “The definition of a management team that spends its money better is one that can provide the same services for less. So what we’re saying to the council is we’re going to be able to provide the same services more efficiently for less.”
