Advisory Neighborhood Commissions Management Control and Funding Emergency Amendment Act of 1998

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A BILL IN THE COUNCIL OF THE DISTRICT OF COLUMBIA

To amend, on an emergency basis, the Advisory Neighborhood Commissions Act of 1975 to require the Chairman of an Advisory Neighborhood Commission to maintain a surety bond, to require Advisory Neighborhood Commissions to submit certain documentation with quarterly financial reports and to relinquish their checkbooks to the D.C. Auditor if they fail to file 2 consecutive quarterly reports on time, and to reallocate quarterly allotments held in reserve for Advisory Neighborhood Commissions in order to provide funding to Advisory Neighborhood Commissions in fiscal year 1999.

BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this act may be cited as the "Advisory Neighborhood Commissions Management Control and Funding Emergency Amendment Act of 1998".

Sec. 2. Section 16 of the Advisory Neighborhood Commissions Act of 1975, effective March 26, 1976 (D.C. Law 1-58; D.C. Code §1-264), is amended as follows:

(a) The second sentence of subsection 16(c) is amended to read as follows:

"The treasurer and Chairman of each Commission shall file with the District of Columbia Auditor, and maintain in force during their occupancy of their respective offices, a cash or surety bond in an amount and on a form satisfactory to the Auditor.".

(b) Paragraph 16(j)(1) is amended to read as follows:

"(j)( 1) The treasurer of a Commission shall prepare a quarterly financial report on a form provided by the Auditor. The financial report shall be presented to the Commission for its consideration at a public meeting of the Commission within 45 days of the end of the quarter. A copy of the approved financial report, signed by the Chairman, the secretary, and the treasurer, shall be filed, with a record of the vote adopting the report, with the Auditor within 7 days of approval. Each quarterly financial report must include copies of canceled checks, bank statements, invoices and receipts, grant request letters, executed contracts, and the minutes indicating the Commission's approval of disbursements reported in the quarterly report. A financial report shall be available for public inspection during the Commission's normal office hours.".

(c) Paragraph 1 6j(2) is amended to read as follows:

"(2) No quarterly allotment shall be forwarded to a Commission until all reports of financial activity for the quarters preceding the immediate previous quarter are approved by the Auditor. If a Commission fails to file 2 consecutive quarterly reports that meet the requirements of paragraph (1) of this subsection, it shall relinquish its checkbook to the Auditor, whose permission will be needed for any expenditure made by check until the Commission files the required financial reports. No branch or office of a bank or financial institution located in the District of Columbia shall honor any check or bank withdrawal by a Commission after it receives notice from the Auditor that a Commission has failed to relinquish its checkbook in accordance with this paragraph"."

(d) Paragraph 16(j)(3) is amended to read as follows:

"(3) On the effective date of the Advisory Neighborhood Commissions Management Control and Funding Emergency Amendment Act of 1998, the Chief Financial Officer shall reallocate any quarterly allotments that are held in reserve for Commissions for any period through the end of fiscal year 1997. The funds shall be used to provide fiscal year 1999 allotments to each Commission, consistent with section 738(e) of the District of Columbia Home Rule Act, approved December 24, 1973 (87 Stat. 824; D.C. Code §1-251). On September 30, 1999, and on the last day of each subsequent fiscal year, any additional funds held in reserve for Commissions by the Chief Financial Officer, due to the failure of a Commission to file a quarterly financial report on a timely basis, shall be returned to the District's General Fund.".

Sec. 3. The second sentence of subsection 17(b) of the Advisory Neighborhood Commissions Act of 1975, effective March 6, 1991 (D.C. Law 8-203; D.C. Code §1-264.1(b)), issubsection 17(b) is amended to read as follows:

"A Commission shall be eligible to participate in the Fund if the treasurer and the Chairman of the Commission agree, on a form to be provided by the Trustees, to be personally liable to the Fund for any sum paid out by the Fund as a result of the treasurer or Chairman's wrongful misappropriation or loss of Commission monies.".

Sec. 4. Fiscal impact statement.

The Council concludes that this legislation will have a positive fiscal impact.

The legislation includes 3 provisions that will strengthen financial management and oversight of Advisory Neighborhood Commissions ("ANCs"), thereby preventing waste, fraud, and abuse while ensuring that funds are spent to benefit District neighborhoods.

First, section 2(a) requires the ANC chairman to be bonded, supplementing the present statutory requirement that the ANC treasurer is bonded. This is a prudent change because subsection 16(f) of the Advisory Neighborhood Commissions Act of 1975 states that the signature of the ANC treasurer or the chairman must appear on any expenditure an ANC makes by check. Section 3 presents an alternative to the bonding requirement, as provided in current law, by stating that if an ANC chooses to participate in the ANC Security Fund instead of maintaining a bond, that both the ANC treasurer and Chairman must agree to be personally liable to the Fund for any wrongful appropriation or loss of ANC funds.

Second, section 2(b) introduces a new requirement for quarterly financial reports to include copies of canceled checks, bank statements, invoices and receipts, grant request letters, and contracts executed, along with the minutes indicating the Commission's approval of disbursements reported in the quarterly report. This information will make Commissions more accountable for documenting their expenditures and will enable the Auditor quickly to detect any financial errors or improper expenditures.

Third, section 2(c) includes a provision to deter and prevent financial mismanagement by requiring Commissions that fail to file 2 consecutive quarterly reports on time to relinquish their checkbooks to the Auditor. Commissions that have failed to file 2 or more quarterly reports will not be able to make any expenditure by check without the permission of the Auditor.

The legislation also includes language in section 2(d) that provides fiscal year 1999 funding for Advisory Neighborhood Commissions in a fiscally neutral way. In approving the District's fiscal year 1999 budget, Congress did not provide funding for Advisory Neighborhood Commissions, but specified in the conference report on the District's budget that the District could reprogram funds for Advisory Neighborhood Commissions "so long as necessary management controls are enacted by the Council of the District of Columbia to assure that the funds are disbursed for previously reviewed and agreed upon purposes, consistent with the laws, rules, and regulations of the District of Columbia." This legislation enacts the necessary management controls and also allocates $334,790.38 for Advisory Neighborhood Commissions in fiscal year 1999 by transferring that sum from a reserve fund maintained for ANCs by the Chief Financial Officer.

The Chief Financial Officer presently holds $596,438.38 in reserve for Advisory Neighborhood Commissions that have failed to file the quarterly financial reports required by law. Commissions can claim the funds associated with a quarterly report by filing a report meeting the standards prescribed by the D.C. Auditor. The Office of the Chief Financial Officer reports that $334,790.38 of the funds held in reserve is for allotments from fiscal years 1991 through 1997. This legislation reallocates the reserve funding of $334,790.38 for fiscal years 1991 through 1997 for use as the fiscal year 1999 appropriation for Advisory Neighborhood Commissions.

Sec. 5. Effective date.

This act shall take effect following approval by the Mayor (or in the event of veto by the Mayor, action by the Council to override the veto) and approval by the Financial Responsibility and Management Assistance Authority as provided in section 203(a) of the District of Columbia Financial Responsibility and Management Assistance Act of 1995, approved April 17, 1995 (109 Stat. 116; D.C. Code §47-392.3(a)), and shall remain in effect for no longer than 90 days, as provided for emergency acts of the Council of the District of Columbia in section 412(a) of the District of Columbia Home Rule Act, approved December 24, 1973 (87 Stat. 788; D.C. Code §1 -299(a)).