Logosm.gif (1927 bytes)
navlinks.gif (4688 bytes)
Hruler04.gif (5511 bytes)

Back to Chief Financial Officer’s main page

Testimony of Valerie Holt, Chief Financial Officer
Committee on Finance and Revenue Oversight Hearing on FY 1999 and FY2000
February 25, 2000

Home

Bibliography

Calendar

Columns
Dorothy Brizill
Bonnie Cain
Jim Dougherty
Gary Imhoff
Phil Mendelson
Mark David Richards
Sandra Seegars

DCPSWatch

DCWatch Archives
Council Period 12
Council Period 13
Council Period 14

Election 1998
Election 2000
Election 2002

Elections
Election 2004
Election 2006

Government and People
ANC's
Anacostia Waterfront Corporation
Auditor
Boards and Com
BusRegRefCom
Campaign Finance
Chief Financial Officer
Chief Management Officer
City Council
Congress
Control Board
Corporation Counsel
Courts
DC2000
DC Agenda
Elections and Ethics
Fire Department
FOI Officers
Inspector General
Health
Housing and Community Dev.
Human Services
Legislation
Mayor's Office
Mental Health
Motor Vehicles
Neighborhood Action
National Capital Revitalization Corp.
Planning and Econ. Dev.
Planning, Office of
Police Department
Property Management
Public Advocate
Public Libraries
Public Schools
Public Service Commission
Public Works
Regional Mobility Panel
Sports and Entertainment Com.
Taxi Commission
Telephone Directory
University of DC
Water and Sewer Administration
Youth Rehabilitation Services
Zoning Commission

Issues in DC Politics

Budget issues
DC Flag
DC General, PBC
Gun issues
Health issues
Housing initiatives
Mayor’s mansion
Public Benefit Corporation
Regional Mobility
Reservation 13
Tax Rev Comm
Term limits repeal
Voting rights, statehood
Williams’s Fundraising Scandals

Links

Organizations
Appleseed Center
Cardozo Shaw Neigh.Assoc.
Committee of 100
Fed of Citizens Assocs
League of Women Voters
Parents United
Shaw Coalition

Photos

Search

What Is DCWatch?

themail archives

GOOD MORNING, CHAIRMAN EVANS AND OTHER MEMBERS OF THE COMMITTEE ON FINANCE AND REVENUE, I AM PLEASED TO APPEAR BEFORE YOU TODAY TO DISCUSS THE ACCOMPLISHMENTS OF THE OFFICE OF THE CHIEF FINANCIAL OFFICER (OCFO) FOR FY 1999 AND 2000 TO DATE AND OUR GOALS FOR FY 2001. APPEARING WITH ME TODAY ARE MY DEPUTIES: DR. WILLIAM HALL, DEPUTY CFO FOR FINANCE AND TREASURY; MR. TONY POMPA, DEPUTY CFO FOR FINANCIAL OPERATIONS AND SYSTEMS; MR. HENRY DEBNAM, CHIEF INFORMATION OFFICER; AND DR. NATWAR GANDHI, DEPUTY CFO FOR TAX AND REVENUE. THEY ARE AVAILABLE TO ASSIST IN ANSWERING YOUR QUESTIONS.

WE NOT ONLY WANT TO TELL YOU ABOUT SOME OF OUR CONSIDERABLE ACCOMPLISHMENTS, BUT WE WILL ALSO TELL YOU ABOUT SOME OF THE AREAS THAT WE KNOW NEED IMPROVEMENT. AS YOU KNOW IN THE LAST FIVE (5) YEARS, THIS CITY HAS COME A LONG WAY IN STABILIZING ITS FINANCIAL STATUS. YET, WE STILL HAVE A CONSIDERABLE WAY TO GO BEFORE WE ARE COMPLETELY OUT OF THE WOODS.

IN FY 1999, THE OCFO HAD A BUDGET OF $89.4 MILLION AND 1,063 AUTHORIZED FTEs. IN THE CURRENT FISCAL YEAR, OUR BUDGET IS $86.8 MILLION AND THE NUMBER OF AUTHORIZED FTEs IS 1,081. OUR CONSIDERABLE ACCOMPLISHMENTS INCLUDE:

  • ACHIEVING INVESTMENT-GRADE RATINGS ON THE DISTRICT'S OUTSTANDING GENERAL OBLIGATION BONDS, WHICH WILL ALLOW THE DISTRICT TO BORROW AT LOWER INTEREST RATES, FREEING UP MORE MONEY FOR CAPITAL PROJECTS AND OTHER SERVICES;
  • WE ALSO RESTRUCTURED THE DISTRICT'S DEBT TO REDUCE THE COST OF DEBT SERVICE IN FY2000 BY $59 MILLION AND TO ACHIEVE A PRESENT VALUE SAVINGS OF ABOUT $5.0 MILLION. COMPLETED IN JULY 1999, THIS IS THE LARGEST SINGLE FINANCIAL TRANSACTION IN THE DISTRICT'S HISTORY ON WALL STREET.
  • IMPLEMENTING THE TAX INCREMENT FINANCING PROGRAM AND ISSUING CLOSE TO $1 BILLION IN INDUSTRIAL REVENUE BONDS;
  • CONDUCTED OR INITIATED THIRTY-FIVE (35) AUDITS/REVIEWS OF VARIOUS GOVERNMENT AGENCIES. THESE REVIEWS, PERFORMED BY OUR INTERNAL CONTROL UNIT, UNVEILED 108 DEFICIENCIES IN INTERNAL CONTROL WEAKNESSES. THEY ALSO SAVED THE DISTRICT OVER $1.5 MILLION DOLLARS IN DISALLOWED AND QUESTIONABLE COSTS AND INCORRECT BILLINGS TO THE DISTRICT;
  • BEGAN REQUIRING AGENCY CFOs TO PREPARE FINANCIAL PLANS AT THE BEGINNING OF THE FISCAL YEAR. THIS IS A GOOD MANAGEMENT TOOL THAT ALLOWS OUR CFOs TO ASSESS THEIR BUDGETS, ORGANIZATIONS AND FINANCIAL PRESSURES EARLY IN THE YEAR SO THAT CORRECTIVE ACTIONS ARE DEVELOPED IN A TIMELY FASHION, RATHER THAN IN THE LAST QUARTER. WITH THESE PLANS, WE HOPE TO NOT HAVE ANY AGENCIES FINISH THE YEAR WITH A DEFICIT;
  • SUCCESSFULLY ADDRESSED THE Y2K ISSUE FOR $7 MILLION BY EVALUATING AND REMEDIATING 77 COMPUTER APPLICATIONS. THESE INCLUDED 8 MAJOR APPLICATIONS THAT COMPRISED MORE THAN 7 MILLION LINES OF CODE, ONE OF THE LARGEST QUANTITIES OF DATA OF ANY DISTRICT GOVERNMENT AGENCY AND 4 (FOUR) TIMES LARGER THAN THE NEXT MISSION CRITICAL AGENCY;
  • CONVERTED NEARLY HALF OF THE CITY'S AGENCIES TO THE NEW POSITION CONTROLLED CAPPS COMPUTER HUMAN RESOURCES SYSTEM AND BEGAN THE FIRST YEAR OF OPERATION OF THE CITY'S NEW FINANCIAL MANAGEMENT SYSTEM, SOAR.

IN THE AREA OF TAX AND REVENUE, WE CONTINUED TO HAVE SOME OF OUR MOST SIGNIFICANT ACHIEVEMENTS. IN ADDITION TO PHYSICALLY RELOCATING OUR OTR OFFICES, WE:

  • INSTITUTED A NUMBER OF NEW INITIATIVES TO IMPROVE TAX COLLECTIONS. WE CONTINUED OUR EFFORTS TO MAKE IT EASIER TO PAY TAXES BY USING TELEPHONES AND CREDIT CARDS. THE EFFECTS OF THESE EFFORTS CAN BE SEEN IN THE CITY'S NEW REVENUE ESTIMATE OF $55 MILLION IN ADDITIONAL REVENUE EXPECTED FOR THIS FISCAL YEAR. WE WOULD LIKE TO ALSO POINT OUT THAT OVER THE LAST 3 YEARS, 16,000 NEW TAX FILERS HAVE BEEN ADDED TO OUR TAX ROLLS, ADDING $250 MILLION TO OUR TAX BASE.
  • IMPROVED OUR ENFORCEMENT EFFORTS BY INSTITUTING A TAX FRAUD HOTLINE TO REPORT POTENTIAL TAX FRAUD AND ABUSE AND ESTABLISHED A NEW CRIMINAL, INVESTIGATIONS TAX UNIT.
  • NEARED COMPLETION OF A MAJOR REAL PROPERTY AUTOMATION PROJECT. APPROVED IN FY 1997, THE GEOGRAPHICAL INFORMATION SYSTEM (GEIS) WILL SOON MAKE ACCESSING REAL PROPERTY INFORMATION OF THE RECORDER OF DEEDS AVAILABLE BY COMPUTER.
  • CONTINUED INSTALLATION OF THE INTEGRATED TAX SYSTEM. OUR NEW STATE OF THE ART MULTI-YEAR TAX SYSTEM WILL MAKE IT POSSIBLE TO CROSS-REFERENCE ALL CITY TAXES BY COMPUTER. BUSINESS TAXES WILL BE AVAILABLE THIS FALL WITH REAL PROPERTY AND INCOME TAXES AVAILABLE IN 2001 AND 2002, RESPECTIVELY. ONCE COMPLETED THE DISTRICT WILL HAVE ONE OF, IF NOT THE, MOST SOPHISTICATED TAX SYSTEMS IN THE COUNTRY.

WHILE WE ARE PROUD OF OUR ACCOMPLISHMENTS, THERE ARE STILL A NUMBER OF AREAS THAT NEED IMPROVEMENT. THE FOLLOWING ARE SOME OF THE MOST SIGNIFICANT. WE NEED TO:

  • IMPROVE THE RECORDING OF DEBT RELATED TRANSACTIONS. ISSUES ARISING FROM THE NEW SOAR SYSTEM AND THE ANTIQUATED BOND SYSTEM NEED TO BE WORKED OUT TO FACILITATE THIS PROCESS.
  • IMPROVE THE BANK RECONCILIATION PROCESS.
  • START USING STATISTICAL TECHNIQUES TO ENHANCE THE RELIABILITY OF CASH FORECASTING, TO INCREASE INVESTMENT RETURNS, AND TO REVISE PROCEDURES TO IMPROVE THE TIMELINESS OF OUR CASH FLOW REPORTING.
  • IMPROVE THE OPERATION OF SOAR SO THAT IT PROVIDES FINANCIAL DATA IN THE FORMAT USERS NEED. AS PART OF THIS PROCESS, POLICIES AND PROCEDURES WILL BE UPDATED TO REFLECT CHANGES BROUGHT ON BY SOARS IMPLEMENTATION. WE WILL BE DEVELOPING STANDARDIZED REPORTS FOR USERS' USE OF SOAR.
  • COMPLETE CONVERSION OF THE REST OF THE GOVERNMENT TO THE NEW CAPPS SYSTEM AND IMPROVE THE MANAGEMENT OF THE PROCESSING OF PERSONNEL AND BENEFITS INFORMATION. BECAUSE OF THE COMPLEXITY OF THE CITY'S PAYROLL STRUCTURE, WE HAVE ALREADY STARTED TO IMPROVE THE PROCESS OF WORKING WITH AGENCIES TO INCORPORATE THEIR SPECIFIC NEEDS INTO CAPPS.
  • IMPROVE MONTHLY/QUARTERLY FINANCIAL REPORTING PROCESSES AND PROCEDURES, AS WELL AS TO PERIODICALLY CLOSE ACCOUNTS THROUGHOUT THE YEAR, NOT JUST AT YEAR-END. IN THIS WAY WE CAN RESOLVE THOSE ISSUES IN A MORE TIMELY FASHION, AS THEY OCCUR.
  • DEVELOP STANDARDIZED ACQUISITION POLICIES AND STANDARDS TO ENSURE THAT COMPUTER SYSTEMS CAN BE INTEGRATED AND FUNCTION FROM A COMMON PLATFORM.
  • IMPLEMENT A DATA WAREHOUSE SOLUTION TO SUPPORT USER ACCESS TO FINANCIAL AND PERFORMANCE INFORMATION. THE EXECUTIVE INFORMATION SYSTEM (EIS) IS THE FIRST STEP IN THIS PROCESS.
  • MODIFY EXISTING PROCEDURES FOR THE COLLECTION OF DISHONORED TAX PAYMENT CHECKS SO THAT WE CAN PURSUE THOSE RELATED TO THIS TAX DEBT. BY IMPROVING THIS PROCESS, WE COULD COLLECT AN ADDITIONAL $10 MILLION IN TAX REVENUES.

A "GOING FORWARD" APPROACH FOR THE SOAR SYSTEM THAT WILL BE AN INTERNALLY DRIVEN APPROACH AND INCLUDE:

  • DEVELOPMENT OF NEW CLOSING PROCESS USING AVAILABLE INTRANET TOOLS TO SUPPORT THE TRANSFER, TRACKING AND RECONCILIATION OF AGENCY LEVEL PACKAGES.
  • CHANGE AUDIT SCOPE AND PROCESS TO MANAGE NEW SYSTEM CAPABILITIES.
  • LIMITED CHANGES TO ACCOUNTING STRUCTURE (INTERNAL TRANSACTION FILE, TO SUPPORT BETTER ANALYSIS OF AGENCY LEVEL DATA AND TO SUPPORT MORE EFFICIENT DATA ROLL-UP.
  • SOME RESTRUCTURING OF OFOS TO SUPPORT BETTER COORDINATION AND SUPPORT BETWEEN CENTRAL OFFICE AND AGENCY ACCOUNTING OPERATIONS.

IN ADDITION TO MAKING THE IMPROVEMENTS NOTED DURING THE REST OF THIS FISCAL YEAR, THERE ARE SOME MANAGEMENT IMPROVEMENTS THAT WE WILL DO THIS FISCAL YEAR.

  • WE WILL DEVELOP PERFORMANCE AGREEMENTS FOR ALL OF OUR SENIOR MANAGERS, INCLUDING MYSELF. WITH THESE AGREEMENTS WE WILL BE ABLE TO MEASURE PERFORMANCE OF OUR EXECUTIVE LEVEL MANAGERS, WITH THE INTENT OF FILTERING THE PROCESS DOWN THROUGHOUT THE AGENCY.
  • WE WILL CONTINUE TO HAVE AGENCY CFOs WORK CLOSELY WITH THEIR AGENCY DIRECTORS. WE WANT THE AGENCIES TO SEE THEIR CFOs AS BUSINESS MANAGERS, HELPING THEM TO SOLVE PROBLEMS AND ISSUES IN A TIMELY AND FISCALLY RESPONSIBLE MANNER. PREPARATION OF THE FINANCIAL STATEMENTS WAS THE FIRST STEP IN THIS IN THIS OBJECTIVE AND TO FURTHER IT, I WILL WORK WITH AGENCY DIRECTORS TO DEVELOP THE PERFORMANCE EVALUATION PLANS FOR THE AGENCY CFOs.
  • WE ARE CHANGING AND REVISING THE MONTHLY FINANCIAL STATUS REPORT, COMMONLY KNOWN AS THE FRP, AND THE FLASH REPORTS. GOVERNMENT OFFICIALS WHO RECEIVE THEM MUST GET THE FINANCIAL INFORMATION THEY NEED IN A ROUTINE, TIMELY MANNER.

LASTLY, WE ARE VERY PROUD-OF THE EXECUTIVE MANAGEMENT TEAM THAT WE HAVE PUT TOGETHER WITH THE EXCELLENT TALENT AND SKILLS THAT WE ALREADY HAVE IN THE OCFO, WE HAVE DONE AN EXTENSIVE, LOCAL AS WELL AS NATIONAL, COMPETITIVE RECRUITMENT. WE HAVE ATTRACTED SOME EXTREMELY WELL QUALIFIED AND EXPERIENCED PROFESSIONALS, MANY OF WHOM HAVE ADVANCED DEGREES OR PROFESSIONAL CERTIFICATIONS. IN FACT, THE QUALITY OF OUR TALENTED PROFESSIONALS WAS RECOGNIZED IN A RECENT ISSUE OF THE BOND BUYER, THE DAILY NEWSPAPER OF PUBLIC FINANCE OFFICIALS, WHICH STATED THAT, "THE GOVERNMENT OF THE DISTRICT OF COLUMBIA... HAS A RELATIVELY NEW BUT VASTLY EXPERIENCED FINANCIAL MANAGEMENT TEAM UNDER THE LEADERSHIP OF CHIEF FINANCIAL OFFICER (CFO) VALERIE HOLT ...." OUR NEWCOMER STRONGLY COMPLEMENT OUR TALENTED "OLDTIMERS."

IN ADDITION TO RECRUITING LOCALLY AND NATIONALLY, WE HAVE CANDIDATES INTERVIEW WITH PANELS OF OTHER FINANCIAL PROFESSIONALS FROM INSIDE AND OUTSIDE THE GOVERNMENT. IN FACT, AS PART OF OUR SELECTIONS OF THE DEPUTY CFO FOR FINANCE AND TREASURY, DR. HALL AND OUR NEW BUDGET DIRECTOR, MR. OTIS WILLIAMS, WE HAD A PANEL EXTENSIVELY INTERVIEW THEM. THE PANEL WAS COMPOSED OF DISTINGUISHED CITIZENS WHO VOLUNTEERED THEIR TIME TO HELP IN THIS PROCESS. THEY INCLUDE AN OFFICIAL OF THE SMITHSONIAN, TWO MEMBERS OF THE BANKING COMMUNITY, THE PARTNER OF A MAJOR LAW FIRM, AND AN OFFICIAL OF A MAJOR PUBLIC INTEREST ORGANIZATION. WITHIN THE OCFO WE ARE USING THE SAME PROCESS TO FILL AGENCY CFO AND OTHER FINANCIAL POSITIONS.

WHILE WE HAVE ACCOMPLISHED MUCH, WE KNOW THAT WE STILL HAVE CONSIDERABLE CHALLENGES AHEAD OF US. HOWEVER, WITH THE TALENTED AND VERY EXPERIENCED TEAM THAT WE HAVE PUT TOGETHER, WE BELIEVE THAT WE ARE WELL ON OUR WAY TO HAVING, AS ONE TOP INVESTMENT FIRM OFFICIAL STATED LATE LAST FALL, A FINANCIAL OPERATION WITH A WORLD CLASS REPUTATION.

I WOULD NOW LIKE TO HAVE THE MEMBERS OF MY STAFF SEATED AT THE TABLE SAY A FEW WORDS ABOUT THEIR OPERATIONS.

Back to top of page


Send mail with questions or comments to webmaster@dcwatch.com
Web site copyright ©DCWatch (ISSN 1546-4296)