The District of Columbia received a “clean” audit in its comprehensive annual financial report issued last week, marking the city’s 12th consecutive balanced budget, chief financial officer Natwar Gandhi said.
Still, auditors of the CAFR called the district’s financial management of public schools and the Office of Tax and Revenue a “significant deficiency,” which is an improvement from last year’s report, which called them “material weaknesses.” But management of the Medicaid program was again cited as a material weakness.
“We are already busy fixing those issues,” Gandhi told the District Council at a hearing on the CAFR Friday.
While auditors said material weaknesses can negatively affect credit strength, no action against the district’s bond ratings was taken by any of the three major rating agencies last year.
Moody’s Investors Service rates the city A1, and both Fitch Ratings and Standard & Poor’s rate it A-plus — the highest bond ratings the city has ever garnered.
The report shows a nearly $200 million budget surplus in fiscal 2008, as well as a $1.245 billion general fund balance, even after planned draw-downs for one-time uses, Gandhi said. The rainy-day fund is at $330 million and is projected to grow to $358.5 million in fiscal 2010. The district also has about $87 million of unrestricted funds available for fiscal 2009.
The district’s fiscal 2009 revenues are projected to be $127 million less than were estimated in September and will continue to deteriorate in each of the next three fiscal years, Gandhi said in late December. Tax revenues are expected to be $304 million less than projected in fiscal 2010, $330 million less in fiscal 2011, and $327.5 million less in fiscal 2012, he said.
Gandhi said the federal stimulus package being worked out in Congress could benefit the city’s financial situation. He expects about $1 billion to be allocated to the district through fiscal 2011 from the $819 billion House version of the stimulus.
The council will hold a committee of the whole hearing on Wednesday to discuss priorities for the use of potential stimulus funds.