Jonetta Rose Barras: CFO surprise? Not really

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Local,DC,Jonetta Rose Barras

Anyone who has followed the declining career of D.C. Chief Financial Officer Natwar Gandhi isn't surprised by the inspector general's recent report indicating his office failed to collect nearly $7 million in tax penalties from businesses who failed to file electronically. There is a trail of similar failures.

Gandhi reportedly failed to collect as much as $100 million in recordation taxes from certain refinanced commercial properties; he claimed there was some misinterpretation of the law. The council ultimately made clear in the fiscal year 2013 budget it expects the CFO to levy and collect that tax.

Then, the CFO's operation reduced the assessed values of as many as 500 commercial properties. That meant the District missed out on $48 million in tax revenues. Historic sums of money also were stolen -- not once but multiple times -- under his inattentive eyes.

Once upon a time, Gandhi's financial management may have been stellar. But it has become sloppy, as evident by the report from independent auditors who cited 34 internal control weaknesses and deficiencies.

Ward 2 Councilman Jack Evans, chairman of the Committee on Finance and Revenue, told me earlier this week he is concerned about the uncollected penalties. But he is equally worried that businesses are being penalized simply because they aren't filing electronically.

"How much of the penalty is because they didn't pay their taxes on time, and how much of it is because they mailed in their returns instead of filing electronically?" said Evans, adding that he's trying to get an answer to that question.

That's a nice homework assignment. But the law is the law. Until the council changes it, the CFO should be expected to follow it.

Taxpayers may find comfort in the fact that Gandhi is on his way out. He has resigned effective June 1 -- although he has agreed to remain until the city finds a replacement. The search committee should act with urgency.

Who knows how many other undisclosed cases there are of money being stolen or uncollected. Truth be told, neither the mayor nor the council knows the mess Gandhi has buried in his office behind closed doors.

Within that context, at-large Councilman Vincent B. Orange's OCFO Audit and Revenue Projections Amendment Act of 2013 takes on greater importance. The legislation would mandate the creation of a mayorally appointed task force to conduct a forensic audit, including evaluating internal controls; assessing how Gandhi spent his appropriated budget; determining whether there are protections against loss, waste, fraud and abuse; assessing compliance with District laws, rules, polices and procedures; and identifying how much revenue may have been lost each year since the creation of the OCFO because of weak internal controls.

Introduced earlier this year, the bill has languished in Evans' committee. That's one way to protect the CFO.

With the fiscal year 2014 budget now approved by the council, Evans said he would get back to other business. "I will hold a hearing on [Orange's] legislation, probably before the end of the summer."

Better late than never, right?

Jonetta Rose Barras' column appears on Tuesday and Friday. She can be reached at jonetta@jonettarosebarras.com.

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