Jonetta Rose Barras, The Examiner
2008-05-08 07:00:00.0
Current rank: Not ranked

WASHINGTON -

The assessment of the District’s automated integrated tax system — detailed this week in The Examiner — the alleged theft of more than $40 million from the Office of Tax and Revenue, and the “yellow book” report provided by BDO Seidman auditors serve as indisputable evidence the city’s fiscal management system is in crisis.

The Wendell Group and its partner, Advanced Concepts and Technologies Inc., concluded that Accenture LLC, the company that installed and maintained the integrated tax system (ITS), and the District “created an environment that is non-conducive” in providing staff the tools and support they need to properly “collect and manage” the city’s revenues.

Finance officials want to downplay the nearly $200,000 Wendell Group report and its findings. David Umansky, spokesman for the chief financial officer, asserts that the recently revealed decision to upgrade and expand the ITS would have been made even if the theft hadn’t occurred and serious flaws in the design and implementation hadn’t been disclosed. The CFO changed its fiscal 2009 capital budget, providing $5 million to accelerate modernization of the system.

Further, Umansky says things are much better than they were, citing the old “files-were-on-the-floor” tale.

Everyone remembers those bad days. We remember, too, that then-Chief Financial Officer Anthony A. Williams and his deputy Natwar Gandhi performed near-miracles. But, that was then. This is now.

Gandhi can’t continue to use the past to carry him through every bad review. Even on long-running, popular television dramas, the main characters are rotated off — check out the departure of Jesse Martin on “Law and Order.”

Truth telling and transparency serve the CFO and the public better. Things aren’t good. Stephen Cordi, the new head of the tax office, admits as much — though he declined to provide his list of improvement priorities, arguing, “I don’t want you to see how many weaknesses there are [in the system].”

BDO Seidman last month provided a glimpse. Its auditors cited a material weakness at the tax office that, if not corrected, could spell disaster for the city’s bond rating. The Wendell Group underscored the problems.

The theft and other troubles in the tax office may have been avoided with a better ITS. Certainly, adding the refund process in the system would have made a difference. Government insiders say the decision not to fold in that process could’ve been because Harriette Walters — one of the people charged in the theft — was part of the official committee helping to identify business needs that would be included in the ITS.

Residents’ eyes may glaze over financial management issues. But as money gets tighter and city officials begin fighting over resources, the importance of a superior integrated tax system may become clearer. Hopefully, it won’t take the loss of another $40 million — through theft or failed collections — before folks pay attention.