[Senate Report 106-493]
[From the U.S. Government Publishing Office]
106th Congress
2d Session SENATE REPORT
106-493
_______________________________________________________________________
Calendar No. 943
DISTRICT OF COLUMBIA RECEIVERSHIP ACCOUNTABILITY ACT OF 2000
__________
R E P O R T
of the
COMMITTEE ON GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
To Accompany
H.R. 3995
TO ESTABLISH PROCEDURES GOVERNING THE RESPONSIBILITIES OF COURT-
APPOINTED RECEIVERS WHO ADMINISTER DEPARTMENTS, OFFICES, AND AGENCIES
OF THE DISTRICT OF COLUMBIA GOVERNMENT
October 6 (legislative day, September 22), 2000.--Ordered to be printed
COMMITTEE ON GOVERNMENTAL AFFAIRS
FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware JOSEPH I. LIEBERMAN, Connecticut
TED STEVENS, Alaska CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine DANIEL K. AKAKA, Hawaii
GEORGE VOINOVICH, Ohio RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania JOHN EDWARDS, North Carolina
JUDD GREGG, New Hampshire
Hannah S. Sistare, Staff Director and Counsel
Kristine I. Simmons, Staff Director, Subcommittee on Oversight of
Government Management, Restructuring and the District of Columbia
Mason C. Alinger, Professional Staff Member, Subcommittee on Oversight
of
Government Management, Restructuring and the District of Columbia
Joyce A. Rechtschaffen, Minority Staff Director and Counsel
Peter A. Ludgin, Minority Professional Staff Member
Marianne Upton, Minority Chief Counsel Staff Director, Subcommittee on
Oversight of
Government Management, Restructuring and the District of Columbia
Darla D. Cassell, Chief Clerk
Calendar No. 943
106th Congress Report
SENATE
2d Session 106-493
======================================================================
DISTRICT OF COLUMBIA RECEIVERSHIP ACCOUNTABILITY ACT OF 2000
_______
October 6 (legislative day, September 22), 2000.--Ordered to be printed
_______
Mr. Thompson, from the Committee on Governmental Affairs, submitted the
following
R E P O R T
[To accompany H.R. 3995]
The Committee on Governmental Affairs, to whom was referred
the bill (H.R. 3995) to establish procedures governing the
responsibilities of court-appointed receivers who administer
departments, offices, and agencies of the District of Columbia
government, having considered the same, reports favorably
thereon without an amendment and recommends that the bill do
pass.
CONTENTS
Page
I. Summary and Purpose..............................................1
II. Background.......................................................2
III. Legislative History..............................................3
IV. Explanation of Amendment.........................................4
V. Section-by-Section Analysis......................................4
VI. Estimated Cost of Legislation....................................4
VII. Evaluation of Regulatory Impact..................................5
VIII.Changes in Existing Law..........................................6
I. SUMMARY AND PURPOSE
H.R. 3995 directly addresses concerns about the District of
Columbia's receivership programs and the accountability of the
receivers. This legislation will promote financial stability
and efficient management of the District government, as well as
establish communication between the city and the receiverships.
Specifically, the legislation would establish
recommendations for how court-appointed receivers in the
District should operate. The legislation would mandate that
receivers should (1) promote best practices, (2) subject
themselves to an annual audit by the city's inspector general,
(3) ensure that costs are consistent with regional and national
standards, (4) consult with the Mayor and the chief financial
officer on the budget, and (5) procure through a competitive,
open-bidding process.
II. BACKGROUND
The District of Columbia has had four of its agencies
placed under court-appointed receivership in the last five
years. Typically, court intervention into the administration of
government agencies is utilized to bring about brief, drastic
change to an agency. However, the District's court-controlled
agencies have all languished in receivership for three to five
years, some showing minimal signs of improvement.
Two of the four agencies under receivership were returned
to the city in September 2000. The D.C. Housing Authority,
which has been in receivership since 1995, has proven after
five years of receivership to be financially and managerially
stable enough to return to the city. The Jail Medical Services,
which has also been under receiver since 1995, was returned to
the city this September, but substantial concerns remain about
the agency. (Although medical and psychological services at the
jail have improved under the receiver, environmental conditions
remain grave--vermin are rampant, and faulty ventilation
greatly reduces air movement in critical parts of the
building.)
The Mental Health Services Agency, which has been under
receivership since 1997, is slated to return to the city
sometime in 2001. However, the agency's return to city control
is not due to the receiver's success. Mental Health Services is
being returned to the city because the judge that oversees the
receiver found that the system has actually deteriorated since
being seized by the courts.
The Child and Family Services Agency has also stagnated
under receivership for the past five years. A September 20,
2000 hearing by the House Subcommittee on the District of
Columbia revealed no progress by the Agency under the receiver.
In fact, conditions at the agency were so bad that at the
hearing Members called for the agency to return to the city. In
addition to these agencies currently under receivership, the
city's public school transportation system has been threatened
with receivership in recent months due to its inability to
address the needs of special education children.
The purpose of court-appointed receivers is to intervene
and take over a failing government agency, institute the
necessary management reforms to get the agency properly running
again, and return the agency to the city in a timely fashion.
This has clearly not been the case with the District of
Columbia receiverships. Consequently, this legislation
establishes minimum standards to guide receivers in managing
their operations and maintaining accountability.
H.R. 3995 requires court-appointed District of Columbia
receivers to ensure that the costs incurred in administering
the agency under receivership are consistent with regional and
national standards. Under this legislation, the receiver must
use the best means available to promote financial stability and
sound management practices within the agency. The receiver must
consult with the Mayor and the Chief Financial Officer of D.C.
when preparing the annual budget. Estimates of expenditures and
appropriations for the operations of the agency must be
submitted to the Mayor for inclusion in the city's annual
budget. The legislation also requires an independent auditor to
conduct annual fiscal and management audits of the agency under
receivership. Nothing in this bill is intended to impede a D.C.
receiver's mandate to remedy constitutional violations.
III. LEGISLATIVE HISTORY
H.R. 3995 was introduced by Delegate Eleanor Holmes Norton
(D-DC) on March 15, 2000 and referred to the Government Reform
Committee's Subcommittee on the District of Columbia. On May 5,
the Subcommittee held an investigative hearing on the status of
reforms under the Child and Family Services Agency (CFSA)
receiver. The following witnesses testified: Congressman Tom
DeLay (R-TX), the General Accounting Office's Cynthia Fagnoni,
Judy Meltzer from the Center for the Study of Social Policy,
CFSA Receiver Ernestine Jones, Deputy Mayor for Health Carolyn
Graham, the Mayor's Special Counsel for Receivers Grace Lopes,
and Kimberly Shellman from the D.C. Child Advocacy Center. At
the hearing, the Subcommittee reprimanded the receiver for her
lack of progress and demanded that she show improvement when
the Subcommittee called her back in September. However, as
discussed in the section above, little progress was made.
Immediately after the May 5 hearing, the Subcommittee held
a markup and voted the bill out of Subcommittee by voice vote,
with one amendment. The Subcommittee adopted an amendment by
Delegate Norton that requires the use of generally accepted
accounting principles, fiscal management practices, and an
annual fiscal and management review conducted by an independent
auditor. In addition, the amendment requires a competitive
procurement process unless one of the specified exceptions is
met. Finally, the amendment clarifies the applicability of the
Anti-deficiency Act. The full Committee on Government Reform
approved H.R. 3995 on June 12, 2000, and it passed the House by
unanimous consent the same day.
On the Senate side, the issue of receivership
accountability was addressed at a May 9, 2000 hearing by the
Subcommittee on Oversight of Government Management,
Restructuring, and the District of Columbia. At the hearing,
the Mayor testified that his office had appointed a special
counsel to work with the receivers to establish standards and
expectations that could be worked into the city's performance
accountability plan. The Receivership Accountability Act would
open the lines of communication between the city and the
receivers in order to make this possible.
On June 13, 2000, H.R. 3995 was received in the Senate and
referred to the Committee on Governmental Affairs, where it was
subsequently referred to the Subcommittee on Oversight of
Government Management, Restructuring, and the District of
Columbia on June 20, 2000. The Subcommittee approved the
legislation by unanimous consent and forwarded it to the full
Committee on September 18, 2000. It was ordered reported by the
Governmental Affairs Committee by voice vote at a full
Committee business meeting on September 27, 2000.
IV. EXPLANATION OF AMENDMENTS
No amendments were offered in the Senate. For an
explanation of Delegate Norton's amendment, refer to House
Report 106-633.
V. SECTION-BY-SECTION ANALYSIS
Section 1 establishes the bill's short title, ``District of
Columbia Receivership Accountability Act of 2000.''
Section 2 defines a ``District of Columbia Receiver'' for
purposes of this legislation and provides that all D.C.
receivers are subject to the requirements of Section 3.
Section 3 requires that D.C. receivers use administration
practices which promote financial stability and management
efficiency, while ensuring that the costs incurred by the
agency, department, or office under receivership are consistent
with applicable regional and national standards. The receivers
are also required to use generally accepted accounting
principles and fiscal management practices to promote
efficiency and cost-effectiveness.
Beginning in fiscal year 2001, D.C. receivers are required
to consult with the Mayor and the Chief Financial Officer when
preparing a budget for the agency, department, or office under
receivership. The receiver then submits a budget to the Mayor
who forwards it to the City Council pursuant to sections 446
and 603(c) of the District of Columbia Home Rule Act. The Mayor
and Council are permitted to make recommendations, but not
revisions. This budgetary requirement is effective unless the
terms of the D.C. receiver's appointment permit revisions by
the Mayor and the Council.
This section also requires that the D.C. receiver and the
Mayor jointly choose an independent auditor to conduct an
annual fiscal and management audit, unless the terms of the
receiver's appointment permit the parties to the court action
to select the auditor.
Section 3 requires the use of competitive procedures
considered the best suited to the circumstances in order to
attain a full and open competitive procurement process.
Alternative methods would need to be used if the amount of
money involved in the procurement is nominal, the public need
is urgent, the receiver certifies that only one supplier is
available, or the required services are technical and
professional and are performed by the contractor in person, or,
the services are performed under the D.C. receiver's
supervision and are compensated based on the period of time
worked.
Section 4 clarifies that the provisions of subchapter III
of chapter 13 of title 31, United States Code, relating to the
Anti-Deficiency Act, apply to District of Columbia receivers.
VI. ESTIMATED COST OF LEGISLATION
U.S. Congress,
Congressional Budget Office,
Washington, DC, September 29, 2000.
Hon. Fred Thompson,
Chairman, Committee on Governmental Affairs,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3995, the District
of Columbia Receivership Accountability Act of 2000.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are John R.
Righter (for federal costs), and Susan Sieg Tompkins (for the
state and local impact).
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
H.R. 3995--District of Columbia Receivership Accountability Act of 2000
H.R. 3995 would require agencies of the District of
Columbia that are in receivership to follow certain budgeting,
management, and procurement practices. Currently, two District
agencies--Child and Family Services and the Commission on
Mental Health Services--are administered by court-appointed
receivers. Because the legislation would apply only to agencies
of the District of Columbia, CBO estimates that enacting H.R.
3995 would have no impact on the federal budget. The
legislation would not affect direct spending or receipts, so
pay-as-you-go procedures would not apply.
H.R. 3995 contains an intergovernmental mandate because it
effectively would require the departments within the District
of Columbia that are currently administered by a court-
appointed receiver to adopt certain management practices to
improve their financial stability. CBO estimates that the costs
of complying with this mandate would be minimal, and thus would
not exceed the threshold established in the Unfunded Mandates
Reform Act ($55 million in 2000, adjusted annually for
inflation). The legislation contains no private-sector mandates
as defined in that act.
On May 31, 2000, CBO transmitted a cost estimate for H.R.
3995 as ordered reported by the House Committee on Government
Reform on May 18, 2000. The two versions of this legislation
are identical, as are our cost estimates.
The CBO staff contacts are John R. Righter (for federal
costs), and Susan Sieg Tompkins (for the state and local
impact). This estimate was approved by Robert A. Sunshine,
Assistant Director for Budget Analysis.
vii. evaluation of regulatory impact
Pursuant to the requirement of paragraph 11(b) of rule XXVI
of the Standing Rules of the Senate, the Committee has
considered the regulatory and paperwork impact of H.R. 3995.
The legislation contributes to the efficient administration and
management of both the Federal and District of Columbia
governments by establishing a framework for oversight of the
court-appointed receivers in the District of Columbia. It would
impose additional regulatory burdens on the court-appointed
receivers, but the intent of the increased regulation would
serve to streamline the administration of the receiverships,
and establish lines of communication between the receivers and
the Mayor in order to expedite and smooth the eventual
transition of the agency back to the District government. The
legislation would also reduce the paperwork burdens on the
court-appointed receivers by clarifying the role and
responsibility of the receivers. H.R. 3995 would impose no
burdens on the public and will improve the management of
taxpayer-funded services.
viii. changes in existing law made by the bill, as reported
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, the Committee states that H.R.
3995, as reported, makes no changes in existing law.