District of Columbia:

Information on the District's Debt

AIMD-95-19: Published: Nov 22, 1994. Publicly Released: Nov 22, 1994.

Additional Materials:

Contact:

Gloria L. Jarmon
(202) 512-4476
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO provided information on the District of Columbia's debt, focusing on: (1) the types of debt that are available to the District and the limitations on that debt; (2) the total District debt and its estimated future borrowings; and (3) how the District's debt compares with other jurisdictions' debt.

GAO found that: (1) the Home Rule Act authorizes and limits the District's short- and long-term debt; (2) the District's debt limits have not been revised since enactment of the Home Rule Act; (3) the District is authorized to issue revenue bonds to finance capital projects that are not backed by the full faith and credit of the District and to borrow from the U.S. Treasury to meet its general expenses; (4) as of September 30, 1994, the District's long-term general obligation debt totalled $3.65 billion; (5) total debt service for these long-term obligations is expected to be $409 million in fiscal year 1998; (6) by 2000, the District's projected debt service percentage is expected to be close to the statutory limitation of 14 percent; (7) as of September 30, 1994, the District's general obligation bond rating was at its lowest and was below that of most states and large cities; (8) the District's bond rating has not changed since it began issuing general obligation bonds in 1984; (9) the District's debt level is higher than other jurisdictions, in terms of debt per capita and debt as a percentage of real property; (10) the District's debt cannot be adequately compared with other jurisdictions because its service responsibilities include both city and state governments; and (11) debt service calculations in the District's multiyear plans and annual financial statements are not consistent with the methodology required by the Home Rule Act.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: According to the District's CFO, the multiyear plan does contain debt information, but not in the same manner as required in the Home Rule Act. The CFO believes that the multiyear plan is not required to follow the methodology prescribed in the act. The CFO stated that debt information using the methodology prescribed would be reported in the 1996 Comprehensive Annual Financial Report. GAO's review of the 1996 report showed that debt service information was not presented in accordance with the method prescribed. Similarly, GAO's review of the 1997 report showed that debt service information was not presented in accordance with the method prescribed. GAO's discussions with the District's Manager of the Reporting Division revealed that the recommendation Is resolved. GAO's review of the 1998 CAFR showed that the debt service information was presented in accordance with the method prescribed under the Home Rule Act.

    Recommendation: The Mayor of the District of Columbia should direct that the multiyear plans contain debt service percentage information in the manner required by the Home Rule Act.

    Agency Affected: District of Columbia

  2. Status: Closed - Implemented

    Comments: According to the District's CFO, the fiscal year 1995 financial statement does not contain the debt information in the manner required in the Home Rule Act. The CFO stated that this information would be reported in the 1996 Comprehensive Annual Financial Report. GAO's review of the 1996 Comprehensive Annual Financial Report showed that debt service information was not presented in accordance with the method prescribed by the Home Rule Act. Similarly, GAO's review of the 1997 Comprehensive Annual Financial Report (CAFR) showed that debt service information was not presented in accordance with the method prescribed by the Home Rule Act. GAO's review of the 1998 CAFR showed that the debt service information was presented in accordance with the method prescribed by the Home Rule Act.

    Recommendation: The Mayor of the District of Columbia should direct that the financial statements contain information on the debt service percentage that is calculated using the Home Rule Act methodology by dividing the maximum estimated annual debt service by the actual revenues.

    Agency Affected: District of Columbia

 

Explore the full database of GAO's Open Recommendations »

Sep 21, 2016

Aug 3, 2016

Aug 1, 2016

Jul 14, 2016

Jul 5, 2016

Jun 30, 2016

Jun 28, 2016

Jun 23, 2016

Jun 22, 2016

Looking for more? Browse all our products here