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Council Chairman Vincent C. Gray
Statement on Council Oversight of Office of Tax and Revenue
November 14, 2007

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COUNCIL OF THE DISTRICT OF COLUMBIA

CHAIRMAN VINCENT C. GRAY

NOVEMBER 14, 2007

STATEMENT ON COUNCIL OVERSIGHT OF OFFICE OF TAX AND REVENUE

ON THURSDAY, NOVEMBER 15TH AT IPM IN THE COUNCIL CHAMBER, THE COUNCIL OF THE DISTRICT OF COLUMBIA WILL CONVENE AN OVERSIGHT HEARING ON THE PROBLEMS OF FRAUD AND EMBEZZLEMENT THAT HAVE SURFACED IN THE DISTRICT'S OFFICE OF TAX AND REVENUE. PUBLIC WITNESSES HAVE BEEN INVITED TO TESTIFY AS WELL AS A NUMBER OF GOVERNMENT OFFICIALS AND OTHERS, INCLUDING CHIEF FINANCIAL OFFICER DR. NAT WAR N. GANDHI.

THE PURPOSE OF THE COUNCIL HEARING IS TO CONDUCT AN INVESTIGATION INTO THE MANAGEMENT, PROCEDURES, CONTROL SYSTEMS AND STRUCTURES WITHIN THE OFFICE OF TAX AND REVENUE OF THE OFFICE OF CHIEF FINANCIAL OFFICER THAT PERMITTED MILLIONS OF DOLLARS OF DISTRICT TAX FUNDS TO BE STOLEN, AND TO DETERMINE THE STEPS NECESSARY TO PREVENT A RECURRENCE OF THESE ILLICIT ACTIVITIES.

MORE SPECIFICALLY, THE OBJECTIVES ARE:

  • TO REVIEW THE SCOPE OF THE INVESTIGATION INTO THE THEFT OF MILLIONS OF DISTRICT TAXPAYER DOLLARS FROM THE OFFICE OF TAX AND REVENUE OF THE OFFICE OF THE CHIEF FINANCIAL OFFICER AND THE ADEQUACY OF THIS INVESTIGATION IN EXPOSING ALL FACTS ASSOCIATED WITH THIS FRAUD AND EMBEZZLEMENT.
  • TO DETERMINE THE WEAKNESSES IN INTERNAL CONTROLS THAT PERMITTED MILLIONS OF DOLLARS TO BE STOLEN.
  • TO DETERMINE THE AREAS WHICH NEED TO BE STRENGTHENED IN ORDER TO PREVENT A RECURRENCE.
  • TO DETERMINE IF THERE WERE FAILURES, AND THE EXTENT AND SCOPE OF SUCH FAILURES, IN ESTABLISHED EXTERNAL CONTROLS THAT SHOULD HAVE DETECTED THIS THEFT.
  • TO DETERMINE IF THERE WERE PREVIOUS SIGNS OF FRAUDULENT ACTIVITY AND WHY THEY WERE IGNORED OR WENT UNHEEDED.
  • TO ENSURE THE DEVELOPMENT AND IMPLEMENTATION OF A COMPREHENSIVE PLAN OF CORRECTION.
  • TO STRENGTHEN THE COUNCIL'S ROLE IN OVERSIGHT AND MONITORING OF THE OFFICE OF THE CHIEF FINANCIAL OFFICER, RECOGNIZING THAT THE OCFO WAS CREATED BY THE CONGRESS OF THE UNITED STATES DURING THE CONTROL PERIOD AND THAT THE CONGRESS ESTABLISHED THE DUTIES AND STILL SETS THE COMPENSATION LEVEL OF THE CHIEF FINANCIAL OFFICER.

THE HEARINGS WILL BE JOINTLY CONVENED BY THE COMMITTEE OF THE WHOLE AND THE COMMITTEE ON FINANCE AND REVENUE, CHAIRED BY COUNCILMEMBER JACK EVANS.

IN ORDER TO SUPPORT THE COUNCIL'S OVERSIGHT EFFORTS, ON TUESDAY, NOVEMBER 20TH A RESOLUTION WILL BE PRESENTED TO THE COUNCIL REQUESTING AUTHORITY TO ENGAGE OUTSIDE COUNSEL AND A FINANCIAL AUDITING FIRM TO FACILITATE AND EXPEDITE THE COUNCIL'S WORK.

THE HEARING ON NOVEMBER 15TH WILL MARK THE BEGINNING OF THE COUNCIL'S INQUIRY INTO THE FACTS SURROUNDING THIS SITUATION, CULMINATING IN A REPORT OF FINDINGS AND RECOMMENDATIONS ON EACH OF THE STATED OBJECTIVES.

THE COUNCIL RECOGNIZES AND APPRECIATES THAT THERE IS AN ONGOING CRIMINAL INVESTIGATION AND THAT THE CHIEF FINANCIAL OFFICER HIMSELF IS TAKING AGGRESSIVE STEPS TO UNCOVER HOW THIS SITUATION OCCURRED. BUT THESE IMPORTANT AND NECESSARY ACTIONS ARE NOT A SUBSTITUTE FOR THE ROLE OF THE CITY'S LEGISLATIVE BODY.

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