Summary

GAO evaluated the District of Columbia's efforts to record, bill, and collect accounts receivable to determine whether the District is collecting all rents that should be collected and whether procedures, accounting methods, and collection actions are supporting the revenue effort.

The District continues to lose large amounts of revenue annually, because it fails to effectively manage rent collections from public housing and urban renewal tenants, thereby requiring increased levels of Federal subsidies or additional District funding. GAO was unable to determine the annual rental loss for fiscal year 1981 due to poor recordkeeping and documentation, but GAO believes that the District is losing substantial amounts. Delinquent rents for both programs amounted to about $4.2 million for fiscal year 1981 with over $2 million uncollectible. Collection efforts have been hampered due to a failure to maintain accurate accounts receivable for both public housing and urban renewal properties. Public housing financial records, although automated, do not provide accurate and reliable delinquent rent balances which can be used to identify delinquent tenants. The documents which substantiate automated financial records are not regularly maintained and actions taken against delinquent tenants are not recorded in the tenant files or elsewhere. Housing managers do not uniformly apply collection actions, allowing many tenants to remain delinquent. Urban renewal tenant financial records are not automated and do not show current rent balances, because they are not maintained in a timely and accurate manner. Even when delinquencies are identified, vigorous collection actions are not pursued.