Washington’s top municipal finance watchdogs are feuding about perennial agency overspending as the D.C. Council eyes more spending hikes in its annual budget.
D.C. Auditor Kathy Patterson recently asked the Democrat-led Council to hold a September hearing on her April report that Chief Financial Officer Glen Lee routinely hid excess spending with illegal withdrawals from the city’s reserve fund during the past six years — a claim his office strenuously denied in a response appended to the audit.
Her independent office concluded that Mr. Lee made 301 withdrawals from contingency funds to circumvent a city law that bars agencies from exceeding their Council-approved budgets.
Ms. Patterson, a former Democratic member of the D.C. Council, confirmed this week that she had received no response from the city beyond Mr. Lee’s denials included in the report. She has recommended a full investigation of each withdrawal to see whether it complied with the law.
“We will follow up the recommendations in our annual rec compliance report in January,” Ms. Patterson said in an email to The Washington Times.
The Office of the Chief Financial Officer, an independent agency with a federal mandate to ensure the District’s financial stability, insisted that D.C. law does not impose any limits or restrictions on the use of reserve funds within a specific period.
“Our office provided documentation to the D.C. Auditor demonstrating how the specified reserve transactions adhered to D.C Code, federal law and the Home Rule Act,” Eric Balliet, a spokesman for Mr. Lee, said this week in a statement to The Times. “The OCFO maintains strong financial controls and takes any allegation of wrongdoing very seriously.”
The clash between the two watchdogs comes as the D.C. Council weighs recommended spending cuts in outgoing Mayor Muriel Bowser’s $21.2 billion proposed budget for fiscal 2027.
The District is grappling with a projected revenue deficit of over $1 billion. Factors driving the shortfall include fallout from pandemic-era telework, plunging commercial real estate values and Trump administration cuts to the federal workforce.
The D.C. Council voted on Wednesday to restore $400 million in funding to some social safety net programs — including increased allocations for paid family leave and legal services for low-income families — that the mayor suggested cutting.
At the same time, Council members are debating whether to raise taxes and utility fees to pay for the increased expenditures. Their proposed spending hikes also include hundreds of housing vouchers, $15 million in additional charter school funding and $300 million to upgrade the Stadium-Armory Metro station for the planned return of the Washington Commanders to the District.
The Council has proposed using another $150 million from D.C.’s reserve funds to help pay for these projects. A second vote on the fiscal year 2027 budget is scheduled for June 23, with final approval expected by early July.
The office of Ms. Bowser declined to comment this week on the D.C. Auditor’s report. Most D.C. Council members did not respond to an email seeking comment.
A spokesperson for Council Member Robert White, an at-large Democrat, said he needed more time to review the report ahead of the expected hearing in September.
The Office of the Chief Financial Officer insisted it conducted an analysis determining “that the Contingency Reserve Fund was the most appropriate source of funding” to address unexpected budget shortfalls that emerged during the COVID-19 pandemic emergency.
The D.C. Auditor estimates that city agencies overspent their budgets by a collective $300 million in fiscal year 2025, the last available year of data.
“The CFO either fails to understand the law or believes his agency stands outside the law,” Ms. Patterson said in an April statement. “If the OCFO won’t bring greater discipline to use of financial reserves as we are recommending, it will be up to elected officials to put more teeth into the existing legal requirements.”
