MID-YEAR FINANCIAL REPORT

For the months ending March 31, 1983

Prepared By:

DEPUTY MAYOR FOR FINANCE

Office of the Budget

Office of Controller

Department of Finance and Revenue

FY 1983 First Half Actuals and Second Half Projections ...

Mid-year Financial Report

Table of Tables

Table E-1:

Table 1:
Table 2:
Table 3:

Table 4:
Table A-1:

Comparison of First and Second Quarter Forecasts of
Revenues and Obligations

Comparison of First and Second Quarter Projected Gaps
FY 1983 First Half Actuals and Second Half Projections
First Half Actual Obligations and Second Half Projections
in Comparison to FY 1983 Congressional Budget .....

FY 1983 Revenue Estimates .....

Comparison of Congressional Budget and Current Obligation
Projections by Agency

1

2

5

7

A-1

Table A-2:

Comparison of FY 1982 Actuals and FY 1983 Forecasts ......... A-6

Table A-3:

Comparison of FY 1983 Revenue Estimates by Revenue Source ... A-7

Table A-3-a: Comparison of Year-to-Date Collections and

Estimates ......

A-8

EXECUTIVE SUMMARY

In the early part of November, 1982 the District's financial managers identified a potential gap between expenditure needs and anticipated revenues for fiscal year 1983 of $110.4 million. This was composed of $52.7 million in anticipated revenue shortfall and $57.7 million in potential overspending.

In response to the potential gap, many agency spending levels were reduced and close monitoring of both revenue and expenditure performance initiated. In addition, most agencies were informed that they would not receive the additional two percent for pay adjustments that had been appropriated in a lump sum for allocation by the Mayor.

Table E-1 displays the actual and forecast revenues and obligations for FY 1983 as of the first and second quarters:

Table E-1
General Fund

Comparison of First and Second Quarter Forecasts of Revenues and Obligations

*Adjusted for difference between the House and final marks

The current gap of $37.6 is 66 percent less than the $110.4 million projected in November of 1982. The difference is an improvement in revenue forecast of $28.9 million, due primarily to legislative action on pending revenues, and slight improvements in the economy and a net reduction in projected overspending of $43.9 million. To the extent that revenue performance in the latter half of FY 1983 is stronger than currently forecast, the projected gap will diminish. In the absence of such unanticipated increases, however, it will be necessary to realize $37.6 million in cost-savings between now and the end of FY 1983 if balanced year-end financial results are to be achieved.

The District is committed to executing a balanced budget in FY 1983. By aggressively pursuing cost-containment and ensuring that all possible reimbursements and outstanding revenues are collected, we fully expect to achieve budget balance by year-end and to significantly reduce our accumulated general fund deficit.

MID-YEAR FINANCIAL REPORT

Introduction

The purpose of this report is to review the District's FY 1983 fiscal condition as of the end of the second quarter. This report includes three sections: (1) a comparison of fiscal outlook in the first and second quarters of FY 1983;

(2) a discussion of FY 1983 actual obligations and revenues to date and full year forecasts in comparison to the Congressionally approved budget; and

(3) a discussion of actions necessary to close the remaining FY 1983 program.

The information presented in this report was derived from data collected through the District's monthly financial review process. Each agency prepares a monthly statement of obligations to date and forecast of remaining fiscal year needs. These reports, or "FRPs", are reviewed jointly by the Office of Budget and Office of Controller. In conjunction with the periodic revision of revenue assumptions and estimates by the Department of Finance and Revenue, these reports allow the District's financial managers to determine the extent of cost-containment actions, reprogrammings or other budgetary adjustments needed to ensure that hudget balance will be achieved District-wide by year end.

The appendices provide detailed information on changes in revenue estimates and obligation forecasts as well as other supporting information.

Section 1: Comparison of Fiscal Outlook in the First and Second Quarters In the first quarter the District projected a gap of $110.4 million between projected obligations and estimated revenues. The gap was composed of $52.7 million in anticipated revenue shortfalls and $57.7 million in projected overspending.

By the end of the second quarter, the projected gap had been reduced to $37.6 million. As expected, both the size and the composition of revenue shortfall, and the size and composition of the net projected obligations over budget changed from the first to the second quarters. Forty percent of the change was due to improvement in the revenue estimate as a consequence of legislative action on pending revenues and as a result of improvements in economic forecasts. The remaining 60 percent was a result of actual and projected cost savings.

Table 1 compares the elements of the first and second quarter projected gaps: