How An ANC Accounts For Its Money

Janis Hazel is upset. A representative for the 7D 05 single-member district (SMD), Hazel noticed that her Advisory Neighborhood Commission (ANC), 7D, has been accruing extra money over the last few quarters. “We have relatively few expenditures over the years,” she said. “Usually the money is used for office rent and bank fees.” However, she accused the ANC of refusing to spend its allotted money on those few expenses.

A look into ANC 7D's financial records seems to confirm her accusations. The Commission spent $698.22 for office rent during the first quarter of the 2013 fiscal year; in the 2012 fiscal year, it paid over $2,000 in the first and fourth quarters. However, the second and third quarters show no expenses. While her fellow commissioners did not comment on the situation, Hazel's concerns raise questions about ANC finances.

What Is an ANC?

Created by the Advisory Neighborhood Commission Act of 1975, ANCs consist of elected officials who “advise the Council of the District of Columbia, the Mayor and each executive agency, and all independent agencies, boards and commissions of the government of the District of Columbia with respect to all proposed matters of District government policy ... which affect that Commission area.” These matters could include education, planning, social service programs, and budget. If needed, ANCs can employ staff members and spend public funds and donations for public purposes within their commission area.

Each ward is divided into commission areas according to factors such as geographic borders and election districts; each commission area is further divided into single-member districts based on Census data. Every SMD, which usually has at least 2,000 residents, votes for a commissioner every two years. A typical ANC could have 2 to 12 commissioners depending on the area.

What Are the ANC Rules for Finance?

The DC government distributes funds quarterly to all ANCs from general revenues and other sources authorized by the City Council. ANC money is used to pay for expenses, employee wages, neighborhood programs, and grants. The amount each ANC receives “shall bear the same ratio to the full sum allotted as the population of the neighborhood bears to the population of the District.” This means that the smaller the population in a commission area, the less money the ANC receives. Conversely, the larger the population the more money the ANC receives.

The Office of the DC Auditor (ODCA) is responsible for providing financial oversight to, and conducting audits of, ANCs. Every commission treasurer submits quarterly reports to the auditor, which include copies of receipts, invoices, grant requests, canceled checks, and other proof of expenses. After ODCA reviews the report, which is signed by the chairman, treasurer, and secretary, it notifies the commission of discrepancies, missing documentation, or illegal expenditures. That notification could include a request to provide missing documentation within a specific time or a recommendation for deductions.

Commissions cannot receive their quarterly allotments without first submitting a report to ODCA. Failure to do so by the end of the fiscal year means forfeiting unclaimed allotments, which go instead into the District's General Fund. If a commission fails to submit three consecutive reports, the auditor can seize the check book, meaning the ANC has to ask the auditor to approve every expense. Also, the Mayor could, at the auditor's request, ask a commission's bank to freeze its accounts.

What Is the Auditing Process?

Every year ODCA conducts three to eight ANC audits, usually at the request of a councilmember or commissioner. The results are then given to the affected ANC, the City Council, the mayor, and the Office of Advisory Neighborhood Commissions (OANC). If the auditor finds proof of illegal activities the results are also given to the Office of the Inspector General, the Office of the Attorney General, and other law enforcement agencies. The commission then has 90 days to respond or it will forfeit its next allotment until a response is filed.

Can ANCs Fix Their Finances?

Elizabeth Nelson, whose husband serves as Commission 6A's treasurer, knows the difficulties that come with an ANC’s attempting to improve its financial standing. “When he first came in, Ward 6 ANCs and their boundaries were different,” she said, noting that the present ANC 6A was the product of merging two earlier commissions. As the new ANC 6A convened, they realized they had a problem. “The finances were dysfunctional,” Nelson recalled. “The bank accounts were frozen; the checkbook was taken away.” In addition there were few proper finance records. “They really worked like crazy,” Nelson said. “They worked closely with the auditor to figure out what happened.”

Today ANC 6A's finances have improved, with much of their quarterly allotment going toward administrative expenses and grants. The commission also has one of the most organized financial records in the city. “We get a good rating every year from the auditor,” Nelson said. One way that the commission keeps records organized and accessible is by posting them on their website. “We are very scrupulous about posting every document,” said Nelson, who helps maintain the ANC 6A website. “If a commissioner wants to find something, it's there. If the auditor has a question, the treasurer can show a document without being in the same room.” She also said that the move shows transparency: “You can't get more transparent than this!”

How Can I Be More Aware?

Commissioner Hazel hopes that ANC 7D will have the same transparency. “It's extremely dysfunctional,” she said. “More people should be aware.” One way residents can become aware is by attending ANC meetings.

While many commissions advertise their meetings through social media, a complete schedule is available on OANC's website. Another way is by reading the commission's financial records online on ODCA's website or by visiting the ANC office (depending on the area). According to DC law, residents are allowed to do this “in accordance with reasonable procedures that shall be issued by the Commission after notice and comment concerning the time and place of access,” as financial records are considered “public record.” It is through community awareness that commissions can improve, especially when it comes to finance.