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DOCUMENT RESUME 5 - /
04052 - (B319. 35]
Analysis of Operating Expenses in New York City's Fiscal Year
1978 Capital Budget. GGD-78-13; B-185522. November 15, 1977.
Released December 15, 1977. 9 pp. + 2 appendices (14 pp.).
Repor to Rep. William S. Moorhead, Chairman, House Committee on
Banking, Finance and Urban Affairs: Economic Stabilization
Subcommittee; by Elmer B. Stadtse Comptroller General.
Issue Area: intergovernmental Policios and fiscal Relations:
liscal Problems and Potertial Solutions (407).
Contact: General Government Div.
Budqet Function: Revenue Sharing and General Purpose kiscal
Assistance: Other General Purpose Fiscal assistance (352).
Organization Concerned: New York, NY; Departmert of the
Treasury.
Congressional Rel,vance: House Committee on Banking, Finance and
Urban Affairs: Economic Stabilization Subcommittee.
The operating expenses contained in New York City's
fiscal year 1978 capital budget are understated, but only by a
relatively small amount. This amount was determined using a
strict interpretation of the criteria, which are more strict
than many municipalities s.ght currently be following. However,,
in view of the current fiscal problems of the city and its need
to restore investor confidence, it is in the city's best
interest to apply strict criteria in deteroining whether budget
items are valid capital outlays or operating expenses.
F-ndings/Conclusions: Bew York St&te law requires New York City
to eliminate operating expenses from its capital budget over a
10-year period. Using criteria established by the State
Comptroller, the city classified $643 sillicy, of its $1.031
billion in planned capital outlays as cperating in nature.
Application of a strict interpretation of the State's criteria
identified an additional $18.9 million which should have been
classified as operating expenses. For an additional $8.3 million
in planned expcnditures, city officials did not have sufficient
documentatioa to permit determination as to whether the items
were valid capital charges. City officials agreed that $5.5
million in expenditares should be classified as operating, but
disagreed with the deterainations on the remaining $13.4
mi)lion. Representatives of both the State and City
Comptrollers' offices agreed with the determinations in all
cases. (Author/SC)](ViewImageLocal?handle=hein.gao/gaobaawfm0001&div=1&collection=&method=preview&ext=.png&size=3)