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WASHINGTON - Washington's Chief Financial Officer and the City Administrator are revealing some of the benefits and challenges that might result from the local use of federal stimulus funds.

D.C. Council Chairman Vincent Gray called for the public oversight briefing to give the public a look at how Mayor Adrian Fenty plans to spend the hundreds of millions of federal dollars the District will receive from "The American Recovery and Reinvestment Act."

District CFO Natwar Ghandi says the District is set to receive $147 million in federal funds in 2009, $185 million in 2010 and $76 million in 2011.

The funds will come in the form of state stabilization dollars, plus an increase for Medicaid and foster care assistance. But to receive much of that money, the D.C. government will need to apply for competitive block grants. Deadlines are fast approaching and some are just 120 days away.

Council member Jim Graham expressed his concern. "And so I'm concerned and I want to ask the City Administrator about what we're going to do to be sure we'll spend this money effectively because the money could be re-circulated to other jurisdictions - in effect, forfeited."

With the city's 2009 fiscal year budget deficit at about $260 million, Chairman Gray says the council wants to ensure the District is taking advantage of every opportunity to apply for federal funds to avoid potential cuts to critical projects and programs down the road.

The CFO explained the stimulus legislation sets aside money for federal agencies to update their facilities, their technology, their operations. Since many if not most of those agencies are located in D.C., that could lead to more jobs, more spending, more stimulus locally.

However, because of D.C.'s proximity to the federal government, it's on a list of one of 16-cities and states selected by the Government Accountability Office required to submit bi-monthly reviews about how they're using these funds.

It means more oversight and maybe more regulation. Much to Chairman Gray's disappointment, Virginia and Maryland are not on that government accountability list.

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