Examination of Pennsylvania Avenue Development Corporation Financial Statements

An audit was undertaken of the statements of financial condition as of September 30, 1979, of the Pennsylvania Avenue Development Corporation (PADC). PADC, a wholly owned Government corporation, was created by Congress under the Pennsylvania Avenue Development Corporation Act of 1972. The Corporation finances a program of extensive public improvements and expanded pedestrian amenities. Also, to facilitate private development, the Corporation buys and assembles properties in the areas adjacent to Pennsylvania Avenue between the Captiol and the White House and leases them back to private investors for development according to the Pennsylvania Avenue Plan. To carry out its operations, the Pennsylvania Avenue Development Corporation established three separate funds. They are the salaries and expense fund, the land acquisition fund, and the public development fund.

In its review of the financial statement of PADC, GAO found that, at the end of fiscal year 1979, PADC had received advances from the Treasury Department totaling $38,629,702. During the fiscal year, PADC returned $4,691,613 to the Treasury leaving a balance of outstanding advances as of September 30, 1979, of $33,938,089. Funds were also paid from the public development fund to the land acquisition fund for the acquisition of the Willard Hotel. The funds, $4,852,702, retired an advance due to the Treasury and its interest. Overall, GAO found that the financial statements presented fairly the financial position of PADC, and the results of its operations and the changes in its financial position for the fiscal year were in conformity with generally accepted accounting principles applied on a consistent basis.