DC CFO outlines FY26 spending cuts, IT and tax initiatives as reserves are drawn down

The Committee on Business and Economic Development heard from Lehi Lee, Chief Financial Officer for the Government of the District of Columbia, on June 11 during the committee’s FY26 budget oversight hearing. Lee said the OCFO’s proposed FY26 operating budget is about $213.7 million — a 7.8% reduction from FY25 — and said the agency is shifting final implementation costs for a major finance system from capital into the operating budget while maintaining reserves to handle cash‑flow timing.

Why it matters: The OCFO manages tax administration, central collections and the District’s treasury and accounting systems. Changes it makes to staffing, IT and estimates for collections affect the District’s ability to pay bills across the fiscal year and the accuracy of revenue forecasts that underpin other agencies’ budgets.

Lee said the OCFO budget is “people and systems,” and that about two‑thirds of the office’s costs are personnel. He told the committee the proposed budget includes roughly $177.6 million in local funds and $34.4 million in special‑purpose revenue, and that the office is budgeted for 1,079 full‑time equivalents — an increase of 22 FTEs over FY25 driven largely by moving capital‑funded positions into operating status to maintain a recently stabilized main financial system (known internally as “DIFS”).

The OCFO director…