Audit of Senate Employees Barber Shop, Calendar Year 1970

Published by the Government Accountability Office on 1971-06-18.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

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Accounting Office except on the basis of specific approval
by the Office of Legislative Liaison, a record of which is kept
by the Distribution Section, Publications Branch, OAS


Audit of Senate Employees
Barber Shop, Calendar Year 1970

United States Senate


                                          JUH'1E         9 1
                                                       1 97
                          WASHINGTON. D.C. 20548


Dear Mr. Dunphy:

     We have examined into the financial transactions of the
SENATE EMPLOYEES BARBER SHOP for the calendar year 1970 pur-
suant to your request dated December 22, 1970. Our examina-
tion included appropriate tests, to the extent permitted by
the accounting records, and such other auditing procedures as
we considered necessary. We did not obtain the head barber's
comments on the matters discussed in this report.


     The barber shop was established about 1928 to provide
convenient, efficient, and economical services to employees
of the Senate. The shop was managed by the head barber, under
the direction of the Senate Committee on Rules and Administra-
tion and the Sergeant at Arms of the Senate. At December 31,
1970, the staff consisted of the head barber, four regular bar-
bers, and a shoeshine boy who also served as a part-time jani-
tor. Each barber held a license from the District of Columbia
Board of Barber Examiners.

     Income was received principally from barber services per-
formed for the following fees.

                   Haircut                         $1.5 0 a
                   Shave                            1.00
                   Tonic                             .35
                   Massage                          1.75
                   Shampoo                          1.75
                   Shoeshine                         .25

aIncreased from $1.25, effective May 1, 1970.

In addition to the fees received from barber services, other
income was received from the sale of combs and nail clippers.

     The head barber collected the receipts from all barber ser-
vices and paid the other barbers as compensation 75 percent of
the receipts for the services they had performed. The head
barber retained 100 percent of the receipts for the services

                    50TH ANNIVERSARY 1921-1971

he had performed. The head barber deducted from the compensa-
tion of each of the other barbers Federal income taxes, Dis-
trict of Columbia income taxes, and uniform rental and laundry
expenses. The shoeshine boy, who provided his necessary sup-
plies, retained all receipts from shoeshine operations.

     The head barber, in addition to participating in the
receipts, received a management fee consisting of the net in-
come from shop operations, that is, the total income less the
compensation of the barbers and shop expenses.

     Appropriated funds were used to supplement the earnings
of the barber shop employees. An annual salary of $4,476 was
paid to the head barber and to each of the other barbers. The
shoeshine boy was paid $2,220, on the basis of an hourly rate,
to supplement the income from his operations for the year.
The barbers are classified as custodial employees of the Archi-
tect of the Capitol, under sections 501 and 502 of the Federal
Employees Pay Act of 1945, as amended (2 U.S.C. 60e-3, 60e-4).


     The head barber is responsible for maintaining the ac-
counting records of the shop. The only formal records main-
tained are cash register tapes, payroll records--payments to
the barbers--and summary ledger sheets. The ledger sheets sum-
marized the weekly amounts paid to each barber as gross pay;
the deductions for taxes, etc.; net pay; and the amounts paid
for supplies and laundry service.

     Receipts from barber services were recorded through the
use of a cash register. Each barber was assigned a number,
which appeared on the register tape next to his recorded re-
ceipts. At the end of each week, the head barber totaled the
receipts for each barber, prepared the payroll record, and
paid each barber on the basis of his recorded receipts. We
found that the payroll records contained numerous arithmetical
errors. Although the net dollar effect of these errors was
not considered significant, the number of errors indicated
that not enough care was being given to the preparation of
the payrolls.


     Expenses of the barber shop are paid in cash, except for
magazine expenses and taxes, both of which are paid by the head
barber's personal check. The head barber maintains a file of
paid invoices, which are used as source documents to record
the expenses in the summary ledger sheets.


      In our report for calendar year 1969, we commented on the
sale of sundry items, the declaration of tips, and the leave
system. During our review for calendar year 1970, we noted

     -- The head barber started recording the sale of sundry
        items (combs and nail clippers) on a monthly basis be-
        ginning in August 1969. He failed, however, to rec-
        ord or report any of these sales for the second half
        of 1970 to your office. (For statement purposes, we
        estimated the sales for the year on the basis of the
        selling price of goods purchased for resale.)

     --All barbers had filed weekly declarations of tips. We
       noted that one barber, despite the amount of his gross
       receipts, had reported receiving no tips during the
       entire year.

     -- The head barber, contrary to requirements, had not re-
        ported leave usage to your office quarterly during cal-
        endar year 1970, nor had he maintained individual leave
        records. The daily time sheets showed that the five
        barbers employed during the year had taken a total of
        16 weeks and 3 days of annual leave and 21 weeks of
        sick leave.


     Recorded receipts from the barber services for the calen-
dar year 1970 was $685 less than those for calendar year 1969,
as shown below.

                               Receipts          Increase or
       Quarter          1970              1969   decrease(-)

           First      $ 4,070          $ 4,742    -$672
           Second       4,644            4,465      179
           Third        4,694            4,516      178
           Fourth       4,331            4,701     -370

              Total   $17,739          $18,424     -$685


     The accompanying comparative statement of income and ex-
penses and compensation to barbers was prepared by us from
records maintained and information furnished by the head bar-
ber. The statement does not include the cost of certain bene-
fits and services furnished to the barber shop without charge,
such as space, utilities, telephone service, permanent equip-
ment, furniture, painting, and repairs.

     Because of the small size and character of the operations
of the barber shop, the usual accounting controls do not exist.
We believe that, under these circumstances, the reliance that
can be placed upon the financial statement depends upon the
degree of confidence in the manner in which the financial rec-
ords have been maintained. Our audits of the Senate Employees
Barber Shop give us serious doubt as to whether the financial
records maintained by the head barber are accurate and com-
plete. Therefore we are not expressing an opinion on the ac-
companying financial statement.

                                   Sincerely yours,

                                   Comptroller General
                                   of the United States


The Honorable Robert G. Dunphy
Sergeant at Arms
United States Senate

                                                                    SCHEDULE 1

                            SENATE EMPLOYEES BARBER SHOP

                           COMPARATIVE STATEMENT OF INCOME
                     FOR CALENDAR YEARS 1970 AND 1969

                                                             1970      1969
INCOME (note a):
    Barber services                                        $17,739    $18,424
    Merchandise sales (estimated)                               50         53
                        Total income                       $17,789    $18,477
    Barbers (note a):
        Alexander C. Culver                                $ 4,446    $ 4,221
        Alonzo G. Nicholson                                  1,528      1,159
        Philip Johnson                                       3,212      2,668
        John F. Nicholson                        -                        919
             Henry T. Hampton                                  -        2,539
             Edward Bronson                                  2,545      2,323
             John Martin                                     2,685      1,188
             Earl Anderson                                     -          146
                    Total compensation                      14,416     15,163
    Supplies                                                   348        320
    Laundry                                                    374        406
    Magazines (note b)                                          54        180
                    Total operating expenses                   776        906
  HEAD BARBER                                                2,597      2,408
                    Total compensation, operating
                      expenses, and management fee         $17,789    $18,477
aExclusive of tips and of salary paid by the Architect of the
 Capitol from appropriated funds.

bContrary to requirements, magazine expense was not posted in
the ledger, nor was it reported to the Sergeant at Arms each

U.S. GAO, Wash., D.C.