Audit Of The t-louse Beauty Shop Calendar Year 1970 8.162878 House Of Representatives BY THE COMPTROLLER GENERAL OF THE UNITED STATES JUNE 9,%9-V e z Y 4 COMPTROLUER GENERAL Ol- THE UNITED STATES WASHINGTON DC 20548 B- 162878 Dear Madam Chairman* The General Accounting Office has made an audit of the fmanclal transactions of the House Beauty Shop for calendar year 1970 as re- quired by the Leglslatrve Branch Approprlatlon Act, 1970 (83 Stat. 338). Our audrt was made m accordance with generally accepted auditing standards and mcluded an exammnatlon of selected fmancaal transac- tions, appropriate tests of the accounting records, and such other au- dltmg procedures as we considered necessary. GENERAL CO MMX NTS The House Beauty Shop provides convenient beauty facllltles for Congresswomen, wives of Congressmen, and congressional employees, as well as the general public. The shop IS operated by Mrs. Betty Jane Oszust, Manager, under a fuced-fee contract. As of December 31, 1970, the staff of the Beauty Shop consisted of the manager, 14 beauticians, three manrcurlsts, two maids, a receptlomst, and an electrologist. The House Beauty Shop was orrgmally established about 1932. The shop was reorganized on December 11, 1967, pursuant to House Resolution 1000, Ninetreth Congress, which created a Select Commlt- tee on the House Beauty Shop, placed management of the shop and all matters connected therewith under the direction of the Select Commlt- tee, and authorized the Committee to use not more than $15,000 of the House contingent fund for the purchase of lmtlal equipment and mate- rials. As of December 31, 1970, the entrre $15,000 had been repaid to the Clerk of the House for deposrt to the contingent fund as shown m the comparatrve statement of assets, lrabllitles, and equity (schedule 1). As shown in the comparative statement of income, expenses, and retained earnings (schedule 2), the shop realized a net income of $9,288 in calendar year 1970 compared with $8,625 m calendar year 1969. The Increase was partially attributable to a June 1970 increase in shop prices for all beauty services, except services for wigs and wIglets 50TH ANNIVERSARY 1921- 1971 B-162878 LEGISLATIVE BRANCH APPROPRIATION ACT, 1970 The Leglslatlve Branch Approprlatron Act, 1970, made the Select Commattee on the House Beauty Shop a permanent commrttee and pro- vided for annual audits of the operations of the Beauty Shop by the Gen- eral Accountnng Office The act establlshed, effective January 1, 1970, a self-sustalmng re- volving fund in the Treasury of the United States for the Beauty Shop All recerpts of the Beauty Shop are deposIted m the fund and are avarlable without fiscal year limltatlon for disbursement by the Clerk of the House for payment of expenses of the Beauty Shop. Prior to the ebtablishment of the fund, a checking account for de- posit of receipts and payment of expenses was maintained wrth the Na- tional Savings and Trust Company, Washmgton, D C. During 1970 the account was closed and the funds were transferred to the revolving fund The act also requred that the net income from shop operatrons, as established by our annual audit, after restoring any impairment of capital and provldmg for replacement of equnpment, be transferred to the general fund of the Treasury. We computed the net income to be transferred to the Treasury for calendar year 1970 and prior years as follows. Retamed earnings as of December 31, 1970 $21,067 30 Capital authorized pursuant to H Res 1000, 90th Gong. $15,000 00 Provrsion for replacement of equipment (ac- cumulated depreclatlon as of December 31, 1970) 3,916 46 18,916 46 Net mcome to be transferred $ 2,150.84 ACCOUNTING SYSTEM Durmg 1970 employees of the General Accounting Office, other than those responsible for the au&t of the records, assisted the manager of the Beauty Shop in maintalmng the accountmg records The manager, however, continued to maintain the payroll records. We suggested that 2 c B-162878 the manager employ a part-time bookkeeper to maintarn all the account- ing records for the Beauty Shop The manager stated that a part-time bookkeeper would be employed m the near future In Aprrl I970 the Select Committee approved the accounting system which we had designed for the Beauty Shop FINANCIAL STATE~YXNTS The accompanpng fmancral statements for the House Beauty Shop were prepared by us from records furmshed by the manager of the shop In preparrng the statements, we adJusted the shop* s records, whxh were mantamed on a cash basis, to present the frnancnal posltlon and operat- mg results of the House Beauty Shop on an accrual basrs These state- ments do aot Include the cost of certam benefits and services- -such as space, utllltles, local telephone servxe, and repairs--furmshed to the Beauty Shop wrthout charge In our oplmon, the accompanymg statements (schedules 1, 2, and 31, which were prepared on a basis consistent -Pnth that of the preced- mg year and m accordance with the fmanclal arrangements described above, present fairly the financial posatzon of the House Beauty Shop at December 31, 1970, the results of its operations, and the sources and applxatlon of Its funds for the year then ended As required by the Leglslatlve Branch Approprlatlon Act, 1970, copies of thxs report are being sent to the Speaker of the House and to the Clerk of the House Sincerely your 6, Comptroller General of the Umted States The Honorable Martha W. Grlfflths, Chairman Select Commrttee on the House Beauty Shop House of Repre sentatlve s 3 SCHEDULE1 HOUSE BEAUTY SHOP COMPARATIVESTATEMENTOF ASSETS, LIABILITIES, AND WUlTY DECEMBER31, 1970 AND 1969 ASSETS 1970 1969 CURRENTASSETS Cash $ 6,862 $ 6,305 Accounts receivable 128 109 Inventory of rnerchandlse and supplies (at cost) 4.589 4,043 Prepaid insurance -514 425 Total current assets 12,093 10,882 FIXED ASSETS Equipment and fixtures 15,827 14,040 Less allowance for depreciation 3,916 2,498 Total fixed assets 11,911 11,542 Total assests $24,004 $22,424 LIABILITIES AND EQUITY CURRENTLIABILITIES Accounts payable $ 2,029 $ 1,742 Employees' Federal and State taxes withheld 693 2,515 Employer's payroll taxes payable 215 1,354 Sales taxes collected 34 Total current liablllties 2,937 5,645 EQUITY OF THE HOUSEOF REPRESENTATIVES Capital provided pursuant toH. Res.1000, 90th Gong.. Balance at beginning of year 5,000 15,000 Less repayments 5,, 000 10,000 Balance at end of year 5,000 Retained earnings 21,067 11,779 Total equity 21,067 16,779 Total liabilities and equity $24,004 $22,424 -I__ SCHEDULE 2 HOUSE BEAUTY SHPP CoMFmTIm s OF INC t EPENSES, ANDRETAINED INGS s 1970 AND 1969 1970 1969 Beauty operations $156,150 $153,225 Sales of merehandfse $9,442 5,356 Less cost of goods sold (note a) 7,009 2,433 GROSS PROFIT FROM OPERATIONS 158,583 158,581 OPERATING EXPENSES: Salaries : Beauticians 87,000 86,274 Mamcurists 10,879 8,269 Receptionist 6,349 5,574 Maids 4,717 4,284 Total salaries 108,945 104,401 Supphes 13,236 18,275 Managerial fee 14,168 14,499 Bonus to manager 1,000 Payroll tax 7,173 6,395 Laundry 624 1,378 Office 883 606 Insurance 1,265 1,462 Depreciataon 1,523 1,398 Accounting 600 Miscellaneous 636 942 Total operating expenses 149,453 149,956 NET INCOME FROM OPERATIONS 9,130 8,625 MISCELLANEOUS INCOME 158 NET INCOME FOR THE YEAR $ 9,288 $ 8,625 RETAINED EARNINGS: Balance at begmning of year $ 11,779 $ 3,154 Add net Income for year 9,288 8,625 Balance at end of year $ 21,067 $ 11,779 'Cost of goods sold In 1969 was included in expenses for supplaes. 4 SCHEDULE 3 HOUSE BEAUTY SHOP COMPARATIVE STATEMENT OF S@URCES AND APPLICATION OF FUNDS CALENDAR YEARS 1970 AND 1969 1970 1969 FUNDS PROVIDED: Sales $165,593 $158,581 Miscellaneous Income 228 Decrease In working capital 514 Total funds provided $165,821 $159,095 FUNDS APPLIED: Operating expenses $154,939 $148,558 Eqzaipment addltlons 1,963 537 Return of capital provided pur- suant to H. Res. 1000, 90th Cong. 5,000 10,000 Increase in working capital 3,919 Total funds applied $165,821 $159,095
Audit of the House Beauty Shop, Calendar Year 1970
Published by the Government Accountability Office on 1971-06-09.
Below is a raw (and likely hideous) rendition of the original report. (PDF)