oversight

Audit of the Senate Recording Studio Revolving Fund for Fiscal Year 1971

Published by the Government Accountability Office on 1971-11-15.

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

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                              LM090545




Audit Of The Senate Recording
Studio Revolving Fund For
Fiscal Year 1971 6-725079

United States Senate




BY THE COMPTROLLER GENERAL
OF THE UNITED STATES



                                   HOV.15,1971
             COMPTROLLER        GENERAL     OF   THE       UNITED      STATES
                              WASHINGTON.    D.C.      20548




B- 125079




Dear   Mr.    Dunphy:

        This is our report       on an audit   of the Senate      Record-
ing Studio   Revolving       Fund for the fiscal    year    1971.    The
audit was made        pursuant    to your request     dated   June 28,
1971.

                                                    Sincerely              yours   ,




                                                    Comptroller                 General
                                                    of the United               States

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




                     50 TH ANNIVERSARY                  1921-       t97t
   COMPTROLLERCRNERAL'S                              AUDIT   OF THE SENATE RECORDING STUDIOpREVOLVING
   RFPORT TO THE SERGEANT                            FUND,   FISCAL YEAR 1971  B-125079
   AT AkMS, lINTTED STATES
   SENATE


   DIGEST
   ------


   WHY THE AUDIT WASMADE
               The General      Accounting   Office    (GAO) made an audit       of   the   Senate   Recording
               Studio   Revolving      Fund pursuant    to a request dated       June 28, 1971, by the
               Sergeant    at Arms, United      States    Senate.


   FINDINGS AND CONCLUSIONS

               In GAO's opinion    the accompanying    financial      statements       (schs.     1, 2, and
               3), which were prepared      on a basis   consistent      with that       of the preceding
               year and in accordance      with the acccounting       practice      and financial      arrange-
               ment described    on page 7, present    fairly     the financial       position      of the
               revolving    fund at June 30, 1971, and the results             of its operations       and
               the sources and application      of its funds for the year then ended.




                                                                                NOY.15,1971
Tear
--     Sheet                                                  I
                                Contents
                                                           Page

DIGEST                                                       1

CHAPTER

      1     INTRODUCTION                                     2

      2     FINANCIAL POSITION
                 Cash (U.S. Treasury)
                 Accounts   receivable
                 Equipment    and furnishings
                 New studio    facilities

      3     OPERATIONS                                       6

      4     OPINION      OF FINANCIAL      STATEMENTS        7

FINANCIAL    STATEMENTS

Schedule

      1     Comparative      statement   of assets and
              liabilities,        June 30, 1971 and 1970    11

      2     Comparative     statement of operations,
              fiscal    years ended June 30, 1971
              and 1970                                      12

 '3         Comparative   statement     of sources   and
              application    of funds,fiscal     years
              ended June 30, 1971 and 1970                  13

APPENDIX

      I     Letter   dated June 28, 1971, from the
               Sergeant   at Arms, United States Senate     17
COMPTROLLERGENERAL'S                         AUDIT   OF THE SENATE RECORDING STUDIO              REVOLVING
REPORT TO THE SERGEANT                       FUND,   FISCAL YEAR 1971  B-125079
AT ARklS, UNITED STATES
SENATE


DIGEST
__----


WHYTHE AUDIT WASMADE

         The General      Accounting   Office    (GAO) made an audit      of the Senate  Recording
         Studio   Revolving      Fund pursuant    to a request dated      June 28, 1971, by the
         Sergeant    at Arms, United      States    Senate.


FINDINGS AND CONCLUSIONS

     In GAO's opinion     the accompanying       financial       statements       (schs.     1, 2, and
     3), which were prepared          on a basis    consistent      with that of the preceding
     year and in accordance          with the acccounting        practice      and financial      arrange-
     ment described     on page 7, present       fairly      the financial        position     of the
     revolving    fund at June 30, 1971, and the results                  of its operations       and
     the sources     and application      of its funds for the year then ended.
                                  CH&.PTER 1

                                INTRODUCTION

       The General Accounting             Office   audit    of the SENATE RE-
CORDING STUDIO REVOLVING FUND for the fiscal                     year ended
June 30, 1971, was made in accordance                  with generally      ac-
cepted auditing        standards      and included       a review    of the con-
trols    over equipment        and inventories,        an examination      of
selected     financial      transactions,        and such other auditing
procedures      as we considered          necessary.       We also made the ac-
counting     entries    necessary       to close the books and prepared
the accompanying        financial       statements      (schs.   1 through    3).

        The Senate Recording         Studio   was established      pursuant
to the provisions         of section     105 of the Legislative         Branch
Appropriation       Act, 1957 (2 U.S.C.        123b).     The Studio     is
operated      by the Sergeant      at Arms of the Senate under the
direction       and control   of the Senate Committee          on Rules and
Administration.         The Studio makes film,         video tape, and
audio tape recordings         for the Vice President          and for members
and committees       of the Senate.         The prices    or rates    to be
charged for services         are set by the Committee          on Rules and
Administration.

        The Studio    operations     are financed        through   a revolving
fund and from appropriated           funds.      All moneys received         are
deposited     into the revolving        fund and are available           for the
operation     of the Studio.       Employee salaries          and benefits
and certain      other operating       expenses,      such as utilities,
are paid from appropriated           funds.      These payments are not
recorded    in the Studio's      accounting        records     but are shown
as a footnote       to the financial       statements.




                                       2
                                  CHAPTER2

                            FINANCIAL       POSITION

      A comparative   statement  of assets and liabilities    of
the revolving    fund on June 30, 1971 and 1970, is presented
as schedule 1. The following      comments relate    to items
shown on this statement.

CASH (U.S.      TREASURY)

      The cash balance at June 30, 1971, was $432,967,   a
decrease of $405,897 from the balance at June 30, 1970.
The decrease was due mainly to expenditures    for video tape
equipment.    The cost of this equipment amounted to $457,876
at June 30, 1971.

ACCOUNTS RECEIVABLE

       Accounts receivable     amounted to             $30,744 at June 30,
1971, a decrease of $13,174 from the                   amount outstanding
at June 30, 1970.       We did not obtain              confirmations       of re-
ceivables;     however, our examination               showed that,       of the
June 30, 1971, balance,       $10,920 was             collected     during July.

     A comparison of the ages of accounts                     receivable    at
June 30, 1971 and 1970, follows.
      Days                    June 30, 1971                    June 30, 1970
  outstanding               Amount    Percent                Amount    Percent

  1 through 59              $20,909            68.0         $21,012           47.8
 60     "    89               2,957             9.6           7,198           16.4
 90     "   119               2,787             9.1           1,709            3.8
120 or more                   4,091            13.3          13,999           32.0

    Total                   $30,744           100.0         $43,918




                                        3
       The facilities      were required      because of the demand
from Senators for services which could not be satisfied                 by
the old facilities        due to limited      space and equipment.      The
new Studio,      in addition     to providing     video tape services,
has the in-house      capability      to develop color film.       This
capability    has resulted       in reducing    the time to process
film from 6 days to less than 1 day.
                             CHAPTER 3

                            OPERATIONS

       A comparative     statement of revolving     fund operations  for
the fiscal    years ended June 30, 1971 and 1970, is presented
as schedule 2. The excess of revenue over costs amounted to
$10,557 for fiscal       year 1971 compared with $104,360 for fis-
cal year 1970.       The decrease is due partially       to the loss in-
curred on the operation        of the video equipment,     which re-
sulted primarily      from the depreciation     expense of $35,427 as-
sociated   with the video equipment,        and to the decrease in
sales during     the year.
                                   CHAPTER 4

                   OPINION OF FINANCIAL           STATEMENTS
                                                      --
        The accompanying    financial   statements     were prepared     by
us from the Studio's       accounting   records    which were maintained
on the accrual     basis.     Employee salaries     and benefits     and
certain    other operating     expenses were paid from appropriated
funds and are shown in a footnote          to the financial      state-
ments.

       In our opinion,        the financial       statements      (schedules      1,
2,  and  31,    which    were  prepared     on  a  basis    consistent      with
that of the preceding           year and in accordance          with the ac-
counting    practice      and financial      arrangement      described      above,
present   fairly      the financial     position       of the Senate Recording
Studio Revolving        Fund at June 30, 1971, and the results                   of
its operations        and the sources and application               of its funds
for the year then ended.
    ..     .,


~AIUCIAL            STATEMENTS




                9
                SENATE                 RECORDING                       STUDIO
                                       REVOLVING FUND


                COMPARATIVE STATEMENT OF ASSETS AND LIABILITIES
                               JUNE 30, 1971 AND 1970


                                         ASSETS

                                                                1971                  1970
CURRENT ASSETS:
    Cash (U.S. Treasury)                                $       432,967         $     838,864
    Accounts receivable                                          30,744                43,918
    Inventory  of materials              and sup-
       plies, at cost                                            26,731                20,364
    Work in process                                                   17                   112
    Prepaid bond premiums                                            112                   307
            Total   current     assets                      _ 490,571                 903,565
FIXED ASSETS:
     Equipment and furnishings                                  714,553               243,920
    Less depreciation                                           187,827               134.149
                                                            _ 526,726-                109,771
    New studio facilities                                       518,008               461,629
    Less depreciation                                       _    24,201
                                                                493.807             _ 461,629
    Tools      and minor      equipment                                750                   750
            Total   fixed     assets                        1,021,283_                572,150
TOTAL ASSETS                                            $1.511.854
                                                         -                      $1.475,715
                                                                      SCHEDULE 1




           LIABILITIES                      AND        CAPITAL

                                                        --1971              1970
                                                                            __-
CURRENT LIABILITIES:
    Accounts    payable                           $      37,265        $-    11,633




CAPITAL AND EXCESS OF REVENUE OVER
  COSTS:
     Contributed  capital                               183,619             183,619
     Standby equipment--donated                                  --     -           50
                                                        183,619         _ 183,669-

     Excess of revenue       over costs:
          Balance prior      years                    1,280,413         1,176,053
          Fiscal  year                                    10,557        _ 104,360
                                                   1,290,970            1,280,413
               Total   capital    and excess
                  of revenue     over costs           1,474,589         13464,082
TOTAL LIABILITIES        AND CAPITAL              $1,511,854           $1,475,7x




                                       11
                              SENATE                RECORDING                          STUDI


                                                     REVOLVING        FUND




                                       COMPARATIVE STATEMENT OF OPERATIONS

                                 FISCAL    YEARS ENDED JUNE 30.              1971 AND 1970



                                            Motion      picture                      Radio                     Video                 'Total
                                                                                                                             - -----.--____                 _
                                            1971           1970              1971            ~1970         1971
                                                                                                           ___       1976
                                                                                                                     ___       1971
                                                                                                                               ._-               1970

REVENUE:
    Sales                                 $84,899       $117,661         $37,149         $73,599        $35,796       :     $157,844          S191,26!!
COSTS:
   Film, radio, video materials            43,019         50,634             6,092           6,661       12,195                h1,306            57,295
   Outside processing                           846         9,393                                                                   846           9,393
   Maintenance and repairs                  1,551              321              255             921        6,793                8,599             1,242
   Maintenance supplies                         877            852              180             329             34              1,091             1,181
   Office      supplies and expense             240            233              240             213           241                  721                446
   Insurance                                      73             66               74             67             74                  221               133
   Depreciation       of equipment         14,176         14,923                h99             920      35,427                50,302            15,843
   Loss on disposition        of fixed
      ,assets                                                   357                             227                                                   584
   LOSS on disposition        of
      inventory                                                 427                             356                                                   783
   Depreciation--new       studio
      facilities                            8,067                            8,067                         8,067     .- -     24,201

         Total   costs   (note a>          68,849         77,206          15,607             9,694       62,831      _       147,287             86,900

         Excess of revenue over
           costs or excess of
           costs over revenue (-)                                       $2.1,5+?        $63,905       -$?7,.035      -2     $ 10,557          $104 ..&360
                                                                                                                                                       ~.__

aSalaries   of $237,214 ($lYO,823 in fiscal year 19701, employee benefits,   and certain  other operating
 expenses of the Studio have been provided for by 'appropriations    and are not included as expenses in
 determining   the excess of revenue over costs of the revolving  fund.
                                                                SCHEDULE 3


       SENATE               RECORDING                  STUDIO


                              REVOLVING FUND




                        COMPARATIVE STATEMENT OF

                 SOURCES AND APPLICATION          OF FUNDS

           FISCAL YEARS ENDED JUNE 30, 1971 AND 1970




                                                       1971         1970

FUNDS PROVIDED:
   Sales                                            $157,844      $191,260
   Decrease in working             capita%           438,627       209,055

       Total    funds    provided                   $596.471      $400,315

FUNDS APPLIED:
   Costs (excluding      depreciation
     and other items not requb
     ing current    outlay    of funds)             $ 72,784      $ 70,473
   Equipment additions                               467,308         2,683
   New studio facilities                              56,379       327,159

       Total    funds    applied                    $596,471       400,315




                                             13
APPENDIX
                                                                                                                          APPENDIX I

ROBERT        G. DUNPHY
   SERGEANT     AT ARMS




                                                           OFFICE     OF   THE    SERGEANT        AT      ARMS

                                                                WASHINGTON.              D.C.     20510



                                                                      June        28,     1971



                          B- 125079




                          The Honorable              Elmer           B. Staats
                          Comptroller             General           of the United                States
                          Washington,             D. C.

                          Dear       Mr.      Staats:

                                           Please     arrange      to have the annual        audit    made     on
                          the Senate     Recording        Studio’s     Revolving      Fund  for the fiscal
                          year   ending     June 30, 1971,         pursuant      to the regulations        of the
                          Senate   Committee         on Rules      and Administration          which    direct
                          me to “request        the General        Accounting       Office  to verify      a
                          yearly   inventory       and the books        and collateral     records       as of the
                          end of each fiscal        year.     ‘I

                                                Your      auditors          may         start          on this   at any   time.

                                                 As Mr.       Bernard      A. Brady,      of your     staff,                      has a
                          thorough           background        on the Studio,      I would     appreciate                          it if
                          he may           be permitted        to supervise     this   undertaking.

                                                                                                Sincerely,




                          RGD:mar




                                                                             17