oversight

Audit of Financial Transactions of the Sergeant at Arms for Fiscal Year 1971

Published by the Government Accountability Office on 1971-10-27.

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

Audit Of Financial Transactions
Of The Sergeant At Arms
For Fiscal Year 1971 B.114854
House of Representatives




BY THE COMPTROLLER    GENERAL
OF THE UNITED  STATES


                           U-.27,1971
                            COMF’TRQLLER     GENERAL     OF      THE       UNITED      STATES
                                           WASHINGTON.    B.C.         20548




            B-114854




            Dear   Mr.      Speaker:

                   The accompanying           report      summarizes      the results     of
     I      our audit   of the financial       transactions        of the Sergeant    at -4rms,                      .r*’
/’          House    of Representatives,          for fiscal    year 1971.      Our audit
            was made     pursuant       to the act of July 26, 1949 (2 U,S.C,            81a).

                       This report  is also being       sent                   today       to the    Sergeant   at
            Arms       of the House   of Representatives.

                                                              Sincerely                yours,




                                                              Comptroller                    General
                                                              of the United                  States

     ,r !   The Honorable           Carl Albert                                                 ‘C     _’
            Speaker   of the        House  of Representatives                               ‘* ’ -




                                   50 TH ANNIVERSARY               1921-            1971
                COMPTROLLER     GENERAL           OF      THE    UNITED       STATES
                              WASHINGTON.          D.C.     20548




B-114854




Dear     Mr.   Johnson:

       The accompanying          report      summarizes       the results     of
our audit of the financial        transactions        of the Sergeant     at Arms,
House   of Representatives,          for fiscal   year     1971.  Our audit
was made pursuant          to the act of July 26, 1949 (2 U.S.C.             81a).

          This report    is also          being        sent           today      to the Speaker   of
the    House   of Representatives.

                                                       Sincerely              yours,




                                                       Comptroller                 General
                                                       of the United               States

The Honorable       Zeake       W. Johnson,                     Jr.
Sergeant    at Arms
House    of Representatives




                      50 TH ANNIVERSARY                     1921-         1971
          .

               COBPTROLLERGENEBAL'S REPORT                           AUDIT OF FINANCIAL  TRANSACTIONS OF THE
               TO THE SPEAKER OF THE HOUSE                           SERGEANT AT ARMS, HOUSE OF REPRESENTATIVES,
               OF REPRESENTATIVES                                    FOR FISCAL YEAR 1971 B-114854


               DIGEST
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               WHY THE AUDIT WASMADE
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I                     The General    Accounting     Office       {GAO) is required    to make an audit    of all
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I                     receipts    and disbursements        pertaining    to the financial     records  of the
 I                    Sergeant    at Arms, House of Representatives,              not less frequently   than once
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                      each 6 months.
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  I            FINDINGS AND CONCLUSIONS
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  I                   In GAO's opinion,       the financial       statements      (schs.   1 through   3) present
 I                    fairly  the financial       position     and accountability        of the Sergeant      at
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                      Arms at December 31, 1970, and June 30, 1971, and the transactions                         for
  I                   each of the 6-month        periods    then ended,      on a basis     consistent   with    that
  I                   of the preceding      year.
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  I                   GAO noted that   the amount of members'   unpaid             checks        outstanding   decreased
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  I                   from $10,271   on July 1, 1970, to $7,874    on           July 1,         1971.
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                            Contents


DIGEST

CHAPTER

   1        INTRODUCTION                                                 2

   2        ASSETS AND LIABILITIES                                       3
                Exchange items on hand                                   3
                Due from members                                         4

   3        SCOPE OF AUDIT                                                6

   4        OPINION   OF FINANCIAL      STATEMENTS                       7

FINANCIAL    STATEMENTS                                                  9

SCHEDULE

   1        Statement    of assets and liabilities,             Decem-
               ber 31,   1970, and June 30, 1971                         11

   2        Statement  of financial        transactions,        appro-
               priated funds,   for     the fiscal       year   ended
               June 30, 1971                                             12

   3        Statement    of financial     transactions,         de-
               posit  for the fiscal      year ended
               June 30, 1971                                             13
COMPTROLLERGENERAL'S REPORT                             AUGIT OF FIEJANCIAL TRANSACTIONS OF THE
TO THE SPEAKER OF THE HOVSE                             SERGEANT AT ARMS, HOUSE OF REPRESENTATIVES,
OF REPRESENTATIVES                                      FOR FISCAL YEAR 1971 B-114854


DIGEST
------


WHY THE AUDIT WASMADE

         The General    Accounting     Office      (GAO) is required     to make an tit           of all
         receipts    and disbursements        pertaining   to the financial     CL-records     of the
         Sergeant    at Arms, House of Representatives,             nomss      frequently       than once
         each 6 months.


FIJDINGS AND CONCLVSIOh'S

         In GAO's opinion,       the financial       statements      (schs.   1 through   3) present
         fairly  the financial       position     and accountability        of the Sergeant      at
  .      Arms at December 31, 1970, and June 30, 1971, and the transactions                         for
         each of the 6-month        periods    then ended,      on a basis     consistent   with    that
         of the preceding      year.

         GAO noted that   the amount of members'   unpaid    checks outstanding                 decreased
         from $10,271   on July 1, 1970, to $7,874    on July    1, 1971.
                                 CHAPTER1

                              INTRODUCTION

        The Sergeant at Arms is directed     by statute    to keep the
accounts for the pay and mileage of members of the House of
Representatives,      to act as disbursing   officer    of moneys ap-
propriated     for the compensation    of members, and to account
for such funds according      to law (2 U.S.C. 78, 80).

        Salary and expense appropriations            are disbursed     on the
basis of monthly payroll            vouchers covering     the earned sal-
aries and mileages         of members and the expense allowance             of
the Speaker.       The amount due each member either            is paid to
him by check or, if he so requests,             is transferred       to his
credit     in the deposit      fund account which has been estab-
lished     in the Treasury       for this purpose.      In addition,      the
Sergeant at Arms acts as disbursing             officer     for amounts ap-
propriated      for gratuities       to widows or widowers and heirs
of deceased members and maintains             a banking operation       known
as the House Bank.

       The deposit     fund maintained      by the Sergeant    at Arms
represents   the total      of the individual     accounts for the var-
ious members who utilize          the banking facility.       The amount
due each member may be withdrawn            by a written   order for pay-
ment presented     either    directly   to the Sergeant at Arms or
through regular      banking channels.

        Moneys on deposit       in the deposit     fund are used in cash-
ing checks for members and employees of the House.                Other
banking operations       consist     of selling    traveler's  checks and
assisting     members in (1) purchasing         savings bonds and (2)
negotiating     and liquidating       personal   loans with local banks.

        These banking activities        have not been established         by
specific     legislation    but have developed      over a long period
of time as a service        to members.     These activities       were
given recognition        in the act of July 26, 1949 (H. Res. 465,
84th Cong.),        and were made permanent by section         103 of the
Legislative       Branch Appropriation     Act, 1957 (70 Stat.        370),
and the act of July 2, 1958 (72 Stat.            293).     In these acts
the moneys in the deposit          fund are classified       as trust   funds.


                                      2
                                  CHAPTER2

                       ASSETS AND LIABILITIES

       The funds for which the Sergeant at Arms was account-
able at December 31, 1970, and June 30, 1971, are summarized
in the statement       of assets and liabilities.        (See sch. 1.)
Pertinent    comments on certain      accounts,   transactions,    and
accounting    controls    are presented    below.

EXCHANGE ITEMS ON HAND

      Exchange    items on hand amounting to $68,332 at Decem-
ber 31, 1970,     and $270,323 at June 30, 1971, represent
checks cashed     for members and employees of the House on the
last business     day of each 6-month period.   The checks are
exchanged for     cash at a local bank on the following    business
day.

       The peak volume of check-cashing      transactions       occurs
when House employees cash their       paychecks,    usually     at the
end of each month.      During fiscal   year 1971 the largest          vol-
ume of checks cashed during a month occurred           in June 1971
and the largest    volume during 1 day occurred        on April     1,
1971, when checks amounting to $1,646,414          and $283,253,       re-
spectively,    were cashed.

     The check-cashing       transactions          for     fiscal   year     1971 are
summarized below.

                                               Six-month  period ended
                                             December 31,       June 30,
                                                  1970             1971

Checks on hand at beginning         of
  period                                      $      234,437           $       68,332
Checks cashed                                     7,713.053                9.104,393

                                                  7,947,490                9,172,725

Checks exchanged     for   cash                   7,879,158                8,902,402

Checks on hand at end of period               $          68,332        $     270,323


                                         3
       The total  amount of checks cashed during fiscal          year
1971 decreased $1,062,138     from that of the prior      fiscal
year 9 a decrease of about 5.9 percent.        Checks returned        to
the Sergeant at Arms, for various      reasons,   by the banks
during fiscal    year 1971 totaled   $23,591,   a decrease of
$15,129 from the amount of checks returned        in the prior
fiscal   year.

      The Sergeant at Arms has stated that he maintains              con-
trol  over these returned checks on an item basis until              they
are liquidated.

DUE FROM MEMBERS

       The accounts receivable     due from members (members' un-
paid checks) (see sch. 1) represent           checks which were drawn
on and cashed by the Sergeant at Arms but which were not
charged to the members' accounts pending deposits             of suffi-
cient funds by the members.        Individual      unpaid checks are
listed    on the days of receipt,     but the amounts unpaid at
any time by individual      members can be determined        only from
the unpaid checks on hand.        Furthermore      records are not
maintained     from which the frequency,       duration,   and amounts
of actual overdrafts,     in total    or by individual      members, can
be determined.

       During fiscal     year 1971 members' unpaid checks numbered
8,519 and amounted to $1,509,922,            compared with 10,711
checks that amounted to $1,872,521             in the preceding  fiscal
year, a decrease of about 20 percent              in both number and
amount.       Redemption   of these unpaid checks totaled
$1,503,340      and $1,874,051    during   fiscal    years 1971 and 1970,
respectively,      which resulted      in unpaid checks of $54,988 on
hand at June 30, 1971, compared with $48,406 on hand at
June 30, 1970.

     After salaries  were credited   to the accounts on July 1,
1971, only one member owed more than $2,500.      On July 1,
1971, six members had unpaid checks outstanding     amounting
to $7,874, a decrease from July 1, 1970, when nine members
had unpaid checks outstanding    amounting to $10,271.

         The Sergeant  at Arms informed us that no loss had re-
sulted     from the practice  of cashing members' checks when

                                   4
they did    not have sufficient       funds on deposit        to cover the
checks.     He stated that many of the checks were outstanding
for only    a few days.     He considers       that the members gener-
ally are    drawing against     their    accruing    salaries    which will
be paid    on the 1st of the following          month.




                                       5
                                  QMPTEFi    3

                              SCOPE OF AUDIT

        Our audit of the financial             transactions    of the Ser-
geant at Arms,       which     consisted      of  separate   examinations    for
the 6-month periods         ended December 31, 1970, and June 30,
1971, respectively,          included      (1) a review of applicable
Federal    laws relating        to payments of salaries         and mileages
of members, the expense allowance                 of the Speaker,      and pay-
ments of gratuities          to widows or widowers and heirs of de-
ceased members, (2) a review of House banking operations,
and (3) a review,        on a test basis, of the records and fi-
nancial    transactions,         including     such auditing    procedures     as
we considered       appropriate        and necessary under the circum-
stances.

     Because salaries   of employees and other expenses of
the Office  of the Sergeant at Arms are paid by the Clerk of
the House from separate   appropriations, such transactions
were not covered in our audit.




                                       6
                                 CHAPTER4

                   OPINION OF FINANCIAL        STATEHENTS

        The financial     statements     in this report  were prepared
by us from the records          of the Sergeant    at Arms.     In prepar-
ing the financial       statements     from these records     which are
maintained      on a cash basis,      we have included    adjustments
to present      the accountability       of the Sergeant    at Arms on an
accrual    basis.

      In     our opinion,      the accompanying      financial       statements
(schs.     1  through    3)  present   fairly   the    financial       position
and accountability          of the Sergeant     at Arms at December 31,
1970, and June 30, 1971, respectively,                 and the financial
transactions        for each of the 6-month periods              ended at those
dates,     in conformity      with generally      accepted       accounting
principles       applied    on a basis consistent         with that of the
preceding      year and with applicable         Federal       laws.
FINANCIAL       STATEMENTS




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                            SERGEANT                   AT        ARMS

                                   HOUSE OF REPRESENTATIVES

                       STATEMENT OF ASSETS AND LIABILITIES

                      DECEMBER31, 1970,            AND JUNE 30, 1971

                                                        December 31,         June 30,
                                                            1970               1971

                   ASSETS

        APPROPRIATED FUNDS:
            Funds with U.S. Treasury                   $12,041,071.03     $1,804,083.52

        DEPOSIT FUNDS:
            Funds with U.S. Treasury                     1,269,168.06      1,207,121.60
            Cash on hand                                    111,350.17        163,453.12
            Exchange items on hand                           68,331.89        270,322.54
            Accounts receivable:
                 Due from members                            52,700.34         54,988.21
                 Tellers'  shortages                              87.25            230.32

                                                         1,501,637.71      1,696,115.79

                           Total    assets             $13,542,708.74     $3,500,199.31

             LIABILITIES

        APPROPRIATED FUNDS:
            Accrued liabilities                        $ 1,674,776.86     $1,681,573.53
            Unobligated      balances                   10,366,294.17         122,509.99

                                                        12,041,071.03      1,804,083.52

        DEPOSIT FUNDS:
            Accounts payable:
                 Members' deposits                       1,501,493.39      1,695,890.01
                 Tellers' overages                               144.32            225.78

                                                         1,501,637.71      1,696,115.79
                           Total    liabilities        $13,542,708.74     $3,500,199.31


                                                  11
SCHEDULE 2


                                       SERGEANT                AT         ARMS
                                             HOUSE OF REPRESERTATIVES

                                      STATMENT OF FINANCIAL TRAKSACTIDNS
                                                  APPROPRIATED FUNDS
                                   FOR THE FISCAL YEAR ENDED JIJEE 30, 1971

                                                                  Six-month period ended                    Fiscal
                                                               December 31,       June 30,                   y-r
                                                                   I970             1971                     1971

  ACCOUNTABLE BALANCE AT BEGIWIEG OF PERIOD                   9 lB794.386.85      812.041,071~         8 1,794;386.85

 APPROPRIATIONS:
     Salaries                                                  20,212.950.00                            20,212,950.00
     Mileages and expenses                                         200.000.00                               200,000.00
     Gratuities                                                    170.000.00            170.000.00         3.%0,000.00
                         Total   appropriations                20,582,95O.Q0             17o,ooo.r)o    20,752.950.~@
                         Total   funds available               22,377,336.85       12.2lI.071.03        22,547,336.85
  DISBURSWENTS AED TRAESFERS:
      Salaries    and Government contributions:
            Paid to members:
                 By check                                           459.655.73           473,789.75        933,445.48
                Transferred     to deposit fund ac-
                   count (sch. 3)                               5,649,082.04           5,871,196.85     11,520,278.89
            Paid to Internal      Revenue Service:
                Withholding     tax deductions                  2,201,684.71           2,027,522.46      4,229,207.17
            Paid to Civil Service Commission:
                Members' deductions:
                     Retirement                                     723,898.72           722,868.88      l&46,767.60
                     Life insurance                                  68,444.64            70,080.66         138,525.30
                     Health insurance                                71,523.18            70,604.22         142.127.40
                     Optional     life insurance                     17.850.23            18,286.19          36,136.42
                Government contributions:
                     Retirement                                     723,898.72           722,868.88      1.446.767.60
                     Life insurance                                  34,222.32            35,040.33          69,262.65
                     Health   insurance                              20.826.48            39.945.93          60.772.41
                         Total                                  9.971.086.77       10.052.204.15        20.023.290.92
      Mileages of members and expense allowance
         of Speaker:
            Paid by check                                              5,450.oo           12,928.80          18.378.80
            Transferred  to deposit fund account
               (sch. 3)                                                7.997.00          171.854.56        179.851.56
                        Total                                        13.447.00           184.783.36        198.230.36
                        Total salaries,    mileages,
                           and expense allowance                9,984,533.77       10,236,987.51        20,221,521.28
      Gratuities  to widows of deceased members                     170,000.00           170,000.00        340,000.00
      Unexpended balance of appropriations  dopos-
        ited into general fund of the Treasury                      181.732.05     -         -             181.732.02
                        Total disbursements        and
                           transfers                           10.336,265.82       10.406.987.51        20,743.253.33
 ACCOUNTABLE BAWLNCEAT BED OF PERIOD                          $12,041.071.03      S 1,804.083.52       $ 1,804,083.52




                                                         12
                                                                                              SCHEDULE 3


                                   SERGEANT               AT          ARMS
                                      HOUSE OF REPRESmTATIVES



                              STATEMENT OF FINANCIAL           TRANSACTIONS
                                              DEPOSIT FUNDS
                           FOR THE FISCAL YEAR ENDED JUNE 30, 1971



                                                      Six-month period ended
                                                   December 31,       June 30,                  Fiscal year
                                                       1970             i971                        1971

ACCOUNTABLE BALANCE AT BEGINNING OF
  PERIOD                                          $ 1,413,287.84        $1,501,637.71         $ 1,413,287.84
RECEIPTS:
    Transfer from appropriated
       funds (sch. 2):
          Salaries   of members                     5,649,082.04          5.871.196.85         11,520,278.89
          Mileages of members and ex-
             pense allowance of the
             Speaker                                      7,997.oo           171,854.56            179,851.56
               Total                                5,657,079.04          6,043,051.41         11,700,130.45
    Personal deposits        by members             3,485,211.82          4,661,281.62          8,146,493.44
    Sale of traveler's        checks                    72,019.26             67,343.69            139,362.95
    Tellers'  overages                                      144.32                 81.46                225.78
               Total    receipts                    9,214,454.44         10,771,758.18         19,986,212.62
                                                                                          \
               Total available         for dis-
                  bursement                        10,627,742.28         12,273,395.89         21,399,500.46

DISBURSEMENT:
     Payments to or for acc0unts of
       members (net of amounts due
        from members)                               9,053,606.66         10,509,936.41         19,563,543.07
     Remittances       to consignors for
        traveler's       checks sold                      72,019.26           67,343.69            139,362.95
     Tellers'      overages (prior years>
        applied     to shortages                               478.65                                   478.65
               Total    disbursements               9,126,104.57         10,577,280.10         19,703,384.67
ACCOUNTABLE BALANCE AT END OF PERIOD $ 1,501,637.71                     $ 1,696,115.79        $ 1,696,115.79




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

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