oversight

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

Published by the Government Accountability Office on 1971-10-19.

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

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Audit Of The House Recording
Studio Revolving Fund For
Fiscal Year 1971 8-714842

House of Representatives




BY THE COMPTROLLER    GENERAL
OF THE UNITED  STATES
                            COMPTROLLER          GENERAL     OF      THE       UNITED     STATES
                                               WASHINGTON.    D.C.         20548




             B- 114842




             Dear     Mr.   Jennings:


         I            This is our report    on an audit of the House   Recording                               YI
    --       Studio    Revolving   Fund for fiscal   year 1971.  The audit was
             made     pursuant   to your request   dated June 1, 1971.

                    Additional            copies    of this report    are being furnished      to
             you for transmittal              to the members       of the Committee       on the
             House   Recording             Studio.

                     A copy of this           report     is being                  sent   to the   Chairman,
    , .
             Committee     on House            Administration.
.
                                                                  Sincerely               yours,




                                                                  Comptroller                  General
                                                                  of the United                States

             The Honorable         W. Pat Jennings
             Clerk of the       House  of Representatives




                                    50 TH ANNIVERSARY                        1921-1971
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I                     CO&TROLLER GENERAL'5'                                      AUDIT OF THE HOUSE RECORDiNG STUDIO
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I                     REPORT TO THE CLERK OF                                     REVOLVING FUND FOR FISCAL YEAR 1971
                      THE HOUSE OF REPRESENTATIVES                               B-114842
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I                      DIGEST
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I                     WHYTHE AUDIT WASMADE
    !                           The General     Accounting   Office  (GAO) made an audit               of the House Recording
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    I                           Studio  Revolving      Fund pursuant  to a request dated               June 1, 1971, by the
    I                           Clerk  of the House of Representatives.
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    I                 FINDINGS AND CONCLUSIONS
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     I                          In GAO's opinion          the accompanying       financial    statements       (schs.     1, 2,
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    I                           and 3), which were prepared              on a bXs??consistent           with that of the
    I                           preceding      year--except        for the change in accounting            for transistors        and
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                                diodes     which GAO approved--and           in accordance      with the accounting          prac-
    I                           tice    and financial        arrangement     described     on page 6, present         fairly    the
    i                           financial      position      of the revolving        fund,  at June 30, 1971, the re-
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    I                           sults     of its operations,          and the sources      and application        of its funds
    I                           for the year then ended.
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                  i   Tear   Sheet                                                                       OCT.7.9,19?1
                              Contents
                                                                    Page

DIGEST                                                                1

INTRODUCTION                                                          2

FINANCIAL   POSITION                                                  3
    Accounts    receivable                                            3
    Equipment                                                         3

OPERATIONS                                                            5

OPINION OF FINANCIAL         STATEMENTS                               6

                                                         Schedule
FINANCIAL   STATEMENTS
    Comparative        statement    of assets and
      liabilities,          June 30, 1971 and 1970            1       9
    Comparative        statement    of operations,
      fiscal       years ended June 30, 1971
      and 1970                                                2      10
    Comparative        statement    of sources     and
      application         of funds,   fiscal    years
      ended June 30, 1971 and 1970                            3      11

APPENDIX
    Letter   dated June 1, 1971, from the
       Clerk of the House of Representatives                         15
COMPTROLLERGENERAL'S                                         AUDIT OF THE HOUSE RECORDING STUDIO
REPORT TO THE CLERK OF                                       REVOLVING FUND FOR FISCAL YEAR 1971
THE HOUSE OF REPRESENTATIVES                                 B-114842


 DIGEST
------


WHYTHE AUDIT WASMADE
          The General     Accounting   Office  (GAO) made an audit               of the House Recording
          Studio  Revolving      Fund pursuant  to a request dated               June 1, 1971, by the
          Clerk  of the House of Representatives.


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--except        for the change in accounting            for transistors        and
          diodes     which GAO approved--and           in accordance      with the accounting          prac-
          tice     and financial       arrangement     described     on page 6, present         fairly    the
          financial      position      of the revolving        fund,  at June 30, 1971,         the re-
          sults     of its operations,          and the sources      and application        of its funds
          for the year then ended.




                                                         1
                                  INTRODUCTION

       The General       Accounting        Office    audit    of the HOUSE 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
accounting      entries     necessary       to close      the books and prepared
the accompanying         financial       statements.         (Schs.    1 through   3.)

         The House Recording     Studio   was established      pursuant   to
provisions      of section   105 of the Legislative        Branch Appro-
priation     Act,    1957 (2 U.S.C.    123b).    The Studio    is operated
by a Studio       Director  under the jurisdiction        of the Clerk of
the House of Representatives,           subject    to the direction     and
control     of the Committee     on the House Recording        Studio.

       The Studio   makes film,   audio tape, and video tape re-
cordings    for members of the House of Representatives.           The
prices    or rates   to be charged for services    are established
by the Clerk of the House, subject         to the approval   of the
Committee     on the House Recording    Studio.

        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 Studioss      accounting       records     but are shown
as a footnote       to the financial       statements.




                                           2
                         FINANCIAL   POSITION

      A comparative    statement of the assets and liabilities
of the revolving    fund at June 30, 1971 and 1970, is pre-
sented as schedule 1. The following      comments are furnished
with respect to items shown on this statement.

ACCOUNTS RECEIVABLE

       Accounts receivable     amounted to $21,109 at June 30,
1971, an increase     of $5,886 from the amount outstanding           at
June 30, 1970.     Confirmations     received    from members of
amounts owed represented       about 80 percent      of total receiv-
ables at June 30, 1971.        No material    discrepancies   were
noted.

     The age of the accounts receivable            at June 30,    1971,
and at June 30, 1970, is shown below.

      Days                 June 30, 1971               June 30, 1970
  outstanding            Amuunt    Percent           Amount    Percent

  1 thraugh  59         $18,247           86.4      $12,936         85.0
 60      "   89           2,018            9.6        1,786         11.7
 90      "  119              784           3.7           499         3.3
120 or more                   60             .3             2          .O

     Total              $21,109          100.0      $15,223        100.0

EQUIPMENT

      A summary of the changes in the equipment accounts dur-
ing the fiscal  year and the balances at July 1, 1970, and
June 30, 1971 follows.

                         Balance                                  Balance
   Type of               July 1,                     Dis-        June 30,
  equipment               1970       Additions      posals          1971

Television              $415,716         $4,462     $      -     $420,178
Motion picture           118,460          1,312         2,350     117,422
Radio                     54,026             243           -       54,269
Office and shop            5,586                                    5,586

     Total              $593,788         $6,017     $2,350       $597,455
                                     3
       Television    equipment additions      consisted  of a micro-
phone, a teleprompter        reader,   a timer and related    equipment,
and a camera cable.         Motion picture    equipment additions
consisted      of a microphone     and a camera and parts.      Radio
equipment additions        consisted   of two timers and related
equipment.

        Equipment disposals    consisted     of two recorder-playback
units    in the motion picture     category.

       The Studio acquired    surplus property,     some of which was
repaired    and put into use and assigned an estimated        value
of $1,430.     Since the equipment was acquired       without  cost to
the Studio,    however,  it was not recorded     in the accounting
records or statements      and was not depreciated.




                                     4
                             OPERATIONS

      A comparative        statement  of revolving     fund operations
for the fiscal       years ended June 30, 1971 and 1970, is pre-
sented as schedule 2. The excess of revenue over costs
amounted to $23,912 for fiscal          year 1971 compared with
$48,909 for fiscal         year 1970.    The prices charged for mo-
tion picture     and radio tape services         during this period
were substantially         the same as those charged in June 1956
by the Studio's        predecessor,   the Joint    Senate and House
Recording    Facility.

        During fiscal   year 1971 the Studio made a change in its
accounting     system for transistors    and diodes.      Previously
they had been expensed when acquired.          A physical     inventory
of these items was taken and an asset control           account was
set up as of July 1, 1970.         Since all these items had pre-
viously     been expensed,   the change resulted     in a credit     to
capital     of $3,926.    If this change in the accounting        system
had not been made, the net income for fiscal           year 1971
would have been $499 less than the amount reported              in sched-
ule 2.
                   QPINION    OF FINANCIAL       STATEMENTS

        The accompanying     financial      statements   were prepared     by
us from the accounting         records     of the Studio   which were main-
tained    on an accrual    basis.       Employee salaries     and benefits
and certain      other operating       expenses were paid from appro-
priated     funds and are shown in a footnote           to the financial
statements.

        In our opinion,         schedules     1, 2, and 3, which were pre-
pared on a basis consistent               with that of the preceding
year --except        for the change in accounting            for transistors
and diodes which we approved--and                  in accordance      with the ac-
counting      practice     and financial        arrangement     described    above,
present     fairly      the financial      position     of the House Recording
Studio Revolving          Fund, House of Representatives,              at June 30,
1971, and the results            of itsloperations        and the sources and
application        of its funds for the year then ended.




                                        6
-CIAL   STATEMENTS
          HOUSE               OF         REPRESENTATIVES


                              HOUSE RECORDING STUDIO
                                      REVOLVING FUND




           COMPARATIVE STATEMENT OF ASSETS AND LIABILITIES

                              JUNE 30,       1971 AND 1970




                                        AS   S ET-S

                                                               1971        1970

CURRENT ASSETS:
    Cash (U.S. Treasury)                                     $204,234    $140,282
    Petty cash                                                      78            53
          Total                                               204,312     140,335
    Accounts      receivable                                   21,109      15,223
    Inventory       of materials        and supplies,   at
       cost                                                    18,821      17,740
          Total    current     assets                         244,242     173,298
FIXED ASSETS:
     Equipment  (note        a>                               597,455     593,788
     Less accumulated         depreciation                    190,391     143,378


         Total     fixed     assets                           407,064     450,410
TOTAL ASSETS                                                 $651,306    $623,708
aDoes not include       surplus   equipment    acquired   from General  Services
 Administration       at no cost.     The studio     has assigned an estimated
 value of $1,430 to the items that have been repaired               and are
 currently      in use.
                                                                      SCHEDULE I




           LIABILITIES                   AND         CAPITAL

                                                             1971              1970
CURRENT LIABILITIES:
    Accounts    payable                                 $           127   $        367


CAPITAL AND EXCESS OF REVENUE OVER COSTS:
     Contributed capital                                    183,410           183,,410
     Excess of revenue over costs:
          Balance , prior years                             439,931           391,022
          Fiscal     year                                    23,912            48,909
          Capitalization  of supplies     acquired
             and expensed in prior    years                   3,926

                                                            467,769           439,931
               Total   capital and excess    of
                  revenue over costs                        651,179           623,341
TOTAL LIABILITIES        AND CAPITAL                    $651,306          $623,708
SCHEDULE         2




                                          .IU~ISE RECOKDTNI: STUDIO

                                               REVOLVING FUND



                                 COMPARATIVE STATEMENT OF OPERATIONS

                              FISCAL YEARS ENDED JUNE 30, 1971 AND 1970



                                Motion    picture
                                               --              Radio
                                                                 --                  Television                        Total
                                 -1971       -1970        -1971       1970
                                                                     ---            1971        1970           -1971           1970
                                                                                                                               __
REVENUE:
    From sales                 $20,326    $40,511       $33,162      $41,017      $63,460      $57,749       $116,948      $139,277

COSTS :
    Film materials               8,528     16,166          -                                                    8,528          16,166
    Outside processing           6,644      9,589          -                                                    6,644           9,589
    Maintenance    and re-
        pairs                    3,526      2,155         1,885        1,731       21,310       19,474         26,721          23,360
    Office supplies    and
        other expenses              593           426          593          427          593           426      1,779           1,279
    Loss on disposal     of
        equipment                   235       _            _            _            _             _               235           -
    Depreciation    of
        equipment                6,868       4,819        4,538       -5,115       37,723       30,040         49,129          39,974

         Total costs
            (note a)            26,394     23,155         7,016       -7,273       59,626       49,940         93,036          90,368
         Excess of revenue
           over costs or
           excess of costs
           over revenue(-)
           (note a)            $-5,06_8 $22X$           $26,146      $23,744      $ 3,834      $_Q99         $ 23,912      $ 48,909
aSalaries of $211,784 ($191,205     in fiscal    year 1970) employees'   benefits   of $17,834
 ($13,672 in fiscal    year 1970), and certain     other operating  expenses of the Studio were
 provided by appropriations     and were not included    as expenses in determining     the excess of
 revenue over costs of the revolving       fund.




                                                           10
                                                                   SCHEDULE 3

      HOUSE               OF          REPRESENTATIVES




                          HOUSE RECORDING STUDIO

                               REVOLVING FUND


              COMPARATIVE STATEMENT OF SOURCESAND

                          APPLICATION       OF FUNDS

           FISCAL YEARS ENDED JUNE 30, 1971 AND 1970




                                                          1971         1970

FUNDS PROVIDED:
    Sales                                               $116,948    $139,277
    Disposition of equipment                                            2,399
    Decrease in working capital                                       74,823

          Total   funds     provided                    $116,948    $216,499

FUNDS APPLIED:
    Costs (excluding     depreciation            and
       other items not requiring               cur-
       rent outlay   of funds)                          $ 43,673     $ 50,395
    Equipment additions                                    6,017      166,104
    Increase   in working capital                         67,258

          Total   funds     applied                     $116,948    $216,499




                                          11
APPENDIX
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 13
                                                                               APPENDIX I




                                                     June 1, 1971


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

             Dear Mr. Staats:

                             I would be grateful     if you would conduct       an audit       of

             the House Recording           Studio   and the Office      Equipment    Service        of

             the House of Representatives             for   Fiscal    Year 1971.

                             With kind regards,     I remain

                                                     Sincerely,




                                                                                    tatives

             WPJ:el




U.S   GAO.   Oash..   D.C.                          15