oversight

Audit of the House of Representatives Restaurant for the Period June 28, 1970, to June 26, 1971

Published by the Government Accountability Office on 1971-12-16.

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

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




B-114891




Dear   Mr.    Chairman:

        This is our report     on the audit of the House     of Representa-
tives Restaurant     for the period      June 28, 1970, to June 26, 1971.
The audit was made pursuant          to section   208(c)(2) of the act of
October     9, 1940 (40 U.S.C.    174-k).

        Copies   of this report    are being                 sent to the Chairman,     Select   3
Committee      on the House     Restaurant,                 and to the Clerk    of the House    fig
of Repre sentative     s.                                                &50-J                   addov
                                                 Sincerely             yours,




                                                 Comptroller                General
                                                 of the United              States



The Honorable        Wayne L. Hays,     Chairman
Committee       on House Administration                            t-k5 0[7W
House     of Representatives




                  50 TH ANNIVERSARY              1921-          1971
.




                            Contents
                            --e----p
                                                               Pane

    DIGEST                                                       1

    CHAPTER

       1      I-HTRODUCTION                                      2
       2      OPERATIONS                                         3
       3      ACCOUNTSRECEIVABLE                                 5
       4      OPINION OF FINANCIAL STATEMENTS                    6
    FINANCIAL STATEMENTS

       1      Comparative statement of assets and liabil-
                 ities,  June 26, 1971, and June 27, 1970        7
       2      Comparative statement of operations   for
                 fiscal  years ended June 26, 1971, June 27,
                 1970, June 28, 1969, and June 29, 1968          8
       3      Statement of sources and application    of
                 funds, fiscal  year ended June 26, 1971         9
    EXHIBIT

       A      Statement of operations   June 28, 1970
                thru June 26, 1971                              10
;   COMPTROLLERGENERAL'SREPORT                              AUDIT OF THE HOUSE OF REPRESENTATIVES
'   TO THE COMVITTEEON                                      RESTAURANT FOR THE PERIOD JUNE 28, 1970
;   HOUSEADMINISTRATION                                     TO JUNE 26, 1971  B-114891
I   HOUSEOF REPRESENTATIVES




; WHYTHE AUDIT WASMADE
I
I
I         The General Accounting     Office  (GAO) is required                  by law    to make an annual
          audit of the House of Represenlatlves      Restaurant.                                     L...
I
I                      __y__--a- .Yr - _ .--

i OPINION OF FINANCIAL STATEMENTS
I
I
I      In GAO's opinion, the financial                statements.      (schs.    lp 2, and 3), which were
I         prepared   on a basis con%iYiZhtYwitfi             that of the preceding         year and in ac-
I
I         cordance   with the accounting         practices       and financial      arrangements      described
I         on page 6 of this     report,      present     fairly     the financial      position     of the House
I
I         of Representatives      Restaurant       at June 26, 1971, the results               of its operations,
!         and the sources    and application          of its funds for the year then ended.


i OTHERMATTERSOF INTEREST
I
I     The operation of the House Restaurant                       resulted     in a net loss for fiscal    year
I          1971   of $340,728     compared     with    a net    loss for     fiscal  year 1970 of $298,715.
I
          On April      1, 1971, the responsibility       for management  and operation     of the 0~
          Restaurant      was transferred     from the Architect    of the Capitol    to the Corn- g60/3
          mittee     on House Administration.        At that date the accumulated       net loss for
          fiscal     year 1971 was $286,578.

          As of June 26, 1971, the Committee                     on House Administration          established       a
          contributed        capital      account,        to be maintained     at $50,000,      to provide      the
          Restaurant       with working          capital.       The Restaurant    will    be reimbursed       for
          actual     operating       losses      after      each 4-week accounting       period    to permit      it to
          maintain      a liquid       position.




I
1   Tear Sheet                                              1
                                                                               DEC.16,19TI
                                  CHAPTER1
                                        -

                               INTRODUCTION

        Our audit of the House of Representatives              Restaurant
was made in accordance with generally              accepted auditing         stan-
 dards and included an examination of the financial                   statements
 for the year ended June 26, 1971, and such tests of the ac-
 counting records and such other auditing              procedures as we
considered necessary in the circumstances.
        The House Restaurant is operated primarily               for members
of the House and their         staffs.      Until April 1, 1971, the Ar-
chitect    of the Capitol was responsible           for the management of
the Restaurant,      subject,      during the Ninety-first         Congress,
to the direction       of the Select Committee on the House Restau-
rant.
        Pursuant to House Resolution           317, Ninety-second        Con-
gress, the responsibility            for the operation      of the House Res-
 taurant was transferred         from the Architect        of the Capitol       to
 the Committee on House Administration             effective     April 1,
1971. The same resolution             assigned direct      supervision     of the
Restaurant,     during the Ninety-second          Congress, to the Select
Committee on the House Restaurant.
        The Restaurant    facilities       consist of three cafeterias,
one each in the Capitol,           Longworth,    and Rayburn Buildings;
three carryouts,      one each in the Longworth, Rayburn, and Can-
non Buildings;      and the congressional         and members' dining
room in the House wing of the Capitol.                The Longworth Build-
ing Cafeteria     is normally open on Saturday.              when the Con-
gress adjourns for a significant             length of time, the congres-
sional and members' dining rooms usually close.
        Funds for the operation     of the Restaurant     are provided
by receipts      from sales and from allocations      from the appro-
priations     for Contingent   Expenses, House of Representatives,
Miscellaneous       Items, to cover losses and the acquisition        of
equipment.       In accordance with the act of October 9, 1940,
these funds are deposited with the Treasurer            of the United
States.     Also funds appropriated      to the Architect    of the
Capitol    for construction    or maintenance are available      for
purchases of equipment.        These purchases are not recorded
as assets of the Restaurant.


                                       2
                               CHAPTER2

                              OPERATIONS

       The operation     of the House Restaurant      in fiscal   year
1971 resulted     in a net loss of $340,728 ($286,578 to
March 31, 1971), which included equipment expenditures               of
$9,813 ($8,947 to March 31, 1971), compared with a net loss
in fiscal    year 1970 of $298,715, which included equipment
expenditures     of $5,345.    The increase of $42,013 in the
loss was caused by higher labor,         food, and other operating
costs which were not offset       by corresponding       increases in
prices.     Pursuant to the provisions       of House Resolution       429,
enacted May 18, 1971, additional         funds of $106,812 were
transferred    to the House Restaurant       from the appropriations
for Contingent      Rxpenses,  House  of   Representatives,     Miscel-
laneous Items, to absorb the balance of the Restaurant's
loss for fiscal      year 1971.

       As of June 26, 1971, the Committee on House Administra-
tion established   a contributed    capital account, to be main-
tained at $50,000, to provide the Restaurant with working
capital.    In the future the Restaurant will be reimbursed
for actual operating     losses after each 4-week accounting pe-
riod to permit it to maintain a liquid      position.

       A condensed comparison of the food and beverage and
cigar-stand   merchandise sales and operating results   for
each of the units for fiscal   years 1971 and 1970 follows,




                                     3
                                                   1971                               1970
                                                      Operating                          -Operating
                                                      profit    or                        profit   or
                                         Sales          loss(-)             Sales          loss(-)

Food and beverages:
    Dining rooms:
         Congressional               $   194,867        -$237,134     $     229,229        -$234,673
         Members'                         18,574           -38,237           20,409           -35,764
    Cafeterias:
         Longworth Building              421,389          -76,481           394,027          -75,107
         Capitol   Building               96,558          -25,693            86,599          -35,155
         Rayburn Building                479,640          -78,407           455,065          -35,533
    Carryout service:
         Longworth &i.lding               93,440             10,301          93,374             19,430
         Cannon Building                 132,652             25,378         121,456             28,263
         Rayburn Building                 87.901              7.244          87.785             10.164

              Total                  $1,525.021         -$413,029     $1.487.944           -$358.357

Number of guests      served          1.683.759                           1.677.360
                                                                          --
Cigar-stand     merchandise:
     Congressional     dining room   $    34,609         $    7,753   $      38,820         $    8,614
     Cafeterias:
          Longworth Building             160,921             44,405         137,982             33,171
           Capitol Building               16,811              5,363          13,448              3,664
           Rayburn Building               88,574             20,030          73,722             14.485

              Total                  $ 300.915           $ 77,551     $     263,972         $ 59.934


      A comparative   statement of assets and liabilities      of
the House Restaurant at June 26, 1971, and June 27, 1970, is
presented as schedule 1. A comparative        statement of opera-
tions for fiscal    years 1968 through 1971 is presented as
schedule 2, and a statement of sources and application         of
funds for fiscal    year 1971 is presented as schedule 3. A
comparison of sales and operating     results    for each of the
units for fiscal    year 1971 is presented as exhibit     A.




                                             4
                            CHAPTER3

                      ACCOUNTSRECEIVABLE

      The following schedule shows a comparison of the re-
ceivables  at June 30, 1971, and June 30, 1970.

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

  0 to 30 days        $24,307        76       $31,796        57
 31 to 60 days          5,510        17        12,037        22
 over 60 days           2,202a        7        12,000        21

     Total            $32,019      =100       $55,833      j&o

aIncludes accounts totaling   $966 outstanding  over 90 days
 compared with accounts totaling   $9,508 outstanding   over 90
 days in fiscal  year 1970. This is approximately     a 90-
 percent decrease.

       At March 31, 1971, the outstanding       accounts receivable
had reached an all-time      high of $65,791.     In an effort   to
reduce the amount outstanding,       the Select Committee sent out
collection   letters.   As a result     of this effort,  the total
amount outstanding    decreased to $32,018 at June 30, 1971, a
reduction   of approximately     51 percent,

     We did not confirm the accounts receivable   at June 30,
1971; however, a review of July and August collections    showed
that $28,366 or about 89 percent of the receivables    at
June 30, 1971, had been collected  by August 31, 1971.
                                CHAPTER4

                  OPINION OF FINANCIAL STATEMENTS

         The accompanying financial       statements     (schs. 1 through
3) were prepared by us on the basis of accounting                records
maintained by the House Restaurant Accounting Office.                   Trans-
actions are recorded on an accrual basis except that the
cost of equipment and furnishings             acquired with Restaurant
funds is recorded as an expense in the period acquired
rather than charged off over the period of their useful
life.      Also the statements do not include the cost of equip-
ment and furnishings        acquired with funds appropriated          to
the Architect      of the Capitol      or the cost of certain      benefits
and services furnished         to the Restaurant without charge,
such as space; ordinary         building    repairs    and maintenance;
utilities;     garbage disposal;       menus and forms printed       by the
Government Printing       0ffice;and     personal services of the
staffs     of the Architect     of the Capitol,      the Select Committee
on the Restaurant,       and the Committee on House Administration.

       In our opinion,   the financial      statements  (schs. 1
through 3), which were prepared on a basis consistent            with
that of the preceding year and in accordance with the ac-
counting practices     and financial     arrangements described
above, present fairly      the financial     position  of the House
of Representatives     Restaurant    at June 26, 1971, the results
of its operations,     and the sources and application        of its
funds for the year then ended.




                                      6
                                                                           SCHEDULE1

                          HOUSEOF REPRESENTATIVES
                                                RESTAURANT



                 COPIPARATIVE
                            STATF&lENIOF ASSETSAND LIABILITIES

                                JUNE 26, 1971, AND JUNE 27, 1970



                                               June 26, 1971         June 27, 1970
            ASSETS
CASH:
   Funds with U.S. Treasury                 $157,280                $ 93,466
   Undeposited receipts                       18,166                  23,489
   Petty cash and change funds                12,950    $188,396      12,950 $129,905
ACCOUNTSRECEIVABLE                                       135,847a                 62,350
INVENT.ORYOF FOOD, BEVERAGES,
  MERCHANDISE,AND SUPPLIES,
  AT COST                                                 46,882                  43,563
        Total    assets                                 $371.125                $235;818
   LIABILITIES     AND EQUITY
LIABILITIES:
    Amounts due vendors                     $159,891                $ 89,427
    Net payroll   and benefits                64,002                  36,608
    Federal and D.C. withhold-
       ing taxes                              15,777                   5,394
    Unclaimed wages                               202                     202
    Buployees' accrued leave                  55,971                  81,047
    Allowance for purchase of
       china, glassware, silver-
       ware, and kitchen uten-
       sils                                   23,458                  15,900
        Total     liabilities                           $319,301                $228,578
EQUITY OF THE HOUSEOF REPRE-
  SENTATIVES:
    At beginning of year                                             60,955
    Current-year appropriations              385,312
                                               7,240b               245,000

                                             392,552                 305,955
    Less net loss for fiscal
      year (sch. 2)                          340,728                 298,715
        Total    equity                                   51,824                   7,240

        Total liabilities            and
          esuitr                                        $371,125                $235,818

aIncludes amount due from appropriations  for House of Representatives Miscel-
 laneous Items (H. Res. 429, May 18, 19711, $106,812.54.
b Supplemental appropriation, fiscal year 1970 (Pub. L. 91-3051, $8500; regular
 appropriation,  fiscal year 1971 (Pub. L. 91-382), $270,000; transfer from Mis-
 cellaneous Items (H. Res. 429, May 18, 19711, $106,812.54.

                                                7
                                                                                                         SCHEDULE2


                       HOUSE         OF         REPRESENTATIVES                       RESTAURANT


                                              COMPARATIVE STATEMENTOF OPERATIONS
                  FOR FISCAL YEARS E..DED JiXE 26, 1971,JUNE 27, 1970, JUNE 28, 1969, AND JUNE 29, 1968


                                        June 26, 1971            June 27, 1970           June 28, 1969          June 29. 1968-
                                                Percent                  Percent                 Percent                Percent
                                                  of                       of                      of                     of
                                      Anount     &             haunt      sales        Amount     sales       Amount     sales
SALES OF FOODAND BEVERAGES:
    Regular services        $1,307,380               85.7    $1,281,422       86.1   $1,132,965     86.0    $1,193,990      88.5
    Catering                    217.641             14.3         206.522    L 13 9       175.744   14.0         155,621    11.5
          Total                     1,525,021       100.0     1,487,944     100.0     1,308,709    100.0     1.349,611     100.0
     Cost of food and bever-
       ages sold                       647.388      L 42 5       628,264    A 42 2      505,319    A 38 6       580.592    L 43 0
GROSS PROFIT                           877.633      L 57 5       859.680    L 57 8      803,390    L 61 4       769,019    57.0
OPERATING EXPENSES:
   Salaries     and wages:
         Straight   time               901,650       59.1        868,984     58.4       758,786     57.9        857.059     63.5
         Overtime                       46,892        3.1         39,062      2.6        25,857      2.0         51,510      3.8
   Leave expense                        72,831        4.8         76,647      5.2        61,342      4.7         68.495      5.1
   Employee meals                       27,600        1.8         27,461      1.8        24,960      1.9         35;454      2.6
   Employee benefits                    70,715        4.6         61,030      4.1        50,556      3.9         52,586      3.9
   Laundry                              56,809        3.7         49,577      3.3        36,461      2.8         43;006      3.2
   Paper supplies                       44,665        2.9         35,524      2.4        26,064      2.0         25;487      1.9
   Cleaning supplies                    15,022        1.0         13,600      0.9         7,294      0.6         10.900      0.8
   Miscellaneous                        30,929        2.0         23,595      1.6        12,096      0.9         191585      1.5
   Replacement of china,
     glassware,     silverware,
     and kitchen utensils                 23,549    1.6            22.557   L 15         19.825    1.5           20.237    1.5
         Total                      1.290.662       84.6      1.218.037     81.8      1.023.241    78.2      1.184.319     87.8
LOSS ON FOODAND BEVERAGES
  OPERATIONS                           413.029      A 27 1      358.357     A24 0       219,851    - 16 8       415,300    L30 a
CIGAR-STAND MERCHANDISE:
    Sales                              300,915      100.0       263,972     100.0       236,733    100.0        256,463    100.0
    Cost of sales                      223,364      L 74 2      204,038     77.3        193,732    81.8         210.070    81.9
PROFIT ON CIGAR-STAND OPERA-
  TIONS                                   77.551    A25 8          59.934   A22 7        43,001    18.2          46,393    18.1
VENDING MACHINE COMMISSIONS                4.563                    5.053                 4.625                   6.195
NETOPERATINGLOSS                       330,915                  293,370                 172,225                 362,712
EQUIPMENT EXPENDITURJZS                    9.813                    5.345                     67                  4,249
NET LOSS F'ORYEAR                  $--- 340.728              $~- 290.715             $ 172.292              $z.--366.961




                                                               8
                                                  SCHEDULE 3


       HOUSE OF REPRESENTATIVESRESTAURANT

  STATEMENT OF SOURCESAND APPLICATION OF FUNDS

         FISCAL YEAR ENDED JUNE 26, 1971


FUNDS PROVIDED BY:
   Appropriations                          $      385,312
   Sales                                       1,830,500

        Total   funds   provided           $2,215,812

FUNDS APPLIED TO:
    Cost of merchandise sold               $     870,752
    Salaries and wages                           948,542
    Other operating  expenses                    334,564
   Equipment expenditures                          9,813
    Increase in working capital                   52,141

        Total   funds applied              $2,215,812




                             9