oversight

Audit of the Stationery Revolving Fund, Fiscal Year 1970

Published by the Government Accountability Office on 1971-01-08.

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

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Audit Of The Stationery
Revolving Fund
Fisca I Year 1970          &7?4862




House of Representatives




BY THE COMPTROLLER   GENERAL
OF THE UNITED STATES




                               I     JAN. 619-71
                                   COMPTROLLER          GENERAL       OF     THE      UNITED    STATES
                                                      WASHINGTON.      DC.         20548




                 B- 114862




                 Dear   Mr.   Jennings:

                           The accompanying       report     summarizes        the results   of
                 our audit of the Stationery         Revolving     Fund,     House   of Rep-
     5 ?
I                resentatives,     for the fiscal     year ended June 30, 1970.            The
     - i
,c               audit was made pursuant          to your request        dated June 1, 1970.
 /
                         A copy of this          report     is being          sent         to the Chairman,
       :‘: lj/   Committee     on House           Administration.                            ‘,( ’ - - .

                                                                    Sincerely              yours,




                                                                    Comptroller                General
                                                                    of the United              States

                 The Honorable      W. Pat Jennings
                 Clerk of the    House  of Representatives                                 ”
    COMPTROLLER
             GENERAL'S                     AUDIT OF THE STATIONERY REVOLVINGFUND
I
    REPORT
         TO THECLERKOF                     FISCAL YEAR 1970 B-114862
I
I
    THEHOUSEOF
    REPRESENTATIVES

    DIGEST
    ----me

    WHYTHEAUDIT WASMADE
           The General Accounting Office    (GAO) has made an audit of the Stationery
           Revolving Fund at the request    of the Clerk of the House of Representa-
           tives.   (See wp.)

    FINDINGSAND CONCLUSIONS
           GAO found that improvements had been made in the two areas that were
           reported upon in fiscal year 1969--the payment of vendors' invoices was
I          being handled more promptly by the Office Supply Service and an inter-
I
           mediate level of supervision had been established.  (See p. 5.)

           GAO believes that greater management attention  should be given to the
I
I          areas of sales and inventory control.   (See pp. 5 and 6.)

           In GAO's opinion the accompanying financial    statements, prepared on a
I
           basis consistent with that of the preceding year and in accordance with
           the accounting practice and financial   arrangement described on page 7,
           present fairly   the financial position of the Stationery   Revolving Fund
           at June 30, 1970, the results of its operations,     and the sources and ap-
           plication  of its funds for the year then ended.




I
I




    Tear Sheet
                         Contents
                                                                 Page

DIGEST

INTRODUCTION

OPERATIONS

IMPROVEMENTSIN OPERATIONSAND MANAGEMENT
    Payment of vendors'   invoices
    Realignment of duties

SCOPE OF AUDIT

OPINION OF FINANCIAL STATEMENTS

                                                      Schedule
FINANCIAL STATEMENTS
    Comparative statement of assets and
      liabilities,      June 30, 1970 and 1969            1       11
    Comparative statement of operations         and
      retained     income for fiscal   years ended
      June 30, 1970 and 1969                              2       12
    Comparative statement of sources and
      application      of funds for fiscal   years
      ended June 30, 1970 and 1969                        3       13
    Statement of members' stationery        ac-
      counts for the fiscal       year ended
      June 30, 1970                                       4       14

APPENDIX

    Letter from Clerk of the House of Rep-
      resentatives,  dated June 1, 1970                           17
COMPTROLLER
          GENERAL'S                 AUDIT OF THE STATIONERYREVOLVINGFUND
REPORT
     TO THECLERKOF                  FISCAL YEAR 1970 B-114862
THEHOUSEOF
REPRESEflTATl-VES

DIGEST
------

WHYTHEAUDIT WASMADE
    The General Accounting Office       (GAO) has made an audit of the Stationery
    Revolving Fund at the request       of the Clerk of the House of Representa-
    tives.   (See app.)

FINDINGSAND CONCLUSIONS
    GAO found that improvements had been made in the two areas that were
    reported upon in fiscal year 1969--the payment of vendors' invoices was
    being handled more promptly by the Office Supply Service and an inter-
    mediate level of supervision had been established.   (See p. 5.)

    GAO believes that greater management attention  should be given to the
    areas of sales and inventory control.   (See pp. 5 and 6.)

    In GAO's opinion the accompanying financial    statements, prepared on a
    basis consistent with that of the preceding year and in accordance with
    the accounting practice and financial   arrangement described on page 7,
    present fairly   the financial position of the Stationery   Revolving Fund
    at June 30, 1970, the results of its operations,     and the sources and ap-
    plication  of its funds for the year then ended.




                                    1
                            --INTRODUCTION
       The General Accounting Office has made an audit of the
Stationery   Revolving Fund, House of Representatives, for the
fiscal   year ended June 30, 1970. The scope of our audit is
described on page 7.

       The Stationery    Revolving Fund,which was established         by
the act of July 17, 1947 (2 U.S.C. 46b-l),          is administered
by the Office Supply Service under the jurisdiction            of the
Clerk of the House of Representatives,        subject to rules and
regulations     of the Committee on House Administration,         The
Service supplies members, committees,        departments,    and of-
ficers    of the House with stationery     and office   supplies     at
cost (exclusive      of salaries  and other operating     expenses).

       A stationery allowance of $3,000 for each member and
for the Resident Commissioner from Puerto Rico for a full
regular   session was authorized    by the act of July 2, 1954,
as amended (2 U.S.C. 46b).       A pro rata allowance for each
member elected for a portion      of a term was authorized by
the act of February 27, 1956 (2 U.S.C. 46b-2).

     Funds for these allowances are provided for in the an-
nual legislative  branch appropriation   acts for contingent
expenses of the House of Representatives     and are adminis-
tered through the Stationery   Revolving Fund.

       The members' stationery  allowances are credited    to
their individual    accounts at the beginning of each session,
or at such other times as new members qualify,     and may be
withdrawn in cash or applied to purchases from the Office
Supply Service.     When a member*s service is terminated,    any
stationery   allowance remaining to his credit   is payable in
cash to him or his heirs.

        Stationery    is furnished   by the Office Supply Service to
officers,      committees,   and others upon receipt    of requisitions
approved by the Chairman, Committee on House Administration.
The Stationery      Revolving Fund is reimbursed monthly for
this stationery       from funds appropriated     for miscellaneous
items and for special and select committees of the House,




                                   2
      Stationery and supplies are also furnished    on a reim-
bursable basis to other authorized  House officials    and
committees having funds not under direct   control. of the
Committee on House Administration.
                              OPERATIONS

       A comparative     statement of operations       and retained     in-
come for fiscal      years ended June 30, 1970 and 1969,is pre-
sented as schedule 2. Sales of merchandise amounted to
$1,339,231 in fiscal        year 1970 compared with $1,242,958 in
fiscal    year 1969. Sales of services          amounted to $176,274
in fiscal     year 1970 compared with $208,374 in fiscal            year
1969.     The services     included printing     services rendered by
the Majority      and Minority    Printing   Clerks of the House and
rental    fees for photocopying       equipment as authorized       by the
Committee on House Administration.            Net income for fiscal
year 1970 amounted to $14,728 compared with $12,985 for fis-
cal year 1969.




                                     4
                      IMPROVEMENTSIN OPERATIONS

                            AN'D MANAGEMENT

       In our fiscal   year 1969 report    (B-114862, December 19,
1969), we made recommendations regarding         the payment of
vendor invoices and a realignment       of staff duties that,we
believed,   would result    in a more efficient     and better man-
aged operation.      Our recent audit showed that improvements
had been made in both of these areas.

PAYMENTOF VENDORS' INVOICES

       The installation      of a new accounts payable system in
March 1970 greatly        improved the processing    of vendors
vouchers and reduced the normal invoice-paying           cycle from
30 to 7 days.       We observed that after March discounts       had
been taken within       the discount period,    which eliminated   the
extra work associated        with the charge-back of unearned dis-
colJnts.

REALIGNMENT OF DUTIES

        In our prior report, we cited a number of areas where
improvements could be achieved through a realignment    of
duties.

      During the latter    part of the fiscal   year, certain
management functions     were assigned to intermediate-grade
personnel.    Sufficient   time has not elapsed to permit an
appraisal   of this realignment    of duties.   We believe,   how-
ever, that greater management attention       should be given to
the following    areas.

      --Sales--Credit   sales to members had increased even
         though there was no authority    for the Office Supply
         Service to sell on credit.    Also price reductions
         not always were being passed on to the members
         promptly.

      --Inventory     control--The   cage in the stockroom for
          sensitive   items still  was being left open most of
          the day.    This was particularly    serious because there


                                   5
were no perpetual inventory  records being maintained    on
cage items which had a total   cost value of approximately
$20,000 at June 30, 1970.




                               6
                           SCOPE OF' AUDIT

      Our audit of the Stationery       Revolving Fund was made in
accordance with generally      accepted auditing        standards and
included a review of the operating         activities      of the Office
Supply Service,  House of Representatives,            and of the appli-
cable Federal laws; an observation        of the physical        count of
stock on hand; an examination        of selected financial         trans-
actions and records;    a verification      of members' stationery
account balances through the use of positive             confirmations;
and such other auditing    procedures      as we considered neces-
sary.

                 OPINION OF FINANCIAL STATEMENTS

      The comparative     statements of assets and liabilities
(schedule I), operations       and retained    income (schedule Z),
and sources and application       of funds (schedule 3), included
in this report were prepared by us from the books and rec-
ords of the Office Supply Service,          House of Representatives,
which are maintained      on an accrual basis.       Costs of sala-
ries and other operating       expenses of the Office Supply Ser-
vice were provided for under separate appropriations            for
the House of Representatives        and are not required     to be in-
cluded as expenses in the determination           of the net income
of the revolving    fund.

       In our opinion the accompanying financial         statements,
which were prepared on a basis consistent          with that of the
preceding year and in accordance with the accounting prac-
tice and financial     arrangement described      above,    present
fairly   the financial    position   of the Stationery    Revolving
Fund at June 30, 1970, the results         of its operations,     and
the sources and application        of its funds for the year then
ended.




                                   7
-CIAL   STATEMENTS
                                                                                                      SCHEDULE1


                    HOUSE                   OF           REPRESENTATIVES


                                        STATIONERY REVOLVING FUND



                       COMPARATIVE STATEMENT OF ASSETS AND LIABILITIES

                                            JUNE 30,          1970 AND 1969



                                                                     1970                             1969
                       ASSETS

CASH:
    In U.S. Treasury                                      $734,949                       $803,031
    Undeposited  receipts                                   14,320        $749,269         26,263      $ 829,294
ACCOUNTS RECEIVABLE:
    Comnittees, officers   of
      the House, and others                                   25,615                       14,917
    Members-- stationery ac-
      counts overdrawn                                            429       26,044              174           15,091
MERCHANDISE INVENTORY,                 at cost                             200,401                           183,833

               Total     assets                                           $975,714                     $1,028,218


LIABILITIES            AND RETAINED INCOME

ACCOUNTS PAYABLE (note                 a):
    Due vendors                                                           $ 45,420                     $      68,644

AMOUNT DUE MEMBERS (schedule                        4)                     729,629                           776,487
ALLOWANCE
        APPROPRIATED BUT NOT
   ALLOTED:
     Beginning    balance                                 $      150                     $ 3,650
     Current   year                                            2,850         3,000        -3,500b                 150
RETAINED INCOME (schedule                     2)                           197,665                           182,937
               Total     liabilities          and
                  retained         income                                 $975,714                     $1,028,218
aIn addition,  obligations  for undelivered                              orders      amounted    to $103,383         at
 June 30, 1970, and $73,416    at June 30,                             1969.
b Allocation           of previous  years'               appropriations        instead     of a transfer        of
 funds     from        the House contingent                 fund.



                                                                    11
        SCHEDULE2

                                 HOUSE              OF        REPRESENTATIVES


                                                  STATIONERY REXOLVING FUND




                          COMPARATIVESTATEhENT OF OPERATIONSARD RETAINED INCOME

                                  FOR FISCAL YEARS ENDED JUNE 30, 1970 AND 1969




                                             Fiscal year 1970                                         Fiscal     year 1969
                                      Merchan-                                            Merchan-
                                        dise       Services Combined                        dise           Services            Combined

NET SALES:
    Members                          $1,140,836          $176,274        $1,317,110      $1,006,877        $208,374        $1,215,251
    Committees, officers
      of the House, and
      others                              198,395                              198,395       236,081              -              236,081

             Total    net sales       1,339,231           176,274            1,515,505    1,242,958            208,374         1,451,332

COST OF SALES:
   Beginning inventory                    183,833                              183,833       179,450              -              179,450
   Purchases, less re-
      turns and dis-
      counts                          1,341,077           176,268            1,517,345    1,234,377            208,353         1,442,730

             Total                    1,524,910           176,268            1,701,178    19413,827            208,353         1,622,180

        Less ending     inven-
          tory                            200,401                              200,401       183,833              -              183,833

             Cost of sales            1,324,50?           176,268            1,500,777    1,229,994            208,353         1,438,347

NET INCOME FOR THE
  PERIOD                             s     14,722        S-         6$          14,728   $    12,964       S          2;   S      12,985

RETAINED INCOME:
    Balance beginning  of period                                         S     182,937                                     S     169,952
    Add net income for period                                                   14,728                                            12,985

        Balance,     end of period       (schedule       1)              $     197,665                                     $     182,937

Note:      Fiscal year 1970 salaries   of $215,741 ($183,953 in 19691, employee benefits     of
           $14,978 ($12,443 in 19691, and other operating    expenses of the Office Supply Service
           were provided for under separate appropriations    for the House of Representatives  and
           were not required  to be included as expense in determining   net income.




                                                                    12
                                                         SCHEDULE3


     HOUSE           OF        REPRESENTATIVES



                    STATIONERY REVOLVING FUND




                    COMPARATIVESTATEMENTOF

                 SOURCESAND APPLICATION OF FUNDS

       FOR FISCAL YEARS ENDED JUNE 30, 1970 AND 1969




                                          Fiscal year Fiscal year
                                              1970        1969
FUNDS PROVIDED:
   Appropriation     for stationery
      allowances                          $1,308,000    $1,308,000
    Transfer from contingent       fund         2,350         7,000
   Collection    from sales to other
      than members                           187,697       229,916
    Cash deposits by members                 350,662       292,864
   Refunds from vendors                        4,314
   Decrease in cash                           80,026

         Total   funds provided           $1,933,049    $1,837,780

FTJNDSAPPLIED:
    Payments to vendors                   $1,544,883    $1,399,389
    Cash withdrawals  by members              388,166       437,950
    Increase in cash                                             441

         Total   funds   applied          $1,933,049    $1,837,780




                                   13
SCHEDULE4

      HOUSE           OF      REPRESENTATIVES


                     STATIONERY REVOLVING FUND



           STATEMENTOF MEMBERS' STATIONERY ACCOUNTS

            FOR THE FISCAL YEAR ENDED JUNE 30, 1970



AMOUNT DUE MEMBERSAT JULY 1, 1969                         $     776,487

ADDITIONS:
    Amount provided by Legislative
       Branch Appropriations      Act,
       1970 (Public Law 91-1451, for
       2d session,   91st Congress          $1,305,000
    Amount provided by Legislative
      Branch Appropriations--pre-
      viously   not allotted                        150
    Pro rata allowance transferred
       from contingent    fund for new
      members serving portions         of
       terms                                      2,350

                                             1,307,500

    Cash deposits by members                   350,662
    Increase in debit balance         of
      members' accounts                             256       1,658,418

         Total   available                                    2,434,905

DEDUCTIONS:
   Stationery   purchases                    1,140,836
    Services authorized                         176,274
   Cash withdrawals                             388,166       1,705,276

AMOUNT DUE MEMBERSAT JUNE 30, 1970                        $     729,629




                                 14
APPENDIX




     15
                                                                               APPENDIX I




                                                     June 1, 1970




  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 cause a physical
  invent‘ory                 and audit   to be made of the Stationery           Room
  of the House of Representatives                        for   fiscal   year   1970.
               With kind          regards,   I am
                                                     Sincerely,


                                                                              lerk
                                                                           epresentatives




U.S.   GAO   Wash.,   D.C.
                                                    17