oversight

Financial Audit: Senate Restaurants Revolving Fund for Fiscal Years 1996 and 1995

Published by the Government Accountability Office on 1997-05-16.

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

                 United States General Accounting Office

GAO              Report to the Chairman, Committee on
                 Rules and Administration, U.S. Senate,
                 and the Architect of the Capitol


May 1997
                 FINANCIAL AUDIT
                 Senate Restaurants
                 Revolving Fund for
                 Fiscal Years 1996 and
                 1995




GAO/AIMD-97-93
          United States
GAO       General Accounting Office
          Washington, D.C. 20548

          Accounting and Information
          Management Division

          B-275906

          May 16, 1997

          The Honorable John Warner
          Chairman, Committee on Rules
            and Administration
          United States Senate

          The Honorable Alan M. Hantman
          Architect of the Capitol

          In response to your requests and as discussed with each of your offices,
          we contracted with the independent public accounting firm of KPMG Peat
          Marwick LLP (KPMG) to audit the financial statements of the United
          States Senate Restaurants Revolving Fund as of September 28, 1996 and
          September 30, 1995, and for the years then ended. The contract required
          that the audit be done in accordance with generally accepted government
          auditing standards and GAO’s Financial Audit Manual.

          In its audit of the United States Senate Restaurants Revolving Fund, KPMG
          found the following:

      •   The financial statements were reliable in all material respects.
      •   Management fairly stated its assertion that internal controls in place on
          September 28, 1996, were effective in safeguarding assets against
          unauthorized acquisition, use, or disposition; assuring material compliance
          with laws and regulations; and assuring that there have been no material
          misstatements in the financial statements.
      •   There was no reportable noncompliance with laws and regulations it
          tested.

          KPMG’s audit disclosed a significant weakness related to the adequacy of
          logical access controls over the Fund’s accounting and information
          management system and related data. Logical access controls use
          computer software and related procedures to prevent or detect
          unauthorized access to computer software and data. In commenting on a
          draft of KPMG’s report, Senate Restaurants management agreed with
          KPMG’s assessment of the weakness and agreed to take corrective action.
          Implementation of the corrective action will be reviewed in future audits.

          As disclosed in the Fund’s financial statements and accompanying notes
          and KPMG’s report, the Fund’s financial statements reflect the results of
          the Senate Restaurants’ operating activities financed through Fund




          Page 1                                       GAO/AIMD-97-93 Senate Restaurants
B-275906




receipts. The Fund has had to rely on loans, advances, and transfers of
appropriated capital to offset cumulative operating losses totaling over
$2.2 million. As noted in footnote 3 to the financial statements, these
operating losses do not include (1) other identifiable costs, such as those
related to management personnel and capital expenditures, paid directly
from funds appropriated to the Architect of the Capitol and (2) other
costs, such as those related to space and utilities, which are not readily
identifiable. KPMG’s report disclosed that if past operating trends
continue, the Fund will require supplemental funding to support its future
operations.

In connection with your request, we reviewed the KPMG report and
related working papers and, as necessary, inquired with KPMG
representatives. Our review, as differentiated from an audit, was not
intended to enable us to form an opinion on the fair presentation of the
Fund’s financial statements, the effectiveness of internal controls, or
compliance with laws and regulations. KPMG is responsible for the
attached Auditors’ report, dated February 24, 1997, and for the conclusions
expressed therein. However, the results of our review disclosed no
instances where KPMG did not comply, in all material respects, with
generally accepted government auditing standards.


We are sending copies of this report to interested committees and other
interested parties. Copies will be made available to others on request.
Should you or your staffs have any questions concerning our review of the
audit, please contact me on (202) 512-9406 or John J. Reilly, Assistant
Director, on (202) 512-9517.




Robert W. Gramling
Director, Corporate Audits
  and Standards




Page 2                                       GAO/AIMD-97-93 Senate Restaurants
Page 3   GAO/AIMD-97-93 Senate Restaurants
Contents



Letter                                                                                           1


Appendix I                                                                                       6
                         Independent Auditors’ Report                                            6
Audit of United States   Balance Sheets                                                         11
Senate Restaurants       Statements of Operations and Changes in U.S. Government                12
                           Equity (Deficit)
Revolving Fund           Statements of Cash Flows                                               13
                         Notes to Financial Statements                                          14




                         Page 4                                   GAO/AIMD-97-93 Senate Restaurants
Page 5   GAO/AIMD-97-93 Senate Restaurants
Appendix I

Audit of United States Senate Restaurants
Revolving Fund

Independent Auditors’ Report




                               Page 6   GAO/AIMD-97-93 Senate Restaurants
Appendix I
Audit of United States Senate Restaurants
Revolving Fund




Page 7                                      GAO/AIMD-97-93 Senate Restaurants
Appendix I
Audit of United States Senate Restaurants
Revolving Fund




Page 8                                      GAO/AIMD-97-93 Senate Restaurants
Appendix I
Audit of United States Senate Restaurants
Revolving Fund




Page 9                                      GAO/AIMD-97-93 Senate Restaurants
Appendix I
Audit of United States Senate Restaurants
Revolving Fund




Page 10                                     GAO/AIMD-97-93 Senate Restaurants
                 Appendix I
                 Audit of United States Senate Restaurants
                 Revolving Fund




Balance Sheets




                 Page 11                                     GAO/AIMD-97-93 Senate Restaurants
                                          Appendix I
                                          Audit of United States Senate Restaurants
                                          Revolving Fund




Statements of Operations and Changes in U.S. Government Equity (Deficit)




                                          Page 12                                     GAO/AIMD-97-93 Senate Restaurants
                           Appendix I
                           Audit of United States Senate Restaurants
                           Revolving Fund




Statements of Cash Flows




                           Page 13                                     GAO/AIMD-97-93 Senate Restaurants
                                Appendix I
                                Audit of United States Senate Restaurants
                                Revolving Fund




Notes to Financial Statements




                                Page 14                                     GAO/AIMD-97-93 Senate Restaurants
Appendix I
Audit of United States Senate Restaurants
Revolving Fund




Page 15                                     GAO/AIMD-97-93 Senate Restaurants
Appendix I
Audit of United States Senate Restaurants
Revolving Fund




Page 16                                     GAO/AIMD-97-93 Senate Restaurants
Appendix I
Audit of United States Senate Restaurants
Revolving Fund




Page 17                                     GAO/AIMD-97-93 Senate Restaurants
Appendix I
Audit of United States Senate Restaurants
Revolving Fund




Page 18                                     GAO/AIMD-97-93 Senate Restaurants
           Appendix I
           Audit of United States Senate Restaurants
           Revolving Fund




(917559)   Page 19                                     GAO/AIMD-97-93 Senate Restaurants
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