Financial Audit: Senate Restaurants Revolving Fund for Fiscal Years 1999
and 1998 (Letter Report, 04/12/2000, GAO/AIMD-00-98).

Pursuant to a congressional request, GAO reviewed the financial
statements of the Senate Restaurants Revolving Fund for the period ended
September 30, 1999 and 1998. GAO contracted with the independent public
accounting firm of KPMG Peat Marwick LLP to conduct the audit.

GAO noted that: (1) the financial statements were fairly presented in
conformity with generally accepted accounting principles (2)
Management's assertion that internal controls in place on September 30,
1999, were: (a) effective in safeguarding assets against unauthorized
acquisition, use, or disposition; (b) assuring material compliance with
laws and regulations; and (c) assuring that there have been no material
misstatements in the financial statements is fairly stated; and (3)
there was no reportable noncompliance with selected provisions of laws
and regulations tested.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD-00-98
     TITLE:  Financial Audit: Senate Restaurants Revolving Fund for
	     Fiscal Years 1999 and 1998
      DATE:  04/12/2000
   SUBJECT:  Accounting procedures
	     Revolving funds
	     Financial statement audits
	     Internal controls
	     Financial management
	     Auditing standards
	     Reporting requirements
	     Auditing procedures
	     Fund audits
IDENTIFIER:  Senate Restaurants Revolving Fund

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GAO/AIMD-00-98

Appendix I: Report on Audit of the United States Senate
Restaurants Revolving Fund

6

Independent Auditor's Report 6

Balance Sheets 10

Statements of Operations and Changes in U.S. Government
Equity (Deficit) 11

Statements of Cash Flows 12

Notes to Financial Statements 13

Management's Report on Its Assertion About the Effectiveness
of Controls Over Financial Reporting 19

GAAP generally accepted accounting principles

GAO General Accounting Office

KPMG KPMG Peat Marwick LLP

Accounting and Information
Management Division

B-284650

April 12, 2000

The Honorable Mitch McConnell
Chairman, Committee on Rules
and Administration
United States Senate

The Honorable Alan M. Hantman
Architect of the Capitol

As you requested, we provided for an audit of the financial statements of
the United States Senate Restaurants Revolving Fund (the Fund) for the
fiscal years ended September 30, 1999 and 1998, by contracting with the
independent public accounting firm of KPMG Peat Marwick LLP (KPMG). 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 Fund, KPMG found the following:

ï¿½ The financial statements were fairly presented in conformity with
generally accepted accounting principles (GAAP).

ï¿½ Management's assertion that internal controls in place on September 30,
1999, 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 is fairly stated.

ï¿½ There was no reportable noncompliance with selected provisions of laws and
regulations it tested.

Although KPMG found that management fairly stated its assertion regarding
the effectiveness of the Fund's internal controls, KPMG did identify certain
matters involving the Fund's internal controls. These matters, while not
significant, were reported to management in a separate letter.

As disclosed in KPMG's report and note 1 to the Fund's financial statements,
the operation of the Senate Restaurants is economically dependent on
financial and other support provided primarily by the Architect of the
Capitol and the United States Senate.

ï¿½ The Fund's financial statements for fiscal years 1999 and 1998 include
direct financial support provided by the Architect and the Senate in the
form of transferred appropriations, loans, and/or appropriated capital
totaling about $1.1 million and $1.7 million, respectively.

ï¿½ The Fund's financial statements for fiscal years 1999 and 1998 do not
include other support that benefits the operation of the restaurants.
Specifically, the Architect of the Capitol provided about $205,000 and
$123,000, in fiscal years 1999 and 1998, respectively, for the purchase and
maintenance of restaurant-related capital items owned by the Architect. In
addition, during fiscal years 1999 and 1998, the Architect and the
Government Printing Office provided the Fund with support services--the
value of which cannot readily be determined.

As KPMG noted in its report, if operating trends continue, the Fund will
continue to require future financial support to maintain continuing
operations.

In connection with the audit of the Fund's financial statements performed by
KPMG, we reviewed its report and related working papers and, as necessary,
met with KPMG representatives and the Fund's management. Our review, as
differentiated from an audit in accordance with generally accepted
government auditing standards, was not intended to enable us to express, and
we do not express, opinions on the Fund's financial statements and
management's assertions about the effectiveness of its internal controls or
conclude on compliance with laws and regulations. KPMG is responsible for
the attached Auditor's Report and for the conclusions expressed in the
report. However, our review disclosed no instances in which KPMG did not
comply, in all material respects, with generally accepted government
auditing standards.

This report is a matter of public record and is intended for the use of the
U.S. Senate, the Architect of the Capitol, the management of the Senate
Restaurants and other interested parties. We are sending copies of this
report to Senator Christopher J. Dodd, Ranking Minority Member, Senate
Committee on Rules and Administration; Senator Robert F. Bennett, Chairman,
and Senator Dianne Feinstein, Ranking Minority Member, Subcommittee on
Legislative Branch, Senate Committee on Appropriations; Senator Trent Lott,
Majority Leader; and Senator Tom Daschle, Minority Leader. Copies will be
made available to others upon request. Should you or your staffs have any
questions concerning our review of the audits, 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

Report on Audit of the United States Senate Restaurants Revolving Fund

Independent Auditor's Report

Balance Sheets

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

Notes to Financial Statements

Management's Report on Its Assertion About the Effectiveness of Controls
Over Financial Reporting

(917598)
*** End of document. ***