Financial Audit: House Recording Studio Revolving Fund for the Periods
Ended 9/30/92 and 12/31/91 (Letter Report, 05/19/94, GAO/AIMD-94-82).

GAO audited the financial statements of the House Recording Studio
Revolving Fund for the periods ended September 30, 1992, and December
31, 1991, and the related statements of operations and cash flows.  The
studio makes photographic prints, as well as radio and television tape
recordings, for Members of Congress and congressional committees.  GAO
found that the financial statements were reliable in all material
respects; internal controls reasonably ensured that losses,
noncompliance with laws and regulations, and misstatements material to
the financial statements would be prevented or detected; and there was
no material noncompliance with laws and regulations.

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

 REPORTNUM:  AIMD-94-82
     TITLE:  Financial Audit: House Recording Studio Revolving Fund for 
             the Periods Ended 9/30/92 and 12/31/91
      DATE:  05/19/94
   SUBJECT:  Revolving funds
             Accounting systems
             Compliance
             Internal controls
             Federal fund accounts
             Auditing standards
             Financial records
             Financial management
             Legislative bodies
             Financial statement audits
IDENTIFIER:  House Recording Studio Revolving Fund
             
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Cover
================================================================ COVER


Report to the Clerk of the House of Representatives

May 1994

FINANCIAL AUDIT - HOUSE RECORDING
STUDIO REVOLVING FUND FOR THE
PERIODS ENDED 9/30/92 AND 12/31/91

GAO/AIMD-94-82

House Recording Studio Revolving Fund


Abbreviations
=============================================================== ABBREV


Letter
=============================================================== LETTER


B-114842

May 19, 1994

The Honorable Donnald K.  Anderson
Clerk of the House of Representatives

Dear Mr.  Anderson: 

As you requested, we audited the accompanying statements of financial
position of the House of Representatives Recording Studio Revolving
Fund as of September 30, 1992 and December 31, 1991, and the related
statements of operations and cash flows for the periods then ended. 
We found

  the financial statements were reliable in all material respects;

  internal controls in effect on September 30, 1992, provided
     reasonable assurance that losses, noncompliance with laws and
     regulations, and misstatements material to the financial
     statements would be prevented or detected; and

  no material noncompliance with laws and regulations we tested for
     1992. 

The following sections outline each conclusion in more detail and
discuss the scope of our audits. 


   OPINION ON FINANCIAL STATEMENTS
------------------------------------------------------------ Letter :1

The financial statements and accompanying notes present fairly, in
conformity with generally accepted accounting principles, the Fund's

  assets, liabilities, and government equity;

  revenues and expenses; and

  cash flows. 

The financial statements present the activities of the House of
Representatives Recording Studio Revolving Fund and are not intended
to present the financial position and results of operations of the
House Recording Studio as a whole.  Other costs, primarily salaries
and benefits, that are not financed directly by the Revolving Fund,
but which are readily identifiable, are presented in note 3. 


   OPINION ON INTERNAL CONTROLS
------------------------------------------------------------ Letter :2

The internal controls we evaluated were those designed to

  safeguard assets against loss from unauthorized use or disposition;

  assure the execution of transactions in accordance with laws and
     regulations; and

  properly record, process, and summarize transactions to permit the
     preparation of financial statements and to maintain
     accountability for assets. 

Those controls in effect on September 30, 1992, provided reasonable
assurance that losses, noncompliance, or misstatements material to
the financial statements would be prevented or detected.\1


--------------------
\1 Our reports on the Fund's internal control structure and
compliance with laws and regulations for 1991 are presented in
GAO/AIMD-93-13, dated August 10, 1993. 


   COMPLIANCE WITH LAWS AND
   REGULATIONS
------------------------------------------------------------ Letter :3

Our current year audit tests for compliance with selected provisions
of laws and regulations disclosed no material instances of
noncompliance.  Also, nothing came to our attention in the course of
our other work to indicate that material noncompliance with such
provisions occurred. 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
------------------------------------------------------------ Letter :4

Studio Management is responsible for

  preparing annual financial statements in conformity with generally
     accepted accounting principles,

  establishing and maintaining internal controls to provide
     reasonable assurance that the internal control objectives
     mentioned above are met, and

  complying with applicable laws and regulations. 

We are responsible for obtaining reasonable assurance about whether
(1) the financial statements are reliable (free of material
misstatement and presented fairly in conformity with generally
accepted accounting principles) and (2) relevant internal controls
are in place and operating effectively.  We are also responsible for
testing compliance with selected provisions of laws and regulations. 

In order to fulfill these responsibilities, we

  examined, on a test basis, evidence supporting the amounts and
     disclosures in the financial statements;

  assessed the accounting principles used and significant estimates
     made by management;

  evaluated the overall presentation of the financial statements;

  evaluated and tested relevant internal controls which encompassed
     the following areas:  (1) treasury, (2) revenues, (3)
     expenditures, (4) property (equipment), (5) inventory, and (6)
     financial reporting; and

  tested compliance with selected provisions of section 105 of the
     Legislative Branch Appropriations Act, 1957, as amended (2
     U.S.C.  123b), and of the rules and regulations of the Special
     Committee on the House Recording Studio and of the Committee on
     House Administration. 

We limited our work to accounting and other controls necessary to
achieve the objectives outlined in our opinion on internal controls. 
Because of inherent limitations in any system of internal control,
losses, noncompliance, or misstatements may nevertheless occur and
not be detected.  We also caution that projecting our evaluation to
future periods is subject to the risk that controls may become
inadequate because of changes in conditions or that the degree of
compliance with controls may deteriorate. 

We performed our work in accordance with generally accepted
government auditing standards.  We completed our audit work on
December 15, 1993. 

Sincerely yours,






Charles A.  Bowsher
Comptroller General
of the United States


FINANCIAL STATEMENTS
=========================================================== Appendix 0

   Statements of Financial
   Position

   (See figure in printed
   edition.)

   Statements of Operations

   (See figure in printed
   edition.)

   Statements of Cash Flows

   (See figure in printed
   edition.)

   Notes to Financial Statements

   (See figure in printed
   edition.)



   (See figure in printed
   edition.)



   (See figure in printed
   edition.)