Financial Audit: Senate Restaurants Revolving Fund for Fiscal Years 1993
and 1992 (Letter Report, 10/12/94, GAO/AIMD-95-1).

GAO audited the balance sheets of the Senate Restaurants Revolving Fund
for fiscal years 1993 and 1992 and the related statements of operations
and cash flows. The Fund operates restaurants for Senators, Senate
employees, and the public. 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
affecting the financial statements would be prevented or detected; and
there was no material noncompliance with laws and regulations.

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

 REPORTNUM:  AIMD-95-1
     TITLE:  Financial Audit: Senate Restaurants Revolving Fund for 
             Fiscal Years 1993 and 1992
      DATE:  10/12/94
   SUBJECT:  Internal controls
             Compliance
             Congressional privileges
             Dining facilities
             Financial records
             Financial statement audits
             Revolving funds
             Auditing standards
             Accounting procedures
             Civil audits
IDENTIFIER:  Senate Restaurant Revolving Fund
             
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Cover
================================================================ COVER


Report to Architect of the Capitol

October 1994

FINANCIAL AUDIT - SENATE
RESTAURANTS REVOLVING FUND FOR
FISCAL YEARS 1993
AND 1992

GAO/AIMD-95-1

Senate Restaurants Revolving Fund


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


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


B-114871

October 12, 1994

The Honorable George M.  White
Architect of the Capitol

Dear Mr.  White: 

Pursuant to your request and section 5 of the act of July 6, 1961 (40
U.S.C.  174j-5), we audited the balance sheets of the United States
Senate Restaurants Revolving Fund (the Fund) as of October 2, 1993
and October 3, 1992, and the related statements of operations and
cash flows for the years then ended.  We found

  the financial statements were reliable in all material respects;

  internal controls in effect on October 2, 1993, 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. 

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 of the Senate
Restaurants Revolving Fund as of October 2, 1993 and October 3, 1992,
present fairly, in conformity with generally accepted accounting
principles, the Fund's

  assets, liabilities, and government equity;

  results of operations; and

  cash flows. 

As discussed in note 3, the financial statements present the results
of activities financed through the Senate Restaurants Revolving Fund
and are not intended to present the financial position and results of
operations of the Senate Restaurants as a whole.  Other readily
identifiable costs, such as management personnel salaries and
benefits, amounting to nearly $1.8 million in fiscal year 1993, which
are financed by appropriated funds, are not included on the financial
statements.  These costs are disclosed in note 3.  Also, the
statements do not include such costs as space and utilities, which
are not readily identifiable. 

The Senate Restaurants Revolving Fund began incurring losses in
fiscal year 1987.  As of October 2, 1993, the Fund had cumulative
losses totaling over $1 million.  The Fund has relied on loans and
appropriated fund transfers to offset these losses and continue to
pay Fund expenses.  The Senate Restaurants Revolving Fund reported a
small profit in fiscal year 1993.  However, operating results for the
first 9 months of fiscal year 1994 indicate that the Fund will
probably incur a loss for fiscal year 1994.  If trends continue, in
addition to the appropriated funds required for other identifiable
and nonidentifiable costs mentioned above, the Fund itself will
continue to require supplemental funding, such as additional loans or
appropriated fund transfers, to support its future operations. 


   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 maintain accountability
     for assets. 

Those controls in effect on October 2, 1993, 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 fiscal year 1992 are
presented in GAO/AIMD-94-64, dated April 8, 1994. 


   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

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, including those
     over revenues, payroll and other expenditures, inventory,
     treasury, and financial reporting; and

  tested compliance with selected provisions of 40 U.S.C.  174j-1
     through j-9, Department of Treasury regulations on cash, Office
     of Personnel Management regulations on employee benefits and
     employer costs, and Internal Revenue Service regulations on
     federal income and social security tax withholdings. 

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 July
6, 1994. 

Sincerely yours,







Charles A.  Bowsher
Comptroller General
of the United States


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

   Balance Sheets

   (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.)



   (See figure in printed
   edition.)



   (See figure in printed
   edition.)