Financial Audit: Statement of Accountability of the House Office of
Finance for Fiscal Year 1993 (Letter Report, 04/04/95, GAO/AIMD-95-31).

GAO audited the statement of accountability of the House of
Representatives Office of Finance for fiscal year 1993.  The Finance
Office handles receipts and disbursements for, among others, House
Member staffs, congressional committees, and the Capitol Police.  GAO
found that the statement of accountability was reliable in all material
respects; internal controls reasonably ensured that losses,
noncompliance with laws and regulations, and misstatements affecting the
statement would be prevented or detected; and there was no material
noncompliance with laws and regulations.

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

 REPORTNUM:  AIMD-95-31
     TITLE:  Financial Audit: Statement of Accountability of the House 
             Office of Finance for Fiscal Year 1993
      DATE:  04/04/95
   SUBJECT:  Financial statement audits
             Cash management
             Accounting procedures
             Auditing standards
             Legislative bodies
             Funds management
             Appropriated funds
             Accountability
             Internal controls
             Compliance
IDENTIFIER:  House Information System
             
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Cover
================================================================ COVER


Report to the Chief Administrative Officer of the House of
Representatives

April 1995

FINANCIAL AUDIT - STATEMENT OF
ACCOUNTABILITY OF THE HOUSE OFFICE
OF FINANCE FOR FISCAL
YEAR 1993

GAO/AIMD-95-31

House Finance Office Accountability


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


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


B-259570

April 4, 1995

Mr.  Scot M.  Faulkner
Chief Administrative Officer
House of Representatives

Dear Mr.  Faulkner: 

As requested by the Acting Director of the former Office of
Non-Legislative and Financial Services, we audited the accompanying
Statement of Accountability for Appropriations and Other Funds
arising from cash transactions of the Office of Finance, House of
Representatives, for the fiscal year ended September 30, 1993. 

The House Office of Finance performed receipt and disbursement
activities for certain legislative branch organizations within the
House of Representatives.  These organizations included the House
Member staffs, committees, Capitol Police, and revolving funds listed
in the Statement of Accountability for Appropriations and Other
Funds.  The Statement of Accountability does not include appropriated
funds disbursed by the Sergeant at Arms\1 for Member salaries and
benefits and appropriated funds disbursed by the Architect of the
Capitol for utilities and maintenance of the Capitol and related
office buildings. 

During the period covered by our audit, the Office of Finance
maintained and relied on comprehensive, detailed manual financial
records as the primary basis for its Statement of Accountability. 
Because the Office of Finance maintained comprehensive, detailed
manual financial records as the primary basis for its Statement of
Accountability, we audited those records to reach our conclusion as
to the reliability of the House Finance Office's Statement of
Accountability and the effectiveness of internal controls. 

The computer system serving the Office of Finance is maintained by
the House Information Systems (HIS).  This system duplicates much of
the manual recordkeeping that is performed by the Office of Finance's
staff.  Until January 4, 1995, HIS was a separate unit within the
House of Representatives administered by the Committee on House
Administration.  Computerized data maintained for House Office of
Finance represents only a small portion of HIS data activities.  HIS
serves as a data center for Members, committees, officers, House
legislative support offices, and other legislative branch
organizations.  Additionally, the U.S.  Treasury checks for other
House units are printed at HIS. 

We found

  the Statement of Accountability was reliable in all material
     respects;

  internal controls in effect on September 30, 1993, provided
     reasonable assurance that losses, noncompliance with laws and
     regulations, and misstatements material to the statement of
     accountability would be prevented or detected; and

  no material noncompliance with laws and regulations we tested for
     1993. 

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


--------------------
\1 Financial Audit:  House Office of the Sergeant at Arms--Periods
Ended December 31, 1993 and June 30, 1993 (GAO/AIMD-95-63, March 30,
1995). 


   OPINION ON THE STATEMENT OF
   ACCOUNTABILITY
------------------------------------------------------------ Letter :1

The Statement of Accountability for Appropriations and Other Funds
was prepared on a cash basis, which is a comprehensive basis of
accounting other than that required by generally accepted accounting
principles.  The statement presents fairly, in conformity with the
cash basis of accounting described in note 2, the receipts and
disbursements of the Director, House Office of Non-Legislative and
Financial Services, for appropriated and other funds arising from
cash transactions of the House Office of Finance for the fiscal year
ended September 30, 1993. 


   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 at the House Office of Finance on September
30, 1993, provided reasonable assurance that losses, noncompliance,
or misstatements material in relation to the financial statements
would be prevented or detected. 


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

Our 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 the Statement of Accountability in conformity with the
     cash basis of accounting described in note 2,

  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 the cash basis
of accounting described in note 2 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 Statement of Accountability;

  assessed the accounting principles used by management;

  evaluated the overall presentation of the Statement of
     Accountability;

  evaluated and tested relevant internal controls which encompassed
     the following areas:  treasury, receipts, payroll, other
     expenditures, and financial reporting;

  reviewed and tested the safeguarding controls used by the Office of
     Finance;

  confirmed House of Representatives' cash balances with the
     Department of the Treasury;

  reconciled receipts and expenditure data produced by the computer
     system at the Office of Finance with related manual ledgers,
     traced expenditures and receipts to supporting documents on a
     statistical sampling basis, and traced receipts to relevant
     revolving fund records; and

  tested compliance with selected provisions of

the Legislative Branch Appropriations Acts for fiscal years 1991,
1992, and 1993 (Public Laws 101-520, 102-90, and 102-392,
respectively);

the Department of the Treasury financial reporting requirements for
disbursing officers (Treasury Financial Manual, volume I, section
2-3100);

laws and implementing Office of Personnel Management regulations for
employee benefits and employer costs (5 U.S.C.  8334, 8422, 8423,
8707, 8708, and 8906);

laws and implementing Internal Revenue Service regulations on federal
income and social security tax withholdings (26 U.S.C.  3402 and
3101); and

the Legislative Branch Appropriations Act, 1977, (Public Law No. 
94-440), authorizing voluntary withholding of state income taxes. 

We limited our work to accounting and other controls necessary to
achieve the objectives outlined in the 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 any 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 audit in accordance with generally accepted
government auditing standards.  We completed our audit work on
January 4, 1995. 

As adopted in the Rules of the House of Representatives for the 104th
Congress, the Office of Inspector General was directed to coordinate
and contract with an independent accounting firm, or firms, for a
series of audits that will result in a consolidated report of the
financial operations of the House, including the House Office of
Finance.  Such a consolidated report should provide valuable
information on the overall results of operations and current
financial position of the House of Representatives. 

We continue to strongly encourage all federal entities to prepare and
have audited comprehensive financial statements as an integral facet
of their financial management program. 

Sincerely yours,

Charles A.  Bowsher
Comptroller General
of the United States


FINANCIAL STATEMENT
=========================================================== Appendix 0

   Statement of Accountability for
   Appropriations and Other Funds

   (See figure in printed
   edition.)

   Notes to the Financial
   Statement

   (See figure in printed
   edition.)