Financial Audit: House Office Systems Management--Fiscal Year Ended
9/30/93 and Three Months Ended 9/30/92 (Letter Report, 03/30/95,
GAO/AIMD-95-78).

GAO audited the House Office Systems Management's Statements of Cash
Receipts and Disbursements for fiscal year 1993 and the three months
ended September 30, 1992.  GAO found that the statements were reliable
in all material respects; that internal controls reasonably ensured that
losses, noncompliance with laws and regulations, or misstatements
affecting the financial statements would be prevented or detected; and
that there was no material noncompliance with laws or regulations.

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

 REPORTNUM:  AIMD-95-78
     TITLE:  Financial Audit: House Office Systems Management--Fiscal 
             Year Ended 9/30/93 and Three Months Ended 9/30/92
      DATE:  03/30/95
   SUBJECT:  Financial statement audits
             Legislative bodies
             Accounting procedures
             Auditing standards
             Cash management
             Financial records
             Internal controls
             Accountability

             
******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO report.  Delineations within the text indicating chapter **
** titles, headings, and bullets are preserved.  Major          **
** divisions and subdivisions of the text, such as Chapters,    **
** Sections, and Appendixes, are identified by double and       **
** single lines.  The numbers on the right end of these lines   **
** indicate the position of each of the subsections in the      **
** document outline.  These numbers do NOT correspond with the  **
** page numbers of the printed product.                         **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
** A printed copy of this report may be obtained from the GAO   **
** Document Distribution Center.  For further details, please   **
** send an e-mail message to:                                   **
**                                                              **
**                                            **
**                                                              **
** with the message 'info' in the body.                         **
******************************************************************


Cover
================================================================ COVER


Report to the Chief Administrative Officer of the House of
Representatives

March 1995

FINANCIAL AUDIT - HOUSE OFFICE
SYSTEMS MANAGEMENT--FISCAL YEAR
ENDED 9/30/93 AND THREE MONTHS
ENDED 9/30/92

GAO/AIMD-95-78

House Office Systems Management

(918709)


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


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


B-259437

March 30, 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 have audited the House
Office Systems Management's Statements of Cash Receipts and
Disbursements for the fiscal year ended September 30, 1993, and the 3
months ended September 30, 1992.  We found

  -- the Statements of Cash Receipts and Disbursements to be reliable
     in all material respects;

  -- internal controls in effect on September 30, 1993, provided
     reasonable assurance that losses, noncompliance with laws and
     regulations, or 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 of our conclusions in more detail
and discuss the scope of our audits. 


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

The House Office Systems Management's financial statements are
prepared on a cash basis, which is a comprehensive basis of
accounting other than that required by generally accepted accounting
principles.  The financial statements referred to above and the
accompanying notes present fairly, in conformity with the basis of
accounting described in note 2, the House Office Systems Management's
cash receipts and disbursements. 

As discussed in note 2, the Statements of Cash Receipts and
Disbursements present only the results of activities financed from
funds allocated or reimbursed to the House Office Systems Management. 
They do not include costs which cannot be readily determined such as
space, building repairs, utilities, and office furniture financed
from other legislative appropriations. 


   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 in accordance with the
     basis of accounting described in note 2 and to maintain
     accountability for assets. 

As of September 30, 1993, management corrected an internal control
weakness identified in our last report.\1 Specifically, we noted that
the House Office Systems Management did not have procedures to
prevent or detect all unauthorized changes to its automated data
files.  Among other things, these automated files are used to
maintain and bill equipment usage fees.  In response to our concern,
management arranged to receive copies of daily reports which list all
changes made to data files.  Management periodically reviews these
reports to ensure that all changes were authorized. 

Those controls in effect on September 30, 1993, provided reasonable
assurance that losses, noncompliance, or misstatements material to
the financial statements would be prevented or detected. 


--------------------
\1 Financial Audit:  House Office Systems Management--Three Months
Ended 9/30/92 and Fiscal Years Ended 6/30/92 and 6/30/91
(GAO/AIMD-94-18 January 14, 1994). 


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

Our 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

The Office's management is responsible for

  -- preparing the financial statements in conformity with the 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 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 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 receipts, disbursements, and financial reporting; and

  -- tested compliance with selected provisions of 2 U.S.C.  112e and
     117e, 48 U.S.C.  1715 and 1735, and regulations on the Office's
     operations contained in the House of Representatives edition of
     the Congressional Handbook. 

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
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 Systems
Management.  Such a consolidated report should provide valuable
information on the overall results of operations and current
financial position of the U.S.  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 STATEMENTS
=========================================================== Appendix 0

   Statements of Cash Receipts and
   Disbursements

   (See figure in printed
   edition.)

   Notes to Financial Statements

   (See figure in printed
   edition.)


*** End of document. ***