Financial Audit: Senate Restaurants Revolving Fund for Fiscal Years 1996
and 1995 (Letter Report, 05/16/97, GAO/AIMD-97-93).

Pursuant to a congressional request, GAO reviewed the financial
statements of the Senate Restaurants Revolving Fund as of September 28,
1996 and September 30, 1995, and for the years then ended. GAO
contracted with KPMG Peat Marwick LLP (KPMG) to conduct the audit.

GAO noted that: (1) in its audit of the U.S. Senate Restaurants
Revolving Fund, KPMG found that: (a) the financial statements were
reliable in all material respects; (b) management fairly stated its
assertion that internal controls in place on September 28, 1996, were
effective in safeguarding assets against unauthorized acquisition, use,
or disposition, ensuring material compliance with laws and regulations,
and ensuring that there have been no material misstatements in the
financial statements; and (c) there was no reportable noncompliance with
laws and regulations KPMG tested; (2) KPMG's audit disclosed a
significant weakness related to the adequacy of logical access controls
over the Fund's accounting and information management system and related
data; (3) the Senate Restaurants management agreed with KPMG's
assessment of the weakness and agreed to take corrective action; (4) the
Fund's financial statements reflect the results of the Senate
Restaurants' operating activities financed through Fund receipts; (5)
KPMG's report disclosed that if past operating trends continue, the Fund
will require supplemental funding to support its future operations; and
(6) the results of GAO's review of KPMG's audit disclosed no instances
where KPMG did not comply, in all material respects, with generally
accepted government auditing standards.

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

 REPORTNUM:  AIMD-97-93
     TITLE:  Financial Audit: Senate Restaurants Revolving Fund for 
             Fiscal Years 1996 and 1995
      DATE:  05/16/97
   SUBJECT:  Financial statement audits
             Legislative bodies
             Auditing standards
             Accounting procedures
             Internal controls
             Federal agency accounting systems
             Computer security
             Revolving funds
IDENTIFIER:  Senate Restaurant Revolving Fund
             
**************************************************************************
* 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.                                          *
*                                                                        *
* A printed copy of this report may be obtained from the GAO Document    *
* Distribution Facility by calling (202) 512-6000, by faxing your        *
* request to (301) 258-4066, or by writing to P.O. Box 6015,             *
* Gaithersburg, MD 20884-6015. We are unable to accept electronic orders *
* for printed documents at this time.                                    *
**************************************************************************


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


Report to the Chairman, Committee on Rules and Administration, U.S. 
Senate, and the Architect of the Capitol

May 1997

FINANCIAL AUDIT - SENATE
RESTAURANTS REVOLVING FUND FOR
FISCAL YEARS 1996 AND 1995

GAO/AIMD-97-93

Senate Restaurants

(917559)


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


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


B-275906

May 16, 1997

The Honorable John Warner
Chairman, Committee on Rules
 and Administration
United States Senate

The Honorable Alan M.  Hantman
Architect of the Capitol

In response to your requests and as discussed with each of your
offices, we contracted with the independent public accounting firm of
KPMG Peat Marwick LLP (KPMG) to audit the financial statements of the
United States Senate Restaurants Revolving Fund as of September 28,
1996 and September 30, 1995, and for the years then ended.  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 United States Senate Restaurants Revolving Fund,
KPMG found the following: 

  The financial statements were reliable in all material respects. 

  Management fairly stated its assertion that internal controls in
     place on September 28, 1996, 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. 

  There was no reportable noncompliance with laws and regulations it
     tested. 

KPMG's audit disclosed a significant weakness related to the adequacy
of logical access controls over the Fund's accounting and information
management system and related data.  Logical access controls use
computer software and related procedures to prevent or detect
unauthorized access to computer software and data.  In commenting on
a draft of KPMG's report, Senate Restaurants management agreed with
KPMG's assessment of the weakness and agreed to take corrective
action.  Implementation of the corrective action will be reviewed in
future audits. 

As disclosed in the Fund's financial statements and accompanying
notes and KPMG's report, the Fund's financial statements reflect the
results of the Senate Restaurants' operating activities financed
through Fund receipts.  The Fund has had to rely on loans, advances,
and transfers of appropriated capital to offset cumulative operating
losses totaling over $2.2 million.  As noted in footnote 3 to the
financial statements, these operating losses do not include (1) other
identifiable costs, such as those related to management personnel and
capital expenditures, paid directly from funds appropriated to the
Architect of the Capitol and (2) other costs, such as those related
to space and utilities, which are not readily identifiable.  KPMG's
report disclosed that if past operating trends continue, the Fund
will require supplemental funding to support its future operations. 

In connection with your request, we reviewed the KPMG report and
related working papers and, as necessary, inquired with KPMG
representatives.  Our review, as differentiated from an audit, was
not intended to enable us to form an opinion on the fair presentation
of the Fund's financial statements, the effectiveness of internal
controls, or compliance with laws and regulations.  KPMG is
responsible for the attached Auditors' report, dated February 24,
1997, and for the conclusions expressed therein.  However, the
results of our review disclosed no instances where KPMG did not
comply, in all material respects, with generally accepted government
auditing standards. 


---------------------------------------------------------- Letter :0.1

We are sending copies of this report to interested committees and
other interested parties.  Copies will be made available to others on
request.  Should you or your staffs have any questions concerning our
review of the audit, 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


AUDIT OF UNITED STATES SENATE
RESTAURANTS REVOLVING FUND
=========================================================== Appendix I

   Independent Auditors' Report

   (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.)

   Balance Sheets

   (See figure in printed
   edition.)

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

   (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.)


*** End of document. ***