Financial Audit: Senate Restaurants Revolving Fund for Fiscal	 
Years 2001 and 2000 (15-MAR-02, GAO-02-461).			 
                                                                 
GAO contracted with Clifton Gunderson LLP to audit the financial 
statements of the Senate Restaurants Revolving Fund for fiscal	 
years 2001 and 2000. Clifton Gunderson LLP found that (1) the	 
financial statements were fairly presented in conformity with	 
U.S. generally accepted accounting principles, (2) the fund	 
maintained effective internal control over financial reporting	 
and compliance with laws and regulations, and (3) there was no	 
reportable noncompliance with selected provisions of the laws and
regulations it tested.						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-02-461 					        
    ACCNO:   A02859						        
  TITLE:     Financial Audit: Senate Restaurants Revolving Fund for   
Fiscal Years 2001 and 2000					 
     DATE:   03/15/2002 
  SUBJECT:   Accounting procedures				 
	     Auditing standards 				 
	     Dining facilities					 
	     Financial statement audits 			 
	     Fund audits					 
	     Internal controls					 
	     Revolving funds					 
	     Senate Restaurant Revolving Fund			 

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GAO-02-461
     
United States General Accounting Office

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

March 2002

FINANCIAL AUDIT

Senate Restaurants Revolving Fund for Fiscal Years 2001 and 2000

                                      a

GAO-02-461

Contents

Letter 1

Appendix

Appendix I: Report on Audit of the U.S. Senate Restaurants Revolving
Fund 4
Independent Auditor's Report 4
Balance Sheets 7
Statements of Operations and Changes in U.S. Government Equity

(Deficit) 8
Statements of Cash Flows 9
Notes to Financial Statements 10

 Page i GAO-02-461 Senate Restaurants Page ii GAO-02-461 Senate Restaurants

A

United States General Accounting Office Washington, D.C. 20548

March 15, 2002

The Honorable Christopher J. Dodd Chairman, Committee on Rules and
Administration United States Senate

The Honorable Alan M. Hantman Architect of the Capitol

As you requested, we provided for audits of the financial statements of the
U.S. Senate Restaurants Revolving Fund (the Fund) for the fiscal years ended
September 30, 2001, and 2000 by contracting with independent public
accounting firms.1 The contracts required that the audits be done in
accordance with U.S. generally accepted government auditing standards and
the joint GAO/PCIE2 Financial Audit Manual.

In its fiscal year 2001 audit of the Fund, Clifton Gunderson LLP found the
following:

* The financial statements were presented fairly, in all material respects,
in conformity with U.S. generally accepted accounting principles.

* The Fund maintained effective internal control over financial reporting
(including safeguarding assets) and compliance with laws and regulations.

* There was no reportable noncompliance with selected provisions of laws and
regulations it tested.

1Clifton Gunderson LLP audited the financial statements of the Fund as of
September 30, 2001, and KPMG Peat Marwick LLP audited the financial
statements of the Fund as of September 30, 2000. KPMG Peat Marwick LLP
expressed an unqualified opinion on the Fund's fiscal year 2000 financial
statements.

2President's Council on Integrity and Efficiency (PCIE).

                    Page 1 GAO-02-461 Senate Restaurants

Although Clifton Gunderson LLP found that the Fund maintained effective
internal control, it did identify certain matters involving the Fund's
internal control that, while not significant enough to be considered
reportable conditions,3 deserve management attention. Clifton Gunderson LLP
reported these matters to management in a separate letter.

As disclosed in Clifton Gunderson LLP's report and note 1 to the Fund's
financial statements, the operation of the Senate Restaurants is
economically dependent on financial and other support provided primarily by
the Architect of the Capitol and the U.S. Senate.

* The Fund's financial statements for fiscal years 2001 and 2000 include
direct financial support provided by the Architect and the U.S. Senate in
the form of transferred appropriations, and/or appropriated capital totaling
$700,000 in each year.

* The Fund's financial statements for fiscal years 2001 and 2000 do not
include other support that benefits the operation of the restaurants.
Specifically, the Architect of the Capitol provided about $110,000 and
$133,000 in fiscal years 2001 and 2000, respectively, for the purchase and
maintenance of restaurant-related capital items, which remain the property
of the Architect. In addition, during fiscal years 2001 and 2000, the
Architect and the Government Printing Office provided the Fund with support
services-the value of which cannot be readily determined.

As disclosed in Clifton Gunderson LLP's report and note 1 to the Fund's
financial statements, if operating trends continue, the Fund will continue
to require future support to maintain continuing operations. Such support
will be greater in the coming year due to the effect on the Senate
Restaurants' operation from the September 11, 2001, terrorist attack and the
October 2001 anthrax incidents.

In connection with the audit of the Fund's financial statements performed by
Clifton Gunderson LLP, we reviewed its report and related working papers
and, as necessary, met with Clifton Gunderson LLP representatives and the
Fund's management. Our review, as differentiated from an audit in

3Reportable conditions are matters coming to the auditor's attention that in
the auditor's judgment should be communicated because they represent
significant deficiencies in the design or operation of internal control,
which could adversely affect the entity's ability to meet the internal
control objectives described in the report.

                    Page 2 GAO-02-461 Senate Restaurants

accordance with U.S. generally accepted government auditing standards, was
not intended to enable us to express, and we do not express, opinions on the
Fund's financial statements and about the effectiveness of its internal
control or conclude on compliance with laws and regulations. Clifton
Gunderson LLP is responsible for the accompanying auditor's report and for
the conclusions expressed in the report. However, our review disclosed no
instances in which Clifton Gunderson LLP did not comply, in all material
respects, with U.S. generally accepted government auditing standards.

This report is a matter of public record and is intended for the use of the
U.S. Senate, the Architect of the Capitol, the management of the Senate
Restaurants, and other interested parties. We are sending copies of this
report to Senator Mitch McConnell, Ranking Member, Senate Committee on Rules
and Administration; Senator Richard J. Durbin, Chairman, and Senator Robert
F. Bennett, Ranking Member, Subcommittee on Legislative Branch, Senate
Committee on Appropriations; Senator Tom Daschle, Majority Leader; and
Senator Trent Lott, Minority Leader. Copies of this report will be made
available to others upon request. This report will also be available on
GAO's homepage (www.gao.gov). Should you or your staff have any questions
concerning our review of the audits, please contact me on (202) 512-9406 or
Hodge Herry, Assistant Director, on (202) 512-9469. You can also reach us by
email at [email protected] or [email protected].

Jeanette M. Franzel Acting Director Financial Management and Assurance

                    Page 3 GAO-02-461 Senate Restaurants

Appendix I

Report on Audit of the U.S. Senate Restaurants Revolving Fund

                        Independent Auditor's Report

                    Page 4 GAO-02-461 Senate Restaurants

Appendix I Report on Audit of the U.S. Senate Restaurants Revolving Fund

                    Page 5 GAO-02-461 Senate Restaurants

Appendix I Report on Audit of the U.S. Senate Restaurants Revolving Fund

                    Page 6 GAO-02-461 Senate Restaurants

Appendix I Report on Audit of the U.S. Senate Restaurants Revolving Fund

                               Balance Sheets

                    Page 7 GAO-02-461 Senate Restaurants

Appendix I Report on Audit of the U.S. Senate Restaurants Revolving Fund

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

                    Page 8 GAO-02-461 Senate Restaurants

Appendix I Report on Audit of the U.S. Senate Restaurants Revolving Fund

                          Statements of Cash Flows

                    Page 9 GAO-02-461 Senate Restaurants

Appendix I Report on Audit of the U.S. Senate Restaurants Revolving Fund

                       Notes to Financial Statements

Appendix I Report on Audit of the U.S. Senate Restaurants Revolving Fund
Appendix I Report on Audit of the U.S. Senate Restaurants Revolving Fund
Appendix I Report on Audit of the U.S. Senate Restaurants Revolving Fund
Appendix I Report on Audit of the U.S. Senate Restaurants Revolving Fund
Appendix I Report on Audit of the U.S. Senate Restaurants Revolving Fund
Appendix I Report on Audit of the U.S. Senate Restaurants Revolving Fund

               (194085) Page 16 GAO-02-461 Senate Restaurants

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