Financial Audit: Senate Restaurants Revolving Fund for Fiscal	 
Years 2003 and 2002 (09-MAR-04, GAO-04-416).			 
                                                                 
GAO contracted with Clifton Gunderson LLP to audit the financial 
statements of the Senate Restaurants Revolving Fund for fiscal	 
years 2002 and 2001. Clifton Gunderson LLP found that (1) the	 
financial statements were presented fairly, in all material	 
respects, in conformity with U.S. generally accepted accounting  
principles; (2) the Fund maintained effective internal control	 
over financial reporting (including safeguarding assets) and	 
compliance with laws and regulations.; and (3) here was no	 
reportable noncompliance with selected provisions of laws and	 
regulations it tested.						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-04-416 					        
    ACCNO:   A09428						        
  TITLE:     Financial Audit: Senate Restaurants Revolving Fund for   
Fiscal Years 2003 and 2002					 
     DATE:   03/09/2004 
  SUBJECT:   Financial statement audits 			 
	     Internal controls					 
	     Auditing standards 				 
	     Fund audits					 
	     Dining facilities					 
	     Revolving funds					 
	     Accounting procedures				 
	     Senate Restaurant Revolving Fund			 

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GAO-04-416

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

March 2004

FINANCIAL AUDIT

Senate Restaurants Revolving Fund for Fiscal Years 2003 and 2002

Contents

March 9, 2004Letter

The Honorable Trent Lott Chairman The Honorable Christopher J. Dodd
Ranking Minority Member Committee on Rules and Administration United
States Senate

The Honorable Alan M. Hantman Architect of the Capitol

As you requested, we provided for an audit of the financial statements of
the U.S. Senate Restaurants Revolving Fund (the Fund) for the fiscal years
ended September 30, 2003 and 2002, by contracting with the independent
public accounting firm of Clifton Gunderson LLP. The contract required
that the audit be done in accordance with U.S. generally accepted
government auditing standards and the joint GAO/PCIE1 Financial Audit
Manual.

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

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

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

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

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,2 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 through the
Architect of the Capitol (the Architect) and by the U.S. Senate. The
financial statements present the financial positions and the results of
activities financed through the Fund and are not intended to present the
financial position and results of operations of the Senate Restaurants as
a whole.

o The Fund's financial statements for fiscal years 2003 and 2002 include
direct financial support provided through the Architect, which, after
deducting repayment of loans in fiscal year 2002 to the Senate contingent
fund, totaled $1,095,000 and $850,000,3 respectively, from transferred
appropriations.

o The Fund's financial statements for fiscal years 2003 and 2002 do not
include other support that benefits the operation of the restaurants.
Specifically, the Architect provided approximately $176,000 and $200,000
in fiscal years 2003 and 2002, respectively, for the purchase and
maintenance of restaurant-related capital items, which remain the property
of the Architect. In addition, during fiscal years 2003 and 2002, 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 losses from operations continue, which totaled
$678,211 and $1,191,941 in fiscal years 2003 and 2002, respectively, the
Fund will continue to require future support to maintain operations.

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
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 and the joint GAO/PCIE Financial Audit Manual.

This report is a matter of public record and is intended for the use of
the U.S. Senate, the Architect, the management of the Senate Restaurants,
and other interested parties. We are sending copies of this report to the
Chairman and Ranking Minority Member, Subcommittee on Legislative Branch,
Senate Committee on Appropriations, and the Majority Leader and Minority
Leader of the Senate. Copies of this report will be made available to
others upon request. This report will also be available at no charge on
GAO's Web site at www.gao.gov. Should you or your staff have any questions
concerning our review of the audits, please contact me on (202) 512-6906
or Hodge Herry, Assistant Director, on (202) 512-9469. You can also reach
us at [email protected] or [email protected].

McCoy Williams Director Financial Management and Assurance

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

(195022)
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